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Karting tracks take off across the country.

They expand and move indoors, allowing them to stay open year-round. They often debut in growing population centers, with operators building bespoke facilities or moving into vacant big-box retail space.

And they’ve become mainstays of multi-million dollar family entertainment centers that offer customers a variety of activities – not just go-karting but also bowling, arcades, ax throwing, laser tag, virtual reality, climbing, meeting rooms and restaurants. — all under one roof. These centers are thriving after the worst of the pandemic, with Americans eager to get out of the house and have fun together.

In November, what is billed as the world’s largest go-kart track is set to open in Edison, New Jersey, by Supercharged Entertainment. The Andretti Indoor Karting & Games chain, based in Orlando Florida, is mounting a nationwide expansion, with new locations planned for Arizona and Texas soon.

Industry giant K1 Speed ​​is expanding its reach with last month’s acquisition of Pole Position Raceway. Hotel Showboat Resort & Convention in Atlantic City, New Jersey, added an indoor go-kart track to its lucky snake arcade few months ago. Even Norwegian Cruise Line has put go-kart tracks — with the newest three-level — on some of its ships.

Go-kart tracks are “the icon of the day, if you will, for our industry because that’s what’s growing. … A lot of people are looking at them now to see if they can make them work,” Dennis said. Speigel. , founder and owner of the consulting firm International Theme Park Services. “I would say they are on their way back.”

After the worst of the coronavirus outbreak, families are eager to get out and participate in activities together, spending more on money than on goods, retail analysts say. Go-kart track operators said they see this as an opportunity. Visits from celebrities such as Billie Eilish, David Letterman, Brad Pitt, Bad Bunny and Ye, formerly known as Kanye West, added to the cool factor of the tracks.

Even so, some consultants predict that the trend and interest in karting could peak and then decline once the social activity trend subsides as the pandemic shows signs of easing. The sudden increase in interest could also increase the number of competitors to the point of causing an upheaval in the industry.

What’s billed as the world’s largest go-kart track is under construction in Edison, New Jersey. (Supercharged Entertainment)

Go-kart tracks became popular in the 1960s and 1970s, but concerns about their safety and operator liability dampened activity, according to Speigel. With advances in technology, cars are now electric and equipped with sophisticated safety features. And new installations are installing multi-level tracks, which replicate the effect of riding a roller coaster.

Today, the industry has outgrown the family operations of yesteryear and is attracting investors from Wall Street.

“These are all companies with very smart people behind them and a lot of money,” Edison “Eddie” Hamann said, one of the leading members of Andretti Indoor Karting.

One of the company’s major backers is EPR Properties, a real estate investment trust focused on what it calls “experiential” and entertainment-oriented commercial properties. The Kansas City, MissouriThe New York-based REIT has also partnered with Topgolf at practice courses across the country.

Pedal go-karts are just one aspect of the general boom in family entertainment centers, according to Randy White, CEO of White Hutchinson Leisure & Learning Group, a consulting firm.

“A lot of that is due to vacant retail space, whether in malls or department stores that have closed,” he said. “And we have landlords who are looking for entertainment to try and drive traffic to their locations. So a lot of these chains are able to get great deals on real estate. And there’s also a lot of money from the private equity that is suing the industry for some reason I guess because they can’t put it somewhere else.

A rendering depicts the facility Andretti Indoor Karting & Games is planning in Grand Prairie, Texas. (Andretti Indoor Karting & Games)

Supercharged Entertainment already has a go-kart track in Wrentham, Massachusetts, and the new one it’s building in North Jersey is 37% larger. The racecourse at 987 United States 1 at Edison, the set will be 131,000 square feet, with just over 80,000 square feet dedicated to the track, according to Michael Dawson, the facility’s director of operations.

The cost of the Edison Center is approximately $25 million. It will include an arcade with 140 games, 19 ax throwing lanes, a restaurant and several bars, as well as a Drop-and-Twist tower.

“We’re building our centers to have something for literally everyone, whether you’re a family of four, whether you’re on a date, hanging out with your friends,” Dawson said. “We want to give something to Everyone. … We don’t want to be just for the old or the young.”

As for go-karts, they should attract a large audience.

“We have young kids driving,” Dawson said. “We have bachelor parties who love it. We have bachelor parties who love it. We have corporate events. It’s really wide. As long as you like roller coasters or a ride like that…because the track is multi-level and goes up, down, turns left, right. It’s kind of a roller coaster that you can control.”

