Effect of new industries on CRE
What do you guys think will happen in the future with real estate in regards to new industries such as cannabis, eSports, etc. My advisor and I were talking about this the other day in regards to eSports for example. What will the plays be here you guys think?
Filling in since you dont have a response yet. In your two examples I'd respond with "niche at best."
eSports is simply just not relevant from a RE perspective. Perhaps if you owned a convention center or sporting venue you would want to look at that has a part of your total sales but "eSports" in general is not really going to affect anything in the major food groups. Outside of some pockets you could take the entire NFL apparatus and remove it form the economy and nothing would really change. If the NFL wouldn't affect the real estate market eSports isn't.
Cannabis on the other had seems to be helping Class B-C product in recreational states. One reason its lower quality product in general is because most landlords that are REITs, HNW Families or have money coming from institutional sources will not lease to that industry while it is still illegal federally. That leaves local investors as the primary landlords for that industry. Industrial is seeing some absorption from that industry but in the current economy there are replacement tenants; cannabis biggest effect is on retail in certain cities in recreational states. So to see some benefit from an industry like cannabis you need to own retail, in urban locations in recreational states, you're getting very specific and moving away from any type of effect on the RE market as a whole.
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