I visited Fenway Park last week on the eve of the 700th consecutive sellout. Luckily, they aren't counting concerts because I think the Dropkick Murphy's fell a little short earlier this summer. While it would have been easy to dismiss this run of success as "small ballpark + good team = 700 sellouts", my mind started to churn. There are some lessons to be learned from the Red Sox when it comes to leasing space in office buildings. Coming from a diehard Yankee fan, that's saying something. Of course, Fenway would sell out when the Yankees come to town. However, 700 sellouts means over eight years of selling EVERY game. That includes Tuesdays in April against the Twins or Royals when it's 50 degrees. Taking the recent economy in to consideration and the fact that the Red Sox typically have the highest average ticket prices in baseball, it's pretty impressive. So I came up with the following reasons for this run of success:
- Location: Fenway is easy to get to and it's in one of the largest markets in the country.
- Quality product: Ownership spends the money to put out a good/great team every year.
- Safety: I saw little old ladies in the Park, but also didn't feel overrun by security guards.
- Loyalty: Sox fans are passionate about their team and they draw from the entire region.
- Friendly staff: From the ushers to the concession workers, everyone was friendly, even to Yankee fans.
Now, you could say that all of these things were in place prior to the streak starting in 2003 and you would be right. However, the current ownership has also re-invested in the Park by adding seats above The Green Monster and in right field. They have fostered the culture of the intimate park, but enhanced the fan experience. And two World Series championships don’t hurt either.
When looking at commercial buildings that have experienced significant positive absorption in the past twelve months or have remained near fully leased through the economic downturn, there are some significant similarities.
We all know that sometimes, real estate is about location, location, location. When marketing a building, it's certainly something you can't change. You either have a prime location or you don't. In New Jersey, Jersey City has outperformed the market throughout the downturn and MetroPark has experienced over 250,000 square feet of positive absorption in 2011.
But location isn't everything. Having a higher quality product will help differentiate buildings within the same location. That includes offering more amenities than the competition. One Meadowlands Plaza has outperformed the market, at high rents, by having one of the most robust amenity packages in the market. Offer more and you can charge more. With that said, there's still a limit. The Yankees don't sell out because they overpriced the most expensive seats, even when though those seats include food, parking, etc.
Breeding loyalty among your tenant base may not help lease additional space, but it will help when it comes time to renew tenants or restructure their leases. This goes hand in hand with having a friendly staff. There are certain buildings in the market that have a transient tenant base because the landlords don't believe it's important to foster relationships with tenants. Granted, most landlords don't have the time or the corporate structure to meet with tenants. However, they do set the tone through property management. It's all about the corporate culture and the feel of the building.
So what did I learn in this mental exercise? That maybe the Sox have some lessons to teach not only other baseball teams, but maybe some landlords too. I just hope the season ends up the same way Thursday night’s game ended…with the Yankees on top.