The Equinox Solstice
by Brendan O’Connor
One of the benefits of private property is that whoever owns it can charge other people to use it. This is called rent. If people want to use this particular property very badly — that is to say, it is in “high demand” — the owner can charge a lot of rent. This is called capitalism. But some owners who have leased their property to someone who is using it conduct business might eventually begin to wonder if they should get into that business themselves, and maybe they should use some of the profits they’ve made from renting out their property to buy that business. Maybe that would benefit everybody. This is called diversifying your portfolio.
Founded in 1972, Related Companies is a multinational real estate developer, one of the most prolific in New York City and around the world. In 2008, it was selected to develop the twenty-eight-acre Hudson Yards residential and commercial complex, the largest private real estate development in United States history, valued at $28 billion. Related has offices or major developments in Boston, Chicago, Los Angeles, San Francisco, South Florida, Abu Dhabi, São Paulo, and Shanghai. Altogether, its real estate assets are valued at some $15 billion. One of its most valuable properties is the Time Warner Center at Columbus Circle, where, in January 2004, Related Companies’ relationship with the upscale athletic lifestyle brand Equinox began.
Equinox Holdings, founded in 1991, operates expensive gyms offering Kiehl’s lotion and often-slammed group fitness classes. In 2004, Equinox opened its forty-thousand-square-foot flagship gym at Columbus Circle; Related was its landlord. In May 2005, the New York Sun reported that Related founder Stephen Ross joined Equinox’s board of directors because he “liked our business model,” according to Equinox COO Scott Rosen. “He saw immediately that real estate is one of the real cores of our business…We’re in the best ZIP codes, serving the top demographics.” The next year, Related acquired Equinox altogether, for just over $500 million. By 2010, Crain’s New York reported, Equinox had more than doubled its revenue to $400 million and underwent a $425 million debt refinancing through Morgan Stanley and Citadel, after which private-equity firm Leonard Green & Partners joined on as investors. Now, in addition to its eponymous line of health clubs, Equinox Holdings operates five other fitness brands, including Blink and SoulCycle, which filed for an initial public offering in July, and of which Equinox has held a majority stake — nearly ninety-seven percent — since 2011.
“The idea was: We own Equinox and we own SoulCycle,” Related CEO Jeff Blau told the Commercial Observer earlier this year. “We like to be very systematic about what we program in the buildings — not just throw amenities at the wall like everybody’s doing. The ability to create value on the real estate side with the clubs, and the ability to help Equinox grow its business with our real estate relationships was very symbiotic for us. We’ve got a great operating management team running the Equinox team. How do we leverage our real estate know-how, our health and wellness know-how, our operational capabilities into another type of private equity investment that fits with all the things that we do?” (Related has also taken a stake in restaurateur Danny Meyer’s Union Square Events, which, conveniently enough, is located at 640 West 28th Street — not far from Hudson Yards. “We’ve always had an interest in that area,” Meyer told the Real Deal in 2012. “And what we’ve found to be somewhat taxing, for a company whose specialty is food service and hospitality, is the amount of time we were spending just trying to source locations for clients’ events.”)
By gender, Business Insider reported this summer, Equinox’s membership is split evenly, while the average membership age is thirty-five. Access to a single location will cost you about $175 per month, in addition to upfront fees, while an all-access membership will cost about $230 per month. There are at least three locations in Manhattan — The Printing House, in the West Village, and the two Equinox Sports Clubs, on the Upper East and Upper West Sides — that are excluded from the standard all-access membership. And then there is E at Equinox, an exclusive club-within-a-club at the Columbus Circle and Greenwich, Connecticut, locations, entry to which requires an eye scan. “Equinox has managed to create an air of exclusivity while also appealing to the masses,” Business Insider claimed.
Currently, it seems that only two Equinox locations in New York are in buildings owned by Related: the Time Warner Center and 1429 2nd Avenue. That will change soon enough. In 2018, Equinox will open an eleven-story luxury hotel — including a sixty-thousand-square-foot gym that, upon completion, will become Equinox’s largest — at 35 Hudson Yards. It will, Equinox and Related hope, be the first of at least seventy-five Equinox-branded hotels around the world, the Wall Street Journal reported in April. A Related spokeswoman said the company will invest or raise “several billion” dollars in Equinox hotels. “We are appealing to the discriminating consumer who lives an active lifestyle and wants to have that as a hotel experience,” said Equinox CEO Harvey Spevak. In an Equinox poll, ninety-five percent of Equinox members said that they would be interested in staying at an Equinox hotel, he said. The Hudson Yards hotel will also feature a SoulCycle, the Commercial Observer reported. “Expanding our club business to hotels allows us to create and support offerings for a larger audience, as an always-on lifestyle partner,” Spevak said. “We are experts in the art of life maximization, creating bespoke experiences, offering unparalleled services and always seeking to inspire through considered design.”
Equinox also seeks to inspire through outrageous advertising. Twice the company has been forced to remove enormous billboards featuring nearly naked models from the front of its location at 97 Greenwich Ave, in the Greenwich Village Historic District — once in 2010 and again in 2014 — at the behest of the Greenwich Village Society for Historic Preservation, because the signs had not been approved by landmark authorities. In 2012, it hired Terry Richardson to shoot waifish blondes being manhandled by dudes with great lats. A few months later, it asked, “Are you skinny fat?” Last year saw the roll out of the inscrutable “Equinox Made Me Do It,” in which outrageously good-looking men and women — all of whom clearly spend a lot of quality time on the squat rack — getting into all kinds of well-lit nocturnal shenanigans. The ad campaigns are absurd, although it’s not clear if they are knowingly so. What is clear is that pretty much everyone in any given Equinox looks like they might have had a legitimate shot at being cast in one of the company’s ads. Everyone is young, fit, and looking their best at all times. Makeup never smears and gelled-back disconnected undercuts never ruffle out of place. Everybody is sweating, but it’s sexy, and nobody smells bad.
It is lucky, then, that gyms at Equinox hotels will be open to both guests and Equinox members. “We want our members and our guests to mesh with each other,” Harvey Spevak said. “They are all part of the same community.” While that may be true, it is worth being wary of any for-profit business that touts “community” as a value proposition. In March, Equinox paid $4 million to settle a class-action lawsuit in which massage therapists, nail technicians, and aestheticians employed by the company in California alleged that Equinox had failed to fairly compensate them for overtime work; last year, the company paid $2.9 million to settle a separate wage dispute. Whatever “community” exists at Equinox — and whatever value it has — is only given form by the extent to which it enforces exclusivity. There is outside, and there is inside. Inside is better than outside. (At the Greenwich Village location in 2013, a man who was in the steam room without permission reportedly tried to bribe a police officer after being arrested for trespassing. Equinox made him do it!) No sooner are you inside, however, than you realize there is another inside, and you are outside of it. But you are so close to whatever is behind the next door!
“The last true luxury we have in this millennium is the ability to control our own health,” the manager of the Columbus Circle E at Equinox, Rolando Garcia III, told Forbes. “That’s the real luxury we offer here at E: How healthy are you? And how much of a priority do you want to put that at, and how much support do you need? And that support is what you get here.” The last true luxury costs twenty-six thousand dollars per year. And what is at the center of the doll? A very well-lit mirror over a well-appointed sink. Probably some lotion, too.
Equinox photo via Business Insider