Coworking Arm of Dallas Cowboys Headquarters Sells Out Offices
The Dallas Cowboys professional football team is opening a branded coworking concept this week at the team's global headquarters, a move that could be a catalyst for other high-profile brands to diversify into flexible office spaces.
Private offices at the coworking space called Formation have all been leased, even with a monthly rent of $1,075 in Frisco, Texas, about 30 miles north of downtown Dallas. For comparison, a coworking competitor in the area rents a private office for $700 per month.
Those other less costly coworking sites don't offer the chance to pass team executives in the hall, mingle with them at members-only events, and get special access to certain events. Professionals who want to go to work just like a team executive get that chance for hundreds of extra dollars a month.
This is just the latest move by Cowboys owner Jerry Jones Sr. to capitalize the team's brand, after putting the familiar blue star of its logo on AT&T's revamped corporate campus in downtown Dallas, at luxury apartments at the Star at Frisco and even esports teams.
That brand ambition has led the Cowboys to be ranked as the world's most valuable sports franchise with a valuation of $5 billion, according to rankings released by Forbes in July. This is the fourth straight year the Cowboys have snapped up the honor. Last year, the team was valued at $4.8 billion.
With a strong brand backing the team, the Cowboys could grow throughout the world to meet the demand of fans, said Paul Hendershot, CoStar's director of market analytics in Dallas. And other popular brands with a strong following could follow suit with similar facilities if the Cowboys effort proves successful.
"The possibilities are endless," Hendershot said in an interview. "The brand allows the Cowboys to diversify outside of football, which makes them truly unique. We haven't seen other sports franchises do it to this level. These real estate ventures, if anything, are helping the team's valuation."
The 18,000-square-foot Formation is opening Thursday at the headquarters for the Cowboys at The Star in Frisco. The Star is located near a 242-acre mixed-use development called Frisco Station scheduled to be home to Uber Elevate, a skyport that will host the first test demonstration flights in the world for Uber Air in 2020.
Formation will compete with other nearby coworking companies such as WeWork at Legacy West, Common Desk at Granite Park in Plano, and Serendipity Labs at Hall Park in Frisco that is across the street from the Cowboys.
Coworking has evolved from once being on the fringe of commercial real estate to one of uncertainty to now being a disruptive force to the market, Hendershot said. Formation is just one more iteration in that continued evolution, he added.
"This is just an extension of the industry evolving to a wider swath of the market," he said. "This will compete against the WeWorks of the world, but offer a more specialized product to Cowboys fanatics truly interested in the brand."
Even so, analysts, lenders and brokers say they are concerned that coworking, featuring flexible lease terms, could leave those space providers on the hook if tenants in a recession decide to move to less expensive quarters. As a result, some lenders consider a building worth less if it has a significant amount of coworking space, while WeWork commissioned a study that found that having WeWork lease part of a building could add value.
That debate about the merits aside, the perks of being a member of Formation include a "one-of-a-kind connection to the Dallas Cowboys organization and the Jones family," officials said.
Concepts available from the Cowboys include Field Formation, which is open workspace and rents for $525 each month, compared to other coworking's open desks in the area renting for $290 a month. Another concept called Fixed Formation includes a dedicated desk in which the space is curated by the team's executives and is located steps away from the Cowboys' corporate offices. Fixed Formation rents for $800 a month, compared to competitor's offering dedicated desks in the area for $420 each month.
Unlike the full offices, known as Full Formation, that are sold out, some individual desks are still available.
But no matter the category, every level of membership includes access to the work space hub's library, conference rooms, phone booths and welcome bar for networking.
Other amenities at Formation include members-only events featuring the Jones family and Cowboys executives, professional headshots, presale access to events at AT&T Stadium and Ford Center, the team's practice facility at The Star in Frisco.
Jerry Jones Jr., executive vice president of the Cowboys and chief sales and marketing officer, said Formation was designed to build a community of passionate business professionals ranging from entrepreneurs to executives to build symbiotic relationships with each other.
The Star in Frisco, a 91-acre mixed-use development housing the Cowboys, is being built by an affiliate of the football club. Construction is currently underway on Dr Pepper Keurig's new $200 million corporate headquarters building within The Star in Frisco.
