How To Choose Amenities Part 6, Fitness Center

The Real Estate Espresso Podcast

How To Choose Amenities Part 6, Fitness Center

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How To Choose Amenities Part 6, Fitness Center

Welcome to The Real Estate Espresso Podcast, your morning shot of what’s new in the world of real estate investing. I’m your host, Victor Menasce.

Today is the final segment in our miniseries on amenities. Last week we started a miniseries that’s a deep dive into amenities based on the outstanding work by apartment operator Greystar. They are the largest operator of apartments in the U.S. with over 100,000 units in their portfolio.

Now we are working with Greystar on our own active adult project up in Spokane, Washington. If you want to learn more about this amazing project, come and register through our portal at ystreetcapital.com. We’ll have more to share about the project.

This is not a solicitation for investment. Of course, any investment would be by prospectus only in compliance with SEC regulations.

We spoke last week about technology, storage, coworking, outdoor amenities, kitchens and security. Now today, we are talking about fitness centers. Not fitness as a lifestyle trend, but as an amenity in your multifamily project, specifically what the data is telling us about how residents actually use these spaces, what they value, and what developers routinely screw up when it comes to allocating capital.

The data comes from Greystar’s 2024 design survey and it’s focused on community fitness centers. On the surface, it looks like an amenity question. In reality, it’s more of a study on human behavior, operating costs and return on investment capital.

So let’s start with usage. In the survey, 68% of respondents nationwide said they currently use the community’s fitness center. That’s a strong number, but it’s also one that can be misleading. It tells us fitness centers are not just decorative amenities, they are actively used by a majority of residents. It also tells us something equally important. Roughly one-third of residents don’t use them at all.

It also counters the perception from many building operators that the gym rarely gets used. So, if the gym is not getting used, it could be the gym lacks the minimum equipment or availability. In that case, it definitely doesn’t get used. It immediately frames the questions developers should be asking. Not: how impressive can we make the gym? How do we design the fitness space so it serves real demand without overbuilding for a minority of users?

So let’s look at what residents say is essential. The top features rated as absolutely essential were:

Number 1, free weights at 43%.
24×7 access, that was 42%.
Water stations at 41%.
And cardio machines at 38%.

Those are the basics. No frills, no boutique concepts, just access, hydration, and equipment that works.

And this is where I see a disconnect in many new developments. Developers are often tempted to install specialized equipment, branded systems, or trend-driven offerings that look great in renderings but underperform in daily use. The data is telling us that residents want reliability and availability first. They want to work out on their schedule, not the building schedule, and they want equipment that supports a wide range of training styles.

So free weights, number one, they matter because they’re flexible. They adapt to beginners and advanced users both. They also age better than highly specialized machines. From a capital perspective, free weights deliver durability and relevance over time.

24×7 access is also critical. Fitness is no longer a 9-to-5 activity. Shift workers, early risers, parents, remote workers all have different rhythms. Restricting access saves very little and it frustrates a lot of folks.

That means the location of the gym is also essential. If free weights create noise for neighboring apartments, then the noise isolation needs improvement or the location needs to be further away. Nobody wants to be woken up or interrupted by someone dropping free weights on the floor.

Water stations ranking high should not be surprising. Usability of the workout machine is part of the workout experience, and it’s a small capital item with a high perceived value.

Now let’s look at amenities that rank lower. Things like towel service, guest access, flexible-use rooms, like things for your yoga classes, they’re far less likely to be considered essential. That’s important because they’re often expensive to operate. A towel service adds laundry, staffing, replacement costs. Guest access introduces liability. Flexible-use rooms, they sound great but they often sit empty or become storage over time.

This is a classic example of operational drag. Amenities that require ongoing labour and management rarely scale well in residential real estate. They increase complexity without a corresponding increase in rent or retention. The data is quietly telling us to be very cautious.

Another interesting data point is the preference of live instructors versus virtual classes. 73% of respondents prefer a live fitness instructor. Only 27% prefer virtual on-demand classes. That’s also a meaningful result. There’s been a strong push towards virtual everything, especially post-pandemic. When it comes to fitness in a community setting, people still value the human connection.

So that just might mean that if someone wants a live class, they’re not going to be doing it in the building, in your gym. They may be going somewhere else, and that’s okay.

At the same time, live instructors are expensive. They want contracts, they want scheduling. This adds a lot of friction. Even if you put the class on, it doesn’t mean it’s going to be at a convenient time for everyone who might want to take it. Pop-up classes, partnerships with local instructors, or occasional groups might deliver most of the perceived value without locking you into a fixed cost structure.

The survey also highlights secondary features like nearby bathrooms, stationary bikes, and the ability to open the space to the outdoors. These are quality-of-experience factors. They don’t define the fitness center, but they enhance the usability. Natural light and fresh air in particular are low design cost considerations when they’re planned early, and very expensive to retrofit later.

So what does this all mean for developers and investors?

First, the fitness center is not optional. In most multifamily apartments, with nearly 70% usage, removing them entirely is considered a competitive disadvantage.

Second, the fundamentals matter far more than the frills. Stick to the basics: free weights, cardio equipment, water, and access. Those drive the majority of the perceived value.

Third, consider recurring costs very, very carefully.

Finally, flexibility beats specialization. Equipment and layouts that serve many use cases age better and survive demographic shifts.

And finally, remember that every amenity competes for capital. Money spent on an oversized fitness center is money not spent on soundproofing or storage or durability elsewhere in the building. The job of the developer is not to build the most impressive gym. It’s to allocate capital in the way that maximizes investor returns.

So this data gives us some clarity. Simpler, accessible and well-designed fitness spaces outperform flashy, overdesigned ones.

As you think about that, have an awesome rest of your day. Go make some great things happen. And we’ll talk to you again tomorrow.

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