Basecamp Fitness in Edina, MN with Mark Norman
Guest: Mark Norman
Topics: Basecamp Fitness, fitness retailers
Chris Ressa 0:01
This is retail retold the story of how that store ended up in your neighborhood. I’m your host, Chris ReSSA. And I invite you to join my conversation with some of the retail industry’s biggest influencers. This podcast is brought to you by DLC management.
Welcome to retail retold everyone. Today I’m joined by Mark Norman mark is the VP of real estate of self esteem brands. He has been in the industry for over 17 years. I think he brings a lot to a lot of insights for everyone today, and I can’t wait for him to get going here. Welcome to the show, Mark. Thank you, Chris.
Mark Norman 0:42
Very warm welcome. I appreciate it. That’s that’s the more good stuff said about me than I’ve had in a while.
tell us a little bit about who you are what you do, and self esteem brands. Yeah, so
obviously, it’s been a crazy year, but self esteem brands and and where I’m at and where I’m excited to be. And we’re still growing, believe it or not 100 Plus leases will find this year, even in a COVID year. Self esteem brands owns and franchises for brands, Anytime Fitness, which I’m sure many of you already know about. That’s our biggest brand nearly 5000 global locations. So US and Canada, but then we’re in a multitude of other countries. We have Waxing the City, which is waxing studio about 125. And the US. We acquired that back in 2012, originally in Denver based. And then we acquired base camp fitness, which is one of our newer concepts, high intensity interval training 35 minute addictive class intense class, I’m actually wearing the base camp logo hat, which we’ll talk about a bit. And then we also acquired the bar method in 2019, which is 100 plus strong in the US a couple in Canada and British Columbia. And that’s again plyometrics heavy bar training bar var E. And so again, a range of different fitness and essentially self esteem brands. That’s kind of how we’re built.
So it seems out
there today, there’s a couple of these portfolio companies that are
health and wellness type brands under one roof, right, whether it’s club Pilates, and their whole. And they’re they’re mothership, and there’s a few of these. And this has been done in the restaurant industry for a long time. It feels pretty new in the fitness, health and wellness. What’s the story behind what’s going on in your industry and kind of this aggregation of brands? Yeah, well,
you’re right. So exponential is another one that does a lot of different brands in the fitness umbrella. I would tell you in the industry, there’s certainly consolidation in terms of companies like self esteem, acquiring and continuing to look at acquisitions. But it is what it gives us. There’s a lot of different chess pieces, right? When we’re looking at a market, we have different targeted brands for different target audience, several of which can be synergistic with each other. So it gives us just more leverage in growing our market share, because we in house have multiple, we have franchisees that are a franchisee, or multiple owners of one of the brands and they might want to expand within the family to another brand, right to supplement and diversify their, their their investments. So honestly, I’m used to this because my prior life before self esteem, I oversaw real estate and Regis Corporation, which I was a range of hair salon brands. So this was a little different, but it’s all it’s not all that different. So one example I would tell you is base camp and The Bar Method, we’re actually testing out putting them next to each other right now, we think there’s a lot of synergies there. And they can play off each other. And both can be successful feeding off of the type of clients that would go to both but for different reasons and different days of the week. Right. So it gives a variety to the same type of, of clientele, that has that disposable income for for more of an upscale niche and fitness niche.
Interesting. And so tell us a little bit more about you. You’ve been in the industry, 17 years, how long you’ve been at
so 17 years, which sounds like a long time. And I don’t feel like I’m that old, but I’m getting there. So I’ve been at self esteem a little over a year. So I started there last September, pre COVID. Right when things were a lot more normal. But I started in the industry, Chris in one of the sexiest parts of the industry in property management, asset management, which again, it’s funny because at the time I was thrilled to have a job brief. But I learned so much in that role. And then I grew into more leasing and and looking at stuff with some of the developers who worked for at the time was in the Twin Cities of western Wisconsin, and back in Oh 30405 Things are great. And then the sky fell down and Oh 809 And so I learned it Han on the landlord side of the business during that time, went over to Regis in 2010 as a dealmaker and oversaw a range of states, there for six years, 25 different states and total in some capacity, and then oversaw the team there for about three years before coming to self esteem. So, again, it’s funny how time flies, but I love the industry. I love the people in the industry. And as you and I both know, it’s a small industry, right? So we see the same people over and over again, people could move around and certainly do. But at the end of the day, your your reputation is what’s critical. And I’ve been blessed to be able to continue to build that and work with some of the same people that I grew up admiring, and continue to admire and work with as I continue to grow on the career. So it’s just yeah, it’s been a long time, I guess, even though it seems like a blink of an eye. So
going a little more granular, that is a great overview, I really appreciate it going a little more granular. And one of the things I know. So at Regis, and you oversaw their real estate, and your team was primarily who landlords and brokers were making deals with, a lot of the landlords you were making deals with, and my team is making deals with your team. And it’s self esteem brands, are the franchisees making the real estate deals, or
it is your team.
