Chloe Keslar, who was in Las Vegas this week with three girlfriends to celebrate birthdays, did something she admitted she would typically not have considered as part of a tourist itinerary in Sin City: venture off the Strip.
What led Keslar of Kansas City and her friends to take a short Uber ride in sweltering 100-degree temperatures is an interactive attraction by arts production company Meow Wolf that she spotted on social media. It's housed at Area15, billed as the world’s first purpose-built immersive entertainment district. It features activities that range from a vintage arcade to an indoor zip line to a Grand Prix auto racing simulation.
“There’s nothing like this on the Strip,” Keslar said in an interview. She added she was surprised to discover there are a slew of other attractions at Area15: "It was really interesting. It's hard to make sure that you've seen everything."
In the span of a few years, after opening during the pandemic in 2020, Area15 has grown into one of the largest testing grounds for immersive entertainment in the United States. The venue has counted more than 13 million visitors and has turned profitable “very quickly” since its start, Jim Heilmann, vice president of expansion and development for Area15 and a retail industry veteran whose career stints included serving as the senior general manager of Las Vegas’ Fashion Show mall, told CoStar News. “This is like a mall of experiences.”
Area15 includes a main 200,000-square-foot building, housing Meow Wolf and most other attractions, and smaller buildings featuring other experiences. The complex also features large-scale artwork inspired by the Burning Man festival in Nevada's Black Rock Desert, Heilmann said.
The development marks a bet that a steady level of visitors are willing to travel 2 miles from the Strip, barring another major economic disruption along the lines of the pandemic that would once again damage Las Vegas' economy. While Area15's organizers say it attracts both locals and tourists, there are also risks in changing tastes and the cycle of economic booms and busts that could slow discretionary spending. There is also a wide array of entertainment options such as the Sphere arena on the other side of the Strip that are vying for consumers' dollars.
While it attracts attention in commercial real estate as a symbol of how a former lower-tier warehouse district can be redeveloped as a potential new tourist destination, not all customer reactions are positive. One common complaint of Area15 from visitors who gave it underwhelming reviews on travel website Tripadvisor often involved it being overpriced, with some describing the experience as "confusing" and a "visual overload."
Area15 generates revenue not only through leases with tenants such as Meow Wolf or Dueling Axes, an axe-throwing bar and lounge, it also operates in-house developed concepts or has revenue-sharing agreements with partners, Heilmann said, adding that what the property features is “constantly changing and evolving” to keep up with what's popular culturally.
Immersive entertainment has grown in popularity among retail landlords across the country with attractions such as Museum of Ice Cream and Museum of Illusions offering photo-worthy social media moments in New York, Chicago and other large markets. Meow Wolf operates five other permanent art exhibitions in Los Angeles, Denver, Santa Fe, Houston and Grapevine, Texas.
New York connection
Area15’s list of tenants and partners includes some big entertainment names. The site has added attractions including Netflix’s “Army of the Dead” virtual reality experience and a soon-to-open Lionsgate “John Wick” experience on a 20-acre plot of land that’s part of a total 80 acres that Fisher Brothers, a multigenerational New York real estate firm, bought in phases in the early to mid 2000s. Fisher Brothers Partner Winston Fisher serves as chief executive of Area15 as the project represents the firm's foray into what a spokesperson described as "immersive and experiential entertainment."
Area15's next phase is set for another 20 acres to be anchored by a 100,000-square-foot Universal Horror Unleashed experience opening next year, according to Heilmann. Universal Destinations & Experiences, the theme park unit of Comcast NBCUniversal, reached out to Area15 when it was looking to have a presence in Las Vegas. The venue will mark Universal’s first year-round horror experience globally, Heilmann said.
“We're obviously out there scouring the world for new concepts and ideas, but we also generate a lot of interest,” Heilmann told CoStar News, adding that Area15 has attracted visitors who are on average younger than those who frequent the Strip as well as families with children.
He added that “we're very selective about the types of experiences, the quality of the operation," he said. "We've created a platform here that all of these things can exist together. There’s not anywhere else that I'm aware of that's pulling in all of these different types" of concepts.
Area15 brings in locals too, he said. The entertainment hub hosts concerts and pinball tournaments among some 400 events every year.
The immersive entertainment industry, including live entertainment, family entertainment, theme parks and cruise operators, is expected to see "further growth" this year after it "finished strong" in 2023, thanks in part to "consumer demand for in-person experiences," according to a study by financial advisory firm Solomon Partners. There's been "significant growth" in site-based entertainment concepts that's seen increased openings since 2019, according to the firm.
New city district
The growth hasn’t gone unnoticed. The Las Vegas City Council in August tentatively approved an ordinance to create a new tourism improvement zone as the next phase of Fisher Brothers' development of its 80-acre plot. It's expected to feature housing, offices and retail as part of what’s being called the New Vegas Immersive District.
“As a result of [Area15] coming and bringing that visitation, there’s a level of dollars that are invested and poured back into the community in different ways based on the consumption of those visitors to our fabulous city,” Councilwoman Olivia Díaz, whose ward includes Area15 and the development area, told Las Vegas Weekly recently.
As Area15's path comes into clearer focus in Las Vegas, Fisher Brothers has paused its previously announced plan to bring the Area15 concept to another tourist hot spot: Orlando, Florida, home to Walt Disney World Resort and Universal Studios.
Still, Area15 is in active talks with partners in the Middle East and Asia, Heilmann said. The concept had a six-month pop-up showcase in Saudi Arabia in late 2022 and early 2023 at the request of its Saudi partners who had visited the Las Vegas location.
That “opened the door for us,” Heilmann said. “We have active conversations underway domestically and internationally. There are probably a number of opportunities throughout the globe for us to expand.”