'Sports and entertainment' proving to be a resilient market
The niche area of real estate services for pro athletes and entertainers is largely insulated from the broader economic downturn.
- Compass and Keller Williams are among the major real estate companies that provide agent specialists with training and education to work with professional athletes, artists and actors.
- The income of these high-net-worth buyers is often less affected by changes in the economy.
- This niche area of clients has more diverse needs for housing, such as buying or renting second homes near sports arenas or recording studios.
Wanted: Spacious single-family home in a gated community with plenty of amenities including a spa with sauna, large entertainment room, outdoor kitchen and multi-game sport court. Budget: $2-5 million.
That description fits the housing needs and interests of many professional entertainers, artists and athletes whose income and lifestyles are largely unaffected by the slowdown in the real estate market, say agents and brokers who work in this specialty area.
Because the earnings of these buyers may hold steady or even rise as the economy falls, demand is resilient in this niche area compared to the market as a whole, said Ben Moss, who heads the Compass Sports & Entertainment Division. Compass counts fashion designer Tommy Hilfiger, NBA star Kevin Durant and quarterback Tua Tagovailoa among the celebrities who have used its specialized real estate services.
"While many consumers are budgeting household expenses in anticipation of an economic slowdown for 2023, athletes — who have a contract in place — know the amount they are planning to make next year, at least at a base level," Moss told Real Estate News.
Clients represented by the Compass Sports & Entertainment Division extend beyond marquee names to high-net-worth individuals who work in these industries. "Our network is strong among the gatekeepers to those clients in the sports and entertainment industries, including business managers, sports agents and financial advisors," Moss said.
The division offers a range of white-glove services, from finding short-term rentals to helping entertainers purchase single-family homes, which can range in price from under $1 million to over $100 million, Moss said.
But the vast majority of the pro-sports and celebrity clients that Compass represents are buying homes in the range of $2 million to $5 million, he said.
Assistance from agent specialists often involves a "complex search" that demonstrates "how we take the best care of our clients that we can while continuing to build upon the relationships," Moss said.
"Our division handles a lot of seasonal rentals for clientele, which doesn't always involve the glitz and glamor," he said, noting that many football players rent residences where their home team is based for the playing season.
Community of agent specialists at Keller Williams
Compass isn't the only brokerage offering these specialized services. Keller Williams, Douglas Elliman and the startup Aston Rose also cater to this affluent subset of clients.
In 2021, Keller Williams introduced a dedicated "community" offering the services of agents from across the U.S. who have specialized training and education to work with professional athletes and entertainers. KW Sports + Entertainment is one of the fastest-growing segments of the KW business, according to company leaders.
Even though the overall real estate market is slowing down, KW reports strong demand by this select group of clientele who tend to buy and sell properties more often than the general public. These buyers have shown heightened interest in acquiring real estate during the market downturn, as there is greater investment potential or opportunities to get a deal on properties, according to Jordan Stuart, global director of KW Sports + Entertainment.
"If you're looking at a market with interest rates affecting sales, all of a sudden there is a smaller pool of buyers and less competition for properties," Stuart said. "Having a high-net-worth client who can forgo a loan and get a deal — their advisers love it."
Jason Ross, deputy director at KW Sports + Entertainment, said "more companies are looking for niches like this when it comes to luxury sales." Ross, who was appointed to his role in January, is responsible for driving sales, instilling brand awareness and recruiting sports-minded agents to the business to provide real estate services to professional athletes.
"We focus on continuing education for the agent specialists, practical scenarios and bringing in guest speakers to grow training and awareness," Ross said. "Keller Williams is all about coming from a place of contribution — giving back. That mindset is already instilled in all of our agent specialists who bring a passion for sports or entertainment to the table."