Over the past few years of advising gym clients, I have heard the same issues over and over again from operators which unexpectedly halt negotiations or even worse - become an issue once in occupation!
At the very least these problems are an irritation, and at the very worse can close the gym. So below I’ve come up with a helpful checklist of topics for potential occupiers to consider before signing on the dotted line.
The five most common issues overlooked by gym occupiers when acquiring space are:
- Cost of Soundproofing – every gym space needs a degree of soundproofing, how much depends on many things such as the location and size of the unit, the types of workouts and activities and even the thickness of the floor slabs. In any case, soundproofing can be the most significant cost to fit out a gym.
Pre-agree with the landlord an acceptable decibel level to comply with and make sure it is documented in the lease. This will guide you on the type of soundproofing material required and the estimated cost.
- Floor Loading Capacity – strangely often overlooked by occupiers is the floor loading capacity of the unit. This is probably due to most gym units having concrete floors, but it is something to be aware of especially if the ground is not concrete or lacks thickness. If not, you could be liable for costly damages.
Ask the landlord for a structural engineer’s report which should contain information on the floor loading capacity.
- Location of Unit – is your gym space located on the ground, upper floors or in the basement? Is it within residential accommodation, offices or retail? Typically it is a much easier and an altogether smoother process if you locate in a commercial premises rather than residential. There seems to be an obsession by occupiers to locate in high footfall locations, however I do not into buy this. Yes, the gym needs to be accessible, but that does not mean they need to occupy prime positions on a high street for example.
There are nearly always more complications when locating in residential accommodation, even in the basement. Costs can quickly mount up to adequately soundproof the unit and be ready to face fierce opposition from local residents. Establish yourself in a unit beneath or adjacent to retail and offices premises, if possible.
- Vibrations – believe it or not, vibrations travelling through concrete walls and, in particular, columns, can be the biggest oversight to foil a potential deal. This is more of an issue when activities are centred around using heavy weights, even with the benefit of sound proofing.
Avoid units with a lot of structural columns. I always advise my clients to carry out tests to establish if there is a potential vibration issue at the earliest opportunity.
- Occupancy Costs – sounds obvious right? I have lost count in the amount of time occupiers forget to incorporate the cost of the business rates and service charge (if applicable) when calculating how much they can afford to pay for rent.
Remember to ask the landlord to provide all the costs associated with the property and not just the rent.
About the Author
Abban Magos - I have been advising national and independent gym operators for more than three years on a range of property related matters including acquisitions and disposals. Above is not an exhaustive list of issues so if you are considering acquiring gym space, already own a gym, or are a landlord of a property that you are considering for gym use, then give me a call or drop me an email at firstname.lastname@example.org.