Finding an apartment or a home to live in is hard enough—but a fitness studio, a space where you aim to grow a business from scratch and make clients feel at home, is a completely different beast.
While the market in every city varies widely, there is one constant: finding a spot of real estate for your studio is very different from finding any other piece of property.
Leasing a space like this is called the retail market—so even though you might not be selling clothes full time, it’s still a retail lease you’re after. Your initial step, therefore, is to hire a retail lease broker. Note that these kinds of brokers are different from the typical broker term many are used to hearing when it comes to residential real estate.
“There’s two things we have in common with a residential broker, the name and the license,” says Brandon Singer, a senior director of retail leasing at Cushman & Wakefield, who regularly works with fitness studios and booked SoulCycle’s first four retail spots before the brand was sold to Equinox.
One difference (and benefit) with retail lease brokers is that, as the client, you’re not responsible for paying the broker’s fee like you would for a New York apartment. This cost is instead absorbed by the landlord.
It’s not just in New York, though, where you should look for a broker before making any decisions. Melissa Nochlin of Colorado says that these leases are not the kinds of leases you want to mismanage or try and tackle on your own.
“Retail leases can be anywhere from 20 to 100 pages, depending on the complexity,” she says. “The intricacies are where your broker comes in. We can also recommend an attorney and all the professionals you may need to help you make this kind of a deal.”
Singer warns to hire a broker before you do a single thing. Using Craigslist or random real estate ads and web sites are a bad idea because they can lead to unsophisticated landlords who won’t be flexible down the road. See a space that has a “For Rent” sign in the window and a phone number to call? Have your broker call that number.
Nochlin says that what she likes from her clients before they look at spaces is to see a business plan. “It really informs things like how many workout classes do you need to sell in order to know what kind of space you can afford.” You should also have a good sense of your demographic so your broker can narrow down what neighborhoods will be best. A broker can help analyze all the information in your plan in order to direct you to what you really need.
Be prepared to take your time with this—it can take up to six months to secure a space. “It’s complex,” Singer says. “Once you like the space, your broker can connect you to attorneys so that every little question you can imagine can be negotiated.”
From there, you can hire a construction team and an architect to lay it out and figure out what’s going where, all of which can occur while the business terms are being negotiated.
What’s the most important thing to consider? Jenn Diner, who worked the real estate market before working in New York, says that where you want your studio is just as important as the size and what’s inside.
You’ll want to take into consideration what’s called “co-tenancy.” The same way Gucci likes to be near Louis Vuitton on Fifth Avenue, you’ll want to target areas where a fitness presence exists. A neighborhood might be up and coming, but be sure it’s ideal for your target customer, including good points of transportation, parking and access to nearby highways, subways and other public transit.
And the one thing to be wary of? Craigslist, Diner says. “If it looks too good to be true, it probably is.”