Entertainment-themed tenants are hopeful the vaccine rollout will get more Americans into their establishments in the coming months, and there are signs that these brands are becoming bullish about opening up new units throughout the country. Americans in general are increasingly showing signs of COVID-19 lockdown fatigue. Entertainment based solely in the home, whether via board games, Netflix or Zoom happy hours, could very well be losing its appeal. Consumers will therefore be itching to find new thrills outside of their own four walls, and consequently entertainment venue brands appear to be gearing up to meet this demand. These brands are especially interested in opening up units in vacated big-box mall spaces, as well as within mixed-use developments, where the demographic base tends to consist of Gen Z and millennials.
E-Sports Venues Flourish
Many of these entertainment brands looking to expand are focused on e-sports, banking on the trend that those who have been forced to play video games at home will be ready to play socially and competitively amongst their peers. This outlook is buoyed by the huge spike of popularity in gaming during the recent shutdowns, not to mention the fact that cable sports channels aired e-sports competitions in place of actual live team sports games. Look for Nerd Street Gamers, Simplicity Esports and GameWorks to fall in this category.
Nerd Street Gamers plans to open approximately 20 of its Localhost sports and gaming units per year over the next five years. The brand raised $11.5M in February from the venture capital firm, Founders Fund to help with expansion goals. The majority of the units will be in approximately 3,000- to 5,000-s.f. spaces that are either adjacent to or have in-store configurations with the Five Below retail chain stores, primarily in retail strip centers and power centers. These units will be targeted in lower income neighborhoods where the average child does not have already have access to gaming equipment. The partnership with Five Below expects to help solidify that teen discount-focused audience in the 14- to 18-year-old range. Look for new growth to spring up in the West, especially Southern California, as well as the outer metro regions of Chicago, Detroit, Phoenix, New York and Kansas City, Mo. Nerd Street Gamers will also open up to 50 larger units, in the 5,000- to 20,000-s.f. range, near college campuses in highly populated regions over the next five years. These larger units will seek popular college-oriented co-tenants, such as BevMo! and Pizza Hut. Nerd Street Gamers provides consoles for in-person game playing, as well as sponsored tournaments at its arenas.
Simplicity Esports is looking to open at least 10 to 12 new units per year over the next three years. As a result of newly signed franchisees, the gaming-themed entertainment brand expects to open new units throughout California, Washington, Texas, Mississippi, Utah, Wisconsin, Michigan and Alabama. Beyond that, Simplicity Esports will look to grow in the Midwest, South and East, with the Carolinas, Tennessee, Wisconsin and Missouri potentially being targeted. Though its usual average unit is in the 1,200- to 3,000-s.f. range, the brand will begin opening larger units, in the 8,000- to 12,000-s.f. range. This is not only to factor in social distancing measures more easily, but also because of a request from commercial property owners who are looking to fill vacant large spaces in shopping malls (distressed or otherwise), strip mall centers and power centers, all spaces where the brand performs well. Simplicity Esports ideally looks for inline space in college towns, urban communities and suburban areas with a large percentage of tweens/teens and millennial-aged adults. Favored co-tenants include retailers that attract male youths, whether fashion or tech brands, such as Hot Topic, Zumiez, Vans, T-Mobile and Apple Store. After acquiring the PlayLive Nation brand in 2019, along with its 44 U.S. retail units which utilize a similar membership/walk-in console gameplay format, the units will eventually be rebranded as “Simplicity Esports Gaming Centers.” The social gaming lounge concept provides gaming console spaces for play purposes, as well as gaming merchandise for sale, and every retail unit will also offer e-sports competition tournaments.
Expect GameWorks to open three new units for the remainder of 2021 and then add up to five new units per year over the next two to three years beginning in 2022. GameWorks, which was acquired by ExWorks Capital in 2018, has filed a draft registration in order to go public within the next three months. The company’s goal is to raise $15M, which will be used towards further unit expansion. GameWorks has also received an additional $15M in 2020 from investors such as eSports Holdings LLC. The brand seeks out space between 20,000 and 35,000 s.f. in malls with heavy foot traffic, including enclosed malls, in communities in which a large demographic is in the 15- to 30-year-old range. Close proximity to office buildings is also a plus, as GameWorks caters to corporate team building events, as well as after-work happy hours. Locations with a high proliferation of tech-related industries are also sought after, as the video game component of GameWorks appeals to those working in this segment.