So I will tell you, it’s both but part of it, Chris, is that when I got to self esteem, one of the things that they wanted was for an evolution of the real estate department to happen, because truly, there wasn’t a VP of real estate before me at Silverstein. They had in house brokerage, essentially, that was the in house brokers, and they were doing deals with franchisees all over the country. So what I’ve done is, is basically installed the same type of scenario that most retailers have like Regis, so my team, our real estate managers, right, and we have territory, and then we have local brokers we’ve on boarded and all the markets, which we did not have before. And so we’re heavily educating and working with the existing owners. And obviously, as we onboard new owners, that we’re really the main focal point, and people that we should be talking about sorry, you should be talking to, to help secure and negotiate and really whittle down options for sites. So some of it is where we’ve been, and just trying to make sure I’m aware of the resources that we have that we frankly just didn’t have before.
That’s interesting. That’s great. So you’ve been really, for the last year, you’ve been team building, and strategizing is what it sounds like. It’s your role as a VP of real estate. Is that fair to say? Yeah,
you make it sound very cool. So yeah, that’s not right. But that is accurate. So yeah, it’s been fun. Like I said, the the people on my team are phenomenal. And like I said, they were doing deals, for the most part, everywhere, essentially, as brokers. And so shifting them into the role overseeing brokers has been good. But the best part is they understand the industry, right? They get it at the core of their deal makers, we have some of the best brokers in the industry representing us, a lot of which I’ve built relationships with and my past across the country. So it’s been a really good setup. So we’re excited to continue to grow even in 2020. And I’m very excited for 2021
and beyond. That’s great to hear.
I’m glad you’re excited. You’re making me excited that you’re excited.
Speaker 3 8:23
Right? Yeah. Are Are they are your
is your team brand focused, or territory focused? Because I know some groups say all right, they might come in their approach might be alright. You’re the base camp real estate person, and you’re the Anytime Fitness person and you’re The Bar Method person. How are you guys set up and structure? Yeah, no,
great question. And again, this goes back to my past. And this is how I like it in general, knowing everything that I know, we’re not brand specific. We’re brand agnostic. It’s all about the territory. So we’re based by geography, we split up the country by state primarily, and we cut it, we split up Canada by province. So I like that because again, you’re really looking for the same type of things over and over again, you’re getting to learn the markets are getting to learn the intricacies of the relationships of local and regional landlords, the local brokers, and really you understand what’s worked and what hasn’t worked for each brand, but really better understanding the market. I’m not a big fan of scattershot thing, and having a different real estate person looking at the same market for a different brand. If it’s under your umbrella, you just have to better understand how that brand operates, who the biggest competition is, and frankly, where your target audiences and your best co tenants are. So it’s not rocket science. It is it is very, certainly a challenge and that’s what keeps me excited about I love the analytical side of this industry. But once you understand some of those basics, there’s no problem growing multiple brands
in the same market. US
word that’s interesting market. Let’s pivot a little bit. That was some helpful context, I think for the listeners. Yeah. What’s going on in the market today? You’re in the fitness industry, which is, and the health care or health and wellness with the personal care industry with the waxing, what’s going on in all these places? What’s going on in the market? As you see it? Because yeah, your market is everywhere in the country, Canada and the globe. So how, what’s your view on what’s going on out there? And obviously, you’re a little optimistic, you have 100 leases you signed this year, and you’re gonna be signing more next year?
