Before the pandemic hit, manyretail landlords saw gyms as a lifeline. 

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"A lot of soft goods retailersthat were big anchors of shopping centers have closed their doorsas they've been impacted by E-commerce," says Nick Banks,principal, managing director and global leader of Avison Young'sretail affinity group. "Pier One is an example. As they wereclosing most of their locations, gyms were backfilling those spacesthat were left unoccupied."

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The gyms didn't just fill space,they also brought energy, visibility and foot traffic to shoppingcenters, even if they tied up parking space.

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"Even though there were stillsome of those parking concerns, it was better than having a bigvacant space that was just empty, and nobody knew what we weregoing to do with it," Banks says. "So before COVID, gyms were oneof the bright spots of retail that we're occupying big chunks ofspace. So it was a real success story."

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Then COVID-19 hit and gymsclosed. Even now that they're reopening, usage isn't close to whereit was. "With COVID, health clubs are just battered because of the natureof their business with shared equipment and people exercising inproximity to other people," Banks says. "They've suffered as muchas restaurants."

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The data supports that. As of theweek of June 29th, foot traffic in the fitness industry was down49.6 percent, which was an improvement from being down 52.1 percentthe week before, according to Placer.ai, the foot traffic analyticsfirm.

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As they've hemorrhaged revenue,some gyms, including Gold's Gym International and 24-Hour FitnessWorldwide, filed bankruptcy, which forced hundreds of health clubsto close completely.

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While there is pain in thefitness club sector now, Banks sees an opportunity for theremaining chains to grow their business afterCOVID-119. 

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"I think the ones that survivewill get stronger and bigger, but I don't think health and fitnessis going away as a category," Banks says. "There is a social aspectof going to a gym. There are things that you can do there that youcannot replicate at home. Even if you tried to work out at home,you can't replicate the energy and the social aspect of working outin a place with other people."

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The continued importance of gymsshould be good news to other retailers.

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"I think you could go through anycategory of retail, and there are going to be clear winners andlosers that emerge from this," Banks says. "I think there has beena continual trend towards health and fitness and gyms and other[retail] businesses have benefited from that. I don't see thattrend diminishing." 

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If anything, Banks thinksCOVID-19 will show people the importance of being healthy. "WithCOVID and what's going on in the world right now, there is evenmore of an emphasis on health and wellness," Banks says. "Healthclubs fit into that dialogue."

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Leslie Shaver

Les Shaver has been covering commercial and residential real estate for almost 20 years. His work has appeared in Multifamily Executive, Builder, units, Arlington Magazine in addition to GlobeSt.com and Real Estate Forum.