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We've been talking about it for years, but now the data proves it. 2025 marked a historic turning point in commercial real estate: for the first time on record, service-based retailers leased more space than goods-based tenants.
If you're still looking at gyms as risky, specialized tenants that create parking headaches, you're missing the single biggest growth driver in retail real estate right now. The "Amazon Effect" killed the middle-market department store, but it can't kill a squat rack.
Here is the straight breakdown of what's happening, why the big money is pouring in, and how we need to adjust our strategy.
THE NUMBERS DON'T LIE (2025-2026 DATA)
Historic Shift: Service retailers surpassed goods retailers in total leasing volume.
Crunch Fitness: Leased 4.27 million sq. ft. in 2025 alone (+48% YoY).
Record Demand: 77 million Americans now hold gym memberships.
Market Cap: Industry hit $45.7B, projected to reach $60B by 2030.
Leasing Share: Fitness now accounts for 8.8% of all new retail leases.
Who Is Taking the Space?
It's not just local CrossFit boxes popping up in industrial parks. The expansion is being driven by well-capitalized national chains absorbing massive footprints.
Planet Fitness: Roughly 2,700 clubs and aggressively targeting 160-170 new locations.
Crunch Fitness: The current leasing king, with 550+ clubs and 100+ new openings slated for 2026.
Life Time & Equinox: Domination on the premium end. Equinox is now Manhattan's largest retail tenant by square footage.
The Investment Case: Why We Want Them
I look for tenants that bring stability and traffic. Fitness brings both in spades.
1. Traffic That Traditional Retail Can't Touch
The average gym member visits 2-4 times a week. A high-volume fitness anchor can generate 500,000+ annual visits. These people don't just work out; they buy smoothies, grab coffee next door, and pick up groceries. They create an ecosystem.
2. True "Stickiness"
These aren't pop-up shops. Fitness tenants sign 10-15 year leases because moving is a nightmare. Once they pour concrete for showers and reinforce floors for heavy weights, they aren't going anywhere.
3. E-Commerce Proof
You can buy Peloton, but you can't download a community. While soft goods retailers bleed out to online competition, fitness has proven structurally immune to e-commerce disruption.
The Risks: What Can Bite You
Let's not pretend it's all upside. Here is where deals go sideways if you aren't careful.
Brutal Buildout Costs
Tenant Improvement (TI) allowances are running $75-$200 per square foot. Specialized flooring, HVAC upgrades, and locker rooms are expensive. If a tenant fails, you are left with a very specific, very expensive shell that is hard to repurpose.
The Parking War
Gyms require about 10 spaces per 1,000 sq. ft. Peak hours (6-9 AM and 5-8 PM) can choke a parking lot and trigger co-tenancy disputes with your other tenants. This is the #1 operational headache I see.
The Boutique Graveyard
There is a massive difference between a Planet Fitness corporate lease and a local franchisee running a spin studio. Boutique concepts (cycling, boxing, pilates) are showing cracks, with closures ticking up for brands like CycleBar and 9Round. The risk profile is completely different.
The Bottom Line
This is a structural shift, not a cycle. The "High Value, Low Price" (HVLP) chains like Planet and Crunch are the new grocery anchors—credit-worthy, traffic-driving, and recession-resistant.
My advice: Treat HVLP fitness tenants as institutional-grade anchors. But if you're looking at boutique studios, underwrite them like any other small business—scrutinize the operator, not just the brand.
Thinking of repositioning a vacancy or acquiring retail assets?
Let's review your portfolio against these new traffic patterns.
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