What’s going on? Well, first of all,
let me address the lease piece. So because I want to say this ties into the question, I’ll get a deeper dive, but at the core, if you’re optimistic about where we’ll be, and you know, six months, eight months, I’m telling all of our franchise partners, now is the time to be looking at sites and negotiating new deals, right, if a tenant market, you’re not going to get a fire sale, and an A plus location, but there might be some faceless locations that weren’t available a few months ago, right, that weren’t gonna be on the table. Now, by the time we negotiate a letter of intent, by the time we negotiate and sign a lease, by the time we take over possession of the space, and permit and build out and get ready to open, we’re looking at eight to 12 months. So my point is, now is a great time to strike the secure sites for your brands. If you’re bullish on where we’ll be, you know, next summer, next fall, which I am, my team is, and a lot of our franchisees are, right, this is this is where the strong brands really thrive and come out of it stronger. Now, having said that, it has been a very challenging year for health and wellness. And frankly, I think for service, right service users, whether your hair, fitness, waxing, nails, anything where there’s a personal touch people in person, it’s been very challenging. We’ve had shutdowns, we’ve had restrictions in terms of capacity. And so I would tell you, we have struggled through getting through a lot of that some landlords, to be unnamed, have been very helpful, and some landlords have been very detrimental, which I think is short sighted. Because if I’m a landlord, I’m looking at my portfolio, and realizing that this pandemic doesn’t affect every retailer the same, right? We’ve seen some retailers, frankly, not only survive, but thrive during this time. And what I’ve been excited about is obviously grocers. And their resurgence, which I was concerned about Grocery, a couple of years ago about maybe being too many grocers. You look at other uses, like fast casual, who failed to survive through it and coffee bags, that type of stuff have been okay, if not doing better. So when you’re looking at your portfolio, from a landlord standpoint, you have to admit, some are able to pay rent without much issue. And some like fitness and personal service if we’re restricted, you know, cannot pay the same rate because we’re not able to generate income. There was times you know, in this year where we were shut down completely in certain states for a lengthy time to three months or longer. Like we’re still shuttered in most of California. We need help, right? And 99% of our locations are franchised. And so, even though we have great owners and great brands, that’s difficult when you have 0% revenue coming in and landlords are expecting 100% rent to be paid. Now, I know there’s there’s some gray area in there. But that’s been a challenge. And again, a lot of landlords have worked with us on rent abatement permits. I know they’ve worked with their lenders to get the same, because lenders also realize there’s going to be retailers that need help. Not all retailers need help, but some do. So that’s what I’m seeing as a as a kind of ping pong around. I am bullish on the future. I’m bullish on the resurgence of grocery, as I mentioned, the Neighborhood Center, I think that there’s gonna be a lot of upside in the long term. Anytime Fitness, which is our biggest brand has some advantages to some of the bigger box gyms because Anytime Fitness is 5000 square feet, right? That’s give or take our target size. Even pre COVID We don’t have to slam people in for it to work. The idea is that you can come anytime, no pun intended. We have great equipment, we have personal training, we have classes, all that but it never is just jam packed. Like maybe some of our competitors need to be like planet LA Fitness and goals and 24 hours. So that’s the advantage we have. And so we’re bullish on being able to take advantage of that as we get out of COVID and some market share we think we’ll be able to pick up as some of our bigger competitors bigger boxes have closed and some have filed bankruptcy and let go some leases that they didn’t want. So there’s upside, but it has been a definitely a challenging year. Right now. We’re just trying to look towards the future and and really focus on what we can do now to support our franchisees and also engage our customer base with digital offerings. All four of our brands have apps on the App Store and Android and Anytime Fitness Basecamp and Bar Method all have Online workouts via the app, which have been in process pre COVID. But really ramped up and additional resources put in as COVID really hit and took form. So adapting, doing our best to support and then looking forward to future growth has really been the year in a nutshell.
Those are three good pillars adapt support and growth. I like it. I’m gonna ask you a tough one now, because you throw out some interesting market Intel, and I’m gonna give you my take and what we did and did you you mentioned landlords, did you suspend? Defer or beat franchise
Unknown Speaker 15:40
fees? We did. So yeah, that’s
a good question. We significantly abated franchise fees. So that was one of the things that I mentioned to landlords, I talked to Chris. You know, some landlords say, Look, you have a lease, you got to pay the rent. Leases don’t contemplate something like we’re going through, they just don’t even a force majeure clause 99.9% of them don’t contemplate this. So one of the points I would make, among other things that I’ve already made, is that we have a contract to with our franchisees, we don’t have to give relief. But we are short term pain is necessary for long term partnership. And that’s really been our pitch to landlords, not our fault. COVID happened, right? Not landlords fault either. But the best thing we can do is somehow share in the burden. Not landlords get 100% whole, while we take the brunt
Unknown Speaker 16:29
of all the losses. So the way I
characterized it with a lot of our tenants, and our strategy for us was, we need to look at the totality of the circumstances.
Unknown Speaker 16:44
you guys were in growth mode, you had a lot of new locations, I think, you know, I had a conversation with a retailer where I said, in 2016, I made a $10 deal, and I spent $60, I’ve been in the red
Unknown Speaker 17:03
for five years. So for
so I’ve been in the red, you might be closed and have no revenue for 365, no profits for 300. For 90 days. I’ve been for 1500 days in the red.
Speaker 3 17:18
And so the I think
there’s so I’m empathetic and cognizant of what’s going on in the world. But we wanted to look at the totality of the circumstances. And, you know, by and large, we were able to work in partner with majority of our retailers and tenants to look at the totality of circumstances to do something that was beneficial for both parties. And that’s kind of how we approached it, mammoth effort 1000s of tenants, and they were all done on a bespoke basis because of what you said. So that’s kind of how we did it from a real estate perspective.
Unknown Speaker 18:01
What do you what do you see, obviously, you
see some, some growth, because you guys are signing leases and doing deals? What’s drive outside of just availability of real estate from, I guess, a personal care, health and wellness? How are you guys viewing the world? And just, you know, you mentioned market share, and the ability to actually grow revenue? Are you guys looking at that?
