No pain, no gain for small central Vancouver fitness studios

Five years ago, Keighty Gallagher was running Tight Club Athletics out of a park.

“I was really struggling with the next steps for Tight Club. I wasn’t ready to open a studio and didn’t have enough money to rent out a hall,” said Gallagher.

Then she found a laneway home with an empty two-car garage and decided to set up shop.

A growing industry 

Gallagher is part of a growing fitness industry in Vancouver. As it grows, so do its hurdles. People are turning to unusual spaces to start fitness studios as commercial and industrial space has become either pricier or unavailable.

“Fitness studios are becoming a more popular tenant category in Vancouver, as the number of more traditional retail uses shrinks,” said David Knight, associate vice-president of Colliers Vancouver.

This boom in the fitness industry stems from overwhelming public demand. Vancouver residents are maintaining higher levels of physical activity than any other metropolitan area in Canada, according to a 2016 city health ranking report by the Conference Board of Canada. Businesses are looking to capitalize on this market.

There are currently 154 fitness centres operating in Vancouver, a 123-per-cent increase since 2012 and a 480-per-cent increase since 2000. Increased competition has pushed some operators to move into unregulated or illegal spaces.

Hurdles are high for commercial, industrial spaces 

Gallagher’s laneway was residentially zoned. Although the bylaws don’t allow for fitness centres, she worked tirelessly to maintain positive relationships with her neighbours and so managed to hang on there without city intervention.

But when she decided she needed to move up, zoning was still a challenge.

Vancouver’s bylaws  allow for fitness centres in commercial, commercial-industrial zones and historic districts, such as Chinatown, but they all have obstacles.

Frequent noise complaints are a big hurdle when finding a good location.

“We play loud music, slam balls, and do it at early times of the day,” said Gallagher.

The obvious locations are industrial spaces away from residents. These spaces also run cheaper than commercial counterparts: an average net rent of $16.19 per square foot, according to a 2017 Colliers International report.

But, unlike Richmond, Vancouver doesn’t allow fitness centres in industrially zoned areas. Buildings can be rezoned, but the price starts at $12,840 and vacancy rates are tight, hovering at two per cent.

Commercial vacancy rates in the city are higher, at 4.9 per cent, but they come with a high price.

Street-front lease rates on a popular street like Alberni can run as much as $250 a square foot or as low as $20 per square foot in Chinatown, according to real-estate firm Cushman and Wakefield.

Owners get what they pay for. For Gallagher, now leasing in Chinatown, this meant the extra cost of renovating dated spaces.

“We tore that place apart and it was super-fulfilling,” she said. “But I shudder knowing how much it cost to renovate that place.”

But sometimes the costs extend beyond renovations.

Owners make it work

In 2017, Nate Robinson, founder of Club Row, moved into the same laneway Gallagher had years earlier.

He turned the vacant space into Club Row, a spinning studio with rowing machines. But on Oct. 11, the City of Vancouver forced him to shut down the garage-studio for violating the residential zoning.

“It almost stopped the business,” said Robinson. “We’re very lucky to have developed a finished business model and a large enough following in our garage-studio that we can afford to move.”

Despite the setback, Club Row is already set to open a new location in Chinatown on Oct. 29.

The move places Club Row alongside other successful fitness studios like Tight Club Athletics, which trains about 100 people a day and has collaborated with brands like Lululemon and Nike.