This Week's Chicago Deal Sheet: Obama Presidential Center Museum Building Topped Off

Taylor Swift’s Eras tour sold almost 4.4 million tickets across 60 dates and grossed approximately $1.4B through mid-March. Beyoncé’s Renaissance tour raked in more than $579M, with more than 2.7 million tickets sold. 

Both of those tours were put on by Live Nation, an entertainment behemoth that has become entrenched in every crevice of the music industry. 

The post-pandemic focus on experiential retail has put a spotlight on music venues as drivers of foot traffic that increase dwell time. While not every music venue is equipped to host generational icons, the U.S. concert industry is a $36B market and growing, and commercial real estate landlords want a piece of the action. 

But independent operators, who anchor retail districts across the country, say they are being squeezed by Live Nation, and the Department of Justice has begun a push to break the company up. 

Live Nation reported its biggest year ever in 2023, with more than 145 million tickets sold and $9B in sales from just the year’s top 100 tours. First-quarter earnings posted last month pointed to another record year, according to the company, with revenue up 21% year-over-year to $3.8B. …

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The fate of San Diego’s $1.6B Research and Development District has taken on new importance as a main contributor to the financial struggles of a regional bank that happens to be the nation’s largest construction lender. 

RaDD, a 1.7M SF multi-use life sciences project with no lab tenants months before its opening, was at one time heralded as a major economic driver for San Diego, with its developer securing $915M worth of financing from Bank OZK. Now the project is on a shortlist of reasons Citibank analysts lowered Bank OZK’s rating from “buy” to “sell.”

Developer IQHQ broke ground on the project in 2021, as life sciences real estate owners gasped for breath trying to keep up with tenant demand. RaDD’s struggles and the ripple effects of those challenges show how quickly developments can go from transformational to symbols of rapid shifts in the market.

“Real estate is inelastic,” Newmark Executive Director John Hundley said. “You can't snap your fingers and have it delivered. It takes a long process. I think we are experiencing the inelasticity of real estate in that some of these larger projects downtown are delivering, and the marketplace has changed dramatically since they were originally conceived.”

RaDD also represents a significant chunk of the new life sciences space downtown, a new lab submarket struggling due to decreased demand. And it’s a substantial weight on IQHQ, the hometown developer that bet big on RaDD as a transformative project for downtown, the city and the region’s life sciences…

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