Will Wearable Devices Change The CRE Fitness Plan?
In-person gyms and fitness clubs took a major hit in 2020. After all, being surrounded by strangers breathing heavily was low on Americans’ priority lists during a pandemic. Meanwhile, a different sector of the fitness industry was seeing a meteoric rise.
As workouts moved more to outdoor solo activities like running and cycling, demand spiked for wearable devices. By tracking heart rates and sleep schedules, wearables allow users to create evolving fitness regimens without the need to go inside a gym.
Whoop, the makers of a wrist monitor with a stable of high-profile celebrity athlete users, raised $100M in a Series E funding round in October 2020, sending the company’s valuation to over $1.2B, in part thanks to demand from users who bought a Whoop Strap during the pandemic. Some wearable device manufacturers reported that their sales doubled in 2020.
As vaccination rates increase and gyms reopen, the proliferation of wearable devices raises questions for the fitness industry and real estate alike. Will fitness enthusiasts who built up outdoor workout habits return to gyms? Will a sprawling fitness center — often the crown jewel of amenities in luxury multifamily and trophy office buildings — still hold the same cachet for prospective tenants?
And with the new emphasis on wellness, will building owners or companies start offering wearables' subscriptions as perks, the same way they offered gym memberships in the past?
On this week’s Walker Webcast, Whoop founder and CEO Will Ahmed said that part of what sets Whoop devices apart is the emphasis on recovery as an integral part of wellness and fitness regimens. While the 2010s saw a “more is more” approach to fitness, the philosophy has shifted toward making sure that users are building fitness without risking injury or overexerting themselves.
When they studied a group of Navy SEALs, the Whoop team found the users were just as competitive about who could get a better night's sleep as they were about who could train the hardest.
“When you start getting competitive people thinking about competing around sleep versus just competing on strain, really positive things can start to happen quickly,” Ahmed said.
Despite the recent surge in interest, the market for wearables has actually become less crowded since 2015, Ahmed said, as competitors like Under Armour’s UA Band and Nike’s FuelBand have been discontinued. Instead, Walker & Dunlop CEO Willy Walker pointed out, Whoop’s biggest competition comes from products of two behemoth tech firms: the Apple Watch and Fitbit, now owned by Google.
“I could probably name 20 startups that at various stages were better funded than Whoop and were destined to kill us,” Ahmed said. “I think more big technology companies will enter the space. I believe that in our lifetime, every human will be wearing a health monitor continuously.”
The recent interest in wearables isn’t solely based around working out; the devices have proven to be somewhat effective at detecting the onset of symptoms of Covid-19. On the Whoop Podcast, professional golfer Nick Watney reported that on the morning of the second round of the RBC Heritage tournament in Hilton Head, South Carolina, he checked his Whoop data to find that his steady rate of around 14 breaths per minute overnight had suddenly spiked to over 18.
Despite the fact that he had tested negative for Covid-19 three days earlier and was cleared to play, Watney requested to be tested again. He withdrew from the tournament later that day after testing positive.
Over the next week, the PGA purchased 1,000 Whoop devices and began offering them not just to players but to any caddies and staff who wanted them. Whoop has now been used by the PGA, the Tour de France and the University of Tennessee to monitor athletes for symptoms. When golfer Hideki Matsuyama won this year's Masters Tournament, he wore a green Whoop Strap to match his green jacket.
“Early on in the company's evolution, I just knew that if we could build the very best technology, these people would wear it,” Ahmed said.
This article was produced in collaboration between Walker & Dunlop and Studio B. Bisnow news staff was not involved in the production of this content.
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