The Bisnow Weekender: O Sports Team, Where Art Thou?
Thanks for reading the Bisnow Weekender, my personally curated roundup of the most impactful news, notable quotes, binge-worthy show recommendations and other colorful highlights from the Bisnow world of commercial real estate and beyond.
People were angry when the Atlanta Braves left the city in 2017 and moved to the suburbs.
How could a beloved, wildly successful baseball team not play ball in the city of Atlanta? And where exactly is Cumberland anyway? It baffled people.
But the move was a calculated commercial real estate decision, and that decision has proven hugely lucrative and influential. The Braves franchise has total control of its real estate — the stadium and practice facilities, for sure, but also all of the surrounding offices, apartments, retail, entertainment and hotels.
The Braves aren’t a baseball team anymore. They are a major real estate business, and business has been very good these last few years.
This week in Washington, D.C., Ted Leonsis, owner of the Washington Wizards and Capitals, showed the sports world he has been paying close attention. As Bisnow reported, he plans to vacate the 26-year-old Capital One Arena in downtown D.C. in favor of a $2B mixed-use entertainment district planned in Alexandria, Virginia’s Potomac Yard neighborhood.
The planned 9M SF development is set to include a new arena for both teams, a corporate headquarters, a television studio, a practice facility and an esports facility, along with surrounding retail, restaurants, and conference and community gathering spaces. The deal would be funded by more than $1B in bonds issued by the state, contrary to the wishes of many politicians around the country who have soured on subsidies for sports teams owned by billionaires.
“That primordial set of ingredients can really create what we think we can build — really the exemplar new experience — and we’ll be very on trend because this is what we’ll have to do in professional sports,” Leonsis said.
There are still some wrinkles to iron out, and D.C. is making some last-ditch efforts to reverse the decision, but assuming those volleys fail, the Washington Wizards and Capitals will call Alexandria home in 2028.
Everyone seems to be breaking up right now. The NFL’s Raiders are now in Las Vegas, and their longtime roommates, the Oakland Athletics, seem like they are coming too. In Chicago, the Bears are flirting with Arlington Heights — and seemingly every other suburb that surrounds the Second City. The Chargers left San Diego and the Rams left St. Louis for Los Angeles. The Warriors left Oakland and now reside in San Francisco.
These were business decisions, and increasingly the business of sports has become inseparable from that of commercial real estate.
Team owners are riding the popularity of their franchises to muscle sweetheart deals with hungry jurisdictions like Virginia that allow them to not only benefit from publicly funded stadiums but also control the valuable real estate around them.
P.S. This is the last Bisnow Weekender of the year, so I hope you and yours have a wonderful holiday season. Thanks for reading, and I hope to see you here again in 2024.
— Mark F. Bonner, Bisnow Editor-in-Chief
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The Best Of Bisnow News: Dec. 11-15
'No One Is Declaring Victory' As Fed Hints At Cuts, Holds Steady On Rates — Bisnow National Reporter Dees Stribling
The Federal Open Market Committee’s decision Wednesday to hold the base interest rate, and maybe cut it soon, was no doubt welcome news to the commercial real estate industry, but it is seen more as a step toward regularity than a huge win.
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Capitals, Wizards To Move To Virginia, Anchor Massive New Entertainment District — Bisnow Washington, D.C., Reporter Emily Wishingrad
The agreement would be a public-private partnership between Monumental Sports & Entertainment, the commonwealth of Virginia, the city of Alexandria and the developer that controls the Potomac Yard property, JBG Smith. The Capitals and Wizards would be the first franchises in the four major North American pro sports leagues in Virginia's history. It is the most populous state in the U.S. without one.
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Investors Bank Billions, Setting Up CRE Secondary Spending Spree — Bisnow National Reporter Dees Stribling
Major investors are gearing up for a year they expect to be flush with advantageous deals on real estate’s secondary markets, raising funds with billions of dollars at the ready for buying up partial interests in portfolios or recapitalizing troubled properties, among other options.
More Big News From The Week …
— Plan For World's Largest Data Center Hub Approved After 27-Hour Hearing
— CRE Marketing Jobs On The Chopping Block Amid Industry Slowdown
— Macy's Real Estate Worth About $3B More Than Investors' Bid For Retailer: Analysts
My Slightly On/Off-Topic Media Diet
So Much Empty Office Space, So Few Easy Options (WSJ): “A lack of capital, or a lack of willingness to commit capital, could be partially solved with government incentives. However, there are questions about how such incentives would be funded, as well as whether taxpayers would object to what could be viewed as a government bailout. These concerns are especially true for cities that already are facing budget pressures.”