So you know, we have some amazing existing owners, and I think those that understand that this is not a forever situation, are seeing the benefit of investing now towards the future. You know, if you think back, Chris, like I mentioned briefly 2008 2009, sky was falling down, right, it was crazy. Now, for different reasons, very different reasons. But this, this type does remind me of that a bit, because it was a very challenging market. But there were certain retailers that didn’t keep take their eye off the ball, and continue to grow and invest in future locations that you know, can pay dividends. For the next 510 1520 years. In some cases, if you’re in the right site, you secure a site that keeps your competition out of the market, etc. So we are seeing the right, existing owners see the future as opportunity and, frankly, prospective new owners that are signing up with us seeing the future, as I mentioned earlier, right? You’re signing up tomorrow, right? So you signed up tomorrow with us to do a base camp or a bar method. You’re not gonna be open till next summer at the earliest, at the very earliest, probably more like next fall. So the timing of it is key. So you’re aware that you’re not going to really be having to hit COVID, head on. If you’re bullish on where you think you will be. You’re more optimistic about about the future. We still believe and I’ll tell you this, this is my philosophy in general. So the future of retail remains in service and food. Right? So service got hit really hard. Who did too, I’m not discounting that, but certain food at least has some wasted to get some revenue. But service and food continue to be a huge piece of the future. gyms are great, right? Even the small shop like anytime and base camp and wet and Bar Method, they’re bringing people to the center. So people want to go workout in these classes want to go workout, it’s a reason to go to brick and mortar. So I’m seeing a lot of landlords too. Even though it’s been a tough year realizing that as a commodity, this there’s certain brands and uses that just aren’t going to survive. But but food and service of which you know, gyms and personal care are certainly a big piece. Those continue to be something that that is the future of retail, right, we might not be as big in terms of square footage. Right now, our sizes are a relatively small, square footage, but we’re going to continue to be a major draw to any retail center that we’re at, and what better way to get other other retailers excited than knowing you have a gym is going to bring people there every day. You know, it’s a really good anchor like tight draw. We’re not as big as a grocer, obviously, or something like that, but a really good synergistic small shop
Unknown Speaker 20:59
I appreciate that. And then I think the last thing on this piece, the you mentioned competition.
And you’ve mentioned it a couple times in in our talk so far. So clearly you guys are focused on competition. Where do you sit in the rising tide raises all boats, right? McDonald’s goes here. So Burger King wants to go across the street? Versus you don’t want exponential or orange theory in and around the market? Where do you guys kind of play in that sandbox?
Unknown Speaker 21:36
Yeah, that’s a good question.
I do agree to some degree that a rising tide lifts all boats. I think the question is the trade area, right? How dense and how big is the trader in areas where there’s a ton of people a ton, and a lot of support for market share? Do we do not have to be on our own right, we can absolutely go head to head with direct competition in the same trade area. And frankly, it’s not a zero sum game, we can both be successful. Right? That’s not that’s something I learned long ago, you don’t have to be one winner, one loser or vice versa. So I definitely think it all depends on the trader, if it’s a smaller market, a more rural market, especially for Anytime Fitness, very tough for us to go head to head in a rural market versus a planet fitness as an example, which is one of our biggest competitors in that space. But when you get into the denser markets, we anticipate base camp and Bar Method and waxing to have competition in and around the same trader because my opinion is if it’s a really good trader and really dense area, you know, I’m talking first ring second ring, suburbs, urban dense suburban areas. They’re gonna be there eventually if they’re not there already. Right? So you got to have a better offering. And you got to be able to compete head
Unknown Speaker 22:52
to head and the
the boutique stuff, the base camp The Bar Method.
Unknown Speaker 23:00
Do you mind if there’s box fitness in the market? LA Fitness planet? Is that okay? Or is it all fitness dollars?
Yeah, no, I would argue that is a different niche. Right. So one of the things we like and frankly when we have several Anytime Fitness owners growing base camp fitness, for example, nearby their gyms are, it’s a very different price point. It’s a very different setup. So I wouldn’t say it’s all the same fitness dollars, Anytime Fitness is a value priced, reasonably low monthly membership where you can kind of do everything and anything, you can obviously do personal training and classes as well. But you have treadmills and weights and ellipticals and bikes and all that base camp is very much it’s a class, you’re setting up you’re in, you’re you’re you’re there for that class, and you’re out. Right, so you’re not hanging out, working out doing different things. You certainly are in your class, but it’s very pointed, it’s intense, it’s cardio with some weights, and it’s in and out in 35 minutes. So we actually view them more synergistic than competitive and that’s in that scope. So no, we would not have a major issue with having a bigger box value gym nearby a base camp or a bar method because it frankly is is a different target price points. Not saying that people wouldn’t do both. that’s in fact what we’re counting on that people would belong to a base gym, but also join one or more niche brands and that’s why I think you’re seeing the niche brands continue to flourish even though there’s there’s a lot of right and a lot of range of different types of niche fitness groups because they are people enjoy doing the group workouts. Right peloton can only be big for so long. I love peloton I don’t have one but I think it’s great. But it reminds me of NordicTrack 15 years ago, right? It was awesome for a while. Everyone loved it and then people got tired of and wanted to go back to the gym and be with people and get pushed. You cannot replicate the kind of intensity at home than you can when you go to a class at Bar Method or base camp.
