Business Expansion: Building The Next Location

In our last installment, I was seeking some ideas and feedback on a couple of potential locations for my next gym location. I've had a lot of time to dwell on it, visit both sites, talk to local managers and business owners for their inputs, and speak with the realtors who represent the building owners.

So I've narrowed it down to a location which I have been negotiating on for a few weeks now. But first, a recap of what this is all about. I own an existing Anytime Fitness gym franchise which was essentially a turn-around project. To be honest, the gym wasn't doing all the great before I took it over. If the previous owner didn't also own the building, I don't know if he would have even been able to cover the overhead of the location. Anyway, a saturated market has enticed me to diversify and look for greener pastures somewhere else in town. In some areas, there isn't enough infrastructure to accommodate a site...there just aren't any shopping centers, although the population could support and benefit from a gym being there.

But the central downtown area looked prime, since there was only one other gym and it wasn't even a 24-hour location. So I looked at the space down there and found a few workable options. But first, here are a few things going in my favor:

The downtown area is being restored. There was already a great existing skywalk area to funnel many downtown employees along designated paths through building and safely over streets, but there is also a few housing projects in the works. When I say "projects", I don't mean the low-income type of housing.

"The M"

This former Macy's building is being completely renovated to become 109 apartments and condos. There will also be a Nike store on the retail level. This building is 2 blocks away from what will be my new location.

Ridpath Apartments

What used to be a hotel is now under renovation to become 200 additional apartments. These spaces will be more along the "micro-apartment" variety and appeal to millennials who might not make a lot of money, but want affordable housing downtown. This building is located across a parking lot from my prospective location.

There are three other apartment buildings in the works at the moment and could open as soon as early 2019.

Other aspects of the deal include a generous tenant improvement allowance, which should cover probably 85-90% of my construction costs. I have also negotiated an addendum that states for every gym membership the landlord gives out as a perk to other building tenants, my rent will be reduced by $30. Considering there are 8 floors in the building, I could be looking at a significant number of employees in the building.

The location is called the Cutter Tower, named after the architect who designed it.

Another feature I like about the building is that there is a brick plaza just on the north side of the building, which would make it easy to hold fitness classes outside. The river front park is also only 2 blocks away, so it would also be a short walk to hold a bigger event there...with more publicity, too!

The gym would be on the second level along the aforementioned skywalk system. I would have the interior wall all glass, allowing me to get the attention of the passer-bys. I'll just have to ensure there are areas where folks will be able to hide if they are self conscious. I would position the cardio on the other side of the gym along exterior windows (good view out, but nobody could see much by looking in as it is just too high up.

So that is the plan. there are a few short hurdles to clear, but we could be moving on this project in the next few months. What do you think? Have you ever opened a business in a downtown location? Any advice or tactics you can share?