When people hear the term “mixed-use real estate,” they might think of an apartment building with retail shops on the ground floor, or an office park featuring a hotel and a few restaurants. Lately, a new type of mixed-use development is gaining momentum across the U.S.: the entertainment or “lifestyle” district. Entertainment districts that are anchored by major venues consistently outperform market fundamentals, and JLL predicts that these properties will grow to represent 30% of national office inventory by 2040 (compared to 4% now). Mixed-use developments anchored by arenas and stadiums are key drivers of this trend.
What defines an entertainment district?
An entertainment district is one variation within a category of mixed-use development also known as lifestyle office markets. These developments are characterized by attributes including:
- Moderate density
- Convenient transit options
- Diverse, high-end property types
- Desirable amenities
- Walkability
- Community engagement
- 24/7 activity
The popularity of these modern mixed-use developments reflects post-pandemic demographic shifts and a growing desire for live-work-play environments among residents of urban and suburban settings. Lifestyle districts offer people places to engage with others and establish a sense of community beyond their homes and workplaces.
The numbers back up the trend: According to a recent report, office properties in lifestyle office markets command a 32% rent premium over other Class A office space. Sports and entertainment venues, waterfront locations and green space are among the top amenities enhancing rent premiums. Entertainment districts also support increased attendance at sports venues — even when the home team isn’t on a winning streak.
In addition, offices in lifestyle districts fill up twice as fast (90% leased in two years compared with four years for traditional developments), and they have lower vacancy rates than the overall office market (12.5% compared to 22.5%). Investors are taking note: Institutional capital allocation to office properties in lifestyle office markets accounted for more than 8% of institutional office acquisition volume nationwide in 2024.
Developers and investors seeking premium returns should recognize that building exceptional brick-and-mortar properties with desirable amenities doesn’t guarantee success. A superlative approach to property management and as well as cohesive operations, elevated placemaking and activation activities are critical to achieving the desired outcomes for these projects.
As demand for lifestyle office market space grows, proposals for mixed-use projects anchored by sports and entertainment are picking up steam around the U.S. Projects are in development with the NFL’s Washington Commanders, Cleveland Browns and Chicago Bears; MLB’s Kansas City Royals and Arizona Diamondbacks; MLS’s Chicago Fire Football Club; the South Philly Sports Complex and other teams and venues throughout the world of professional and collegiate sports.
The Battery in Atlanta pioneered the modern entertainment district
MLB features two historic stadiums integrated directly in urban neighborhoods: Boston’s Fenway Park and Chicago’s Wrigley Field. Built in the early 20th century, these ballparks became relics of a bygone era as stadiums migrated outside of urban cores with the construction of freeways and development of suburbs.
In 2016, the Atlanta Braves opted for a different approach. When their lease expired, they purchased more than 60 acres of greenfield suburban land just outside of Atlanta city limits and built not only a new ballpark but also an entire master-planned development anchored by a new stadium and concert venue with more than 1 million square feet of commercial space, more than 500 residential units and a 406-key hotel.
That new entertainment district, dubbed The Battery, offers a mix of densities and commercial spaces that support a vibrant ecosystem 365 days a year — not just when the Braves are playing at home. The Battery’s residential component has a 1.7% higher occupancy rate than the submarket, and its office and retail spaces are over 99% leased.
Integrating operations early is key to a successful mixed-use development
OCVibe, the 100-acre mixed-use development designed around the Honda Center arena (home to the NHL’s Anaheim Ducks), brings the entertainment district trend to Southern California. OCVibe features diverse dining and nightlife, cutting-edge office space and 20 acres of parks and public plazas to complement the Honda Center’s sports and entertainment experiences. The completed development also will include a 2,500-unit apartment community and two on-site hotels.
Mixed-use developments such as The Battery and OCVibe illustrate an important component of developing and managing a successful entertainment district: These projects demand sophisticated operations and property management expertise. Incorporating that expertise early in the development process is emerging as a best practice.
Incorporating advisory and thought leadership with operations before breaking ground can help validate predicted operating expenses in advance of that stage of delivery. It also creates a functional review of the planned built environment, which can uncover critical insights and “a-ha moments” before construction is complete. Finally, in a stadium, bringing the optimal customer and fan experience to life is a key priority. In an entertainment district, that experience needs to integrate cohesively with the other components of the development. Achieving early stakeholder alignment around a vision statement that tells a consistent, compelling story and provides directional guidance for every aspect of the project’s operations is critically important. Involving operations and property management early in the development process helps ensure that alignment.
The future of the entertainment district
Consumer and tenant preferences are increasingly shifting toward the experiences and amenities offered by entertainment districts — especially sports-anchored lifestyle districts. For example, JLL predicts that by 2040, at least half of MLB organizations will announce plans to develop a new stadium or perform a major redevelopment of their existing venue. As developers and owners take cues from projects such as The Battery and OCVibe, this dynamic trend is gaining momentum, expanding to other national, collegiate, and youth sports leagues and non-sports entertainment venues.
Sam Schaefer is CEO, global property management, at JLL.