Unknown Speaker 24:56
All right You need to work out with me at home then.
Right? You’re right. Good point. Maybe Yeah, maybe just me personally, Chris. I can’t push myself hard enough alone.
No, but I like the there’s riches in niches, ya know right now. So I have a pretty solid gym in my garage. And since March
Unknown Speaker 25:24
I have I have a
concept to rower I’ve been rowing almost every day. And yeah, the last two weeks. I’ve slowed down because I’m making this big push. And I had been doing a lot of free weights up until March and I changed, you know, in some CrossFit style intensive, high interval training workouts. And I switched in Mark, I’m going to get down a row March gonna get my rowing up and get my cardio and I’ve been trying, my goal has been I’m trying to get my 2k Row under seven minutes, which is pretty tough for short guy. But I’ve been pushing it and I’m making this last push till the end of the year, I will be disappointed if I don’t get there. And you have some good days and bad days. But I’m close I hit about a month ago, I hit 711 which was pretty close. But when I started in March, it was like an 830 2k was terrible. So I’ve come down a ton.
Unknown Speaker 26:21
But it’s been like if you see
like any like expert rowers, like, if at 1000 meters, you don’t want to quit and you are not dying. You’re not going hard enough. And so it’s a mental, just brutal mental. And on the long stuff I it took me a while but I finally got a 5k row under 20 minutes, which isn’t that great, but it was good for me on the 2k. I feel pretty good. I got under seven minutes. So anyway, that’s my fitness story. So I’m working on it. That’s awesome. Let’s see. I’m going to be testing myself sometime shortly after Thanksgiving. And we’ll see how I do.
Well, I look, I think that’s awesome, Chris. And I would argue, even internally, we’re all just recommending fitness in general, right? Even if you can’t go to the gym, and you want to do virtual great but get outside bike, run, do something, our big thing or in our hashtag is fight it with fitness, the best defense for COVID or any type of pandemic like that, beyond social distancing and masking. Obviously, it’s just taking care of yourself and being healthy. And we believe that this has really shined a light on our country’s need for for taking care of yourself, right what a good investment to make on your own and your own well being than to invest in working out at a gym or gyms. To continue to be able to fight it with fitness, right fight these type of pandemics because that’s that’s certainly what we’re all learning through. This is your fitness is a critical piece of the of your day to day.
I’ll have to check out that hashtag fight it with fitness. Yeah. All right. Next piece of our show is the story. So what location what brand? Where are we going? Take me there?
Yeah, so I wish I had some really crazy funny story. But this one’s actually awesome for me personally. And it’s very relevant to what we’re doing at self esteem. So a base camp fitness. And by the way, as I mentioned, I’m wearing the updated logo right now,
town in town and stated we’re going to
so we’re going to my hometown of where I grew up, and where I, by the way Live. Today, Chris and the background here. If you can’t tell I’m in Minnesota with my wood looks like a shed or a cabin. But we’re in Edina Minnesota, which is a first ring suburb of Minneapolis. We built a base camp fitness corporate location there, that open right before the pandemic February. So, the story moreso was about how it continue has sorry, it is continue to be exciting and drawn new people even through what has been the most chaotic way to open a location. I myself have been going all throughout the summer, when we haven’t been able to and it’s really served me well mentally and physically, I feel a lot better a lot stronger. My wife and I were both Edina residents hosted a charity event at the at the soft opening. And we invited two groups of 40 people to do the class, which was awesome and I have video I can share and pictures of it, which seemed like a different time, right different world because we were all kind of using the same equipment criss crossing all that but it’s been really fun to realize that there’s still a lot of passion for fitness and I’m seeing new people there. Every time I go to work out we have had great membership success there even with limited capacity in Minnesota under government guidelines. But it’s been fun to see how intense people are and I’ve lived it right so not only am I am I work for the company and it’s my day job but as a person that has gotten really into that workout and that that high intensity interval training, I have found that to be such an awesome location to go to as a resident. And as someone that’s excited about fitness, not only surviving but thriving after COVID. Because you see the passion we have in the coaching there, the passion we have from everyone that comes and joins and hit some new milestones like you were talking about earlier, Chris, base camp has a lot of gamification. How many miles can you get on the assault bike, and in one class, there’s a Apple Watch app on the on the watch. Painful, it is painful, it’s brutal, but it’s a love hate. And so it’s a very cool way to challenge yourself. And that’s I’ve been challenging myself to get more points and get more miles. So the short of it is very cool. Because one of our newest brands, we only have eight locations today, we have several under construction, but eight today. And I’ve been fortunate enough to have one down the street from my home, which I’ve been going through a lot because I’ve been working from home. So it again ties back to the resurgence of the suburbs to be able to go so base camp fitness in Edina Minnesota, which has been a really fun example of one of our new brands. And also I’ve been able to live it.
