New demand from fitness centers are filling retail vacancies in Los Angeles and surrounding markets—but they aren't taking the big box spots left over from recent store closures. These boutique fitness centers, like cycling classes and yoga studios, are typically leasing 3,000 to 6,000 square feet of space. At the same time, big gyms—that typically do lease larger footprints—are going away. The good news: small fitness operators can afford high rents and are expanding to new locations.

“You are never going to get cool, cache fitness concepts taking over 50,000 square feet,” Alex Koustas, a broker at The Agency, tells GlobeSt.com. “Physical fitness is changing, and it is becoming more niche and more cache. It is more community oriented. The days of going to the big gym have transitioned, and you aren't seeing those as often any more.”

Alex has seen a growing demand from fitness operators, and has signed lease expansions to surrounding L.A. markets, like Studio City; however, he doesn't see these concepts moving out to more suburban markets like the Inland Empire and San Bernardino. You can fill infill core-plus assets with these new fitness concepts, and we are seeing it, but they aren't going to spread to more rural communities,” he says. For those markets, boutique fitness operators may not be moving in, but the large footprint gyms are still leasing space. “When you think of big box retail centers in San Bernardino County, for example, those types of properties are not in inner city Los Angeles,” adds Koustas. “Those are big box layouts, and those are the types of properties that tenants like 24-hour Fitness lease. The urban core is where you are seeing these uses and the absorption of space.”