Gym, Fitness Center & Sports Facility Feasibility Study | MMCG

The U.S. fitness facility industry has fully recovered from the COVID trough and surpassed every pre-pandemic peak. Industry revenue reached approximately $45.7 billion in 2025, the facility count topped 106,547 establishments, and total membership crossed 77 million in 2024 against a 31 percent customer penetration of the population aged six and older. Beneath that headline strength, the segment composition has shifted materially. High-Value, Low-Price operators (Planet Fitness at 2,722 clubs, Crunch at 500-plus, EoS, Chuze, VASA) have absorbed the bulk of net membership growth. Premium destination operators (Life Time at 179 centers averaging $3,160 in annual revenue per member) have expanded into longevity, recovery, and pickleball. The legacy mid-tier has compressed through bankruptcy and consolidation, with 24 Hour Fitness, Town Sports International, Gold's Gym, and Blink Fitness all having filed Chapter 11 inside a five-year window. Boutique fitness has corrected through F45 delisting, SoulCycle and CycleBar contractions, and Xponential Fitness portfolio divestitures.

The result for any sponsor pursuing financing in 2026 is a market where 2019 comparable performance no longer translates cleanly. Lender credit committees, SBA Office of Credit Risk Management reviewers, CDC underwriters, and USDA Rural Development State Directors increasingly require explicit segment-specific stress testing, GLP-1 demand sensitivity, and operator-failure base rates calibrated to the post-correction landscape. MMCG Invest produces independent third-party feasibility studies built specifically to the underwriting frameworks that govern modern fitness and sports facility financing: SBA Standard Operating Procedure 50 10 8 effective June 1, 2025; the SBA 504 special-purpose property treatment; USDA 7 CFR Section 4279.150 and the OneRD framework codified at 7 CFR Part 5001; and the conventional credit committee expectations governing sale-leaseback, CMBS, and bank financing pathways. Studies start at $4,900 with a 50 percent engagement, 50 percent delivery payment structure and no hourly billing.

For sponsors evaluating where a fitness or sports project sits within the broader institutional SBA feasibility study and USDA feasibility study framework, the firm's program-level overviews establish the regulatory baseline.

The Health and Fitness Association's 2025 Industry Benchmarking Report, released September 30, 2025, captured 175 reporting companies operating more than 17,000 facilities and establishes the operative benchmarks for 2026 underwriting. Median annual revenue growth among reporting operators reached 9.9 percent in 2024. Median EBITDA margin landed at 23.6 percent . Average net membership growth ran 5.5 percent. Average member retention came in at 66.4 percent, implying 33.6 percent annualized attrition across the broader industry, with substantial dispersion between segments.

Planet Fitness, the segment-defining HVLP operator, posted FY2024 revenue of $1.215 billion at a 10.3 percent year-over-year growth rate, system-wide sales of $4.8 billion, and corporate-segment Adjusted EBITDA margins of 37.6 percent against four-wall margins of 42.2 percent. Life Time Group Holdings posted FY2024 revenue of $2.621 billion at 18.2 percent growth, net income of $156.2 million at 105.3 percent growth, and Adjusted EBITDA of $676.8 million at 26.1 percent growth. Per Life Time's 10-K, average revenue per center membership rose to $3,160 in 2024 from $2,810 in 2023 and $2,528 in 2022, a 25 percent two-year compounded gain that reflects both pricing power and the longevity, Dynamic Personal Training, and pickleball revenue stack.

The boutique segment exhibits a different signal. Xponential Fitness disclosed FY2024 system-wide sales but absorbed a $98.7 million net loss alongside a March 2025 restatement of 2023 financials. Q4 2025 same-store sales declined 4.3 percent system-wide, with StretchLab declining 15 percent. F45 Training operates 753 units against 791 at year-end 2023, a net contraction translating to approximately 9 percent gross annualized closures. Honors Holdings, the largest Orangetheory franchisee at 143 studios, faced involuntary Chapter 7 in December 2024. Restore Hyper Wellness experienced 18 closures in 2024, equal to 8.6 percent of operating units, signaling early margin compression as recovery amenities migrate into HVLP and full-service formats.

