Working out the benefits of an on-site gymnasium.

A recently released study claims that onsite fitness centers increase employee productivity and bring down healthcare costs. But are gyms something owners should invest in when they are putting up new office buildings? Onsite fitness centers can be found within many suburban office complexes, so they are obviously in demand. According to industry insiders, however, the presence or the absence of a gym is not going to make a company stay at a property it didn't find attractive to begin with.

"Considering how competitive the market is, those kind of amenities are obviously important to retaining tenants," notes Ira Bloom, president of the Kushner Companies and developer of office properties throughout New Jersey. "If there is a choice between two comparable properties and one has a fitness center, the tenant is more likely to opt for the one that has the extra amenity. But it really depends on what the company is looking for."

According to Bloom, a large, prominent firm that is looking for premium quality space is more likely to care about on-site amenities, such as gyms and cafeterias, than smaller tenants. For them, the bottom line is the price and having a fitness center in a building that they share with 20 other firms does nothing for their image.

"We just signed a 50,000 s/f lease with Ryan Beck, which is a large company, and it was an important factor for them that those amenities be available. People today spend more and more time at work, so they want to be able to workout somewhere close by," he says. "But we also have a building in Newark that is designed for tenants with smaller space needs. For them, it's not an issue. So that building had to be designed with a different kind of tenant in mind."

On the other hand, Todd Rechler, corporate senior vice president of Reckson Associates Corp., another suburban office giant, feels that a fitness center might benefit any kind of a tenant.

"We believe it's worth investing money in. What employers see when you have a fitness center onsite is that workers will come in to work earlier or leave later to work out," he explains. "We started putting health clubs in our facilities in 1979, 1980 and the one trend that we have seen is that people want them to open earlier and close later. And companies find that it's a great perk to offer their employees because we charge lower rates than health clubs elsewhere."

At the same time, Rechler would be reluctant to put a fitness center in an urban office building.

"We've never done it in Manhattan, this is something we haven't analyzed to see if it makes sense. In the city, people have other places nearby where they feel comfortable going," he says.

Bradley Mendelson, executive vice president of CB Richard Ellis, agrees with him. Manhattan has brand name gyms everywhere, the broker notes, so adding one to an office property is not going to be a deal breaker. "It's certainly a convenience because people either work out where they live or work out where they work," he notes. "But it's not something that when you will look at the space you will say 'Wow, there is a health club in that building.' I know that Equinox just opened up in the new development on Columbus Circle and it's neither a positive nor a negative."

According to Mendelson, one case in which the presence of a fitness center might make a difference is in headquarter buildings which are tenant-owned.

"If you look at Battery Park City, it's an island, you need to have all those services there because you are separated from everything," he says. "But most office buildings in midtown Manhattan don't have that." Then again, those landlords whose name is invested in their properties don't mind offering extra perks.

"Adding Equinox wasn't part of our original decision," said Philip Pipiuzzeulo, vice president of Time Warner real estate projects about the gym at the Time Warner Center. "But it is an additional amenity in the complex." Membership at the gym, coincidentially, runs to $23,500.