Can Fitness Centers Replace Grocery Tenants?

Mark Baziak

Grocery-anchored shopping centers are the hottest asset class for retail investors, thanks to their resistance to the Internet. As a result and for the same reason, grocery tenants have become one of the most sought-after anchor tenants by landlords—but recently fitness centers have rapidly grown in popularity. It makes sense. Fitness centers also have a resistance to the Internet and attract users several times a week, and they use roughly the same amount of square footage as grocery stores. The similarities have made fitness centers a popular alternative to grocery stores.

“Fitness has become a very positive tenant for centers. Like grocery, customers visit a fitness center multiple times a week,” Mark Baziak, senior managing director at Newmark Knight Frank, tells GlobeSt.com. “What is changing is that, unlike the old days where was a concern that people would work out and not shop, people are now wearing fashionable wear to workout, and they don’t feel as un-presentable. We are starting to see more cross shopping with that anchor. We are also seeing that through the recession, fitness centers continued to expand and get stronger, and they were one of very few tenants that did that during the recession.”