For sponsors assessing how segment-specific economics interact with credit committee underwriting, MMCG's memory care and assisted living practice provides a parallel reference for special-purpose property financing logic, while the firm's hotel feasibility study franchise sits adjacent for sponsors evaluating mixed-use destinations that combine lodging with wellness amenities.

SBA SOP 50 10 8 became effective June 1, 2025, superseding 50 10 7.1 and reshaping fitness-center underwriting in five concrete ways. First, the 7(a) Small Loan threshold dropped from $500,000 to $350,000, contracting the streamlined underwriting band where smaller boutique studios historically resided. Second, the minimum equity injection of 10 percent was reinstated for both startups and changes of business ownership. Seller debt counts toward injection only when on full standby for the entire SBA loan term. Third, the SBA Franchise Directory was reinstated effective June 1, 2025; franchisors not appearing on the active Directory cannot serve as eligible franchise concepts. Fourth, the Credit Elsewhere Test requires lenders to affirmatively document credit unavailability on reasonable terms without SBA's guaranty. Fifth, and most consequential for fitness, the SOP clarifies special-purpose property treatment.

A Special Purpose Property under SOP 50 10 8 is defined as a limited market property with unique physical design, special construction materials, or a layout that restricts utility to the specific use for which it was built. The classification matters because it triggers three downstream requirements: a 15 percent equity injection on 504 transactions instead of 10 percent (rising to 20 percent when combined with new business status), a going-concern appraisal performed by a Certified General Real Property Appraiser who has completed at least four going-concern appraisals of equivalent special-use property within the prior 36 months, and a feasibility study expectation that addresses alternative-use scenarios.

Fitness centers are not categorically special-purpose. A typical Anytime Fitness, Planet Fitness, Orangetheory, Club Pilates, or Pure Barre studio housed in a standard retail or commercial shell is multi-purpose. A facility incorporating a natatorium, regulation indoor courts, climbing walls, or extensively built-in heavy equipment can fall into limited or special-purpose territory. The classification is fact-specific, and lender, CDC, and SBA reviewer determinations are not always aligned at first pass. MMCG's feasibility studies include explicit highest-and-best-use and alternative-use sections that address the special-purpose question head-on. Sponsors evaluating SBA pathways can review the firm's broader SBA SOP 50 10 8 analysis, SBA loan calculator , and multi-program SBA and USDA loan comparison calculator .

MMCG produces feasibility studies across the full range of fitness and sports facility formats, from single-site SBA borrowers to platform-level institutional diligence.

High-Value Low-Price / 18K-25K SF

Planet Fitness, Crunch Base, EoS, Chuze, VASA. Buildout $100-150/SF all-in. Ramp 18-24 months to 6,000-8,000 members. Stabilized NOI margins 35-42 percent. Strongest lender perception in the segment given EFT-billed dues predictability and segment-leading public comp economics.

25K-50K SF / Group Fitness + Cardio

LA Fitness, Crunch Signature. Buildout $150-250/SF. AUV $2-3M. Ramp 24-30 months. NOI margins 15-25 percent. Requires careful documentation of segment-shift exposure given the structural compression of legacy mid-tier (24HF, Gold's, TSI all filed Chapter 11 within five years).

60K-180K SF / Multi-Amenity

Life Time, Equinox. Buildout $300-500/SF. Center build $15-25M. ARPM $3,160 (Life Time 2024). Ramp 24-36 months. NOI margins 20-30 percent. Requires multi-amenity modeling spanning fitness, aquatics, racquet sports, recovery, longevity, and food and beverage with explicit ramp curves by amenity tier.

