LA Fitness is making its debut in the Bay Area with two health clubs in San Jose that will be the vanguard of up to 30 fitness centers that, combined, would employ hundreds of people.
"We believe in the economic engines of the Bay Area," said Bill Horner, chief real estate officer with Irvine-based L.A. Fitness International. "We are excited about being there and are looking at projects throughout the Bay Area."
LA Fitness is planning 20 to 30 health clubs in the nine-county region. Each will have about 40 to 50 employees. So that would work out to roughly 800 to 1,500 employees, depending on the company's ultimate expansion.
"The Bay Area has a lot of health-conscious and sophisticated consumers," said Kent DeSpain, a partner with San Francisco-based Retail West, a commercial realty firm that represents LA Fitness in its search for sites to lease.
"We are actively working on deals right now for 10 to 12 locations," DeSpain said. LA Fitness also is planning centers in the East Bay, although specifics weren't provided.
The first two centers in San Jose will be about 45,000 square feet each. LA Fitness intends to seek sites to accommodate clubs of very close to the same size as it expands in the Bay Area.
That uniformity is a core element of the company's philosophy.
"We offer consistency throughout our clubs at a good value," Horner said. "All of our clubs have a full set of amenities. They have pools, racquetball, basketball, a great equipment package. We have 50 classes a week." The company aims for pricing packages that work out to roughly $1 a day.
The first LA Fitness outlet in the Bay Area will be at the northwest corner of Oakland Road and East Brokaw Road in San Jose. The health club will be the anchor tenant for a 100,000-square-foot retail complex, said Damon Scholl, a sales associate with Cornish & Carey Newmark Knight Frank, a realty firm.
"Having LA Fitness definitely helps the center," Scholl said. "The parking lots for their centers are always packed every day." Scholl added that Five Guys Burgers & Fries, Chipotle Mexican Grill and Subway have also signed leases.
The success of the Brokaw North site represents a reversal of the misfortunes the complex had suffered previously. And it's further evidence of the improving retail landscape in the Bay Area.
The developer, Palo Alto-based Dollinger Properties, had a number of tenants lined up. Then came the market crash of 2008, and the tenants headed for the exits.
"We had a complete disaster previously," said Dave Dollinger, a principal executive with the development firm. "But now the leasing is going pretty well."
LA Fitness also has leased a second San Jose site a few miles away, near the Interstate 880-Coleman Road interchange next to the city's airport. That center, Coleman Landings, is anchored by a Lowe's home improvement store.
"There is a huge daytime population there from local companies, and they will also cater to the Rose Garden and Naglee Park neighborhoods, as well as people in Santa Clara," said David Buchholz, a senior vice president with Colliers International, a commercial realty brokerage.
Amid a tough economy, it might seem surprising for a company to be expanding. But for Horner, his company's push into the Bay Area makes sense.
"LA Fitness is a long-term player," he said. "There is softness in real estate in the Bay Area. For people like us who have a long view, this is a good time to get properties that might not be available again for a long time at these rates."
Contact George Avalos at 925-977-8477.