Love it. So I got a bunch of questions about these camping and Dinah Minnesota. So question one, do you ever do intervals and Sprint’s on the assault bike you do.
So the way the base camp workout works, Chris is it’s 35 minutes. And every class you’re on the bike for a minute, and then you’re on the floor for a minute. But every class varies on what you’re going to do on the floor, and specifically what you’re gonna do on the bike. By that I mean, the floor might be leg day where you’re doing weighted lunges, squats might be upper body day where you’re doing, you know, weighted, I’m doing with my arms, you know, curls and different things. So a lot of different types of classes. But the one thing that remains the constant is the bike. And throughout the class, depending on the day, the instructors will challenge you to do sprints to do arms only for a while, right, put your feet up. So it’s yeah, it’s it’s definitely intense. But again, the advantage of a base camp, so maybe some of the direct competitors is it’s low impact. Right? You’re not on a treadmill, you’re not you know, pounding your lower back and your knees are jointed. It’s a low impact. So even though it’s a it’s a hellish low impact, it is low impact.
Yeah, if you for those that are so in my college wrestling days used to get on the Airdyne all the time, which is very similar to the assault bike, different brand. And those things, and I’ve been on the assault bike so I’m on the waiting list for one for my home actually an assault bike right now. But if you want to get your heart rate up and that burning sensation in your lungs and your legs to be fried, push the limit on the assault bike that is a intense intense piece of equipment that is amazing for cardio and is low impact. So there’s a lot of good intervals and a lot of good workouts on the assault bike that really can really really are amazing workout. So, but intense the assault bikes, no joke,
I just learned something new. So base camp has eight locations now.
Speaker 3 33:16
Yes. Okay. What is
the growth potential for base camp? How many you guys think it could be in the country?
You know, yeah, that’s a great question a lot.
I’m gonna say as of right now, obviously, we continue to evaluate and see how big the brand can drill girl. But I definitely think, you know, we look at Orangetheory as someone that’s that’s done it to a great extent, and where we’re trying to get to in terms of size and exceed. So, you know, definitely well over 1500 2000 locations. Obviously, it’s gotta be in the right areas. And they’re going to be you know, areas that have higher income and higher density so they can support the higher price point. But we see a ton of opportunity to eight by the way, today, two are in California started two in Los Angeles, two in San Francisco, two in the Twin Cities and two in Madison, Wisconsin, which are our first two franchise locations that are, by the way owned by an Anytime Fitness owner in Madison as well. So we have one under construction in Houston. We have one under construction in Columbia, South Carolina. We have one under construction in greater Chicagoland area. And we have interest in a lot of other markets. So we truly see a lot of a lot of growth potential for that brand, even though it’s small. Once you get in and do the workout, it is somewhat addicting.
How many square feet
3500 square feet is a target. So we’ll still tweak that a bit as we go. But that’s that’s the ideal size 3500
bought this company or you started Basecamp internally?
Yeah, so self esteem, Brad purchased Basecamp on an existing brand, California based originally in 2018. And so we just now tied to certainly our evolution of our real estate team. But also, we just launched the FTD Franchise Disclosure Document this year in April. So again, right at peak COVID time, earlier Pete COVID time we launched the brand new franchise, so six of the eight are corporate today. But that’s going to shift dramatically in the coming months and years since
you opened this location when? Which one The Dinah Dinah,
data opened in February of this year, February. So I was talking about doing the charity stuff, it was great. We’re all happy. And then then March happen. So it’s been it’s gone through, you know, some tough times. But that’s, that’s what’s awesome. The resilience of it. And not just the customers, but
Speaker 3 35:59
the staff has been really cool to see firsthand. So
when you came on board, where was the plan to open a couple of corporate locations of, of Basecamp? And yeah, this one already identified, or was this one that you identified?
So this is one, which is it’s interesting, Chris. So my team did identify it. Right. So I came on, and it was already kind of down the line in terms of least getting done. And our CEO, Chuck Runyan asked, you know, hey, like, you’re any Dinah guy, and you’re a real estate guy or real estate guy. What do you think of the site? He’s like, you know, I think it can work. What do you think? I think it’s great. I did, I said, Look, I don’t have skin in the game, other than this is the company I represent and work with. But I think it’s great. So it’s been fun to see that location, open and reasonably flourished during a very, very challenging year.
So you, when you say you grew up that like you went to a high school in Medina?
I did. I mean, I
grew up in Edina. And so yeah, I people don’t know that Twin Cities. Well, no Edina, and I am largely born and raised here. So it’s a place that I certainly enjoy. I have two girls, and I love the school system here and the area. But yeah, I grew up here, other than college. I’ve been in the Twin Cities, my whole life.
