Gyms have pushed up and past the competition when it comes to filling up American street corners.
Service-oriented businesses have now surpassed goods-based retailers in leasing activity for the first time on record. The shift is fueled largely by the spread of fitness centers, medical spas and specialty salons. According to data from CoStar seen by The Wall Street Journal, service-based tenants leased more than 50 percent of total retail square footage in 2025 — a significant jump from the 40 percent share they held just 15 years ago.
The shift represents a fundamental change in how consumers signal their social standing.
Brandon Svec, national director of U.S. retail analytics for CoStar, told The Wall Street Journal that "a handbag used to be the luxury symbol," but today’s consumers prefer to spend that capital on yoga classes or high-end facials.
In the U.S., the wellness market reached a staggering $2.1 trillion in 2024, the nonprofit Global Wellness Institute reported in January. New research shows that each of the top 25 countries into wellness have surpassed their pre-pandemic market size, according to the report.
“The U.S., which accounts for a staggering one-third (32 percent) of the total global wellness economy, is a striking example of that,” the Global Wellness Institute report stated. “It grew by over $130 billion just between 2023 and 2024 — a gain roughly the size of Italy and Australia’s entire wellness markets.”
The rise of e-commerce has fundamentally altered the physical requirements for traditional retailers. With online sales accounting for 16.4 percent of all retail activity last year, clothing and office supply stores are frequently downsizing their physical footprints.
Property owners are finding that subdividing these large, vacated spaces can be highly lucrative.
Brian Finnegan, CEO of Brixmor, told The Wall Street Journal about a specific instance where his firm subdivided a single 10,200-square-foot former liquor store in Philadelphia into four smaller units: an animal hospital, a facial spa, a stretching studio and a nail salon. These four tenants combined generate 20 percent more rent than the previous occupant.
Fitness is also becoming a primary social outlet.
Noah Neiman, co-founder of the boxing chain Rumble, recently launched a new self-defense and group-fitness concept called the Pack. Neiman told The Wall Street Journal that spaces such as as gyms are becoming "the new happy hour," where people meet friends or bond with colleagues through activity rather than alcohol.
U.S. retail vacancy remains remarkably low at 4.4 percent, just a slight increase from the 2024 record-low of 4.1 percent.
