Developers are transforming vacant and under-utilized retail spaces into prime spots for American fans of the fastest-growing sports.
Big-box retail stores that are bare and empty anchor stores in abandoned malls are being rehabilitated and transformed into indoor courts for pickleball that will result in the possibility of a “pickleball gold rush” in commercial real property.
Around 130 new courts for pickleball are added across the nation every month, according to USA Pickleball, the governing organization that oversees the activity within the U.S. However, even more is needed to keep up with the demand. According to the Sports & Fitness Industry Association estimates, nearly 25,000 courts will need to be constructed to keep up with the market, which will require a $90 million investment. Converting old properties and abandoned sites has been one strategy to satisfy this demand.
The sport of pickleball, which is a mixture of ping-pong and tennis, has seen an explosion in popularity after the COVID-19 epidemic. It was once thought to be an activity primarily reserved for retirees. It is estimated that 36.5 million Americans played pickleball in 2018, an increase of 158% from 2019, as per SFIA figures. The biggest age range for players in the pickleball game is between 18 and 34 years old, with around 29 percent of the market in accordance with SFIA.
A Modern Amenity
Courts for tennis are now a popular amenity for single-family homes, multi-family communities, as well as public parks. However, outdoor courts have sparked complaints about noise and the encroachment on the tennis courts. Therefore, more courts for pickleball are moving indoors, allowing players to play all year long.
Developers are scouring for properties like recently closed Bed, Bath & Beyond stores to accommodate multiple indoor courts. Ace Pickleball Club, a professional and tournament pickleball franchise, was able to sell 40 franchise licenses prior to the opening of its first facility located in Roswell, Ga., in the summer of. Ace Pickleball Club first began offering franchises in February. The company is expected to sell more than 100 franchise licenses before the end of the year and to open more than 50 locations for pickleball across the nation in 2024.
“Pickleball is the new frontier in commercial real estate,” says Diego Pacheco, chief growth officer at Ace Pickleball Club. “You rarely find something that is completely different from residential real property. The rapid expansion of the sport is comparable to the growth of tennis throughout the 1970s as well as the 1980s. Landlords are also enthralled by it since it draws increased foot traffic from people who have money to spend. Also, it’s great to get leasing agreements.”
Indoor pickleball courts typically are classified into two broad categories: 1)) what’s referred to as “eatertainment” or “sportstainment” (combining pickleball courts and bars or restaurants) and) recreation facilities (pickleball courts for play at home or tournaments). Both are seeing rapid growth. Property owners are discovering that renovating vacant properties can accelerate their entry into the market before their rivals.
Getting to the Market Faster
“The reality of today’s world is that with such high construction prices, it doesn’t often make sense to build from the ground up in building a pickleball facility for recreational and tournament space,” Diego adds. “Everyone is looking to create something. If you decide to construct it, you just need to identify the land and preparing at least a year to obtain construction approval. By then it could be the time for another group to come into the area with their own pickleball facility.”
Ace Pickleball Club mostly targets empty, second-generation big-box retail space to be revitalized, which could be retrofitted in around 100 to 120 days. The full-service franchiser works with franchisees to help find a suitable real estate location with a particular focus on spaces that are between 25,000 and 50,000 square feet of space that can hold up to 16 courts that are tournament-grade indoors.
Some malls that are attracting tenants who offer experiential retail to drive the number of visitors are financing the growing popularity of pickleball. For instance, a brand new company that provides pickleball named Camp Pickle announced this summer that it had secured 200 million dollars from investors, which included Simon Property Group, one of the biggest landlords of U.S. shopping malls. Camp Pickle will open its first indoor facility for pickleball the following year. It will be located within Denver as well as Huntsville, Ala.
Then, in Macon, Ga., the introduction of pickleball courts was an integral part of the Macon Mall revitalization project. An old Belk anchor shop was transformed into 32 courts of pickleball, regarded as one of the biggest indoor facilities for pickleball around the globe.
Pickleball is another new brand that recently opened its first 24-court facility in Arizona Mills Mall in Tempe, Ariz., at Arizona Mills Mall. It is located in a 104,000-square-foot storefront that serves as an anchor for retail. The company plans to grow in the coming two years and open new locations in Minneapolis, Chicago, Dallas, and Oklahoma City, among other places. Billionaire financier Steve Kuhn, a Major League Pickleball founder, supports pickleball.
“Pickleball is truly the ‘Benjamin Button’ of sports,” Kuhn stated in announcing the brand new Arizona facility. “Every year the demographics of the sport are getting smaller and less. Pickleball offers the chance to transcend the boundaries which divide us – race, age or class to foster unity and bring joy to communities. This starts by being creative about the location. Pickleball’s future lies indoors.”