When you got there, how far along was it? It was like in lease, it was an LOI? What was it?
Yeah, it was at least largely close to being executed. So obviously, if I didn’t like the site, we probably could have hit the emergency brake and moved on. But I think it’s the right location. And I think it will work well and serve well for the future. And especially once we come out of this, I’m excited to to continue to flourish. Because I know a lot of people like that. And I talk to people, just as consumers like myself, that I think would love it. Got my family in there. My parents, my dad, who’s 66 years old, but loves working out. He’s done it several times. He loves it. So it’s, it’s fun to see family and friends that I grew up with trying out a concept that, like I said earlier is part of my day job, but also something that I like as a consumer. And by the way, Chris, we’re putting a bar method right next to it right now, as you and I speak. We’re under construction, with a bar method directly adjacent to that Edina.
Speaker 3 38:25
Basecamp Are you going to do the bar method? I will you know, it’s funny because
we’ve done that class a few times, myself and my team we did the class. It’s very hard. Yeah, I really enjoy it. It is very hard. So I wanted to understand it. So I talked to guys like you and other landlords. So I can speak about it intelligently. And I will tell you, it is just as hard if not harder than anything else we have. It’s just different. I went into the first workout thinking okay, this will be calming but reasonably mild and I won’t be that you know, we that intense I was sweating, complete sweat dripping from my face my shirt drenched you know, 10 minutes in because we were doing different plyometrics and leg up with the bar an inch up inch an inch up inch up for a minute. I mean that kind of stuff is just really hard so I can see why people get hooked on that brand. Also 99% of female, that clientele but I’ve told The Bar Method group that and they agree. There’s definitely a place for more and more males to do that class. I think it was really good for me because it’s the type of workout that I wouldn’t typically do.
but it is a good workout. And yeah,
it is very good workup. Talk to me about
the type of location this is this is a shopping center freestanding building. What is this?
So this location for both Basecamp and Bournemouth and Edina. It is more of a street fund type location Chris so it’s in a suburb, but it’s a very dense part of the suburb. It’s right up against South Minneapolis. So we actually had storefront parking ramp attached a lot of other Great retailers nearby. At one point, the number one Athleta in the country is right nearby. And so there’s some good upscale offerings there. And I would tell you having the parking attached has been really helpful. Because you think about Minnesota winters, and we opened in February, being able to park easily and walk in is pretty amazing when it’s minus 10 degrees outside. So it is it’s not grocery anchored or really otherwise anchored. There’s residential above, and attached and across. And there’s a lot of other retail scattered throughout the intersection and the trader.
Got it. So it’s like a downtown Edina, and there’s a parking. Do you have like in certain spots in Minnesota? Can you go underground to get there? Can you walk
you’re talking about the Skyway system that underground but downtown Minneapolis has is amazing. skyways overall the road you can go anywhere downtown and not step foot outside in the winter, which seems crazy. But if you’ve been in Minneapolis in January, you understand why we haven’t. Yeah.
And so the bait the the bar, the bar class is going to be another street from location down here. Well, they have the same parking access.
Well, so literally, Chris, we leased the space we have, we took more space than we needed to make sure we had potential to expand. And so it’s really it’s part of the same lease we already have in place, we’re putting the Bar Method next to it, we’re gonna probably add a joint entry, maybe a shared cash wrap at the entry. We’re still deciding what to how to lay it out, but want to not only cross promote, but but potentially have passes that work. It both concepts, right, that’s, that’s an operations decision that they’re kicking around. But yeah, it’s going to be literally adjacent, sharing the same wall, corporate location, this one, both corporate. So again, we have two corporate base camps here, this will be our first corporate bar method in the Twin Cities. And so I think they will both serve as showcases for us to test and learn what works best for the brand. And also, when we get back to normal life of in person discovery days and people flying to the Twin Cities. For our discovery days when they’re looking at potentially signing on to the franchisee it would take them to visit the location, right locations because they can see a Bar Method base camp on their own and also in conjunction
with each other. Are
as you grow outside, only eight locations. How are you deciding where base camp goes next? What drives the bus? Because the country is that you have the whole country available? Right? And there’s more. There’s a lot of demographics that could work for this. How do you decide what’s next?
Yeah, so you know, right now we’re working more and more with our marketing group internally to help target market to markets, we believe have a lot of room for the brand to expand, right. In an ideal world, we get franchise owners to sign up in those markets. So we can really get some economies of scale and a good basis of locations to get the brand better known. But otherwise, it’s really just when and where we’re getting franchisees of interest and that includes the new owners, but also as I mentioned earlier, we have some of the best franchisees in our Anytime Fitness set up and a lot of them have interest in adding a Basecamp or waxing or bar method to their portfolio. So that’s another really good avenue for us to expand and get interesting growth.