1.5K-5K SF / Group Class Format

Orangetheory, F45, Pure Barre, Club Pilates, Solidcore, Barry's. Buildout $150-300/SF. AUV $400K-1.5M depending on brand. Ramp 12-24 months. NOI margins 10-25 percent with substantial dispersion. Requires AUV calibration to franchisor FDD and explicit stress testing against the boutique correction wave (F45, SoulCycle, Honors Holdings).

4K-8K SF / Key-Card Access

Anytime Fitness. Buildout $80-130/SF. AUV $441K average per 2025 FDD across 1,656 franchised centers. NOI margin 35.7 percent before manager salary. Ramp 12-18 months to 800-1,500 members. Strong SBA 7(a) Small Loan fit; recurring EFT economics anchor lender perception.

CrossFit / 5K-15K SF

CrossFit affiliate model (no franchise structure post-2018), Burn Boot Camp. Class C industrial space at $20-50/SF buildout. Typical box 80-250 members at $150-225/month. 25-40 percent annual attrition. NOI margins 10-20 percent. Lender perception is weak due to unbranded operator dependency.

1K-4K SF / Reformer or Mat

Club Pilates (1,414 global), CorePower Yoga, YogaSix, StretchLab. Buildout $50-70/SF (industry low). AUV $984K (Club Pilates 12-reformer). Class pack $25-40 drop-in; unlimited $150-220. NOI margins 10-20 percent. Member yield $580/SF at 12-reformer Club Pilates.

10K-40K SF / Specialized Capex

Bouldering Project, Movement, Touchstone. Climbing wall construction $30-40/SF (modular panel) or $40-70/SF (premium ARC). Total deployment $1.5-5.5M per facility. Membership $80-120/month. 30-40 percent annual attrition. NOI margins 15-25 percent. Lender perception improving as institutional capital validates unit economics.

30K-150K SF / Multi-Court

Spooky Nook, Big League Dreams, USA Sports Complex. Buildout $300-350/SF per Sports Facilities Companies benchmarks. Court rates $50-100/hour; turf field $150-245/hour. NOI margins 8-25 percent. 70-80 percent of revenue concentrated in 3-5 weather-driven months. Municipal-partner deals (PILOT, GO bond) carry institutional grade.

8K-40K SF / 6-20 Courts

The Picklr (50+ open, 500+ sold), Pickleball Kingdom, Ace Pickleball Club. The Picklr 2025 FDD investment $1.24M-$2.09M; AUV $601K. Pickleball Kingdom investment $940K-$2.26M. Margins unproven at scale; 15 percent operating profit is the typical underwriting assumption. Big-box conversions deliver $55-80/SF effective buildout.

2K-8K SF / Cold Plunge / Sauna / Cryo

Restore Hyper Wellness (225+ studios), Remedy Place, Perspire Sauna Studio, Othership. Restore 2025 FDD investment $777K-$1.29M; AUV $851K (declining). 18 closures in 2024 (8.6 percent). NOI margins 8-15 percent. Sensitivity required: HVLP 2.0 (Crunch 3.0, EoS Refresh, Chuze) is absorbing recovery as table-stakes amenity.

USDA Community Facilities Track

YMCA (2,600+ branches, 22M served), JCC (~170 facilities), public natatoriums, municipal recreation. USDA CF eligibility for nonprofits and public bodies in communities of 20,000 or fewer. Up to 40-year terms; grant components to 75 percent in qualifying low-income communities. Operating model targets cost recovery rather than profit; institutional-grade tax-exempt issuance.

Every MMCG study is built to the specific underwriting requirements of the financing pathway, with explicit alignment to the relevant SOP, regulation, or credit-committee framework.

$5M Maximum / 10% Equity

$5M cap at 25-year RE amortization, 10-year working capital. Small Loan threshold $350K under SOP 50 10 8 effective June 1, 2025. Live Oak Bank #1 SBA 7(a) lender FY2025 with $2.8B/2,280 loans. Franchise Directory check required. Anytime Fitness, Planet Fitness, Orangetheory, Club Pilates routinely SBA-financed.

