\u201cPeople are at the gym more than just to climb,\u201d co-founder Nam Phan told Fortune<\/em>. \u201cThey\u2019re there to meet other people, socialize and climb with other people. That has really cemented our design approach.\u201d<\/p>\n Luxury gyms, like all health clubs, were left out in the cold when COVID lockdowns forced many people to give up their memberships. Along with home-office setups, fitness enthusiasts set up garage-gyms and ordered Peloton bikes en masse<\/em>. But over the past few years, the customer base for high-end clubs has surged again\u2014and many aren\u2019t just coming back for the barbells.\u00a0<\/p>\n \u2018We change travel patterns\u2019<\/strong><\/p>\n Life Time opened its first NYC club in 2016. Eight years later, it has 12 locations throughout the city, either fully open or in development. Their newest location, Penn 1, occupies over 50,000 square feet in the heart of Manhattan, decked out with seven pickle ball courts, multiple workout floors, a bar and cycling studios.<\/p>\n Life Time, Inc.<\/p>\n<\/div>\n While a membership at a Planet Fitness or Blink might run you anywhere from $15 to $40 a month, Life Time\u2019s cheapest midtown membership starts at $269. And if you want access to the pickleball ball courts, it\u2019ll cost another $60. But then again, Life Time isn\u2019t just selling you a gym.<\/p>\n On the ground floor of Penn 1, a lounge area looks out over the courts where members can sit and answer emails after a workout\u2014or pour themselves a draft beer from the bar-style tap in the corner. Up another flight of stairs is a recovery area where people can use Life Time\u2019s massage chairs or pneumatic compression sleeves, which look like giant blood pressure cuffs that wrap around your arms or legs.<\/p>\n Life Time, Inc.<\/p>\n<\/div>\n Parham Javaheri, chief development officer at the company, told Fortune<\/em> that Life Time builds a complete health and wellness experience that keeps members coming back to the facilities far more than a typical fitness club.<\/p>\n \u201cWe change travel patterns,\u201d he said. \u201cIf you\u2019re going to Life Time 12 or 13 times a month, well then you\u2019re more likely to stop and shop around there, do your groceries around there, pick up whatever you need to pick up on your way to and from that Life Time.\u201d<\/p>\n Prime real estate<\/strong><\/p>\n It isn\u2019t just customers that have a new appreciation for everything luxury gyms have to offer.\u00a0<\/p>\n The general shift of more people working from home has spelled trouble for commercial real estate. Earlier this year, the office vacancy rate nationwide passed the 20% threshold for the first time in history, according to a Moody\u2019s analysis<\/a>. In New York City, the value of office space is expected to decline 28% by 2029, equating to a nearly $50 billion loss for the city<\/a>.<\/p>\n But for high-end gyms like Life Time, the city\u2019s vacancy problem has opened the doors to prime real estate, and Javaheri said developers are taking note.<\/p>\n \u201cThat\u2019s phenomenal real estate, with a phenomenal developer in the heart of Manhattan,\u201d he said of the new Penn 1 location, where runners on the second-floor treadmills can literally see NBA teams stepping off their buses to enter Madison Square Garden. \u201cThey could have leased that out to many other users, but what they wanted was an amenity that people use and coveted.\u201d<\/p>\n Top-tier gyms aren\u2019t just a boost for commercial real estate. In Henderson, Nevada, Life Time Living offers a signature membership to a 162,000-square-foot club just feet from its luxury apartments. Javaheri said that Life Time has brought the residential project more rent per square foot and a higher tenant retention rate.<\/p>\n Life Time Work, which has 15 locations across the U.S., is opening a new 110,000-square-foot club in Brooklyn Towers that will complement a curated co-working space with conference rooms, open work spaces, and private phone booths.\u00a0<\/p>\n \u201cWhen we did that Brooklyn Tower deal, there was an available space of office space,\u201d Javaheri said. \u201cWe showed the developer at the time the concept of Life Time Work, and it was just a no-brainer for them.\u201d<\/p>\n A few years ago, the overall landscape was bleak. Like hotels and restaurants, gyms had it rough during the pandemic. Between March 20, 2020 and December 31, 2021, 25% of all health and fitness facilities in the U.S. shuttered, according to a report from the Health and Fitness Association<\/a>.<\/p>\n But since the U.S. emerged from lockdowns, the clubs that were able to hold out have seen people hitting the weights and treadmills again with a vengeance. In the first quarter of 2024, there were 184 million gym check-ins, according to a report by ABC Fitness<\/a>. That\u2019s a 60% increase from the same period in 2023 and nearly double from pre-pandemic levels.\u00a0<\/p>\n Young people have been a crucial factor in the rebound of the fitness industry. Almost a third of new gym sign-ups were Gen Zers, who are more invested in their physical health than any other generation, according to the ABC report.\u00a0<\/p>\n Rick Caro is the president of Management Vision, a consulting firm specializing in the health club industry, and former director of the Health and Fitness Association. He told Fortune<\/em> that health clubs have always been strong anchor tenants for commercial real estate. Gyms generate regular traffic from users who want to get a return on their investment. They boost surrounding retail, and employers like proximity to health clubs because they can often get group discounts that serve as an incentive to their workers.\u00a0<\/p>\n \u201c\u200b\u200bWhat is exciting now, is how clever and creative people are to take this fundamental that\u2019s been proven for a long time, but now they\u2019re doing it a little differently or uniquely,\u201d Caro said. \u201cThey\u2019re doing it with a different variety of concepts at different price points or different size facilities.\u201d<\/p>\n![\"View](\"https:\/\/fortune.com\/img-assets\/wp-content\/uploads\/2024\/08\/pen-court-pickleball-seating-01-e1722633102250.jpg?w=1440&q=75\"\/)
<\/p>\n![\"Lounge](\"https:\/\/fortune.com\/img-assets\/wp-content\/uploads\/2024\/08\/pen-seating-area-03-e1722632850827.jpg?w=1440&q=75\"\/)
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