Fitness Center Feasibility Study in the San Francisco-Oakland-Fremont, CA Metro Area

Losses that start early in the Bay Area gym file

The sharpest feature of the San Francisco-Oakland-Fremont fitness center cell is its loss floor: in the cohort of 74 loans funded during FY2017 to FY2021, no fewer than 13.5% have been charged off so far. That sits beside cancellation of at least 13.4% for FY2017 to FY2024 approvals. The rate of charge-off within five years and the cancellation ceiling are withheld for this cell, and neither has a number here or is zero. The area ranks 15 of 608 for the class, and fitness centers are the fifth-ranked class locally.

The file holds 174 approvals worth $86.1 million. A location quotient of 1.05x tells us gyms are close to their national weight here; the median of $275,150 is 1.06x the national figure, and the middle loans range from $134,300 to $494,925. Program split: 161 are SBA 7(a), 13 are SBA 504. Franchise flags are on 42.5% of loans. Alameda County and Contra Costa County have 49 loans each, San Francisco County 39, San Mateo County 24 and Marin County 13.

Who holds the Bay Area loans

SBA's lender tables list the holder today. The Huntington National Bank has 23 loans, $6.3 million; Wells Fargo Bank National Association has 17, $5.6 million; then come U.S. Bank, National Association with 13 ($3.5 million), Main Street Launch with 11 ($2.1 million) and Stearns Bank National Association with 10 ($2.7 million). Of 504 holders, only The Mortgage Capital Development Corporation reaches the list, with 5 loans worth $11.3 million, a book of large real estate loans. These records show holdings. They do not describe any lender's standards.

Approvals in this cell ran from 23 in FY2019 down to 7 in FY2022, then recovered to 25 in FY2025, worth $16.0 million, and 22 in FY2026, worth $13.3 million. The weak middle of the series, and the recovery after it, are both visible in the yearly counts; a reader should not assume the rebound will hold without evidence from the specific market.

What a Bay Area gym study has to test

Rent is the largest fixed cost, so the study should settle the lease terms before anything else: rate, term, build-out allowances and any rights to renew. Membership demand is then built bottom-up, from households and workers within a short transit or drive time, against the studios, chains and boutique operators already in each neighborhood. Because many borrowers are franchisees, the model should include fees and required remodels. The high loss floor argues for a ramp that is slower than the franchisor's, and debt service coverage should survive it. Appraisal rests on leasehold improvements and equipment. The July 2023 matching step also drops any loan whose county cannot be placed, so Bay Area totals run low.