50/40/10 or 50/35/15 Special-Purpose

50 percent senior bank, 40 percent CDC debenture, 10 percent borrower equity (multi-purpose). Steps to 15 percent for special-purpose (natatoriums, regulation courts, climbing walls), 20 percent for both new business and special-purpose. Green debenture stacking enabled (April 2024) to $16.5M aggregate.

$25M / 80-85% Guarantee

Up to $25M at 85 percent guarantee under $5M / 80 percent at or above (FY2026), in rural communities under 50,000 population. Tourist and recreational facilities explicitly eligible under 7 CFR 4279.113. Feasibility study required for a guaranteed loan above $1,000,000 to a new business, per 7 CFR 5001.306(a)(3)(i).

Sale-Leaseback / Stabilized

Bank LTV 65-75 percent, DSCR 1.20-1.35x. CMBS conduit for credit-rated single-tenant fitness real estate. Sale-leaseback predominant exit pathway: Life Time issued $375M in 2022 across 9 properties; Oak Street Real Estate Capital ($12.4B AUM) is the dominant institutional buyer. SLB cap rates 7.5-11 percent.

MMCG's feasibility consulting practice spans the full operational and regulatory range of the fitness and sports asset class. Specific concepts within our practice include: HVLP big-box gym feasibility studies ( Planet Fitness , Crunch Fitness, EoS Fitness, Chuze, VASA, YouFit); mid-tier full-service health club feasibility studies (LA Fitness, Crunch Signature, Onelife Fitness, Genesis Health Clubs); premium destination club feasibility studies (Life Time, Equinox, Bay Club, Midtown Athletic); 24-hour gym feasibility studies (Anytime Fitness, Snap Fitness, Workout Anytime); boutique fitness studio feasibility studies (Orangetheory, F45, Barry's Bootcamp, Pure Barre, Solidcore, Club Pilates, CycleBar, BFT); pilates and yoga studio feasibility studies (Club Pilates, YogaSix, CorePower Yoga, StretchLab); CrossFit and functional fitness box feasibility studies including Burn Boot Camp, 9Round, UFC Gym, and Title Boxing Club; climbing gym feasibility studies (Bouldering Project, Movement, Touchstone Climbing); martial arts and combat sports academy feasibility studies; indoor sports complex feasibility studies for multi-court basketball, volleyball, soccer training, baseball training, and tournament facilities (Spooky Nook, Big League Dreams, Rocky Top, USA Sports Complex); pickleball feasibility studies for dedicated indoor pickleball facilities (The Picklr, Pickleball Kingdom, PickleRage, Ace Pickleball Club, Dill Dinkers); tennis and racquet club feasibility studies; swim and aquatic center feasibility studies including municipal natatoriums; recovery and wellness studio feasibility studies (Restore Hyper Wellness, Remedy Place, Perspire Sauna Studio, Othership); youth sports academy and travel team facility feasibility studies; community recreation center feasibility studies for YMCAs, JCCs, and municipal recreation centers under the USDA Community Facilities Program; and mixed-use fitness and wellness feasibility studies combining anchor fitness with boutique tenants and adjacent residential or office uses.

Trade area definitions vary materially across fitness segments. HVLP big-box operators underwrite to 3-mile primary rings or 10-minute drive-time isochrones with population density thresholds of 30,000 to 50,000 residents minimum. Mid-tier full-service clubs underwrite to 5-mile primary rings supplemented by 10-minute drive-time analysis. Premium destination operators underwrite to 7 to 10-mile primary rings, often extending to 15 miles in lower-density Sun Belt markets. Boutique studios underwrite to 1 to 3-mile rings reflecting the 3 to 5 weekly attendance frequency of unlimited members.

