09 May The Intersection of Sports and Commercial Real Estate
The Cowboys’ coworking space, Formation.
With the recent announcement that the Dallas Cowboys are entering the coworking arena, we are now witnessing the emergence of a fascinating new real estate trend. The Cowboys are transcending traditional real estate investments in office space, retail, multifamily and, now, coworking, by leveraging the strength of its brand to become a commercial real estate juggernaut. It’s a fascinating study in brand loyalty, and it may hint at the future of our industry: buildings as brands.
As an organization, the Cowboys franchise is no stranger to wise real estate strategy. Establishing the franchise headquarters and the team’s official practice facility in a far north suburb may not seem like a play that would go on to become one of the nation’s most popular real estate developments. But by linking the team offices and practice facility with world-class mixed-use space, a luxury hotel, a private social club and restaurant, a 60,000-square-foot fitness center, and attractions for the team’s biggest fans, they’ve made The Star a destination in its own right.
With the announcement of Formation, their membership-only coworking space, Jerry Jones is once again revolutionizing the business of a sports franchise. At the precise moment that demand for coworking in the Dallas area is rapidly accelerating, he and his family are harnessing the popularity of The Star and leveraging the Cowboys’ brand recognition and loyalty to make us all sit back and reconsider what’s possible in the future of flexible workspaces.
Formation will include 18,000 square feet of executive coworking space, dedicated desks, and private offices for a limited number of end-users, as well as access to fitness facilities and entertainment and networking opportunities at The Star—all of which are consistent with Class-A office amenities and the exact environments in which coworking thrives. Further, the coworking space is located in the team’s headquarters, which promises to put members in direct proximity to the Cowboys’ ecosystem.
With Formation, the Joneses aren’t just providing an in-demand, relevant commercial real estate solution; they are creating an unparalleled value-add by linking their flexible workspace business with the world’s premier sports franchise.
Why The Venture Is Destined to Work
Professional sports teams—and collegiate programs, for that matter—have decades of experience developing brand loyalty. These are some of the most visible, most lucrative brands on earth, and they have the power to capture fans’ loyalty from childhood on.
For the Joneses to invest in a commercial real estate environment that capitalizes on those same principals of brand loyalty and combines them with the attractiveness of coworking—it’s revolutionary. As someone whose career has evolved from working in the world of sports to that of real estate brokerage (I previously spent a decade in sales and management with both the Texas Rangers and Dallas Stars), I can tell you that any landlord in the country would love the ability to retain tenant loyalty the way a sports brand can.
The Joneses have identified a new avenue for real estate investment by leveraging the Cowboys’ brand, and I have little doubt that the rest of the league is taking careful notes. It likely won’t be long before other NFL teams in large markets and some highly successful collegiate franchises follow the Joneses’ lead and begin leveraging their brands to enter the flexible workspaces arena. In partnership with Roger Staubach and Robert Shaw, the Joneses also are adding a luxury apartment tower at The Star—because high-end multifamily real estate is a natural progression from the sports and entertainment, retail, and coworking ecosystem they’ve built there. In the coming months and years, it will be interesting to see where the franchise takes their real estate investments next. I’m sure the whole industry will be watching to see if the coworking success of “America’s Team” ends up bringing coworking to teams across America.
Ryan Hoopes is a director in Cushman & Wakefield’s Dallas office.