The Rise of Live Entertainment in Secondary U.S. Markets: A Boon for Real Estate and Tourism-Driven Growth

The U.S. live entertainment industry is undergoing a seismic shift, with secondary markets emerging as powerhouses of innovation and economic growth. As primary cities like Los Angeles and New York remain dominant, smaller cities are leveraging investments in live entertainment infrastructure to drive real estate appreciation and tourism-driven economic returns. This trend, fueled by a $466.13 billion live events market in 2025 (projected to grow further by 2032), according to a Coherent Market Insights report, is reshaping the American urban landscape.

The Geography of Growth: Secondary Markets as New Hubs

Secondary cities such as Phoenix, Chicago, and Nashville are becoming focal points for live entertainment infrastructure. Phoenix, for instance, has invested heavily in transportation and hotel infrastructure to host events like the WNBA All-Star Game, while Chicago's McCormick Place-a 10.3 million-square-foot convention center-continues to draw millions of visitors annually, as noted in an Expert Market Research report. These cities are not only capitalizing on their cultural appeal but also integrating technologies like augmented reality (AR) and virtual reality (VR) to enhance audience engagement, per a WrapPro report.

Live Nation Entertainment, a global leader in the sector, is accelerating this trend. Live Nation's $1 billion investment in 18 new or revitalized music venues across smaller cities-including Allentown, PA; Birmingham, AL; and Riverside, MO-is projected to generate $2.9 billion in total economic impact from construction alone, with an additional $1.4 billion in annual local economic benefits once operational. An Expansion Solutions Magazine article estimates this initiative will create 37,000 U.S. jobs in 2025, including 15,000 in construction and related activities.

Real Estate Appreciation: A Ripple Effect

The development of live entertainment venues is directly correlated with real estate growth in secondary markets. In Wichita, Kansas, a $110 million mixed-use project adjacent to Equity Bank Park has revitalized the Delano neighborhood, incorporating luxury apartments, a hotel, and retail spaces, according to a NAIOP analysis. Similarly, Fayetteville, North Carolina, and Sugar Land, Texas, have seen downtown revitalization driven by minor league baseball stadiums, as discussed in a Clay Cove Capital perspective.

Tourism plays a critical role in this dynamic. According to a NIVA study, the independent live entertainment sector contributed $86.2 billion directly to the U.S. GDP in 2024, with an additional $66.9 billion in indirect economic output from fan spending on lodging, dining, and retail. For example, the Red Rocks Amphitheatre in Denver generated $717 million in economic output in 2022, supporting over 7,300 jobs, as shown in a Red Rocks economic study. These figures underscore how entertainment infrastructure attracts visitors, spurring demand for short-term rentals and long-term residential and commercial properties.

Tourism-Driven Economic Multipliers

The economic impact of live entertainment extends beyond real estate. An Oxford Economics report found that an out-of-town attendee spending $100 on a concert ticket could generate an additional $334.92 in local economic activity. This multiplier effect is particularly pronounced in secondary cities, where tourism revenue often accounts for a significant share of local GDP. For instance, Nashville's Music City Center, a 1.3 million-square-foot venue, has been credited with contributing $1.2 billion annually to the local economy, according to a Yahoo Finance report.

Moreover, hybrid event formats and immersive technologies are expanding the reach of live entertainment. Cities like Las Vegas, with its Sphere venue-a 50-foot-long immersive experience-demonstrate how cutting-edge infrastructure can attract both domestic and international tourists, further boosting local economies, per a WrapPro/Pollstar report.

Case Studies: Measurable Success

1. Birmingham, Alabama: The Coca-Cola Amphitheatre, part of a redevelopment plan for a former medical center campus, is set to open in 2025. This project is expected to generate $150 million in annual economic impact and create 500 permanent jobs, according to an AL.com article.
2. Allentown, Pennsylvania: Live Nation's new 1,600-seat venue will host over 200 shows annually, contributing to a projected 20% increase in local hotel occupancy rates, as reported by NBC Philadelphia.
3. Wichita, Kansas: The Delano neighborhood's mixed-use development has seen property values rise by 18% since 2022, driven by proximity to Equity Bank Park and associated amenities, according to the NAIOP analysis cited above.

Challenges and Considerations

While the potential is vast, challenges persist. Rising inflation, anti-competitive ticketing practices, and public subsidy debates remain contentious. For example, nearly two-thirds of U.S. stadiums receive public funding, yet economic returns for localities are often uneven, as discussed in a Findings Press analysis. Additionally, 64% of independent venues operated at a loss in 2024, highlighting the need for sustainable business models, according to a Pollstar report.

Conclusion: A Strategic Investment Opportunity

Secondary U.S. markets are poised to benefit from the confluence of live entertainment infrastructure, real estate growth, and tourism-driven economic returns. Investors and policymakers must prioritize long-term planning, ensuring that developments are inclusive and equitable. As Live Nation's CEO, Michael Rapino, noted, "These venues are not just about concerts-they're about creating jobs, revitalizing cities, and elevating American culture," in a Pollstar announcement. For those willing to act decisively, the rewards are substantial.