During the summer, VITAL Climbing’s rooftop rock wall often has as many as 100 members climbing at the same time, watching the sunset and drinking beers from the gym cafe.
“People go to gyms not just for rock climbing,” co-founder Nam Phan told us wealth. “They’re there to meet other people, socialize and climb with other people. That really solidified our design approach.
When the coronavirus lockdown forced many people to give up their memberships, luxury gyms, like all health clubs, fell out of favor. In addition to home office setups, fitness enthusiasts set up garage gyms and ordered Peloton bikes a lot of. But in the past few years, the high-end club’s customer base has surged again, and many are coming back for more than just the barbells.
“We change the way we travel”
Life Time opened its first club in New York in 2016. Their newest location, Penn 1, is located in downtown Manhattan and spans over 50,000 square feet and features seven pickle courts, multiple fitness floors, a bar and cycling studio.
lifetime company
Memberships at Planet Fitness or Blink can range from $15 to $40 per month, while Life Time’s cheapest downtown membership starts at $269. If you want to enter the pickleball courts, there is an additional $60 fee. But then again, Life Time doesn’t just sell you a gym.
On the first floor of Penn 1, a lounge area overlooks the court, where members can sit and answer emails after a workout or pour themselves a draft beer from a bar-style tap in the corner. Up another flight of stairs is the recovery area, where people can use Life Time’s massage chairs or pneumatic compression sleeves, which look like giant blood pressure cuffs that wrap around your arms or legs.
lifetime company
Parham Javaheri, chief development officer of the company said wealth Life Time creates a complete health and wellness experience that keeps members coming back to the facility for more than a typical health club.
“We change travel patterns,” he said. “If you go to Life Time 12 or 13 times a month, you’re more likely to stop and shop there, buy groceries there, buy whatever you need on the way there and back.”
Prime real estate
It’s not just customers who are getting a new appreciation for all that luxury gyms have to offer.
The widespread shift to more people working from home is causing trouble for commercial real estate. Earlier this year, the national office vacancy rate exceeded the 20% threshold for the first time in history, according to Moody’s analysis. In New York City, the value of office space is expected to drop 28% by 2029, equivalent to a loss of nearly $50 billion for the city.
But for high-end gyms like Life Time, the city’s vacancy problem has opened the door to prime real estate, and Jawahiri said developers are taking notice.
“This is extraordinary real estate, with an extraordinary developer in the heart of Manhattan,” he said of the new Penn 1 location, where runners on second-floor treadmills can watch NBA teams step off buses and into McGrady’s Johnson Square Garden. “They could have rented it out to a number of other users, but they wanted amenities that people would use and desire.”
Top-notch gyms do more than just boost commercial real estate. In Henderson, Nevada, Life Time Living offers signature memberships to a 162,000-square-foot club just feet from its luxury condominiums. Javaheri said Life Time has brought more rents per square foot and higher tenant retention rates to residential projects.
Life Time Work, which has 15 locations across the U.S., is opening a new 110,000-square-foot club in Brooklyn Towers that will complement thoughtfully designed coworking spaces such as meeting rooms, open workspaces and private phone booths.
“When we closed the Brooklyn Tower deal, there was office space available,” Jawahiri said. “We were showing developers the concept of a job for life, and it was a given for them.”
A few years ago, the overall landscape was bleak. Like hotels and restaurants, gyms have struggled during the pandemic. According to the Health and Fitness Association, 25% of health and fitness facilities in the United States were closed between March 20, 2020, and December 31, 2021.
But since the U.S. emerged from lockdown, those clubs that have been able to hold on have seen a frantic return to weightlifting and treadmill training. According to a report by ABC Fitness, in the first quarter of 2024, there were 184 million gym check-ins. This is a 60% increase over the same period in 2023 and almost double pre-pandemic levels.
Young people have been a key factor in the fitness industry’s rebound. According to ABC, nearly one-third of new gym sign-ups are from Generation Z, who invest more in physical fitness than any other generation.
Rick Caro is president of Management Vision, a consulting firm specializing in the health club industry, and a former director of the Health and Fitness Association. He said wealth Health clubs have been strong anchor tenants in commercial real estate. Gyms attract regular traffic from users who want a return on their investment. They promote surrounding retail development, and employers like being close to health clubs because they can often get group discounts, thus motivating employees.
“What’s exciting right now is how smart and creative people are taking this long-proven basic principle, but now they’re doing it a little differently or uniquely,” Caro said. “They’re doing it at a different price point. Different concepts are used for different sizes of facilities.”
VITAL’s co-working space emerged organically
Lon Rubackin, Senior Vice President, CBRE said wealth VITAL Climbing contacted him about five years ago, when the upscale bouldering gym was looking to expand to Brooklyn. Rubakin said that when the club opened in 2021, most members were “men” between the ages of 18 and 30.
VITAL’s monthly membership is not as high as Life Time or Equinox, but Williamsburg membership still costs $145 per month. To this end, members have 24/7 access to VITAL’s facilities. To complement the rock climbing, there’s weight training and cardio equipment, walking straps, a sauna, and a second rooftop rock wall that’s triggered by a fire pit and offers views of the Manhattan skyline.
There’s also a lounge-like area that stretches from the entrance to the first-floor rock wall, which Rubakin said isn’t exactly a co-working space but still encourages members to hang out for longer than the average workout session.
“People will exercise, then go hiking, then take a shower, and then go back to their laptops,” Lubakin said. “Then maybe three or four hours later they’ll take a break and maybe they’ll go on the treadmill. It’s a very unique situation.
Pan told wealth VITAL was never intended to include a shared office space, but it was something that happened organically. Unlike old climbing gyms that are often located in remote industrial parks, VITAL is located in the heart of Williamsburg. It’s close to people’s homes and already has existing open space. Eventually, people started carrying laptops and even installing computer monitors.
“The post-pandemic attitude is consistent with what we have already established,” Pan said. “People are working from home more, they’re craving community, and Vital happened to be there at the right time.”
The “golden age” of expansion
While there are some amazing new fitness clubs popping up around the city, there are still challenges in building the space needed for a lifetime or significant facility. Most of Life Time’s New York clubs are around 50,000 square feet, Javaheri said. VITAL is in a similar location in Williamsburg. That’s rare compared to the 15,000 or 25,000 square feet a small gym might have.
VITAL will be opening a new store on New York City’s Lower East Side that will be roughly the same size as their club in Williamsburg. CBRE’s Rubackin said the new space at Essex Crossing is only the second acceptable site he has found for VITAL in five years.
“A lot of buildings that could use tenants like this to attract people back just don’t have enough space,” Lubakyan said. “Imagine your average office building. It’s not designed to accommodate anything 50,000 feet tall.
Still, Jawahiri said Life Time is in a “golden age” of expansion. They need more and more space, and developers are starting to think about the type of luxury gyms they can offer.
“If it’s a good property, I think a good developer will look at the current downturn and see the opportunity,” he said. “They saw an opportunity to take back some space and reimagine their architecture. That’s where we came in.
