CRE Breaks in to the Escape Room Trend

by | 05 February 2019

Believe it or not, the latest CRE phenomenon in the experience economy isn’t as ‘new’ as you think. The very first escape room game was invented in 2007 by the publisher of the free paper SCRAP, Takao Kato. Kato’s live Escape Room, inspired by the Crimson Room video game created by Toshimitsu Takagi, engages people in immersive entertainment. Since then, escape room creators have developed the concept with its intricate sets of clues, puzzles and riddles for enthusiasts all over the world, with themed games offered in Hungary, Poland and the UK and sparking professional leagues in competitive markets like China and Russia. Today, they’re popping up in properties throughout the U.S.

Escape rooms are a legitimate target for real estate brokers and landlords who want to fill vacancies or energize their properties. If you find yourself scoffing at this idea, keep in mind the exponential growth of pop-up concepts like the Ice Cream Museum, the Color Factory and even activities like axe-throwing, which have transformed office, retail, warehouse and other commercial real estate spaces into new entertainment gateways, increasing foot traffic and generating new revenue for landlords and investors.

So, what exactly is an Escape Room? Typically, it consists of a dedicated parcel of leased (and in some cases, owned) commercial space that hosts a team of 6-12 players locked—with permission I might add—in a windowless room. The newly matched cohorts work together to find a way to escape. The games typically last for 30 to 60 minutes and have become the next best experiential attraction for millennials and Gen Z’ers.

As of 2018, there were more than 2,300 escape room facilities in the United States, tucked away in vacant office spaces, abandoned industrial buildings, shuttered retail shops and the occasional strip mall. There is no surprise that escape room venues do well in central downtown areas, maximizing on highly trafficked neighborhoods, but they can also thrive off the beaten path, serving an overlooked community. And it’s clear that the competition for finding the right space, wherever it may be, will be fierce as entrepreneurs join game developers as key players in the next flavor of immersive entertainment.

Innovative entrepreneurs create an environmental extension when they select the less traveled, hard-to-find locations, adding mystery to the game itself. Outsmart Escape Rooms, for example, chose a former police station and jail in Buchanan, MI, to add a “sense of realism” and authenticity to the experience, while newspaper publishers in Dubuque, IA converted an empty company building into an escape room, and with it the bonus of a sizable profit, too. And even city Business Improvement Districts, like Georgetown in Washington, D.C., are putting skin in the game, welcoming the idea of escape rooms and other entertainment properties as anchors to their corridors.

Like any new retail concept, however, the planning and development phase can be extremely time-consuming and expensive. Escape room entrepreneurs know that making a blind choice is not the preferable option. A trusted retail advisor should be part of their team, to help them navigate the complexities of the commercial real estate market. In addition to circumventing known real estate pitfalls, a tenant rep advisor can offer guidance on how to choose an optimal location as they have an understanding of the zoning and known restrictions of an area and can help prospects to prepare a checklist to ensure compliance with proper permits. The viability of such an operation requires everyone involved—prospective business owners, landlords and brokers—to perform due diligence, as it remains to be seen whether the in-world experience of escape rooms will have any effect on square foot pricing.

And then there is the perennial question of how long this wave of immersive entertainment is likely to last. Buzzshot, a UK-based escape room software company, predicts 2019 will be the Year of the Escape Room. Founder Tom Parslow attributes the rise of escape room franchises, brand-approved experiences like Sherlock: the Game is Now and the introduction of augmented reality as some examples that will lend legitimacy to the rising trend.

What is your spin on Escape Rooms? Have you participated in one? Were you able to break out? I’d really like to hear about your experience. Tweet me @anjeesolankiCRE.

Anjee continues to be an insatiable enthusiast of all things retail. She’s a student of culture with a pulse on future shoppers and the fleeting trends constantly changing the retail landscape…driving retailers, landlords and developers crazy!

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