Space can be bi-level, second generation, such as a unit that will open in the Westfield Oakridge mall in San Jose, Calif., this year in a former Ethan Allen furniture showroom. The other two units expected to open by the end of 2021 will be located at the Stonestown Galleria in San Francisco and the Westfield Montgomery mall in Bethesda, Md. Sought-after markets will include those in the West, Midwest and South. Look for Raleigh-Durham, N.C., Boston, Portland, Ore., Miami, Philadelphia, Austin, Dallas, Salt Lake City, Boise, Idaho, and Los Angeles to be targeted. GameWorks is primarily known for its e-sports lounge area that houses current popular video games, up-to-date devices and consoles, as well as its game tournaments that are expected to surge in popularity post COVID-19. The GameWorks venues also feature arcades and its restaurant, The Works Kitchen.
Brands Mix Dining with Recreational Games
Many entertainment venue brands have a niche, such as Pinstripes, that caters to a more upscale fine dining/bowling audience and Chicken N Pickle, which encourages indoor/outdoor play in a dining setting. Yet others, such as Main Event, are all-encompassing, offering activities such as bowling, billiards, laser tag and arcade games, in addition to providing dining options.
Pinstripes expects to open five to seven new venues per year over the next 10 to 15 years throughout the U.S. The upscale Italian restaurant, bocce and bowling brand looks for 25,000- to 35,000-s.f. spaces, preferably with a patio area, in high-end Class A malls, in addition to ground-floor luxury mixed-use spaces, especially near residential and hotel developments. Markets targeted for future growth include thriving cities within the Midwest with a high proportion of millennials, such as Columbus, Ohio, and Kansas City, Mo., in addition to Los Angeles, Scottsdale, Ariz., Raleigh-Durham, N.C., Atlanta and Philadelphia. The restaurant chain has raised $25M from developers such as Simon Property Group and Brookfield Properties and will only open new units in sites where other high-traffic upscale tenants are already in place, such as Apple Store, Lululemon or Life Time Fitness.
Chicken N Pickle will be opening two units in 2021, in Overland Park, Kan., and Grand Prairie, Texas, and expects to open up to four units in 2022, maintaining that same growth for the next two to three years. The wood-fired rotisserie chicken fast-casual restaurant/pickleball venue is targeting the Sunbelt coastal states, as well as the Midwest regions of Omaha, Neb., Denver, Chicago and Minneapolis. The state of New York will also be targeted for potential growth. Even though its pickleball concept is geared for outdoor play, the brand has also had success in colder climates and the new Overland Park unit’s large yard space will become an ice rink in the winter.
The restaurant/entertainment brand can anchor any type of development, and its customer base will drive up to 30 minutes to its destination sites. Chicken N Pickle seeks space of 1.75 acres for its restaurant/courts concept (not including parking). Industrial space can be accommodated as well. The brand prefers to have structured office building parking adjacent to its restaurant concept, in which peak parking traffic does not conflict with its own peak hours. Potential sites can also be within close proximity to multifamily developments and hotels. Neighboring tenants can be similar entertainment-themed brands such as waterparks or billiards brands. The indoor/outdoor entertainment venue provides fast-casual dining, a bar area, pickleball, shuffleboard and bocce ball courts, and an outdoor lawn area. The brand also hosts pickleball lessons and tournaments.
Main Event received an $80M investment from RedBird Capital Partners in June of 2020 after it acquired a minority stake in the entertainment brand. The money will be used for new store expansion, and Main Event hopes to open approximately five to 10 new units per year over the next three years, beginning in early to mid-2022.
Look for growth to be focused on the Midwest, Southeast and Northeast, with Huntsville, Ala., seeing its first unit in early 2022, in a 50,000-s.f. former Toys ‘R’ Us at the Bridge Street Town Centre lifestyle center. Expect Kansas, Florida, Missouri and Arizona to see new units in the future. Main Event seeks out space in the 45,000- to 75,000-s.f. range on five to six acres in upscale suburban communities where there are no competing entertainment-like venues within a 20-minute drive. Its demographic base is primarily families, as well as young adults. Spaces sought out can be empty lots for new construction, as well as vacant large units, such as former movie theater and Sears sites, in new and existing markets in upscale suburban family communities, and ideally within five to ten miles of a college. Nearby co-tenants should be family dining restaurants, such as Olive Garden. Its large indoor buildings are suitable for social distancing measures, and its activities offered include laser tag, billiards, shuffleboard, bowling, zipline ropes, arcades and virtual reality play, as well as sports bar dining.
