Real Estate Business
Event Space is a New Real Estate Asset Class
The market size of the event industry in the United States, measured by revenue, is approximately $5.6 billion in 2023. Globally, the industry is worth $890 Billion. The industry is growing by 4% per annum. Over 40 million Americans attended trade shows, conferences, and meetings each year. This is 12% of all Americans. Yet the real estate associated with all of this is not traded and is mostly government owned and operated. But it does exist.
As of now, there are 255 major convention centers with over 75 million square feet. None of these are privately owned and are government-run, institutional, and not conducive to the needs of a creative population of planners who want to create experiences. However, 75 million square feet is an industry by itself.
Stand-alone event venues not affiliated with a hotel or convention center are rare. The Glasshouse in New York City is the only one built to date. Corporate, Non-profit galas, and social clients are served at the Glasshouse. This privately owned 100,000-square-foot venue has proven to be a huge success.
The demand exists in all major markets for a newly built, privately owned event venue. As an alternative to historically old and outdated existing facilities, the new venues have state-of-the-art technology, luxury amenities, well-thought-out kitchens, flexible floor plan designs, event planning, branding opportunities, built-in suites, all furniture (tables and chairs) and flatware in-house, as well as internal Audio Visual capabilities. These are simply a few of the numerous features that newer venues have in store, allowing for a more diverse and open environment for every occasion. By having these avenues for accessibility, event venues unite form and function into an elevated experience for visitors and renters alike.
Simply put, the world needs new event venues that meet the current needs of a new generation, just like how luxury brands such as Aman, Four Seasons, Rosewood, and Mandarin Oriental have achieved their success by providing a different experience.
We all know the common real estate asset classes: Office, residential, industrial, student housing, single-family, self-storage and hospitality, including hotels. Well, now add the event venue.
Hotels are considered to be under the asset class, and Event Venues are the same. Both of these occupy real estate owned or leased, and the mode of service is typically characterized by rental rooms by the day. Both of these services also provide hospitality as well as food and beverage services, sometimes catering for large groups. Both have a commanding entry and sense of location. Both provide additional services to clients. Both operate on growth in average daily rate (ADR) and occupancy. Both work with repeat clients and referrals. Both make reservations in advance and for multiple days. Guest experience starts at the front door for both.
Until now, there has not been an independent large-scale event venue to evaluate.
Event Venues are a real estate asset class just like hotels, and real estate valuation is the same for both hotels and event venues.