LOS ANGELES—Planet Fitness has signed a long-term lease in a 72,000-square-foot office and retail building on Broadway in Downtown Los Angeles. The 28,000-square-foot lease makes Planet Fitness the biggest retail anchor tenant to move into the area since Urban Outfitters signed its Broadway lease at the end of 2013. Planet Fitness is scheduled to take occupancy this summer.
“From the start, we were looking ideally for a single building tenant, like a larger caliber retailer that could come and take the whole property,” Lee Shapiro, EVP of Kennedy Wilson's brokerage group, tells GlobeSt.com about the leasing efforts for the property. “However, we found that type of tenant didn't want to be in the northern part of Broadway at this point in time; I think it will eventually in the future. So, then we focused on larger block tenants, and we were fortunate that we found a tenant to take nearly two full floors.” Shapiro represented the landlord, Broadway Investments Group, in the transaction along with his Kennedy Wilson colleague, senior associate Justin Weiss.
Located at 437 S. Broadway St. in Downtown Los Angeles, the formerly vacant building is now 39% occupied. Planet Fitness has leased the majority of the ground floor and the basement of the building. There is a 3,000 square foot space that remains available on the ground floor, which the brokerage team will market to a smaller boutique retail store, a coffee shop or a restaurant, and the remaining floors will be marketed toward creative office tenants. Planet Fitness chose the location because of the health and fitness demands of the recently increased population in the downtown market. It is close to Bunker Hill and several multifamily and mixed-use developments, which will ensure “booming activity,” according to Shapiro.
“There is a lot of day and evening population with the new residential components, so this particular tenancy being an affordable gym will service a lot of the changing and growing submarket on the northern end of Broadway,” he says. “The property is really well positioned in the marketplace, and I credit Planet Fitness for recognizing that particular trend in the marketplace as a group that is coming from New York and expanding their model out to Los Angeles.”
Although a lot of the nearby developments have gyms, Shapiro assures that this isn't an issue for Planet Fitness, and won't be considered competition. “In my experience in working with mixed-use properties throughout Los Angeles, most of them do have a boutique-type of fitness center, but that fitness center is often a limited workout,” he says.
This lease transaction further illustrates the growth in the downtown market for retailers, especially on Broadway. “We are seeing an expansion of Broadway literally from the north edge up to the 300 block and all the way south to Olympic Blvd.,” says Shapiro. “The street is stretching, and you are seeing a lot of activity moving from the middle of the market. It is exciting, and the retailers are recognizing the change of the marketplace that has been on Broadway in the past. We are fortunate to be part of it.”
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Kelsi Maree Borland
