How to Play the Private Pickleball Investing Game
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| By Karen Riccio |
Happy Labor Day!
We hope you get a chance to take a break from your own labor and spend some time with your family today.
Maybe have a barbecue … or enjoy your pool one last time … or even try your hand at pickleball.
Pickleball, a cross between ping-pong and tennis, has become the fastest-growing sport in the U.S.
Some 4.8 million people now play, almost double the number from five years ago, according to the Sports and Fitness Association.
Even if you have yet to pick up a paddle and try it out, you’ve probably heard about the sport … or literally heard the characteristically loud sound of a player’s paddle striking the hard plastic, whiffle-like ball.
The noise, characterized by decibel experts, is akin to a hammer striking a nail into a wooden 2-by-4. It’s loud enough, in fact, that the sport is suffering from the NIMBY (not in my backyard) syndrome.
There aren’t enough courts available to meet demand, and modifying existing tennis courts is neither a permanent nor popular solution.
The obvious shortage of built-from-scratch, official pickleball courts — and available real estate to put them on — has caused a rift between the tennis and pickleball communities.
The conversion, of course, requires that boundaries be painted directly on tennis courts in a color bright enough to stand out. While some players use movable nets on wheels, 34 inches high at its center, others simply lower the 42-inch tennis net to meet their needs.
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Unfortunately — or fortunately, depending on which side of the net you stand — the sport has expanded far beyond weekend warriors to competitive leagues, pro tournaments and the Olympics, eventually.
Despite the 10,724 pickleball courts scattered across the U.S., equating to four new facilities for the sport opening every day, that’s simply not enough to meet the tremendous demand.
CNBC predicts 40 million pickle players by 2030, which means at least 280,000 additional courts will need to be built to accommodate that growth.
And with real estate at a premium and in short supply in many places, you can’t just pave paradise and put up a bunch of pickleball courts.
But there’s a new trend that, so far, is music to the ears of all involved in the sport — and could be for you as an investor, as well.
Brick & Mortar’s Loss
Is Pickleball’s Gain
The retail apocalypse that swept through brick-and-mortar stores over the last decade or so has left in its wake large, empty shells of their former selves begging to be repurposed. Now, pickleball entrepreneurs are coming to the rescue.
With their high ceilings, large floor spaces and ample parking lots, the empty big-box stores can easily be converted into indoor sports centers.
And companies such as Picklemall — backed by Austin-based, billionaire financier Steve Kuhn and founder of Major League Pickleball — are repurposing empty retail spaces and malls for indoor membership clubs across the U.S. at a record pace.
The first of Picklemall’s clubs opened in August in Tempe, Arizona. It occupies a 104,000 square-foot-space previously used by At Home Stores, which closed in 2019.
Click here to see full-sized image.
The company plans to target 50 nationwide locations in the next 24 months. Other cities slated for Picklemalls in the coming months include Austin, San Antonio, Chicago, Minneapolis, Milwaukee, Oklahoma City, Tulsa, Madison and Bentonville.
Another company, The Picklr, operates six venues in Utah and Colorado. CEO Jorge Barragan told Business Insider that he expects to open 25 more locations this year and 150 in the next three years.
His prime real estate target? Empty stores.
The CEO even went as far as saying, “It’s almost like the gold rush. Who’s gonna get their footprint faster,” referring to when Barragan meets with real estate agents … who tell him that he’s the third or fourth pickleball business person who’s inquired about the space.
It sure sounds like a win-win all the way around. Owners of these empty stores can secure new tenants and income, while putting the precious real estate they’re built on to good use.
Indeed, pickleball continues its evolution from a social sport that grew out of a Pacific Northwest backyard and was named after Pickles, the dog … to a regulated one even real-estate bigwigs are chomping at the bit for.
In July, super broker Ryan Serhant became a co-owner of a Major League Pickleball team alongside the former NFL star quarterback Drew Brees.
That’s not all.
Tequila brand Casamigos is sponsoring pickleball tournaments (one of its founders, actor George Clooney, is apparently a fan of the game). Fashion label Alice + Olivia launched a pickleball clothing collection.
Startups — Recess, Nettie and Disco Country Club — are also betting big with their equipment and unique clothing offerings for the sport.
So, pickleball is fast becoming a hot business and investment opportunity on a number of fronts.
One of the best ways to profit from the sport, valued at $1.32 billion in 2022 and expected to reach $2.36 billion by 2028, is via the private equity space and companies in the early stages of development.
In fact, these pre-IPO deals — regardless of industry — almost always outperform the company’s post-public share performance.
For nearly a century, the doors to these lucrative deals were slammed shut to ordinary investors. Only venture capital firms and angel investors were legally allowed to invest in high-potential companies while they were still private.
But that’s no longer the case, thanks to regulatory changes and to veteran early stage investor Chris Graebe. He’s been at the forefront of this revolution, guiding retail investors toward high-potential private companies looking to raise funds.
Today, he’s lifting the velvet rope and inviting you to join his rapidly growing community of pre-IPO investors in the Deal Hunters Alliance. You can check it all out by clicking here.
Until next time,
Karen Riccio
