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Growing Trend: Specialty Fitness Clubs

Every week I look forward to my weekend yoga class with my favorite instructor. When I feel like I need a change, I switch yoga studios or go to Shred415. When I first moved to Chicago I joined Equinox, then Bally’s since it was close to the office, then resorted to the two treadmills in the bottom of my condo building. Working out for me has always been about sanity and convenience regardless of how great the gym was. It wasn’t worth the money if I never went. Since then I haven’t been to a gym in years. These days we have the choice to pick someplace that specializes in our favorite workout and they’re popping up all over. Specialty health clubs are a growing trend in Chicago. They range from cycling at Flywheel and SoulCycle to high impact cardio/weights at Shred415 and Orange Theory, ballet inspired classes at Pure Barre, The Bar Method, Daily Method and The Barre Code to yoga at Core Power Yoga, Yoga Six and Yoga By Degrees. But classes are not cheap and range from $20-$25 per class for drop ins or unlimited one-year memberships around $1,900 (or $160/month).

Consequently, full-service gyms are feeling the increasing impact of specialty club expansion in the region. More and more people seem to be opting for the additional service and pricing flexibility that these specialty clubs provide. Mainstream full-service clubs including LA Fitness, Xsport Fitness, Planet Fitness, Chicago Athletic Clubs and Fitness 19 include the standard cardio machines and weights, have showers and locker rooms but are light on the amenities in order to attract the more value oriented customer. These clubs are definitely the cheaper option with rates starting as low as $9.95/month for first-time members up to $105/month for a 12 month contract. However, you have to commit to the club. While specialty clubs do offer one year contacts at a better price, you can also choose to buy a limited pack of classes or just drop in class by class.

With the addition of Class Pass, the new website service that provides one pass for unlimited classes at all participating studios, which allows you to create your own personalized gym and to try a different studio every day. You pay a $99 monthly membership fee and get access to the best specialty fitness studios in your area (but you can’t go to the same studio more than three times per month). It’s the best of both worlds: the custom gym experience without any type of commitment.

The specialty fitness clubs are both corporate and franchise-driven companies looking in the city and suburban regional markets and typically draw from a 10 minute drive time. Most often they do not prevent landlords from leasing to a full-service health club as they do not feel it’s a direct competition. However, they will want an exclusive on their primary use in order to prevent leasing to one of their direct competitors. When leasing to a full-service club, it’s ideal to carve-out language in their exclusive to allow for a specialty fitness club so they can co-exist together. Even though the larger guys may ultimately allow this, the smaller guys still have had some impact on the larger club memberships. Some institutional landlords have been hesitant to lease space to a full-service health club as they’ve typically perceived them to be risky with high parking requirements. It seems there has been a more positive response to the smaller clubs due to a niche business, smaller spaces and less parking requirements.

Yoga Six rendering
Rendering of Yoga Six in River North neighborhood of Chicago. Mid-America's Michael Wexler represents Y6 in the Chicago area.

Jaime Platt Bertsche | Vice President
Mid-America Asset Management, Inc.
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