Health, Fitness, Beauty and Wellness Concepts are Thriving with Millennials
The emerging “Self-Care” sector is a perfect fit for Retail Real Estate because the exponential growth of Health, Wellness, Beauty and Fitness are complementary to traditional retail concepts. Health clubs, yoga studios, nutrition, weight control, beauty products, preventive care, dentistry services, anti-aging care, physical therapy, cosmetic enhancements, adult day care, and emergency care centers are all part of this phenomenon. The term “self-care” is about people investing more in their health, wellbeing, and bodies.
Since most Self-Care/Wellness is experiential, meaning you have to go there, these tenants are the perfect fit for retail property owners making defensive moves to protect against online sales and store closures. In addition, these Self-Care/Wellness tenants drive regular, even daily visits to a property which creates a positive spill-over effect for cross-shopping at other co-tenants in that development.
According to the Global Wellness Institute, the Self-Care/Wellness sector of the economy is now a $4.7 trillion business that has shown dramatic growth in the last few years and is poised for additional growth.
Self-Care/Wellness has also ignited on social media and has been great for neighborhood and community shopping centers. Many Self-Care or “Medtail” tenants prefer to locate on NNN out parcels of shopping centers or in the nexus of a retail trade area. Good Retail Real Estate is usually well located, with high visibility and excellent parking.
New tenant opportunities include: health clubs, vitamin stores, yoga studios, Jenny Craig, Weight Watchers, Physical Therapy, Doctors, Dentists (Aspen Dental, Heartland Dental, Pacific Dental, Western Dental, etc), Emergency Care Centers (American Family Care, U.S. HealthWorks, NextCare Urgent Care, FastMed Urgent Care, Fast Pace Urgent Care, HCA CareNow, CareSpot, Doctors Care, MedSpring, MD Now Urgent Care), Core Power Yoga, Pure Barre, SoulCycle, CycleBar, Club Pilates and Row House. Cyc Fitness, Swerve, FlyWheel, Aqua Studio, Orangetheory, CorePower Yoga, YogaWorks, Yoga at Equinox, Jivamukti, YYoga, Yoga to the People, Bikram Yoga, Club Pilates, Life-Time Fitness, LA Fitness, Planet Fitness and Gold’s Gym among others. Many new concepts are franchise models with the franchisor providing training and national marketing. The franchise agreements will run 10 years so tenants will want to sign a 10-year lease or 5-year lease with a 5-year option.
Some newer tenants have a subscription service or membership model and are adept at online marketing and funneling customers to their locations. These operators can offer membership pricing for a certain number of services or visits per month. Membership models add a degree of stability and cash flow for the tenants and a greater degree of security for the landlord. Some doctors and dentists are experimenting with membership fees to provide better care and even out cash flows.
Additional tenants can be old school like Jenny Craig, Weight Watchers, Women’s Workout World, Doctors, Dentists, or new concepts like spin classes, Soul Cycle, Physical Therapy, Emergency Care Centers, Adult Day Care. For all these activities you have to be dressed for success which explains the rapid growth of Lululemon, Athleta, Fabletics and Under Armor Brand House.
Specialty beauty concepts also are looking for shopping center and retail real estate locations including eyebrow threading, waxing centers, nail salons, blow-dry bars and lash extension studios. Eyelashes, eyebrows, nails, tanning, waxing, hair, massage, manscaping, barber shops, and specialty clinics also continue to grow.
In addition, medical wellness venues are expanding, including vein clinics, laser hair removal, cool-sculpting, and other weight loss methods, stretch labs, cryotherapy centers and spas offering acupuncture, massage, and infrared saunas.
The combination of people seeking experiences combined with a new emphasis on health, beauty, and well-being makes “Self-Care” a massive opportunity for real estate owners and investors.
About the Author: Jason Ricks, CCIM, Principal with Concordia Realty
Mr. Ricks is a native Texan and real estate entrepreneur whose primary focus is on acquisitions. Mr. Ricks’ background in value add asset management has helped him develop strategies to unlock the value of a property. Mr. Ricks’ most recent experience is with AMLI Residential as the Vice President for Retail Asset Management where he established and has led the mixed-used Retail Asset Management team working on premier properties across the country. Prior to that, he served as an Asset Manager for BH Properties where he oversaw a 2.2 million square foot value add retail portfolio throughout Texas and Oklahoma. He received his BS in Business Management from Oklahoma State University and is a Certified Commercial Investment Member (CCIM).