Malls Never Wanted Gyms. Now They Court Them

The reason is twofold. Retailers have closed hundreds of stores across the country amid increasing competition from online shopping, leaving mall owners to grapple with declining foot traffic and rising vacancies. At the same time, fitness centers have boomed and diversified, and a proliferation of smaller, boutique gyms that draw higher-end customers have created more attractive tenants that are easier to accommodate.

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Many of the new tenants at shopping centers are gyms and specialty fitness studios that in some cases are barely bigger than a Starbucks store. But owners of regional malls also are welcoming sprawling, full-service health clubs as anchor tenants, sometimes replacing the stores that once excluded them.

GGP is replacing a Macy's at Oklahoma City's Quail Springs Mall with a 180,000-square-foot Life Time health club with indoor and outdoor pools and tennis courts. GGP soon will open the first gym, a Planet Fitness , in Honolulu's Ala Moana Center, whose 350 stores include Louis Vuitton and a Tesla showroom.

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Gyms fit into a broader push by mall owners to reinvent themselves as centers of entertainment at a time when so much of apparel sales have moved online. Landlords are adding restaurants, ice-skating rinks, pools and other recreational options to boost sagging foot traffic.

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There is also evidence that gyms might not be the retail repellent that mall owners long thought. More than 40% of health-club members reported household incomes exceeding $100,000 in 2016, according to IHRSA, compared with 26% of the overall population.

Consumer spending at fitness centers climbed 3.7% in the third quarter over last year, according to Atlanta-based spending-data analysis firm Cardlytics. By comparison, spending on apparel at brick-and-mortar stores rose 0.5%.

And people who work out are more likely than ever to shop afterward because it has become socially acceptable to wear fitness clothing outside the gym, says David Jamieson, chief operating officer at Kimco Realty Corp.

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Life Time is building a 90,000-square-foot health club with a rooftop pool and bistro as part of Simon Property Group 's ongoing transformation of Phipps Plaza. Life Time also will offer workspace memberships as part of a program called Life Time Work, an outgrowth of the rising number of people who do work at the gym.

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"We're like the nice-looking girl at the dance. Everybody wants to dance with us these days," says Dan Adelstein, vice president of international development for Orangetheory Fitness.