A private equity firm with a stake in more than a dozen professional sports teams is making a major commercial real estate investment.
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Arctos Partners, a division of KKR & Co., is teaming up with RVX Ventures and Magellan Development Group to build a mixed-use entertainment district around Neyland Stadium at the University of Tennessee, Knoxville. It will be the first project in an ongoing partnership between the firms targeting the space.
The district, a public-private partnership with the university, will include 100K SF of entertainment space and a 24-story hotel alongside apartments and a private club, according to a press release. The joint venture is investing $288M in the project, Bloomberg reported.
“We see significant opportunity at the convergence of live sports and real estate, and we wanted to be more than a capital provider in this space,” Arctos partner Chad Hutchinson said in a statement.
“RVX and Magellan have the track records and the operational know-how to deliver on complex projects like this, and together we can define how sports-anchored districts are conceived, built and operated.”
Arctos, which KKR purchased for $1.4B in February, is the majority equity investor in the project. The firm also holds a stake in a wide array of major and minor league teams, including the NBA’s Golden State Warriors and Utah Jazz and MLB’s Los Angeles Dodgers, San Francisco Giants and San Diego Padres.
Mixed-use stadium districts have become a hot topic in CRE following the success of high-profile developments like The Battery Atlanta surrounding the Atlanta Braves’ Truist Park and the Titletown District at the Green Bay Packers’ Lambeau Field.
The Neyland Stadium project comes as investors have increasingly become involved with college sports programs.
The University of Utah and Otro Capital finalized a partnership to drive revenue for the school’s athletics program earlier this month.
This came after Collegiate Athletic Solutions, a joint venture between Redbird Capital and Weatherford Capital, invested $12.5M in the Big 12 conference in May.
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