Luxury Gyms Are No Longer Just Places To Sweat: They’re Becoming Cities Within Themselves
High-end gyms are transforming into comprehensive lifestyle hubs, offering everything from co-working spaces and childcare to full-fledged hotels and entertainment venues – a trend fueled by the changing landscape of commercial real estate and the desire for a holistic wellness experience.
Key Takeaways:
- The rise of the "third place:" Luxury gyms are not just about fitness; they’re becoming spaces where people can work, socialize, and entertain themselves, blurring the lines between traditional gym spaces and "third places" for community and engagement.
- A golden opportunity for large-scale projects: Vacant commercial real estate, particularly in major cities, is creating a perfect storm that benefits high-end gyms looking to expand. These gyms are signing long-term leases, often for previously unsuitable spaces like second-floor office buildings, allowing for expansive facilities.
- Comprehensive amenities are the new norm: From dedicated co-working spaces like Life Time Work to in-house childcare and even full-fledged hotels like Equinox Hotels, luxury gyms are offering a full-service experience that goes far beyond the traditional fitness center.
- Long-term vision for a lasting impact: These gyms are taking a long-term view, committing to 20-25 year leases, transforming spaces with custom designs and architectural features to cater to their extensive amenity packages.
The Transformation of the Gym:
Gone are the days of gyms as simple fitness studios. These luxury spaces are now vying to become one-stop lifestyle hubs, offering a curated experience that caters to all aspects of a member’s life. This shift is largely driven by the changing needs of consumers, who are increasingly seeking a holistic approach to wellness that encompasses physical, mental, and social elements.
"There’s square footage opening up that never existed before — second- or third-floor office space you would never do before because it was a tax firm or a bank," said Sam Bernstein, chief operating officer of Chelsea Piers. "But they’re not coming back. The space in our world is increasing."
Expanding on Unused Spaces:
The availability of large, vacant retail spaces, especially in cities like New York, is a direct result of the decline of department stores and a shift away from traditional office spaces. These vacancies have become a gold mine for luxury gym operators. They are increasingly taking over large spaces, ranging from 30,000 to 175,000 square feet, securing long-term leases that act as a stabilizing force in a volatile commercial real estate market.
This isn’t a new phenomenon. Gyms have a history of adapting to unused spaces, utilizing them in creative ways. Chelsea Piers capitalized on the unused piers along the Hudson River in 1995 to create its expansive flagship complex, featuring a pool, rock wall, and basketball courts.
A Holistic Approach to Wellness:
The rise of holistic wellness is evident in the amenities these gyms are offering. Life Time, a gym chain that bills itself as a "country club" version of a health club, has dedicated co-working spaces, Life Time Work, in addition to childcare services. This allows members to work, exercise, and take care of their families all in one location.
Equinox has gone a step further, opening a hotel in Hudson Yards in 2019, and plans to expand its hotel chain to other locations worldwide. This commitment to offering the complete lifestyle package reflects the growing demand for convenience and integrated living experiences.
Investing in the Future:
The long-term leases and custom designs these gyms are investing in signal a commitment to longevity and a vision for the future of wellness.
"When you start to see these really long lease terms or ones with extension options built into it, it’s because the developer pays some big fixed costs upfront," said Cameron LaPoint, an assistant professor of finance at Yale School of Management. "They’re trying to mold the property in a bespoke way to the tenant."
Life Time, with its focus on "controlling 40, 50 years" in its spaces, shows its dedication to building a lasting presence, and its commitment to creating unique spaces that will accommodate the ever-evolving health and fitness landscape.
Challenges and Considerations:
While the trend is booming, there are challenges ahead. One major consideration is the potential impact of inflation on membership fees. High membership rates could become a point of contention for customers if inflation persists.
Another factor to consider is the long-term viability of these ambitious projects, particularly with leases that stretch decades into the future. The success of this trend depends on continued innovation and the ability of these high-end gyms to cater to the evolving needs of their members.
Conclusion:
The transformation of the high-end gym is a testament to the evolving landscape of wellness and the increasing demand for integrated lifestyle experiences. These luxury gyms are redefining what it means to “sweat” by offering comprehensive amenities and community spaces, blurring the boundaries between fitness, work, entertainment, and social life. With their long-term commitments and innovative offerings, these gyms are shaping the future of wellness, one space, one amenity, and one "third place" at a time.
