The Game Is Changing: Investing in Sports with Kyle Israel
In this episode of Driving with Marley, Magnolia Hill Partners CEO Marley Hughes and Partner Kyle Israel explore how authentic relationships drive success in sports and sports real estate investing. Discover how MHP is shaping the future of sports districts and stadiums as vibrant, mixed-use, community hubs and redefining the 'live, work, play' development model amidst a decade of radical change in the sports experience. Check out our show notes below or tune in on YouTube and Spotify for the complete Driving with Marley experience.
From Cement Dinosaurs to Dynamic Destinations
For decades, sports stadiums were isolated, massive concrete structures—often built in undesirable parts of town, surrounded by seas of parking lots, and used only on game days. These "cement dinosaurs" were functional but failed to create lasting value beyond the limited events they hosted each year. Today, that model is evolving, as sports venues are transforming into year-round destinations that drive economic growth and urban revitalization.
When we look at today’s hottest sports real estate developments – The Battery in Atlanta, LA Live, and the area surrounding SoFi Stadium – these case studies showcase a growing trend: leveraging stadiums as catalysts for creating dynamic live-work-play environments. These developments incorporate multifamily housing, hospitality, retail, and entertainment to build vibrant communities around sports arenas.
The Evolution of Sports Districts: Placemaking and Profitability
A new class of investors is recognizing the untapped potential of underutilized, often undervalued land by transforming it into thriving sports districts that become the heartbeat of their communities. These developments harness the power of sports to create vibrant hubs where residents and visitors can connect, celebrate, and engage year-round—not just on game days.
The first wave of successful projects, such as The Battery in Atlanta and LA Live, showcased the impact of strategic placemaking, turning stadium-centric areas into dynamic live-work-play destinations. While these models have proven highly successful, lessons have emerged on how to optimize the real estate component even further. A key realization is that while team ownership often serves as the catalyst for these developments, many owners miss out on the significant financial upside of the surrounding commercial real estate—despite its value being largely driven by the team itself.
The next evolution in sports real estate development is clear: long-term success requires ownership of both the team and the surrounding real estate, ensuring that those who drive the economic engine also reap the rewards.
The New Playbook: Integrating Sports Ownership and Real Estate
Historically, sports team ownership and real estate development have operated in separate silos. However, forward-thinking investors are now bridging this gap to unlock new synergies, creating a more sustainable and profitable model. Groups like MHP are pioneering this integrated approach, leveraging the power of team ownership to maximize the value of surrounding developments.
This strategy enables ownership groups to:
Enhance Team Value by elevating the fan experience with world-class stadiums and surrounding attractions.
Monetize Real Estate by capturing the rent premiums generated by high-demand commercial, residential, and entertainment spaces near stadiums.
Diversify Revenue Streams beyond ticket sales and sponsorships, tapping into ongoing revenue from hospitality, retail, and mixed-use developments.
By aligning ownership of both the team and its surrounding district, investors are shifting from simply playing the game to truly owning it—both on and off the field.
Opportunities in Secondary Markets
While large markets have embraced this approach of sports-anchored districts, secondary cities across the U.S. are also realizing the potential of these developments. Leagues like USL, WNBA, and others are finding success in these secondary markets, where local communities rally around their teams. These markets offer untapped opportunities to create unique, memorable experiences for fans while spurring local economic growth.
The European Perspective
In Europe, the evolution of stadiums has traditionally faced challenges, such as limited land availability and older infrastructure. Yet, European team owners have taken note of the immense success US owners have realized by truly merging their entire sports ecosystem and the real estate into a buzzing community hub. The focus is not only on financial returns but also on the broader impact these projects can have on local communities, offering more entertainment options for families and creating premium commercial real estate assets.
Building Relationships for Long-Term Success
One of the most important aspects of this sports ecosystem is relationships. The best opportunities often arise through networks, partnerships, and shared visions. Strong relationships between team owners, real estate developers, and community leaders are critical to ensuring the success of these ambitious projects.
Getting Involved
For investors, family offices, and high-net-worth individuals looking to enter the sports industry, there’s never been a better time. Whether through ownership positions in teams, partnerships in real estate developments, or other creative structures, the possibilities are vast.
To learn more about how sports and real estate intersect or to explore potential opportunities, be sure to connect with our team. Visit us at magnoliahillpartners.com for more information.
With gratitude,
Marley Hughes
CEO
Magnolia Hill Partners
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