Introduction
Fitness and wellness facilities have emerged as a compelling niche net lease investment class in commercial real estate. Post-COVID, consumers are increasingly emphasizing health, exercise, and holistic wellness, driving robust demand for gyms, boutique fitness studios, and wellness clinics. Investors and 1031 exchange buyers find these properties appealing for their stable, triple-net (NNN) lease structures and internet-resistant nature—gyms offer services that can't be replaced by e-commerce. The fitness real estate market has shown resilience, rebounding significantly with rising memberships and transaction volumes post-pandemic. Overall, investing in fitness and wellness real estate provides passive income, long-term stability, and exposure to powerful consumer trends.
Industry Economics & Demand Drivers
Booming Health & Wellness Spending: Health consciousness is at an all-time high. Americans spent record amounts on wellness in recent years, with gym memberships surging to unprecedented levels. Millennials and Gen Z, who prioritize fitness and wellness experiences, are fueling this growth, turning fitness from discretionary spending into essential lifestyle investments.
Franchise Fitness & Boutique Brands: Fitness franchising has exploded with brands like Orangetheory Fitness, F45 Training, and boutique concepts under Xponential Fitness rapidly expanding. Wellness clinics, such as Restore Hyper Wellness and Serotonin Centers, are also scaling quickly via franchising, creating consistent demand for leased retail spaces nationwide.
Post-COVID Resilience: Despite initial pandemic disruptions, fitness centers quickly rebounded. Consumers returned to gyms for social interaction and professional fitness guidance, driving foot traffic and occupancy rates above pre-pandemic levels. This resilience underscores the industry's strength and long-term viability.
CRE Market Snapshot: Net Lease Fundamentals
Lease Types and Structures: Fitness properties typically feature landlord-friendly NNN leases where tenants handle most property expenses. Corporate-backed gyms like LA Fitness or Planet Fitness often secure long-term leases (15-20 years) with renewal options, making them highly attractive for passive investors.
Cap Rates and Pricing: Fitness assets generally offer slightly higher cap rates compared to other retail net leases, averaging around 6-7%, reflecting perceived risk yet providing attractive yields. Prices typically range from $1–3 million for smaller studios up to $10–15 million for larger gyms.
Lease Terms & Escalations: Long-term leases with built-in rent escalations (1.5–3% annually) are common, providing protection against inflation and enhancing investment returns over time.
Corporate vs. Franchise Tenancy: Corporate leases offer lower risk due to strong guarantees, while franchise leases often provide higher rents and better escalations, balancing risk with potentially higher returns.
Liquidity Profile: The increasing popularity and acceptance of fitness tenants among private investors and institutional buyers have significantly improved liquidity, facilitating smoother transactions and exits.
Construction & Development Trends
- Rapid Expansion of Brands: Major fitness brands continue aggressive expansion, fueling demand for newly constructed retail spaces.
- Adaptive Reuse & Build-to-Suit: Empty big-box retail spaces are increasingly converted into gyms and wellness centers, providing cost-effective options for tenants and attractive investment opportunities for landlords.
- Zoning and Permitting: While zoning can sometimes require special permits for gyms, many municipalities now welcome fitness uses due to their ability to revitalize retail areas.
Lease Structures & Risk Factors
- Absolute vs. NN Leases: Investors must understand responsibilities under NN leases (e.g., roof, structure) versus the fully passive nature of absolute NNN leases.
- Franchisee Credit Risk: The strength of franchisee operators can vary; due diligence on tenant financials is critical.
- Renewal & Reletting Risk: Specialized gym build-outs pose challenges in re-leasing but are typically mitigated by strong market demand for fitness spaces.
- Pandemic Risk: Although gyms adapted successfully post-COVID, future health crises remain a consideration.
Top Tenants & Operators in Fitness/Wellness Net Lease
- Planet Fitness: Dominant low-cost gym operator, offering recession-resistant memberships and widespread franchise operations.
- Orangetheory & F45: Leading boutique fitness brands known for strong unit economics and rapid franchise-driven growth.
- Crunch Fitness: Mid-market gym appealing broadly with strong suburban growth and steady membership numbers.
- Restore Hyper Wellness: Rapidly growing wellness clinics providing high-margin services, blending retail and healthcare.
Taxation & Depreciation Considerations
Investors can utilize significant tax advantages, including accelerated depreciation via cost segregation studies and deferral of capital gains through 1031 exchanges. These strategies enhance after-tax returns, making fitness and wellness real estate particularly attractive.
Emerging Trends in Fitness & Wellness Real Estate
- Wellness Anchors in Mixed-Use Developments: Wellness-oriented tenants increasingly anchor mixed-use projects, driving traffic and occupancy.
- High-Tech Recovery Services: Growth in cryotherapy, IV therapy, and other high-tech recovery services complement traditional fitness offerings.
- Hybrid Fitness Models: Blending digital and physical fitness experiences has become standard, creating more resilient tenant operations.
- Medical Fitness Integration: Combining healthcare services with fitness programs is an emerging trend, enhancing tenant stability and marketability.
Brevitas Integration: Finding Fitness/Wellness NNN Deals
Brevitas offers investors targeted search and deal management tools to efficiently identify and evaluate net lease opportunities in the fitness and wellness niche. Investors can leverage keyword searches, Deal Rooms for confidential due diligence, and 1031-friendly features to streamline property acquisition processes.
Explore current fitness and wellness real estate listings directly through Brevitas' Fitness Real Estate Listings.
