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Blink Fitness finds its own cool-kid city, in The Urbane Franchisor


Before Austin, Raleigh and Nashville were the cool-kid cities, real estate in those towns was cheap, hole-in-the-wall restaurants were still sleepy and the recent population spurts were just visions in some optimistic city official’s PowerPoint. Flocks of incoming young people spurred the redevelopment of historic buildings, construction of new high rises and rebranding of neighborhoods that were once eyesores.

These upwardly mobile huddled masses brought their fair share of baggage, too. Residents of the hottest cities have seen housing prices skyrocket, while businesses struggle to find quality real estate and employees. Redevelopment of cities is undeniably a net positive for the world, but franchises looking to outfox their competitors need to spot the next Best Coffee City or Best City for Beekeepers while the getting is still good.

For one such tale of spelunking for gold, allow me to present the case of Newark, New Jersey, a big old city with a bad reputation that’s about to get a dramatic new lease on life. I’m told the Portuguese seafood is to die for.

Blink and you’ll miss it

Just a stone’s throw from Manhattan, but dragged down by a history of crime and corruption, Newark is seeing those first green shoots as boosters and developers pitch dramatic plans to remake the city’s identity. While a proposed cluster of skyscrapers in the heart of town haven’t risen yet, its commercial and residential vacancy rates are falling as developers begin building new and renovating old buildings in a city that was first chartered more than 300 years ago.

Blink Fitness recently partnered with Paramount Assets, a New Jersey-based commercial developer with an urban focus that’s completed many retail projects in Newark, including several adaptive re-uses of neglected old buildings. The pair worked together to open a Blink gym, its 69th location, in a historic bank in the gentrifying Ironbound neighborhood just south and east of the city’s central business district.

Blink Fitness

Blink Fitness made the most of its new location in Newark, located in an old bank.

Blink’s newly promoted CEO, Todd Magazine, said the new location was a result of his team shifting its focus to new regions and cities with different demographic and psychographic patterns than it was used to in and around its home turf of New York City. Newark, in particular, has been “starved for quality retail in general and fitness more specifically,” he said, adding that he’s been personally involved with every real estate deal in the company’s history.

Blink’s research included on-the-ground observation that found Newark’s supermarkets weren’t particularly good, its retail scene wasn’t particularly strong and, in general, it is a city that’s “yearning for high-quality propositions” that contribute to the ongoing redevelopment efforts.

“Newark is very much a bullseye of the kind of market we love to be in,” Magazine said. “I’ve spent a lot of time in the market, partly because I’m nearby. At some point, Newark’s going to explode.”

He compared the market to Chicago’s Cabrini-Green, geographically close to the heart of downtown and the Miracle Mile, but historically one of the poorest, most dangerous parts of town until redevelopment forces transformed it into a desirable place.

“It took a long time, but the proximity to the city and the real estate that’s been added there is really spectacular and, in many ways, I think Newark is a lot like that,” he said.

Magazine was careful to offer a caveat: his team isn’t placing bets and hoping for a transformation, but rather, finding desirable markets that haven’t yet been exploited by his competitors.

“We’re going into markets believing we’re doing the right thing for the community and if there is a transformation that is appropriate for that community and that sub-market that’s wonderful,” he said. “We’re going in and hoping to do something good for the community, and our reward is we will get a lot of members and people will stay with us and everybody will benefit.”

Affordability as a catalyst

Rich Dunn and Samir Guzman of Paramount Assets are commercial developers who are very bullish on Newark, which still has a healthy number of grand old buildings awaiting new life. That compares, they said, to more popular cities where most of the building stock has already been converted to new, more modern uses.

Retail is the core of Paramount’s client base, which has included work with countless franchises in the city.

“That’s our forte, and Newark has a lot of these historic structures that bring a lot of character to a city,” said Dunn, Paramount’s senior vice president. “We see the writing on the wall, and we’re very happy to be able to contribute to the emphasis and urban renewal of Newark.”

Photo by Sage & Coombe Architects

 While these skyscrapers may never be built, planners and developers are thinking big about Newark’s future.

Photo by Sage & Coombe Architects

Rising retail and residential prices in top-tier Northeast cities like New York, Boston and Philadelphia is boosting Paramount’s efforts in Newark, as young residents and savvy business owners look for new, less costly markets.

“It has pushed a lot of people out of their price range, so that’s spilled over for us in New Jersey, into Jersey City, Hoboken and the New Jersey side of the Hudson River,” Guzman said. Landlords and developers can help alleviate the impacts of such trends, they said, by forming partnerships with franchisors and business owners to find new buildings and new neighborhoods that recent history has overlooked.

“One of the things I’ve found is there are a lot of franchises that have not discovered the power of urban yet,” he added. “We take national franchises, regional businesses and help them navigate through the process and make sure the product we’re delivering is as close as possible to what they’re looking for.”

Working together to redevelop older properties often means compromises, especially in terms of store sizes and configurations. They emphasized that small changes to store templates can open up new properties if they’re willing to take a leap of faith during the site selection process.

“A lot of them are apprehensive coming into these areas as a franchisee,” Dunn said. “We have the ability to navigate them through the system and hold their hand to get them through that bureaucratic process.”

Banking on the future

For Blink’s Ironbound location, which opened at the end of April, Paramount found an old bank, which allowed them to repurpose a massive vault that now houses workout equipment where customers walk in through the original curved opening.

Compared to restaurants that tend to benefit from clustered locations, Blink prefers to locate near daily needs locations like drugstores, supermarkets and other places to make going to the gym—something many people do grudgingly—as convenient as possible.

“It’s always better to be in a greenfield market versus a market that’s highly competitive,” Magazine said. “Population density and co-tenancy, those are the kinds of things that are really important to us.”

While Blink’s portfolio skews urban, the brand’s suburban locations demand a different calculus about how customers arrive to the site, with parking being a significant added expense in markets that are highly car-focused, like Los Angeles.

“Every one of our locations has their own pluses and minuses and most of the fun or challenging parts of this come with the subtleties of real estate,” he said. “They’re all puzzles and they all have different configurations. Some are really fun and some we’re happy to get done and get open—real estate is so not a one-size-fits-all.”

Tom Kaiser, pictured on page 58, is senior editor of Franchise Times and writes about urban tales in franchising in each issue. Send story ideas to tkaiser@franchisetimes.com

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