NBA finals: $25 million economic impact on host cities

Denver and Miami are expected to generate $25 million in revenue from the 2023 NBA finals, according to the Greater Miami Convention & Visitors Bureau. Daniel Kodsi, Royal Palm Companies CEO, joins Yahoo Finance Live to discuss the economic impact of the NBA games in Miami, as well as the city's real estate market.

Video Transcript

RACHELLE AKUFFO: Well, the Denver Nuggets took down the Miami Heat in game 3 of the NBA Finals. The Nuggets now leading the series 2 to 1 by earning a spot in the NBA Finals. The pro basketball teams are forecasted to generate at least $25 million in revenue in direct sales for entertainment, travel, and lodging according to the Greater Miami Convention & Visitors Bureau.

Well, let's break down the economic impact behind the NBA Finals with Daniel Kodsi, Royal Palm Companies real estate development firm CEO. Good to see you, Daniel. So talk about your role in this. When you--

DANIEL KODSI: Hi, good to see you too, Rachelle. Thanks for having me.

RACHELLE AKUFFO: Of course. When you look at this, sort of, welcome to Miami with the backdrop of the NBA Finals, what does this mean for your company?

DANIEL KODSI: So we're in the real estate. I'm a real estate developer, and so we develop right by the arena. And, of course, having sports is great. Miami Heat-- I was at the game last night. It was a tough loss, tough game. But look, eighth seed Miami plays the next-- plays Boston, now Denver, so, you know, it creates a lot of excitement around Miami. People travel from these different cities, they come to Miami.

And so it impacts us to the extent that we're actually developing projects. I developed a project called the Paramount Miami World Center. This is a project which is part of Miami World Center. This is adjacent to the arena. This is 27 acres.

It's a major urban development, second largest actually in the country. And this is where we have hospitality, retail, five blocks of retail, of course, residential buildings, commercial transportation, the Brightline station. The airport's 10 minutes away, South Beach, largest cruise terminal in the world.

So this converges, it's a very unique neighborhood to the extent that we're even adding more parks. We're going to have about 66 acres of park. And so this is a very unique neighborhood here in Miami. Being adjacent to the arena and all the excitement around the game definitely creates a demand for Miami real estate.

RACHELLE AKUFFO: And I want to talk about some of these prices. We're looking at ticket prices about $21,000, about $45,000 if you go through a ticket scalper. These are not people who don't have coins that are coming to these games.

So when you think about what they're spending on hospitality, on restaurants and things like that, how are you seeing companies cashing in on this? And how are they able to try and stand out when you have so many businesses in this space vying in the short window of time?

DANIEL KODSI: And so look, the overall Miami tourism, it's big. And it's not just the NBA, right? Here we have Lionel Messi who's going to be joining. This is recent news. It's all over. He's going to be joining our soccer club here or football, as we have to call it. We call it soccer here in the US. And so sports is big. We have F1s, we have a lot of events, creates a lot of tourism.

And yes, the prices do get-- and again, those were for very expensive seats. It wasn't-- not everyone in the stadium paid that kind for their tickets. And so it creates a demand for people coming to Miami. It is an affluent market. Just to give you one quick stat, our luxury-- even in the past 12 months, our luxury market sold meeting homes over a million dollars sold, over twice what we did in 2019. And so there's still demand for homes and real estate in Miami.

And again, I think it's a host of not just the Heat, but it's really all of the sports in Miami. It's an exciting time to be in Miami. Even our Florida Panthers right now are in the Stanley Cup Finals.

RACHELLE AKUFFO: So how do you see Miami positioning itself against, say, a Vegas, a place that's well known for its conventions and good weather as well. What edge do you think Miami is going to have there? They're doing things like trying to become the biggest crypto hub in the US as well in Miami.

DANIEL KODSI: Look, from a business standpoint, Vegas doesn't have the business environment. Think of the international presence we have. We have the largest global buyers in the United States right now that buy Miami real estate. We're the largest in the country. And so we have certain dynamics.

Think of financial institutions. We had 57 companies in the past year moved to Miami. So people are opening companies. People are moving to Miami. They're buying, as I mentioned, luxury homes. And so the impact is significantly different than, for instance, of Vegas.

Vegas is based around entertainment, conferences, conventions. We have that, of course, not at the same magnitude as a Las Vegas. But from an overall business environment, major corporations, these are creating professional jobs here in Miami. We've absorbed over a million square feet of office in the Miami market.

And so you're seeing a convergence of a lot of companies, people moving to the city of Miami. It's going to continue too. It's definitely slowed down since interest rates have popped up. But we still see decent pent up demand.

RACHELLE AKUFFO: And Daniel, of course, a lot of us have been talking about the whole air quality issue, especially with the damage coming down from Canada. You have the eruptions in Hawaii as well all contributing to poor air quality. I know that blue zones are something that you're building in to your buildings as well. Talk about those and what that means for really some of the growth and the longevity of the people who move to Florida and perhaps want to stay there.

DANIEL KODSI: Right. So we're building a project called the Legacy Hotel and Residences. It has three parts, a residential component, which is mostly micro-residence, mostly for second home buyers. And then we have a luxury hotel component. This is an a core hotel, again, luxury lifestyle type hotel and then a major wellness component. This is the blue zone center.

This is going to be a wellness center where it's based on the research. National Geographics, if you know anything about blue zones, National Geographics in the early 2000s went around the world, and they looked at where people live to over 100 years old and studied their cultures. And it wasn't just what they ate. It was everything from their lifestyle. They came up with what's called the Power Nine. And this is a lifestyle and how people live, how they socialize, how they interact with other people, how they interact with their community.

And so it's a full circle of life. And when you would come visit the Legacy Hotel and Residence, you come to this wellness center and it could be a life-changing event. You could go through diagnostics where you learn about yourself. You come out where you meet with a life coach that-- and again, this is-- a wellness coach in essence, not a life coach but more of a wellness coach that you come out.

And they guide you and they can give you a different view of your life and different ways of how you should live, what you should eat, supplements you should take. So it's going to be really a game changer here. Of course, longevity, everybody's interested in longevity. We all don't want to get old, and everyone's interested in staying young today. And I think this is going to be really, really impactful to Miami.

RACHELLE AKUFFO: That's fascinating because usually when you think of personalized homes, you think of the gadgets. You don't necessarily think of overall wellness being part of making some of those decisions. So that's really fascinating. A big thank you to Daniel Kodsi there, Royal Palm Companies real estate development firm CEO. Thank you for joining me this morning.