The rise of tenants-only gyms in NYC office buildings
October 20, 2014

To maintain exclusivity and convenience via an attractive amenity, a select group of office buildings are choosing to install their own tenants-only fitness facilities.

These now include the Empire State Building, which has been creating its own vertical campus with many amenities; the far smaller, more boutique-sized 111-115 Broadway; the tony 510 Madison Ave.; and the new International Gem Tower.

At the International Gem Tower, which has a jewel tenants’ lobby at 50 W. 47th and a high floors’ lobby at 55 W. 46th, there is a private, tenants-only 2,000-square-foot gym. It includes locker rooms, showers, steam rooms and bike storage.

On a tour earlier this year, Raizy Haas, senior vice president, project management and development for Extell Development, said it will also have a “quiet” room for yoga.

Extell developed the 34-story, high-security mixed-use office condominium building in part for the diamond, gem and jewelry trade. The separate office “building” on the top floors, entered at 55 W. 46th St., is being sold to SL Green Realty Corp., which will take over all operations, including the gym.

David Falk, Tri-State president of Newmark Grubb Knight Frank, said that during a space search “when there’s a tie” between spaces, a gym can be the tie-breaker, “but it’s not going to be the driver of the decision.”

Richard Cohen, president of Capital Properties, however, said amenities, in general, often drive the leasing of office space...

Boston Properties’ 510 Madison Ave. ups the exclusivity ante by offering only five passes per floor to its 7,000-square-foot fitness facility. The amenity is billed at $1.50 per foot, said its leasing agent, Paul Amrich, vice chairman of CBRE. Where a floor is shared by two tenants, three might go to one and two to the other, he said.The gym was designed by developers Harry and Billy Macklowe prior to the luxury office building being sold to Boston Properties. It includes a 50-foot lap pool, marble vanities and wood-paneled locker rooms fully stocked with top-of-the-line products.

Currently, 510 Fitness is managed by Plus One Health Management. Along with the pool, it has a weight room and cardio machines, and offers personal training, yoga and Pilates.

“They implemented the highest-grade gym in an office building,” said Amrich. “The lap pool is an extra benefit and it’s a nice architectural piece. It’s been a real draw and has assisted with the lease up. A lot of tenants in the building are very serious about their workouts so having it, and being private, is a real benefit.”

The 35-story tower now has roughly 150 passes to the gym handed out, but has the capacity to go up to 200.

“The reason we kept it to that number is so the gym is never crowded. You will only see five or 10 people working out,” said Amrich.

Broker Daniel Posy, senior managing director at Savills Studley, who represents many hedge fund clients, said, “It’s a great amenity for my clients who would otherwise put in their own gyms.”

Posey explained that getting permission from a building owner to install a gym in a tenant’s own space is a “nightmare” and “causes messy lease negotiations.”

Gyms on tenant floors can become noisy for other tenants, Posy explained, especially when employees drop weights. It also adds extra plumbing for showers.

“Tenants will not put in a health club because it’s too costly,” said building owner Cohen. “It’s really the job of the building to put in those amenities.”

The rise of tenants-only gyms in NYC office buildings

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