Newspaper article THE JOURNAL RECORD

Pumped Up for Market: Fitness Centers in Okla. Boost Real Estate Sector, but Will They Go the Distance?

Newspaper article THE JOURNAL RECORD

Pumped Up for Market: Fitness Centers in Okla. Boost Real Estate Sector, but Will They Go the Distance?

Article excerpt

Their white knight couldn't have come from a more unlikely source.

After three years of sluggish leasing and construction activity, Oklahoma's commercial real estate sector is getting a boost from a new wave of fitness centers.

A growing number of national and regional chains have targeted the Sooner State for expansion. The reasons draw from a myriad of sources: increased attention placed on Oklahoma's poor physical fitness and chronic illness rankings, households and workplaces stressed under rising medical inflation, a stronger health care focus on wellness education and illness prevention.

"I think, frankly, it's more about company profits and looking for areas that they feel that they can drive business and increase their business in communities that are underserved," said Karleen Krywucki, director of major tenant retail leasing for Price Edwards in Oklahoma City.

The influx proves hard to track, since fitness centers may set up shop in retail or office space, apartments and hotels, hospitals and clinics, factories and golf clubs. But brokers in both Tulsa and Oklahoma City noted a solid increase in new activity, both construction and leasing, across a wide spectrum of operations.

Titans certainly lead the charge, from giants like the 110,000- square-foot-plus LifeTime Fitness under construction in Bixby and the 40,200-square-foot Sky Fitness and Wellness expansion in Tulsa Promenade Mall to the 50,000-square-foot Gold's Gyms opening with their smaller Gold's Express centers around Oklahoma City.

Along with that we're seeing a number of smaller operators staking out claims for exercise dollars. Fitness 19 opened three 10,000-square-foot-plus centers in central Oklahoma, while Planet Fitness turned a 24,000-square-foot former drugstore into an exercise center. Anytime Fitness has a number of 24-hour, 4,000- square-foot-plus centers popping up in Ardmore, Altus, Guymon, Edmond and other areas.

Tulsa retail analyst Mendy Parish openly admits she doesn't quite understand the sudden increase.

"I'm not 100-percent certain all of them will make it, but I really think it will be noticeable for those who don't give good personal service or keep their equipment in tiptop shape," said Parish, a Tulsa retail specialist with CB Richard Ellis of Oklahoma.

Many share her concerns, since Oklahoma City and Tulsa have witnessed at least three decades of fitness center cycles mirroring the economic times. When household confidence runs strong, fitness centers multiply under renewed consumer demand and steady cash flow, but as confidence drops, the sector has historically contracted, reflecting household discretionary spending cuts.

"It will be interesting to see which ones survive," said Price Edwards broker associate Susan Brinkley. "I think there will be some fallout. …

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