People are hitting the gym just as hard as they did before the pandemic, providing some much-needed good news for fitness centers and their landlords.
Many fitness businesses didn’t survive the worst of the pandemic, when public-health restrictions sharply curtailed operations and people feared infection. But since February, monthly visits to gyms have been, on average, about 13% higher than 2019 levels, according to retail-analytics firm Creditntell, which analyzes location and financial data.
The resilience of in-person fitness is boosting mall and shopping-center landlords who have found that gym goers often stick around after workouts to shop or socialize.
“It’s sort of natural to come out of the gym and if there’s things around you that you can take care of—you do that before you get back in your car and go on to the next thing,” said Barrie Scardina, head of retail, Americas, for brokerage Cushman & Wakefield.
Data from Creditntell shows that the presence of fitness centers increases foot traffic to nearby stores. A retailer located in a shopping center that also has a gym receives, on average, 2.5% more visits a month compared with the same retailer’s other locations in centers without fitness businesses, Creditntell said.
Niche and local fitness studios amplify foot traffic to nearby tenants a bit more than national gym chains, according to Creditntell.
Adam Schwegman, partner and senior-vice president of leasing for North American Properties, which develops and operates mixed-use properties, said boutique studios offering workouts that appeal to female clientele, like barre classes, are particularly good at generating business for nearby stores. Despite the disruptions caused by the pandemic, he said he still sees fitness centers as desirable tenants.
“Just as bullish, would probably be a good way to put it,” Mr. Schwegman said.
Mall landlords have found that gyms are a good way to bring in customers during otherwise quiet times of the day, like the early morning hours and after work, said Ed Coury, managing director at RCS Real Estate Advisors. But Mr. Coury said he believes the body blow the industry took from Covid-19 has left both landlords and most high-end gyms still hesitant about investing significant capital in new locations.
The pandemic slammed gyms, with about a quarter of the 57,600 health and fitness facilities that were operating in March 2020 permanently closed by the beginning of this year, according to IHRSA, a global health and fitness trade association. IHRSA hasn’t tracked how many new businesses opened during the pandemic, but commissioned a poll in January that found the number of paid gym memberships in the U.S. had increased 3.8% since the beginning of 2020.
Rick Caro, founder of IHRSA and president of the fitness-consulting firm Management Vision Inc., said gyms in major cities and office-dependent neighborhoods are still struggling, but the industry overall is recovering.
Infection concerns and the soaring popularity of at-home workout equipment such as Peloton bikes raised questions about whether people would want to exercise in communal settings again.
Now, demand for Peloton bikes is plunging while gyms and fitness centers are seeing foot traffic and revenue recover. Sales per square foot at gyms reached $108 in July, a 24% increase from January 2021 and only slightly below prepandemic levels, according to Datex Property Solutions, whose real-estate portfolio-management platform tracks rent payments from thousands of shopping centers nationwide.
As the money rolls back in, gyms are again paying rent. Collections from eight national fitness chains tracked by Datex have steadily improved this year, and were only about 2% lower in July compared with 2019.
“The numbers all point to the category in general being healthier, getting healthier,” said Mark Sigal, chief executive of Datex.