Median household income thresholds align with segment positioning. Equinox underwrites to $150,000-plus median household income within the trade area. Life Time underwrites to $100,000-plus and reports a member household income median of $158,000. Planet Fitness operates across all income levels including lower-income households, while reporting Massachusetts as its highest-density state at 75,915 residents per club versus Hawaii at 241,765 per club. Boutique studios index demographically to women aged 25 to 44 with $75,000-plus household income.

Co-tenancy and parking ratios are decisive in site suitability. Preferred grocery anchors include Whole Foods, Trader Joe's, H-E-B, Wegmans, Sprouts, Kroger, and Publix. Multifamily density and adjacent residential rooftop count are equally important. Parking ratios run 5 to 7 spaces per 1,000 square feet for standard fitness, materially higher than the 4 per 1,000 retail standard. High-intensity uses including indoor pickleball and embedded medical clinics often require 10 to 12 spaces per 1,000 square feet, frequently triggering parking variance applications and 3 to 9-month Conditional Use Permit timelines. MMCG's site analysis sections incorporate FEMA flood zone overlay through the firm's FEMA flood zone and wetlands map and seismic hazard exposure through the U.S. seismic hazard map .

Construction cost benchmarks segmented by format establish the financial modeling foundation. Single-story HVLP big-box (Planet Fitness, EoS, Crunch Base) runs $80 to $120 per square foot leasehold improvement and $100 to $150 per square foot all-in. Mid-tier full-service runs $150 to $250 per square foot. Premium destination clubs run $300 to $500 per square foot, with Life Time disclosing center build costs of $15 to $20 million for shells and $25 million-plus for ground-up centers at 100,000 to 180,000 square feet. Boutique studios run $150 to $300 per square foot. Sports complexes and multi-court tournament facilities run $300 to $350 per square foot per Sports Facilities Companies benchmarks.

Big-box conversion plays deliver materially better cost efficiency. Recent indoor pickleball conversions of former Bed Bath and Beyond and Rite Aid boxes have delivered effective buildout costs of approximately $55 to $80 per square foot, capturing 25 to 50 percent savings versus ground-up. The Matthews Big-Box Net Lease Tenant Report 2026 documents that fitness backfill of post-2020 retail vacancies has become a defining real estate phenomenon, with the Dallas-Fort Worth market alone absorbing approximately 920,000 square feet of fitness leasing in 2025, more than 2023 and 2024 combined.

Lease-up and membership ramp curves drive Year 1 to Year 3 cash flow modeling and stabilization timing. Planet Fitness 2025 FDD specifies a 60-day minimum presale period with industry intelligence placing presale targets at 1,500 to 3,000 members before opening. Anytime Fitness 2018 cohort data across 127 centers shows average presale of 160 members. Boutique studios typically target 100 to 300 founding members during a 4 to 8-week presale window. Stabilization timelines run 18 to 30 months for most formats; large premium destination centers extend to 24 to 36 months given the complexity of amenity ramp; boutique studios may stabilize in 12 to 24 months.

Pricing tiers have widened post-2022 as Planet Fitness raised Classic membership entry pricing from $10 to $15 monthly while Black Card runs $24.99. Mid-tier full-service runs $40 to $80 monthly. Life Time monthly dues averaged $263 per center membership in 2024 and continue to climb. Equinox dues run $205 to $395 monthly with urban premium tiers exceeding $500. Boutique studios run class packs at $25 to $40 drop-in and unlimited memberships at $150 to $300.

Member retention dispersion is the single most underweighted variable in unsophisticated fitness pro formas. The IHRSA and Health and Fitness Association historical benchmark places average annual retention at 71.4 percent, implying 28.6 percent annualized attrition. The majority of clubs experience 30 to 50 percent annualized attrition. Personal training studios outperform at approximately 80 percent retention. Bankable feasibility studies stress-test attrition at 25, 32, and 40 percent against the segment-specific base rate.

