Sports Condos Hit Stride

Several U.S. developers are trotting onto an expanding field in real estate — multimillion-dollar luxury condominium projects marketed to diehard college sports fans and passionate alumni, predominantly baby boomers. Gameday Centers Southeastern LLC of Atlanta already has built four fully furnished, sports-oriented condo projects in college and university towns, with three other projects in the works, according to President and CEO Brad Pager.

All but one of Gameday's first four projects is sold out, and even that one has less than a dozen units remaining. Sports condos range from roughly 400 to 2,000 sq. ft., while prices start upwards of $140,000 and reach $1 million.

Acquisition of prime real estate near college campuses accounts for up to 25% of the cost for these projects vs. 10% or less for a more typical development.

Capstone Development Corp. of Birmingham, Ala. and The Dinerstein Cos. of Houston are also players in this market, but on a smaller scale. A newcomer to this arena is Collegiate Ventures LLC of Atlanta, a startup headed by Gary Spillers. Amid differences over the direction of Gameday Centers, Spillers quit in December as the company's top executive to venture out on his own.

It's envisioned that Spillers will take on the four Texas projects — Austin (University of Texas), College Station (Texas A&M University), Lubbock (Texas Tech University) and Waco (Baylor University) — that were underway at Gameday Centers. Spillers says he'll be hunting for more opportunities, with an eye toward lining up investors or joint-venture partners for all of his projects.

The sole business of Gameday and Collegiate Ventures is the sports-themed condo, while Capstone and Dinerstein handle other types of real estate. Gameday, Collegiate Ventures, Capstone and Dinerstein likely will find additional competitors targeting affluent fans and alumni who traditionally stay at hotels, experts say. “Investors aren't dumb; developers aren't dumb,” Spillers says.

Trammell Crow Residential of Atlanta has teamed up with Gameday Centers through a national development deal signed this past fall. Trammell Crow Residential is the majority owner of projects in South Bend, Ind. (University of Notre Dame), Knoxville, Tenn. (University of Tennessee) and West Lafayette, Ind. (Purdue University), according to Pager.

The Notre Dame project, which will be adjacent to the College Football Hall of Fame, is Gameday's most expensive at $45 million, Pager says. The firm also will be the majority owner of the seven to 10 projects that Gameday is considering in the East and Midwest, he says.

Capstone has completed a project in Manhattan, Kan. (Kansas State University), is building one in Baton Rouge, La. (Louisiana State University), and has designed properties in Louisville, Ky., and Starkville, Miss. The cost to build one of Capstone's 24- to 140-unit FieldHouse projects ranges from $4.7 million to $28 million, says John Chapman, a vice president at the company.

Dinerstein's first project opened in August in Tuscaloosa, Ala. five years after Gameday finished its condos there. The 148-unit sold out at an average of $140,000 per unit, while the 158-unit South Carolina property is fetching an average of $225,000 per unit.

Brian Dinerstein, vice president of development, is researching other sites throughout the southern tier of states. “In a perfect world, we would like to do anywhere from two to four deals of this type each year.”

TAGS: Multifamily
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