Awesome. Awesome. Awesome. Well, thank you. This was great. When I get to Minneapolis, I’m definitely going to check out a Dinah and go see the base camp and bar method really cool. I’ve been to many Anytime Fitness for a short time I was a member. There’s one by my office. So I was I’m not today but I think it’s great brand and I haven’t been in one of the wax wax locations, but I’m gonna have to go check them out. You guys are growing them still. Absolutely
waxing is I see a ton of upside in perspective, one of the biggest competitors for wax in the city has about 800 locations, right we have 125. So a lot of room to grow a lot of market share to still grab. So we’re excited about that. And that really actually started started the year in a really good clip. We added a lot of new franchisees for Wacom city earlier in the year. It’s slowed down a bit, but we still see a lot of upside and markets that we have a lot of existing locations to like Denver and Dallas Fort Worth. So yeah, absolutely. That brand will continue to grow. personal services are certainly not going away. When we were able to reopen. We saw a huge influx of people wanting to get waxing services done so that was a great sign.
Speaker 3 44:46
Awesome. All right. Yeah. Last part of our show. Retail wisdom. You ready? I am I think I’m ready. Yeah. All right.
What is your best piece of commercial real estate advice?
I would say be patient, and persistent. And and make sure you’re learning from those around you. Right? It’s, as you know, a lot of different avenues for all of us to come up in the industry. And it’s not easy right out of the gate. It’s a tough industry, it’s not that easy to get into. And once you get in, you have to, you have to spend some time to really understand what’s going on and how to do it and earn some trust and respect from your colleagues. So be patient persistence, and be willing to learn
Speaker 3 45:30
from people that you respect of it. Question two,
what a distinct retailer you wish would come back from the dead.
Okay, so this is one I don’t know if I love if I would love to visit it now. But I have a place in my heart for because I used to work there.
And then I was a cashier. And that’s Blockbuster Video.
So blockbuster, as you know, used to be one of the coolest places in the world. And I worked there for two summers in college. And I loved it. It was a it was the easiest, but yet hardest job I’ve ever had very busy, fun. People would always ask me, Chris. Oh, do you see this movie? What do you think of this? And I didn’t have time to see all these movies. So I just started I learned saying No, I haven’t wasn’t a good enough answer. So I started just making up answers. Oh, yeah. Great movie. You’ll love it. I mean, that was the best thing. And one of the fun stories I had the ties back to Minnesota is Kirby Puckett who has passed away but he lives in Edina. He used to come to the blockbuster that I worked at. So I always see him and his family. I thought I was starstruck. And I would always do a quick search of his rental history to see what it was like and, obviously, there’s no scandal there. But anyway, he was a very, very, very nice person. Always nice.
What was Kirby Puckett favorite movie?
He was always renting multi
family movies, but I’ll be honest, I was always so nervous when he’d come up to the to the counter that I don’t really remember. I just wanted to make sure he didn’t think I was bad or that was weird. And I did a good job. So I wanted to make sure he was happy with the blockbuster experience.
Last question, you’re a Minnesota fan. I’m on nfl.com I’m looking at Dalvin Cook Jersey right now and the NFL shop.
What does that retail for? Dalvin. Cook. Number 33. Nike purple game jersey. Game jersey. So not a replica. I was trying to
figure that out. It says it’s a game player jersey.
So the replica I know cuz I have one. I have one of Cooke $100
That’s exactly what it is. 99 actually, so you got it. So
yeah, I have one I have a white coat jersey. I have a purple feeling jersey. I have a color rush. Cousins jersey. So yeah, I’m pretty diehard Vikings fan?
What do you do if they get traded? Like, did you dig jersey?
I did. So that’s the interesting story. Remember the Minneapolis miracle? I was there. Was there? Yeah. What I bought on the way out of that game.
On the way out,
I was high fiving. everyone cheering
I walked by the merchandise I go. Do you have a degree fairly large? Yep. Got it. Got through it on
about high fiving. Everyone. So yeah, I still have it. But I won’t be wearing on Saturday. He left.
He’s having a great year over on the bills.
Yes. Because then we love him Minnesota. So again, even though he’s gone. He’s forever in our hearts. He’s when he was a great player. So we’re all fans of him here and wish him the best the buffalo. At least you didn’t go to Green Bay. Yes.
Awesome. All right, man. Well, listen, this was great. Thanks so much. Thanks for having me.
Yeah, man. Thank you. Appreciate it. Jonas. Awesome. Thank you for listening to retail retold. If you want to share a story about a retail real estate deal that you were a part of on our show. Please reach out to us at retail retold at DLC mgmt.com This show highlights the stories behind the deals from all perspectives. So it doesn’t matter if you are a retailer, broker, entrepreneur, architect or an attorney. Also, don’t forget to subscribe to retail retold so you don’t miss out on next Thursday’s episode.