Ancillary revenue contribution is decisive at the premium tier. Per Life Time's 10-K filings, in-center revenue (Dynamic Personal Training, LifeCafe, LifeSpa, Life Time Swim, Life Time Kids) represented 27 percent or more of total Center revenue in 2024. Across the broader premium club segment, personal training and small-group training commonly contribute 25 to 50 percent of revenue. Insurance reimbursement programs add a utilization-light revenue stream: SilverSneakers operates a network of 17,000-plus U.S. gyms; Renew Active accesses 25,000-plus fitness centers; Active and Fit Direct and Fitness Your Way complete the major payor channels.

Operating expense structure is segment-driven. Per industry benchmarking, payroll runs 20 to 25 percent of revenue at HVLP, 35 to 45 percent at full-service mid-tier, and 40 to 50 percent at premium destination. Rent runs 10 to 15 percent across most formats. Stabilized NOI margins reach 37.6 percent at Planet Fitness corporate clubs, 35.7 percent at Anytime Fitness company-owned (before manager salary, ITDA), 21 to 22 percent at Life Time consolidated, 15 to 25 percent at mid-tier full-service, 20 to 30 percent at premium full-service, 10 to 25 percent at boutique, and 8 to 15 percent at recovery and wellness.

Single-tenant net lease cap rates have repriced through the 2024 to 2025 rate cycle. The Boulder Group's Q3 2025 net lease research placed the overall STNL average at 6.8 percent. Tenant-specific ranges within fitness span Planet Fitness at mid-6 percent to low-7 percent, with a 2024 San Diego transaction clearing at a record 4.90 percent. LA Fitness ranges 6 to mid-7 percent. Boutique fitness STNL runs 7.0 to 8.5 percent.

Sale-leaseback structures have become the predominant institutional exit pathway for full-service operators. Life Time has been the most active fitness SLB issuer, executing transactions across 2008, 2022 (with year-to-date totals of $375 million across nine properties), and a May 2024 single-club $40 million transaction. Oak Street Real Estate Capital, the Blue Owl subsidiary, is the predominant institutional buyer, emphasizing investment-grade tenants under 15 to 20-year lease durations. SLB Capital Advisors notes that fitness SLB cap rates broadly range 7.5 to 11 percent with 11x to 14x implied real estate multiples on EBITDAR, generating a documented value arbitrage when an operating business trading at 5 to 8x EBITDA monetizes its real estate at 12 to 16x.

Three structural factors elevate the analytical bar for fitness and sports facility feasibility studies in 2026. First, GLP-1 weight-loss drug adoption produces divergent demand signals. Approximately 12 percent of U.S. adults have used GLP-1s with approximately 6 percent currently using per the May 2024 KFF Health Tracking Poll. JPMorgan estimates 30 million U.S. users by 2030, equal to roughly 9 percent of the population. Harrison Co. estimates that GLP-1 adoption could expand the gym and studio market by 20 percent, equivalent to $6.8 billion in incremental spend. Clinical literature documents lean mass declines of 9.7 percent under GLP-1 therapy, supporting muscle-preservation training as a mandatory adjunct. Lender models must stress both directions: a downside case where GLP-1 adoption suppresses demand, and a base or upside case where the muscle-preservation thesis drives net new gym demand.

Second, the pickleball court demand surge has reshaped real estate competition. SFIA data places pickleball participation at 19.81 million in 2024, a 311 percent three-year increase and 45.8 percent year-over-year jump. Mid-2025 SFIA data shows approximately 24.3 million players. SFIA estimates $855 million in capital is needed for 24,500 new courts over five to seven years to meet demand. Pickleball franchises are now in direct competition for 18,000 to 40,000 square foot retail boxes against HVLP fitness, recovery franchises, and trampoline parks, bidding up real estate carrying costs in supply-constrained metros.

