How wellness became big business in America

 —  Article by JLL Staff Reporter
Woman walking down street in US with smoothie
Image credit: Shutterstock

During a ‘60 Minutes’ segment on health in 1979, anchor Dan Rather said, “‘Wellness’: there’s a word you don’t hear every day.”

Four decades later, the word is ingrained into the paces of modern life, from a spirulina-infused smoothie in the morning, to an evening sound-healing session at the office, offered as part of a corporate wellness program.

“Wellness went from a niche concern – something ‘granola’ – to something that is mainstream,” says Carl Muhlstein, who leads a landlord agency leasing team at JLL.

With mass appeal comes mass profit. The wellness industry is now valued at US$4.2 trillion, having grown 12.8 percent in the last two years. It now represents 5.3 percent of global economic output.

This has impacted real estate “in diverse sectors that range from retail to hotels and offices,” Muhlstein says.

Take, for example, gyms. From 2000 to 2016, the number of Americans who belonged to a fitness or health club nearly doubled to hit 57 million, according to industry statistics.

As gym membership became commonplace, office landlords worked to secure boutique fitness concepts like SoulCycle or Orange THEORY, in addition to state-of-the-art gyms at their office developments. Muhlstein points to CFIT at C3 at Culver Pointe, a Gensler-designed creative office development in L.A.’s Silicon Beach, which features a complimentary 24-hour gym, which is used exclusively by tenants.

With consumers driving the wellness push, “landlords need to consider how their wellness concepts stack up,” Muhlstein says. “In the workplace, the focus on holistic healthy living and wellbeing – indoor/outdoor amenities, increased natural light, access to fitness areas — also improves morale and productivity.”

What is wellness?

Wellness encompasses anything that promotes physical, mental, spiritual or emotional health and happiness – or merely good feelings.

Tonic bars are wellness. So are relaxed dress codes facilitated by athleisure boutiques. Acai bowls. Walk-in acupuncture clinics. Spin cycling and hot yoga studios. Activated charcoal lemonade. A makeup line formulated specifically to stay on during intense exercise – thereby aiding the ubiquitous gym selfie. All wellness.

Millennials are in the driver’s seat of its growth. More than 80 percent of people aged 18 to 34 are already spending a quarter of their disposable income on health products and services, according to JLL research.

“But it’s not just millennials,” Muhlstein says. “Now that we’re four generations into the workplace, what baby boomer doesn’t want access to a free state-of-the-art gym with high-tech treadmills and showers?”

Wellness and real estate

The retail sector has really felt the wellness charge, both in terms of what goods and services companies offer, as well as what landlords consider when selecting retail tenants. Wellness-related tenants are now filling the prime retail spaces that might have belonged, pre-wellness-craze, to apparel retailers.

“There was a time when malls would prohibit fitness centers and gyms,” says David Zoba, chairman of JLL’s Global Retail Leasing Board. “Today, they are a welcome tenant. The attitude of shopping center owners has changed dramatically, even in the urban street environment. It’s a trend that will never end. If anything, it’s growing.”

Department stores have made efforts to up their wellness offerings. Saks Fifth Avenue dedicated one floor of its New York City flagship to health, fitness and beauty, and called it “The Wellery.”

For supermarkets, Whole Foods may have set the bar high, but now even big box stores, once associated with products with mass appeal and questionable health benefits, are increasingly offering cold brew coffee on tap, organic produce and fresh juice bars. Organic products are now available in nearly three out of four conventional grocery stores, according to the United States Department of Agriculture’s Economic Research Service.

Hotels, too, have changed. Some Westin hotels offer a “SuperFoods” room service menu, incorporating broccoli and oats into dishes. At the Ritz-Carlton Georgetown in Washington D.C., guests can upgrade to one of 13 “Wellness Rooms,” where they can enjoy aromatherapy bath salts, have a vitamin-C infused shower and breathe purified air. Forgot your gym clothes? In a partnership with New Balance, Westin now let’s guests rent the brand’s shoes, shorts, shirts and sports bras for $5.

Apartments, homes and even neighborhoods dedicated to holistic health are also on the rise. There are more than 740 wellness estate and community developments either built or planned in 34 countries, according to the 2018 Global Wellness Economy Monitor. The $134.3 billion real estate niche within the wellness industry is projected to grow by 8 percent in the next five years, reaching over $197 billion by 2022.

Wellness for all

Wellness retail is not without challenges. Many wellness offerings carry the stigma of being elitist, self-indulgent and only for the rich. Satirized on Saturday Night Live, Gwyneth Paltrow’s e-commerce platform Goop has borne the brunt of this mass disdain in all three categories. Her site sells a prettily-packaged, $27 “Psychic Vampire Repellent Protection Mist,” designed to “clear toxic energy, promote calm and creativity” by using “sonically tuned stones.”

In order for the industry to reach its full potential, consumers have to see wellness as a way of life that is accessible to everyone, not just the elite, Zoba says. He predicts that more relatable and inclusive wellness concepts will come forward in coming years.

As it becomes more accessible, it will also be more palatable to geographies outside of the East and West coasts, which are currently home to the bulk of the industry, according to Zoba.

“You’re not going to get the $180 a month gyms in the central part of the U.S.,” he says. “The trend has room to run before it reaches its peak on a national level.”

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