The Math for Buying a Home No Longer Works. These Charts Show You Why (WSJ): “Rents are on the rise, but the cost of buying a home has risen by a lot more. The average monthly new mortgage payment is 52% higher in the U.S. than the average apartment rent, according to an analysis by CBRE. The premium is even sharper in many major metro areas—including 175% or more in Seattle and Austin, Texas, and several cities in California.”
Children Risk Their Lives Building America’s Roofs (NYT): “Federal law bars anyone under 18 from roofing because it’s so dangerous. But across the U.S., migrant children do this work anyway. They call themselves ‘ruferitos’ on social media. In videos like these, they talk about being underage and pose on rooftops and ladders, often without the required safety gear. One slip can be fatal.”
2023: The Year Of The Loneliness Epidemic (The Week): “In 2020, Americans spent about two minutes a day interacting with friends in person, down from 60 minutes almost two decades earlier. Young people aged 15 to 24 were hit particularly hard, reducing their in-person social interactions by 70 percent in 2020 compared to the two previous decades.”
The Boston Tea Party Was A Crime (The Boston Globe): “How should we regard the events of that night 250 years ago? Was it really an act of heroism to destroy 46 tons of tea? Was that massive and costly act of vandalism to private property justified by the protesters’ anger at Britain’s policy on tea? … I am profoundly grateful that I had the good fortune to be born an American. But that doesn’t change the fact that destroying other people’s property to advance a political cause is wrong.”
No, Virginia, Your Christmas Tree Is Not A Climate Crime (Bloomberg): “But the important thing to know is that you can buy an artificial tree and eat cheeseburgers and drive a gas-burning car if you need to and still help fight global warming.”
Bisnow Weekend Interview Preview
Stephanie Rodriguez, national director for industrial services at Colliers, spoke to Bisnow South Florida Reporter Matt Wasielewski about the slowdown in the U.S. industrial market. Rodriguez discussed where the U.S. industrial sector is headed, what’s driving leasing activity and what a shift in policy at the Federal Reserve could mean for development in the year ahead.
Bisnow: I want to read you something Prologis CEO Hamid Moghadam said on an earnings call in October and get your perspective. He said, “The nightmare scenario would be that, you know, a couple of tankers get sunk in the Persian Gulf. … If we see that scenario, I can’t think of a better business to want to be in. I hate to see that scenario happen, but actually, on a relative basis, it should be good for our business.” What’s your thoughts on what he’s saying? Do you share his sense that geopolitical instability is or could be a demand driver for the industrial market?
Rodriguez: I think we’re already seeing that. Look at the supply chain disruption that we experienced during the pandemic. Retailers in the U.S. couldn’t sell goods because they didn’t have access to the goods to sell, and then when they did start coming in on ships, they were stuck in ports. It’s already something that’s happened. It just depends on what the geopolitical unrest situation is, whether it’s a global pandemic, whether it’s war. It is a demand driver for saying, “Let’s be less reliant, mitigate our risks and not have everything coming from one specific geographic region, because they may be our friend today, but they may not be our friend tomorrow.” He’s right in saying that nobody wants these bad things to happen, but sometimes they do result in some wins on our own shores.
The Weekend Interview goes live every Friday evening — head to www.bisnow.com over the weekend to check it out!
Jobs! Jobs! Jobs!
Here are this week’s top jobs over at Bisnow's careers platform, SelectLeaders. Reach out to SelectLeaders Managing Director Ryan Neale to learn more. You can email him at [email protected].
Managing Director of Investor Services — Drive new business while retaining and expanding existing business for a select group of large institutional clients.
Vice President — Lead complex quantitative analysis and financial modeling while overseeing the underwriting processes.
Head of Property Management — Lead property management for a $7B portfolio.
VP of Acquisitions and Asset Management — Lead acquisitions and asset management for a premier Southeast owner-operator.
Hey, Maddy, What Are You Going To Binge This Weekend?
I got Britney Spears’ memoir The Woman In Me from the library this week, so I’ll probably finish it this weekend. The first 50 pages doesn’t make it seem like it’ll be that riveting of a read, but it’s short and I’m curious. I’m also on Season 4 of The Real Housewives of Beverly Hills. I became a Vanderpump Rules fan this year after Scandoval and by chance saw Lisa Vanderpump in person last weekend in Los Angeles, so I have become deeply engrossed in the Bravo network fandom. Outside of that, I’ll probably watch whatever horror movie I can find that I haven’t seen yet. Or maybe one or two that I have seen.
— Maddy McCarty, Bisnow Houston Reporter
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How did I do? You can send all love letters and dissents directly to me at [email protected].
