Passion. Purpose. Partnership. That’s how my firm, NYX Capital, began our synergistic collaboration with Altea Active, a unique Canadian active lifestyle brand. Valuable foresight, teamwork, a great location and an admirable purpose resulted in the development of Altea Active Toronto, a new 89,000-square-foot state-of-the-art social wellness club that recently opened in the Liberty Village neighbourhood in Toronto. This expansive urban playground offers comprehensive and appealing amenities for the urban demographic, including adults, kids and families.
Altea Active Toronto is accessible to 238,000+ people who live within a three-km radius. The two-level facility is housed in the Novus building, a new 34-storey, multi-level residential high-rise by BentallGreenOak, surrounded by a dynamic and culturally energized neighbourhood.
Altea has a successful track record in managing 16 large-scale, health and wellness clubs for close to 20 years. NYX’s expertise in the private equity real estate investment arena combined with a thriving fitness industry brand serves to diversify our investment offerings and solidify synergies. Augmenting investment portfolios through a unique growth strategy like this one, which is based on a recurring revenue model inherent to health clubs, is a key driver behind generating attractive margins for investors.
Altea Active Toronto is a “one-of-a-kind urban playground, designed to foster community and encourage social interaction,” says Michael Nolan, co-founder and COO of Altea Active.
“A modern space with premium amenities and services that are sure to reignite Torontonians love of fitness and living a healthy lifestyle.”
The building: A state-of-the-art masterpiece
The 89,000-plus-square-foot wellness and social club will encompass spaces for relaxation, meditation, socialization, healthy eating, fitness and programming for all ages. The design of Altea Active Toronto’s fitness and social spaces is by the Toronto-based and internationally acclaimed Chapi Chapo Design firm.
The amenities it offers:
- 185+ weekly group fitness classes
- A 2,500-square-foot hot yoga studio with three fireplaces
- 250+ top-of-the-line cardio and strength training machines
- Canada’s largest cycling studio with 75 bikes and 285-inch screen
- A 25-metre lap pool, hot tub, KLAFS Sanarium and Polaris Ice Room and hydrotherapy jet pool
- A Himalayan salt lounge and Somadome meditation pod
- Two Topgolf Swing Suites sports simulators
- Four Duckpin Bowling lanes, pool tables, air hockey, dome hockey and pinball machines
- Family friendly amenities (Kid’s Club, swim lessons, bowling)
- Spacious areas for social gatherings and private events
- Food Hall, including a full-service Starbucks, The Smoothie Bar, Ah-So Sushi Bar and Catalyst (kitchen and cocktails)
- An elevated sit-down social lounge for members and a co-working space
The dollars and sense
Altea Active Toronto will attract members at a price point comparable to fitness facilities offering far less. At a monthly rate starting at $105, the value proposition will help to drive usage and membership loyalty.
The fitness industry is known for its strong margin profile and attractive cash flow characteristics. Fitness clubs operate as subscription-based models, with the majority of its revenue generated from ongoing dues. Prior clubs opened by the management team have demonstrated this:
- Clubs are cash flow positive in year one
- Clubs open two to three years generate EBITDA margins of 40 per cent plus
- Minimal ongoing CapEx requirements
- The ability to leverage overhead, further driving free cash levels
For NYX Capital, investing in high-quality commercial real estate development projects throughout Canada and targeting value-add opportunities through development, re-positioning and active asset management, we deliver compelling risk-adjusted returns to investors. And we offer clients an opportunity to invest directly in a variety of properties and operating businesses and co-invest in all projects under management and development. It all makes sense and properly aligns NYX Capital’s interests with investors in the limited partnership and co-ownership vehicles.
The fitness industry: Pumped for success
The $28-million development comes at a good time as COVID-related lockdown restrictions and closures begin to ease, vaccination rates increase and social restrictions are lifted. Historically, health clubs have shown resilience to economic downturns, due to the nature of the offering. Spending on fitness is considered to be a non-discretionary expense across many segments of the Canadian population, including college-educated 20- to 35-year-olds (2019 Avison Young Demographic Market Research). Fitness spending per person/year in Toronto alone is $1,306.
According to IBIS World, the Canadian fitness club industry generated over $4.5 billion in revenue in 2019 and is estimated to grow 3.9 per cent annually through 2025, far outpacing other multi-billion-dollar industries. The increasing focus on the benefits of a healthy lifestyle is currently driving health club membership in Canada. Growing obesity rates among adults and children, and an increasing awareness of the associated risks, are encouraging more people to include exercise in their daily routines.
NYX Capital and Altea Active are actively overseeing the development of the flagship Toronto club location and four others. Club construction is set to begin in Milton in 2022. NYX works on financing, deal structure, investor compliance, raising capital and reporting. Altea Active focuses on design, layout, marketing, operating the business and growing the brand. Altea Active Toronto will be the first urban model after its previous suburban model success.
Maxwell Vo is chief investment officer at NYX Capital Corp. It is a private equity real estate investment company based in Toronto, with extensive industry relationships. The firm owns, manages, and invests in high-quality and well-located commercial, residential, industrial, self-storage, film-studio and fitness assets throughout Canada. NYX also invests in operating entities when significant real estate opportunities are attached. The company has over 4.1 million square feet of planned, managed, and developed assets and over $1 billion of projects under management and development.