Tuesday, July 28, 2009

Muscling In

"Mall landlords didn't want to hear from Eric Casaburi, chief executive officer at Retro Fitness, three years ago as he tried to expand his Colts Neck-based health and fitness company. 'You're a fitness center? We don't want you in here,' Casaburi was told. Times have changed. The recession and hard-hit national retailers, who are averse to expanding or are closing stores, are delivering a one-two punch to landlords. 'Now I'm getting e-mails from the same guys two or three times a week,' Casaburi said. Now fitness and health businesses are taking advantage of lower rents and mall vacancies to expand, he said. 'The health-club operators are very wise and they are very entrepreneurial,' Lanyard said. 'They recognize a window of opportunity.' It's a reversal. In good times, landlords frowned upon health and fitness clubs. The businesses used up valuable parking spaces, taking then away from other tenants. In some cases, anchor tenants had restrictions against health clubs placed in their own leases. Landlords would rather wait for a national or regional retail tenant, Lanyard said. Now they are lowering rents and making improvement dollars available as a means to entice prospective tenants, he said. 'Landlords are taking a second look at health clubs, appreciating the fact that health clubs could be a draw for shopping centers,' Lanyard said. Health club chains, such as Retro Fitness, L.A. Boxing and Planet Fitness, are among the companies that have grown as a result of the changed landscape.


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