“It took 10 years to become an overnight sensation” is a common refrain from successful people. For example, Jeff Bezos said, “All overnight success takes about ten years.” The same is true about pickleball, a popular sport that combines tennis, badminton and ping pong. It was invented 59 years ago in Bainbridge Island, WA, but in the last few years, it “has been taking the nation by storm,” according to a CBS News Sunday Morning report in 2022.
In 2023, the Sports & Fitness Industry Association (SFIA) declared pickleball the fastest-growing U.S. sport for the third consecutive year. According to the SFIA’s 2023 “Topline Participation Report,” participation expanded 85.7% year-over-year and by “an astonishing 158.6% over three years.” The report states that sport added 8.9 million participants in 2022.
As a result, the number of new pickleball participants exceeded the number of total pickleball players in 2021. Over 36.5 million Americans have played the game at least once last year. These statistics highlight the unprecedented growth and increased awareness of the sport.
The SFIA estimates that due to the sport’s growth, 25,000 courts need to be built, requiring an investment of $900 million in the near future. The courts are smaller than tennis courts, about 44 feet long and 20 feet wide, so new courts must be built to accommodate the demand. In addition, the sport’s popularity has also led to growing demand for equipment used to play the sport; the racquets (paddles) and balls are also unlike those used for tennis.
Factors Contributing to the Sport’s Popularity
After the sport was invented in 1965, it gained traction in Washington. In 1984, Washington residents Sid Williams and Byron Olson formed the U.S. Amateur Pickleball Association (USAPA) and created an official rulebook. That same year, the first composite paddle was made by Arlen Paranto, a Boeing industrial engineer. USAPA changed its name to USA Pickleball Association in 2020.
In the new century, pickleball continued its steady growth, with 39 known places to play the game in North America as of 2003, according to USAPA’s website. Five years later, there were 420 places to play the game, and ABC’s Good Morning America aired a brief in-studio demonstration of the sport—the game’s first national media exposure. The robust growth in USAPA membership continued its steep upward trajectory over the next 16 years.
By 2022, the USA Pickleball National Championships drew about 2,300 registered players and professional players competed for $150,000 in prize money. Now, there are nearly 11.000 locations to play, according to USAPA’s website. Pickleheads.com estimates that there are 13,969 places to play pickleball in the U.S. The USAPA attributes the sport’s boom to its popularity at community centers, PE classes, YMCA facilities and retirement communities.
The pandemic year was a breakout year for the sport as it was featured on major TV networks and publications. The sport drew many new participants in 2020 because it was viewed as an excellent socially distant way to remain active. The equipment—paddles and balls— is affordable, and creating a makeshift court on a driveway or cul de sac with chalk and a portable net is simple. The total size of the pickle paddle market is estimated to be $152.8 million.
In addition, pickleball is an enjoyable, social and efficient exercise. A study by Western State Colorado discovered that pickleball players burned an average of 354 calories per hour, and it is an excellent alternative to traditional exercise for middle-aged and older adults.
Investing in the Sport
Publically Traded Companies
To profit from these trends, several options exist for investing in the sport. Two publicly traded companies involved in the sport are Life Time Group Holdings (LTH) and Skechers (SKX).
Life Time Group Holdings owns 130 athletic country clubs across North America and has the largest network of pickleball courts, about 750. For 2024’s third quarter, the company announced revenue of $693.2 million, up 18.5% from the same year-ago quarter. Net income was $41.4 million, an increase of 422.5% over 2023’s third quarter.
Another equity option is Skechers, now the sport’s official sponsor. The shoe company’s interest in pickleball began with the introduction of its line of Skechers pickleball court shoes, which were well-received by many pickleball players. Now, Skechers is the Official Footwear Sponsor of every major tour and organization in North America, including USAPA and the Carvana Professional Pickleball Association (PPA) Tour.
Caliber’s Pickleball at Riverwalk Opportunity Zone Fund, LLC
While companies also offer individuals the opportunity to become franchise owners of pickleball court facilities, those investments require the ability to run a 24/7 operation and hire employees. Caliber offers investors an opportunity to invest in a large indoor pickleball facility without the demands of day-to-day management.
