From office space to prime fan location? A new trend in sports real estate

Frasier: There’s an old real-estate maxim that says the three most important things in looking for a property are location, location, location.

              Woody: That’s just one thing.

              Frasier: That’s the point, Woody.

              Woody: What, that real-estate people are stupid?

              Frasier: No, that location is the one most important thing in real estate.

              Woody: Then why do they say it’s three things?

              Frasier (resigned): Because real-estate people are stupid.

              Woody: Ah hah.

–”Cheers,” 1989.

As we prepare to raise our glasses and say Cheers to the new year, let’s examine a recent real-estate development in the sports world. It couldn’t be less stupid.

Increasingly, teams are recognizing the value of their location and working to monetize every inch of it. Championships, after all, need not be built precisely or entirely where they are won. And this new trend should create more revenue for clubs to spend toward their next flag to fly forever while providing ticket holders with a stronger return on their investments.

As part of a $200-million upgrade in anticipation of hosting both the Super Bowl and the FIFA World Cup in 2026, the San Francisco 49ers are enhancing high-end experiences. The new Graton Winners Club, for instance, features two open-air patio bars and can service over 2,000 fans per game. One way to create room for such luxuries? Relocate some team employees to nearby sites for their daily work.

It’s a model the Boston Red Sox intend to emulate. Team president and CEO Sam Kennedy told The Boston Globe last month that the Bosox plan to move their offices out of their iconic home Fenway Park and into new buildings purchased by the club as part of its mixed-use “Fenway Corners” development. As detailed in reporter Michael Silverman’s story, “The vacated space in the ballpark would be used to likely expand the concourse and provide dedicated space for season-ticket holders.”

The new space will not expand ticketed capacity, Silverman added, yet an expanded concourse and enhanced space for the most loyal supporters create an obvious opportunity to add revenue.

The Chicago Cubs, meanwhile, moved their front offices out of beloved Wrigley Field, to the nearby North Building at Gallagher Way, over five years ago.

To an older set of sports fans, and even those in the business, this notion requires a conceptual tweak. To name-drop another 1990s sitcom, when “Seinfeld” cut to George Costanza at work, we saw the exterior of Yankee Stadium, not some neighboring, vanilla structure.

But if teams have the ways and means to cede more of their prime real estate to customers, why wouldn’t they do this? It’s not like these employees don’t and won’t have access to the stadiums when they need it, or on game days. They’ll just take up less essential space less often.

Stadiums are only as big as their footprint. What you fit inside that footprint, however, can grow some more. For ardent fans looking to optimize their experiences and leverage their purchases, nothing beats location, location or location.