As esports matures, so does its real estate needs

CHICAGO, Oct. 19, 2021 - Esports has grown from a niche hobby to cross the threshold of a $1 billion industry in 2021, according to Newzoo Research. Well positioned to grow during the pandemic, esports is more popular than ever and is slowly evolving to a business model that parallels traditional professional sports, with a similar hierarchy of leagues, teams and individual players.

"Changing dynamics within esports itself have pushed the industry beyond an entirely online existence and toward an expanding physical real estate footprint," said Jim Renne, National Director, Sports and Entertainment, JLL. "Fans want a place to celebrate their favorite teams, and teams themselves are settling down in home cities and looking for local support."

In a new report, JLL Project and Development Services (PDS) creates a framework of real estate requirements across different members of the esports industry. The report identifies and explores three key categories of real estate needs for the esports industry: Retail, Team Training/Headquarters and Venues. Each category includes specific subcategories, different types of users and unique revenue models, as well as cost and complexity rankings for key components needed for the design and construction of each.

"New global sports do not come into existence often-and hardly ever with the speed that esports has grown," said Renne. "By categorizing each according to the needs of users in esports, our framework aims to provide a starting point for those looking to expand within esports."

* To view use type descriptions and intended users, please view the full JLL 2021 Esports Real Estate Research Report

As fans and teams look to build loyalty, another emerging trend in esports impacting real estate could be new requirements in some esports leagues mandating that teams be based in home cities and have venues where they can play home games. One example, the Overwatch League, planned to shift to home-city-based teams for the first time in 2020. The shift was delayed by the pandemic, but long-term trends continue to signal a home-team-based structure is coming. In the case of the Overwatch League, there are 20 teams split into Atlantic and Pacific divisions, and each team is based in a different global city and will eventually need a location for home games, even if it is just a temporary space at first.

"Between the heavy tech focus and a relatively young audience, a broad range of experimentation in space use and design will be seen in esports real estate," said Henry D'Esposito, Research Manager, PDS, JLL. "Exactly what will the physical footprint of each segment of the esports industry end up looking like? At the rate of esports growth, we may know sooner than we think."

Learn more about JLL's 2021 Esports Real Estate Research Report.

JLL Project and Development Services is a leader in the development, design, construction and branding of commercial real estate projects for the world's most prominent corporations, educational institutions, public jurisdictions, healthcare organizations, industrial facilities, retailers, hotels, sports facilities and real estate owners. Ranked No. 1 Top Development Company by Modern Healthcare, No. 3 in Building Design + Construction's 2019 Construction Management Giants survey, and No. 2 on Engineering News-Record's 2020 list of Top 50 Program Management Firms and No. 3 on their 2020 list of Top 100 Construction Management-for-Fee Firms, JLL's project management team comprises 6,800 project managers across 80 countries and is actively managing $99.4 billion under construction.