Come for the workout, stay for the shopping: US malls look to gyms to fill empty retail space
While mall walkers strolled Yorktown Center's quiet corridors before most shops opened on Monday morning, a handful of visitors in search of a tougher workout strode straight from their cars to the fitness studios along the Chicago mall's western side.
Shopping centres used to shun gyms and workout studios, believing clients would clog parking lots without patronising shops post-workout.
But consumers' changing shopping habits left some US mall-based chains foundering. That's pushed mall operators to turn the empty stores they've left into places for customers to do more than just shop.
Increasingly, that can mean sweating through a workout. Consumers are growing more health-conscious, so "it's the perfect storm," said Jason Press, vice president at real estate firm JLL.
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The trend isn't new - Chicago-based mall operator GGP says it has been working with fitness tenants for more than a decade - but it is growing.
The amount of space leased by fitness centres and gyms in malls and upscale open-air shopping centres grew about 69 per cent across the US over the past five years, according to data firm CoStar Group, and the number of leases has nearly doubled.
In Chicago, roughly a dozen gyms have leased space in malls and multi-tenant shopping centres in each of the last five years. Fitness tenants have picked up more than 1 million square feet of shopping centre space since 2013, according to CoStar.
Sean McCourt, vice president at real estate firm CBRE, sees it as part of a broader interest in catering to the "self-care" trend, with salons and massage providers expanding too. But fitness tenants tend to get more attention because they can fill the big spaces shuttered department stores leave behind at a time when few retailers are looking to take on that much space, he said.
Yorktown operator Pacific Retail Capital Partners turned to the self-care idea when figuring out how to revamp an underused 12,000-square-foot area on the mall's west side.
Shopping centres used to shun gyms, believing clients would clog up car parks, but they might turn out to be a saviour.
The entrance near Yorktown's "self-care precinct" went from the least-used mall entrance to the second most popular over the past year, said Erin Falbo, Yorktown's marketing and business development manager. Pacific Retail now is bringing the approach to other properties.
"What we find exciting is, it's bringing a new shopper here," Falbo said.
Jill Cammarata, a teacher who lives in Willowbrook, wasn't a frequent Yorktown visitor until a co-worker introduced her to CycleBar and she found she liked the intensity of the indoor cycling workout.
She said she's still not a regular shopper, though she has made unplanned trips through the mall when lighter-than-expected traffic left her with time to kill before a class. But she thinks CycleBar and the other studios could bring business to the nearby restaurants.
"I made friends in the class, and we'll sometimes get something to eat afterwards," said Cammarata, 29, who was on her way to a 9.30am workout on Monday.
The ability to attract consumers with regular workout routines who might spend money while lingering before or after a gym session makes fitness tenants particularly attractive, JLL's Press said.
US stores like Saks and Macy's are promising workouts for your face, joining the "self-care" trend at retail outlets.
Chris Pine, senior vice president of big-box leasing at GGP, said the company is actively seeking to add gyms and grocery stores to the mix of retail, entertainment and dining options at its malls, since both can get customers in the habit of stopping by multiple times per week.
"It's just rounding out the experience and offering more for the customer to experience at the property," Pine said.
Last year, GGP and Life Time announced plans to partner on developing athletic clubs at GGP properties. Five have been announced so far, including the 125,000-square-foot Oakbrook Center club, which is expected to open in fall 2019.
For Life Time, regional malls often offer convenient, easy-to-access locations with plenty of parking, said Bahram Akradi, the fitness chain's founder and CEO. As long as Life Time can provide a "country club" atmosphere within a bigger shopping centre, "if we can generate a positive impact for the mall, that's fantastic", he said.
In addition to the clubs in development with GGP, Life Time has opened or plans to open clubs at malls owned by Simon Property Group, Macerich, Kimco Realty and Taubman Centers, including several on the sites of former department stores. But Akradi considers the idea gyms will save US malls "kind of comical".
"With the amount of excess square footage, if it all became fitness centres, the fitness centres would go bankrupt," he said.
But he sees an opportunity to partner with property owners to turn struggling, retail-only malls into "assets for the future", where people can live, work, play and shop in one place.
"That's the transition we're going to see happen over the next decade or two," Akradi said. "Some will make that transition better than others."
In the meantime, mall owners that are considering adding a gym or workout studio can take heart from the fact that fitness so far has proved more internet-resistant than shopping, CBRE's McCourt said.
"You're not going online to exercise," he said. "You still want to be around people to work out."
- Chicago Tribune
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