Caliber is partnering with PURE Pickleball & Padel to co-develop a first-of-its-kind pickleball facility near Scottsdale, Arizona and the Talking Stick Resort & Casino. PURE Pickleball & Padel at Riverwalk is on track to become one of the largest and most advanced pickleball facilities in the United States and worldwide. Once complete, the facility will be more than 186,000 square feet and occupy a site larger than 11.44-acres at Riverwalk.
Caliber provides high-net-worth individuals and investment advisors who serve them access to sophisticated, private real estate investments that have been traditionally reserved for institutions. The Pickleball at Riverwalk Opportunity Zone Fund, LLC is one of the latest funds. The fund represents an opportunistic strategy or category, which typically represents the highest risk and rewards.
To tap into the robust growth in pickleball, the PURE Pickleball & Padel at Riverwalk is designed to become one of the largest and most advanced U.S. pickleball facilities. The facility has the potential to attract significant interest from pickleball enthusiasts worldwide, making it a premier destination for the sport.
The facility will feature 50 indoor courts, including 48 pickleball courts, a Championship court, a special event court and two Padel courts.
The Championship court has 228 seats with additional space to accommodate another 800 people with temporary bleachers for tournaments and events. Other amenities include a fitness center, a pro shop, a teen room, a restaurant, a specialty space for VIP and corporate events and a membership-based club with designated play open to the public.
The facility is located at a strategic spot, just off the 101 Freeway and East Via de Ventura in Scottsdale. An estimated 159,000 vehicles pass daily. Nearby major attractions include the Arizona Diamondbacks and Colorado Rockies spring training facilities, OdySea Aquarium, Top Golf and Talking Stik Resort. The location ensures high foot traffic and accessibility for the pickleball facility.
- Unique Tax Advantages: Investing in the Pickleball at Riverwalk Opportunity Zone Fund can potentially take advantage of significant tax benefits, including deferral of capital gains taxes and potential tax-free appreciation.
- Opportunistic Return Profile: Investors may have the opportunity to earn opportunistic returns with equity ownership of both the real estate and operating businesses of Pickleball at Riverwalk.
- Flexible Investment Options: Investors can be diversified, gaining exposure to this project while investing in a multi-asset opportunity zone fund or traditional real estate fund. Alternatively, investors can concentrate in this project, either directly as an opportunity zone or as a traditional real estate investor. Self-directed IRA investors may also invest in this project.
Please review our investment offerings to determine if investing in commercial real estate would be an advantageous way to add diversification to your investment portfolio and possibly unlock the potential of your retirement funds.
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About Caliber (CaliberCos Inc.) (NASDAQ: CWD)
With more than $2.9 billion of managed assets, including estimated costs to complete assets under development, Caliber’s 15-year track record of managing and developing real estate is built on a singular goal: make money in all market conditions. Our growth is fueled by our performance and our competitive advantage: we invest in projects, strategies, and geographies that global real estate institutions do not. Integral to our competitive advantage is our in-house shared services group, which offers Caliber greater control over our real estate and visibility to future investment opportunities. There are multiple ways to participate in Caliber’s success: invest in Nasdaq-listed CaliberCos Inc. and/or invest directly in our Private Funds.
Investor Considerations
The information contained herein is general in nature and is not intended, and should not be construed, as accounting, financial, investment, legal, or tax advice, or opinion, in each instance provided by Caliber or any of its affiliates, agents, or representatives. The reader is cautioned that this material may not be applicable to, or suitable for, the reader’s specific circumstances, desires, needs, and requires consideration of all applicable facts and circumstances. The reader understands and acknowledges that, prior to taking any action relating to this material, the reader (i) has been encouraged to rely upon the advice of the reader’s accounting, financial, investment, legal, and tax advisers with respect to the accounting, financial, investment, legal, tax, and other considerations relating to this material, (ii) is not relying upon Caliber or any of its affiliates, agents, employees, managers, members, or representatives for accounting, financial, investment, legal, tax, or business advice, and (iii) has sought independent accounting, financial, investment, legal, tax, and business advice relating to this material. Caliber, and each of its affiliates, agents, employees, managers, members, and representatives assumes no obligation to inform the reader of any change in the law or other factors that could affect the information contained herein.
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