Third, the operator failure base rate has elevated lender-perceived risk premia. Five major brand failures within a five-year window (24 Hour Fitness Chapter 11 in June 2020, Gold's Gym Chapter 11 in May 2020, Town Sports International Chapter 11 in September 2020, F45 Training NYSE delisting in August 2023, and Blink Fitness Chapter 11 in August 2024 with PureGym acquisition at $121 million for 67 New York and New Jersey locations) define the modern stress case. Sponsor underwriting now requires explicit modeling of 9 percent annualized closure rates as documented at F45, attrition shock scenarios calibrated to the 2020 to 2024 distress wave, and break-even DSCR calculation showing the membership count or revenue level at which DSCR equals 1.0x and 1.20x.

MMCG produces feasibility studies across the full range of fitness and sports facility formats: HVLP big-box studies (18,000 to 25,000 square feet) anchoring the SBA 7(a) and 504 multi-purpose pathway with predictable EFT-billed dues economics; mid-tier full-service studies (25,000 to 50,000 square feet) requiring careful documentation of segment-shift exposure; premium destination studies (60,000 to 180,000 square feet) requiring multi-amenity modeling; boutique studio studies (1,500 to 5,000 square feet) requiring AUV calibration to franchisor disclosure documents and explicit stress testing against the boutique correction wave; the 24-hour express format (4,000 to 8,000 square feet); functional fitness boxes (5,000 to 15,000 square feet); yoga and pilates studios (1,000 to 4,000 square feet); climbing gyms (10,000 to 40,000 square feet) requiring specialized climbing-wall capex modeling; indoor sports complexes (30,000 to 150,000 square feet) requiring court-hour utilization modeling and explicit recognition of the 70 to 80 percent revenue concentration in 3 to 5 weather-driven months; pickleball-dedicated clubs (8,000 to 40,000 square feet) requiring comparable-set modeling; tennis and racquet clubs; aquatic centers; recovery and wellness studios; youth sports academies; community recreation centers (USDA Community Facilities track); and multi-tenant fitness and wellness mixed-use.

MMCG's feasibility studies are calibrated to the specific underwriting requirements of the financing pathway. SBA 7(a) studies address the new $350,000 Small Loan threshold, the reinstated 10 percent equity injection, the Franchise Directory check effective June 1, 2025, the Credit Elsewhere Test, and the multi-purpose-versus-special-purpose property classification. SBA 504 studies address the 50/40/10 baseline structure, the 50/35/15 special-purpose adjustment, the 50/30/20 startup-plus-special-purpose case, and the green debenture stacking provisions. USDA B&I studies address the OneRD framework codified at 7 CFR Part 5001, the FY2026 guarantee structure of 85 percent under $5 million and 80 percent at or above, and the Section 4279.150 five-pillar feasibility mandate. USDA Community Facilities studies address the public body, nonprofit corporation, and federally recognized tribe eligibility test. Conventional studies address bank, life insurance company, and CMBS underwriting expectations including 1.20x to 1.35x stabilized DSCR and 65 to 75 percent LTV.

Briefing

Modeling

Review

Delivery

Support

Step 1

We review the loan package, site plan, format selection (HVLP big-box, mid-tier full-service, premium destination, boutique studio, sports complex, pickleball-dedicated, recovery and wellness, or community recreation), proposed building area and amenity stack, lender requirements, franchise documentation if applicable, and development budget. For acquisitions, we review trailing financials, membership rolls, retention curves, and ECRI history. For franchise concepts, we verify SBA Franchise Directory status under SOP 50 10 8.

Step 2

We evaluate site visibility, frontage traffic counts (25,000-plus ADT for value/mid-tier; 35,000-plus for premium destination), parking ratios (5 to 7 spaces per 1,000 SF standard; 10 to 12 for high-intensity uses), ingress and egress, parcel suitability, and FEMA flood zone designation. Trade areas are defined by segment (1 to 3-mile boutique; 3 to 5-mile HVLP; 5-mile mid-tier; 7 to 10-mile premium destination), supplemented by drive-time isochrones. Population, household income, age cohort distribution, and renter share are layered into the demand model.

