Fitness Tenants in the Era of COVID-19
Before the pandemic, the fitness industry was booming. They were one of the best tenants for retail centers and were among the top five retailer users in Southern California.[1] In 2018, the U.S. health club industry revenue totaled $32.3 billion, and more than 71.5 million U.S. consumers used health clubs, an all-time high.[2] The number of fitness centers in the U.S. increased by 24 percent since 2010 to 111,055 locations, and the figure was expected to rise to nearly 121,000 locations by 2024.[3]
However, with the advent of social distancing and shelter in place orders, gyms, along with theatres and restaurants, have been among the hardest-hit retailers seeking rent relief from landlords.[4] This has caused many to wonder about the fitness industry’s long-term viability and what bearing the industry might have on commercial real estate going forward. This report will explain the fitness industry’s status prior to the pandemic, how the industry has reacted to the new reality created by COVID-19, and its future prospects as a commercial real estate tenant.