When consumers had no choice but to work out at home during the pandemic, fitness centers were one of the most significant tenant risks. Both mom-and-pop gyms and those that relied on niche fitness were viewed as a sector that wouldn’t survive until people left their homes. 

But gyms have made a remarkable comeback despite 22% of U.S. health clubs and studios closing permanently during the COVID-19 pandemic and losing $29.2 billion in revenue along the way, according to the National Health & Fitness Alliance (NHFA).

“We obviously saw activity in the sector drop severely during the pandemic, but they now represent 12% of all retail space,” said Brandon Svec, national director of retail analytics at CoStar. “It’s really been a mix of both national gyms like Planet Fitness and Crunch Fitness as well as mom-and-pop-owned gyms.” 

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According to their marketing materials, both Planet Fitness Inc. (NYSE:PLNT) and privately held Crunch Fitness — the No. 1 and No. 2 users of retail space in the fitness sector, respectively — need 15,000 to 25,000 square feet of space to operate. 

“Our analytics were not based on foot traffic but who is doing the most leasing,” Svec told Benzinga. He added that Planet Fitness targets predominantly value customers, referring to the company as “the Dollar General of fitness.” The gym’s membership cost, similar to Crunch, runs anywhere from $10 to $25 per month. 

But while franchise gyms like Planet Fitness and Crunch market large warehouse facilities to the casual fitness enthusiast, a few higher-end gyms are doing well post-pandemic and growing and evolving. 

Equinox Group has gyms in 10 states but offers more than 100 locations averaging 30,000 square feet, including 43 facilities in New York. Members pay a $100 initiation fee and $168 per month at the low end for access to one club. Memberships in larger cities can cost up to $28,000 per year. 

The company claims it’s experiencing “exponential growth” and recently announced plans to hire 5,000 “performance coaches” over the next two years “as a commitment to helping its members, who are increasingly demanding personal training options.” 

“This fitness performance (square-footage growth) runs so counter to everything that occurred during the pandemic when everyone bought a Peleton,” Svec said. “There’s a lot you can do in a fitness center you just can’t do at home. I also don’t think we can look past the impact of social media and the shift in how that’s affected gym usage across the population.”

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