The Evolution of the Health Club as a Tenant in Retail and Mixed Use Developments; Pros and Cons.

By Gary D. Buchman

A health club used to be an unwelcome tenant in any retail shopping center.  The traditional thinking was

that health club patrons occupied the parking areas at peak shopping times and for extended periods, and then left without shopping at the other retail stores in the center. The number of people with a membership to a fitness center or health club continues to grow, with 60.87 million in 2017, up from 32.8 in 2000, approximately an 85% increase (see more here). As personal fitness has become the rage, the health club has become not only mainstream, but the anchor store and a requirement in both retail shopping centers and mixed-use and residential developments.

The move for more fitness centers has coincided with the transformation of the shopping center with traditional big box retail anchors into destination centers with restaurants, green open space, retail stores, and of course health clubs and health related uses focused on personal fitness and group related activities – all things one cannot do on the internet.  Circuit City has been replaced by Life Time Fitness, Equinox, or other fitness centers.

While this may have saved the retail shopping center, as a neighbor the health club can be hard to take.  The parking problem continues to be a challenge.  Absent a distinct and separate building, the noise and vibration emanating from a fitness center can deprive neighboring stores (next to, above and below the health club) of the quiet enjoyment of their space.  The slamming of heavy weights, vibrations and blaring music, all typical in health clubs, can create major disruptions to retail, office, and residential tenants alike.  Imagine doing eye exams while the walls and floors shake from the dropping of heavy weights, and as heavy bass vibrates through the walls from the cycling class.  Will you be seeing eye to eye with the health club?

Landlords must consider the location of the health club – preferably a separate pad site otherwise on grade or below, away from residences and professional (particularly medical) offices.  The onus should be on the health club to insulate the sound and vibration or discontinue the offending use.  Upgrading of walls and/or reinforcement or padding of floors and sound proofing the ceiling may be required.  The building structure generally must be considered.

The attraction of a health club as a tenant in a high end residential or mixed use building cannot, however, be denied. Landlords looking to add a fitness center tenant to their roster should contact their attorney to ensure their lease covers their unique needs of these tenants.

A partner in the real estate department of Sherin and Lodgen, LLP, Gary Buchman concentrates his practice in commercial real estate leasing, development and financing, and in franchising transactions. Gary has handled the acquisition, development, financing, and leasing of retail shopping centers and office and retail properties. Gary can be contacted by email at gdbuchman@sherin.com.