Smaller Gyms Struggle in a Search for Spaces

“Finding a studio in New York has been a challenge, to say the least,” said Joey Gonzalez, the chief operating officer and a co-president at Barry’s Bootcamp. “I would travel from Los Angeles to New York every quarter to look at spaces, but I finally decided I just had to pack up and relocate until we found something here.” The studio, which has a military motif, has a retail area with several clothing racks, a juice bar, bare-bones locker rooms and a darkly lighted studio space.

In the last few years, New York has seen a proliferation of niche gyms, with studios that offer only personal training sessions, or focus on jumping rope or using ballet barres. Driving the trend, fitness experts say, is New Yorkers’ desire to make their workouts more efficient in less time, and to have a more social outlet than what is offered at the traditional full-service gyms.

“It is efficiency, effectiveness and engagement — the three E’s,” said Jonathan Fields, a fitness consultant. Smaller gyms can be more efficient because there are no large crowds and long wait times for equipment, and more effective because the workouts are more focused with plenty of one-on-one attention. There is also more social engagement, Mr. Fields said. “In the larger clubs, you walk in the door, put on your headphones and zone out to music or the TV,” whereas in smaller studios there is a higher premium on socializing.

Rachel Swanson, a marketing director at Glamour magazine in New York, is giving up her membership at a full-service gym to focus on regular boot camp workouts and classes at a nearby yoga studio. “The boot camp makes you work out harder than you would on your own, and it is also a social thing — you feel a part of the community when you come here,” Ms. Swanson said.

While there is plenty of demand for niche fitness facilities, the search for real estate is a battle. Gyms not only face high rents, but they also have far more space constraints and physical demands than typical retail tenants. They require extensive plumbing, for example, for multiple showers and toilets; electricity to power the exercise equipment; and soundproofing and reinforced floors to shield neighbors from booming sound systems and the crash of weights. Often they also require high ceilings and open, column-free space that is at a premium in Manhattan.

“Health clubs must consider a lot of factors beyond just the right location or size space,” said Jeff Lagowitz, a corporate managing director in the national retail services group at the brokerage firm Studley.

Five years ago, SoulCycle opened its first spinning studio in a cramped space in the rear lobby of a building on West 72nd Street. Now, SoulCycle is planning to double the number of its Manhattan locations to eight by the end of 2012, as well as expand into New Jersey, Connecticut and California. It also has two locations in the Hamptons, and will open a third Long Island branch, in Roslyn, by the end of this year.

This September, it will move out of its original location and into a 2,000-square-foot storefront at 350 Amsterdam Avenue, on 77th Street. The Related Companies, which owns the Equinox gym chain that acquired SoulCycle this past May, owns the building.

“One of the amazing things that Equinox can give us is access to real estate,” said Julie Rice, who, along with Elizabeth Cutler, founded SoulCycle. “This is what we really needed to help grow our business quickly,” she said.

Not everyone can strike a partnership with Equinox. Ariane Hundt, who started her popular Brooklyn Bridge Bootcamp four years ago, has been searching for a permanent home since spring. In the meantime, she is renting space from a private gym and also from a dance studio to work out her clients.

“The money I spend to rent these spaces is as much as it would cost me to have my own space, and I wouldn’t be at the mercy of other gyms,” she said. But her search criteria are hard to meet. She is looking for 2,000 square feet, “that is bright and open, and in a perfect location with showers,” she said.

Some boutique gyms, like SoulCycle, do not offer showers, “but I have a lot of students who come in the morning before work, so I need that,” Ms. Hundt said. One contractor estimated showers would cost as much as $175,000 to build, so Ms. Hundt is also hoping to find a space that has some of these facilities already built into the space.

“Landlords need to know what they are getting into when they rent to a gym,” said Joshua Strauss, a vice president at the retail brokerage firm Robert K. Futterman Associates, because these tenants’ use of utilities like water and electricity can be costly. There are also expensive build-outs to consider.

Often, landlords and gym tenants will share some of the burden of building out the facilities, Mr. Strauss said. This could include several months of free rent while the gym converts the space, or additional tenant improvement allowances to help gyms defray some of the cost.

While there are additional expenses, gyms can be a boon for landlords. In residential and office buildings, tenants consider workout operations a desirable amenity, sometimes allowing landlords to charge higher rents.

Gyms are also often willing to lease space that other retailers would refuse. For instance, as long as there is a street-level entrance, most gyms are willing to have the bulk of their space located on the second floor or basement level of a building. “While a Starbucks, for example, needs a ground floor retail space with lots of frontage onto the street, a gym would be happy with just an entrance,” said Donald J. Lutt, a senior managing director at Colliers International.

In the case of Barry’s Bootcamp, it is now looking to expand. The company has been focusing on uptown as a possible site for its second location, but like the first effort, the process is “quite challenging,” said Neal Ohm, a director at the CS Commercial Group, a brokerage firm that represents Barry’s. A neighborhood “like the Upper East Side is a whole other battle because the price point is high and most of the buildings are residential, so they are not happy with the idea of music blaring at 6 a.m.”

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