Supercharged Entertainment’s biggest competitor in New Jersey is RPM Raceway in City of Jersey. This operator has recently renovated and made improvements to this track. RPM, which did not respond to an email and a phone call seeking comment, has six installs.

Pedal go-karts line up on the track at the Lucky Snake amusement arcade at the Showboat Hotel in Atlantic City, New Jersey. (Linda Moss/CoStar)

Edison’s track is located next to a Topgolf, as are many venues that Andretti Indoor Karting currently has or is opening, according to Hamann. Parents can hit balls at Topgolf and their families can experience various attractions at its centers, not only racing but also bowling and laser tag. Andretti Indoor Karting is also looking for neighbors such as restaurant and entertainment chain Dave & Buster’s in locations it is considering, according to Hamann.

“We like the synergy with other attractions, other entertainment brands like Topgolf,” he said. “Most of our locations are next to Topgolf. … Their customers are very affluent and we are financed by [EPR Properties] who also funds these golf clubs.”

In Orlando, the Andretti go-kart track and adjacent Topgolf attract about 3 million people a year, according to Hamann.

Several members of the Andretti racing dynasty, including champion and legend Mario, are involved in Andretti Indoor Karting. Hamann started the go-kart business years ago by teaming up with his friend John Andretti, who is the son of Mario’s twin brother, Aldo. John died of cancer in 2020, but the “Andretti family are very involved in the design of the tracks and the appearance of the stores”, said a spokeswoman for Andretti Indoor Karting.

The company now has six locations: Orlando; Buford and Marietta, Georgia; and The Colony, Katy and San Antonio in Texas. And he has big expansion plans.

“We are either in [letters of intent] or purchased or have some type of engagement with about 16 properties across the country right now,” Hamann said. “Our goal, we think because of our investment, we can be in about 35 to 40 [sites] by the end of 2030-2031 that can support the type of investment we are making.

The company already has new track locations in cities including Glendale and Chandler, Arizona, as well as Albuquerque, New Mexico, and Fort Worth and Grand Prairie, Texas, according to Hamann. It is also considering locations in North Carolina and Illinois.

Andretti makes “huge capital investments” in its go-kart tracks, $40 million to $50 million, Hamann said. Properties range from 96,000 to 140,000 square feet and generate sales of $17 million to $25 million per year.

K1 Speed, based in Irvine, California, is the the world’s largest indoor kart racing operator and announces that by next year it will have 73 locations in seven countries and 23 states. But his market is really NASCAR and Formula 1 fans, “gearheads who want to go out and race against each other. … It’s very competitive,” according to Hamann. Andretti wants a wider clientele.

“We decided that if we want to make the type of investment that is going to generate the type of income that we need, we have to appeal to everyone, and not everyone wants to drive a kart,” he said. -he declares.

Andretti Indoor Karting’s facilities have meeting rooms for corporate clients to hold their events and presentations, and then employees can drive karts or do other activities for a few hours, according to Hamann. And there are go-kart tracks for all age groups, from 5 years old with “Mini Mario Karts”, junior tracks for 8-12 year olds and adult tracks.

The karts themselves are now “tremendous” pieces of equipment, according to Hamann.

“It’s a controlled environment,” he said. “If someone hits the bumper system, it absorbs 80% of the energy. … They have disc brakes. If you approach another car, you automatically slow down.”

Bowling is one of the family attractions now found on go-kart tracks, including those owned by Andretti Indoor Karting & Games. (Andretti Indoor Karting & Games)

According to Speigel, “It’s not your grandfather’s kart, OK. They get up and go.”

Andretti Indoor Karting and anyone involved in the family entertainment center business are all competing for consumer discretionary income in a time of high inflation. Hamann is still optimistic despite this challenge.

“Our business isn’t recession proof, but it’s recession proof, which means when things get tough and gas is $5, yeah [families] maybe not go out three or four times a month, but they will go out twice, because they want to spend quality time” together, he said.

White is not so optimistic.

“What’s happened is that there’s been a recent increase in the use of these facilities and people see that as a long-term trend,” he said. “But a lot of it is everybody’s trying to make up for what they’ve been missing for two years. . … It could drop off, so I think there’s going to be a lot of shaking, especially in the older facilities.