Step 3

Our team profiles every operating fitness facility within the trade area: format, size, vintage, dues structure, observed utilization, and ownership profile. We layer in permitted and under-construction competitors. Demand is modeled by segment-specific capture rates against trade area population, income cohort, and propensity-to-participate benchmarks calibrated to HFA 2025 Consumer Report data. GLP-1 demand sensitivity is modeled in both directions per JPMorgan and Harrison Co. forecasting.

Step 4

We construct the ten-year pro forma covering membership ramp curves calibrated to format (HVLP 18 to 24 months; mid-tier 24 to 30; premium destination 24 to 36; boutique 12 to 24), dues by membership tier, ancillary revenue (personal training, retail, ancillary services), insurance reimbursement (SilverSneakers, Renew Active), and ECRI cadence. Operating expenses are itemized. DSCR, IRR, break-even occupancy, attrition stress at 25/32/40 percent, and operator failure base rate sensitivity at 9 percent annualized are calibrated to lender thresholds.

Step 5

The client and lender receive a draft report for factual review. We address questions, refine membership ramp and pricing assumptions, incorporate updated construction cost data, and adjust DSCR sensitivity or financing assumptions before finalization. For institutional engagements and USDA Community Facilities submissions, the draft is structured for credit committee or RD State Director review.

Step 6

The completed feasibility study is delivered as a professionally formatted report with an accompanying Excel financial model, ready for direct inclusion in the SBA, USDA, or conventional loan package. Institutional engagements receive an Argus-comparable cash flow model and credit committee summary. USDA-track submissions are structured to the Section 4279.150 five-pillar mandate with explicit independence statement.

Step 7

MMCG remains available for post-delivery support. Common updates include recalculating the financial model when assumptions change: revised square footage or amenity stack, modified membership pricing, updated construction cost estimates, interest rate adjustments, or stress-tested scenarios requested by the lender, CDC, or USDA Rural Development office.

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Typical timeline: 9 to 16 business days from engagement to final delivery for single-site studies. Expedited delivery is available in 5 business days for an additional fee. Multi-site portfolios, premium destination centers, sports complexes, and platform-level institutional diligence may require additional time.

Typical timeline: 9 to 16 business days from engagement to final delivery for single-site studies. Expedited delivery in 5 business days is available for an additional fee. Multi-site portfolios, platform-level institutional diligence, and complex zoning or entitlement scenarios may require additional time.

Feasibility studies start at $4,900 for single-site boutique studios in well-documented markets. Mid-tier full-service studies are quoted on a fixed-fee proposal; MMCG engagements start at $4,900, and the fee rises with the scope of the study. Premium destination and multi-amenity studies are quoted on a fixed-fee proposal; MMCG engagements start at $4,900, and the fee rises with the amenity stack and the scope of the study. Sports complexes and multi-court tournament facilities are quoted on a fixed-fee proposal; MMCG engagements start at $4,900, and the fee rises with the scope of the study. Multi-site portfolios are quoted on a fixed-fee proposal; MMCG engagements start at $4,900, and the fee rises with the number of sites and the scope of the study. Standard delivery is 9 to 16 business days for single-site studies; expedited delivery in 5 business days is available. Payment is 50 percent at engagement and 50 percent at delivery, with no hourly billing. MMCG does not perform Phase I or Phase II Environmental Site Assessments; sponsors requiring ESA work are directed to qualified environmental engineering firms.

Engagements are led by Michal Mohelsky, J.D., Practicing Affiliate of the Appraisal Institute. Feasibility studies are prepared under USPAP discipline, aligned with SBA SOP 50 10 8 for 7(a) and 504 loans and with 7 CFR Part 5001, Appendix A to Subpart D for USDA Business and Industry, REAP, and Community Facilities financing. Engagements start at $4,900 with fixed-fee scoping. Standard delivery is 9 to 16 business days, with rush turnaround available from 5 days. A senior analyst responds to proposal requests within 12 business hours from the firm's San Francisco office at 27 Maiden Lane, Suite 625.