Hitting the Stairmaster, step class and weights may be good for your health, but it’s not easy on buildings, which find health clubs to be tough, if lucrative, tenants.
The equipment requires sturdy floors, the loud aerobics classes need sound-resistant walls, and weight machines need plenty of room. Then there’s all those showers, the elevator traffic, and constant lights and televisions. In the world of real estate, in other words, sports clubs are high maintenance.
But they are popular, so club owners and landlords continue to dance with each other all over the city, hoping to match the right space with the right club despite a host of obstacles.
There have been a few matches lately to get both sides optimistic.
After more than five years of searching, Equinox Fitness Clubs landed a Soho location this summer: a roughly 40,000-squarefoot, three-level spot at 568 Broadway at the corner of Prince Street.
“If there was ever a 100 percent market for them it was Soho,” said Newmark’s Jeffrey Roseman, who represented Equinox in the deal. He said assembling the needed footprint was difficult, in part because of Soho’s long and narrow buildings and old zoning that encourages light industrial use over retail. There are also 10 expiring leases on the second floor that will clear room for Equinox.
Equinox has also expanded in Brooklyn. In August, the club signed a lease on Joralemon Street between Court and Clinton streets for 35,000 square feet of space. Cushman & Wakefield’s Gene Spiegelman, the broker for Equinox in the Downtown Brooklyn deal, said a six-month stretch elapsed between presenting the site to Equinox and signing the deal.
Also in August, Trinity Real Estate announced that New York Sports Club will open a new 22,200-square-foot fitness center at its 225 Varick Street building. “We definitely look at it as an amenity for the neighborhood and the building,” said Jason Pizer, director of commercial real estate leasing for Trinity Real Estate.
“It seems to be a much more vibrant market for health clubs,” said Roseman. He also recently signed a 20,000-square-foot space on Fourth Avenue in Manhattan for Sport and Fitness Ventures, the New York chain that bought Crunch gyms.
Still, searching for homes for sports clubs is harder today than a decade ago, when the city had a glut of empty office space. Back then, landlords were happy to unload space, those familiar with the market said. Now, the market allows landlords to be more demanding, and health clubs are typically not premium rent payers. Brokers say they are usually looking for a blended rate of $25 to $35 per square foot, and it can take years to find a club the right space.
Still, clubs say they bring something important to the table: They are adaptable. “Our competitive advantage is that we can take the space in any condition,” said John Epifanio, development manager for Town Sports International, which operates New York Sports Club as well as clubs in Boston, Washington, and Philadelphia. Rather than expensive ground-floor space, clubs are also happy to take upper floors.
Roseman also said clubs are more sophisticated than ever, easing landlords’ concerns. “It’s not two kids out of college opening a gym,” he said. “And I think that used to be the prevalent thought in peoples’ minds.”
Epifanio said he tries to convince residential developers and landlords that it’s in their interest to lease to an outside fitness club instead of creating their own smaller club that goes unused. “They think to themselves, ‘He’s right: Why would I set aside that space when I could get rental income from it?'”
Operators and brokers say more deals are likely. Epifanio said New York Sports Club is looking to serve new markets, although he did not specify where. Equinox is looking to expand. Roseman said he is looking for health clubs, though he did not say which. And Spiegelman said he is looking for 30,000 square feet in Midtown for an unnamed sports club. Asked how it was going, he responded with one word: “Tough.”
But Spiegelman said demand exists. He once helped Bally Total Fitness find a site on Tilden Avenue in Brooklyn, and the place took off. “People like to come in and lift weights and work out,” he said. “It’s a lifestyle thing.”