High-end gyms are no longer just places to sweat.
The most exclusive offer not only state-of-the-art equipment, gymnastics classes and spacious changing rooms with cold eucalyptus-scented towels and fine soaps, but also “third places”, places outside the home and work where people can mingle and socialize. This means gyms are now also leisure centers and event spaces. These are salons and spas. These are hotels and workspaces. And these are daycares.
At Chelsea Piers in New York, the sports and entertainment complex located along the Hudson River, members can work out before, between or after workouts in the gym’s lounge and shared workspace , which opens to a 44-foot ceiling and oceanfront view. The gym also hosts events, such as author talks and creative classes and workshops, for members. Nearby, high-end gym Equinox opened a hotel in 2019 at Hudson Yards and plans to open more across North America, Europe and the Middle East.
At Life Time, a gym that bills itself as a “country club” version of a health club, members can drop off their child before a workout for a fee and, at some locations, can get discounts. a private office or a Herman Miller office dedicated to its coworking space, called Life Time Work. A Life Time Work membership includes gym access and will cost you anywhere from a few hundred to several thousand dollars per month, depending on the type of workspace you want and the location.
Gyms, many of which were once an amenity attached to a hotel or office building, have now turned the tables and become the star attraction, offering hotel rooms and workspaces as part of their attraction. This type of equipment requires a lot of space – and now is the perfect time for projects that require large retail spaces: a fragile commercial real estate sector with many vacancies has opened up opportunities for large sports halls, as landlords desperately need anchor tenants who can generate foot traffic to help make their residential and office properties more attractive.
“There are square footages that have never existed before – second or third floor offices that you would have never created before because it was a tax firm or a bank ” said Sam Bernstein, chief operating officer of Chelsea Piers. “But they won’t come back. The space in our world is increasing.
In New York, a city known for its lack of space, the disappearance of department stores and offices has created vast spaces for luxury gyms. They have been able to take over large commercial spaces, ranging from approximately 30,000 to 175,000 square feet, by entering into long-term lease agreements, often before the spaces are built.
Equinox has 41 locations in New York averaging about 43,000 square feet, compared to low-end gyms like Planet Fitness, about 15,000 square feet on average, and New York Sports Club, about 25,000 , according to Trepp, a commercial real estate data company. , which compared the size of New York gyms with securitized loans.
Sports facilities have a habit of taking up unused property and space. They can expand into spaces that aren’t traditionally desirable in the real estate world, using windowless rooms below street level as locker rooms or as spaces for group exercise classes. Chelsea Piers took advantage of unused piers on Manhattan’s west side to build its flagship 150,000-square-foot complex in 1995, equipped with a six-lane, 75-foot pool; a rock wall; and three basketball courts.
Life Time began in Minnesota in 1992 and today has 1.4 million paying members and more than 200 locations across the country, mostly in the suburbs. It has taken up more than 54,000 square feet at its Penn 1 location in Midtown Manhattan, more than enough space for its seven pickleball courts and café-style lounge area and bar, where members can grab beers and other drinks on tap and watch each other play. Its other New York locations average 41,000 square feet. Its first Life Time Work in New York will take place next year in the Brooklyn Tower, which will also offer 110,000 square feet of space for sweating.
Pricing for the upcoming space in New York has not yet been determined, but Life Time Work in Ardmore, Pennsylvania, charges $588 for a salon membership, $776 for a desk and $1,958 for a private office. A Chelsea Piers membership starts at $220 per month in New York; the company declined to share its membership numbers. Equinox did not respond to interview requests for this article.
Life Time and Chelsea Piers can get these big spaces in large part because they sign leases lasting 20 to 25 years, with options to extend at the end of their agreement term. Most commercial leases in New York last from five to 15 years, and office leases can be up to 10 years.
“When you start to see these very long lease terms or those with built-in extension options, it’s because the developer is paying significant fixed costs up front,” said Cameron LaPoint, assistant professor of finance at the Yale School of Management. “They try to shape the property in a way that’s tailor-made for the tenant.”
This can be seen, for example, at Chelsea Piers in downtown Brooklyn, where the first thing a visitor sees – and smells – is a 75-foot, three-lane swimming pool. Mr Bernstein said the firm’s in-house design and architecture team worked closely with developer TF Cornerstone to reinforce the pool with steel beams visible through a bathroom ceiling. group exercises located just below.
Life Time chief executive Bahram Akradi said the company’s strategy was to “try to control 40, 50 years” in its existing spaces. Once its current leases expire, the company has the option to extend them for an additional 25 years. Chelsea Piers also has the option to expand its agreement to its six locations around the city, Mr. Bernstein said.
Mr Akradi said designing a Life Time gym was “not like an Aritzia store that you can convert into an Alo store”.
“It’s a more complex structure, so you have to have a long-term view,” he said, referring to the kind of space needed for all the bells and whistles that the theaters offer. luxury sports, such as basketball courts, cold pools and groups. exercise rooms designed for everything from hot yoga to spinning classes.
To realize this vision, Life Time reduced staff at its headquarters during the pandemic and eliminated sales positions and member promotions, allowing club amenities to speak for themselves, Mr. Akradi said.
Life Time and other high-end gyms have rebounded from tough times during the pandemic, when membership rates fell and 25% of all fitness clubs and studios closed in 2021, according to the industry group National Health & Fitness Alliance.
It’s difficult to predict, however, whether developers will continue to spend big on gyms, Mr. LaPoint said, especially with leases spanning decades. One area of concern that could jeopardize the current resurgence is stubborn inflation, said Chris Hudgins, research analyst at S&P Global Market Intelligence. He highlighted high membership fees as potential problems for customers if inflation continues to rise.
But for Mr Akradi, business was so good that “when you look at our numbers for 2024 and 2025”, in reference to membership prices and sales of gym purchases, it would appear that the pandemic “didn’t never happened.”
“We’ve reinvented the company during this time, and it’s significantly better than it was,” he said.