For decades, retail real estate was dominated by businesses selling goods. Apparel stores, electronics retailers, and home goods chains filled most shopping centers across the country.
That dynamic is now changing.
Today, service-based tenants such as fitness centers, pickleball facilities, wellness studios, and personal services are occupying more retail space than traditional goods-based retailers. This shift marks a significant evolution in commercial real estate trends and signals a new direction for retail property owners, investors, and developers.
From Goods to Services: What the Data Shows
For the first time in modern retail history, service-oriented businesses now account for a larger share of retail real estate occupancy than traditional retailers that sell physical products.
This shift is not simply a temporary market fluctuation. Instead, it reflects deeper changes in consumer behavior and spending patterns.
As e-commerce continues to capture a growing share of product sales, many retailers have reduced their physical store footprints. At the same time, service-based businesses have expanded, filling retail spaces with offerings that cannot be replicated online.
For commercial real estate professionals, this trend is reshaping how properties are leased, managed, and positioned within the market.
Fitness Centers Lead the Shift
Fitness and wellness businesses have been among the most active users of retail space in recent years.
As health and wellness priorities have grown across multiple demographic groups, demand for physical fitness locations has expanded as well. Gym operators, boutique fitness studios, yoga centers, and personal training facilities have increased their presence in retail shopping centers and standalone buildings.
From a property management perspective, these tenants offer several advantages:
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They often sign longer lease terms
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They generate consistent daily traffic
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They contribute to steady customer flow for neighboring tenants
Because fitness services cannot be delivered through e-commerce, they provide stability that traditional retail tenants sometimes cannot.
The Pickleball Phenomenon
Few examples illustrate this shift better than the rapid rise of pickleball facilities.
Pickleball has become one of the fastest-growing sports in the United States, and operators are actively seeking large spaces to accommodate courts and recreational amenities. Many of these facilities are moving into former retail stores, big-box spaces, or industrial buildings that offer the square footage required.
In several markets, landlords have been surprised by the speed at which these operators are securing available space. What might have once been considered an unconventional tenant category has quickly become a major driver of retail leasing activity.
Just five years ago, pickleball facilities were rarely part of retail leasing conversations. Today, they are a growing segment of the tenant mix in many shopping centers.
Implications for Property Owners and Investors
The rise of service-based tenants has meaningful implications for commercial real estate strategy.
Retail properties are increasingly evolving into service and experience hubs rather than purely shopping destinations. As a result, landlords are adapting their tenant mix to include businesses that provide activities, wellness services, and social experiences.
Common service-oriented tenants now expanding in retail environments include:
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Fitness centers and boutique gyms
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Pickleball and indoor recreation facilities
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Medical and wellness providers
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Salons, barbershops, and personal care services
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Physical therapy and rehabilitation clinics
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Educational and training centers
These businesses help drive repeat visits and longer customer dwell times within retail centers.
Looking Ahead
As consumer preferences continue to evolve, the retail landscape will likely keep shifting toward service-driven businesses that provide experiences rather than products.
For property owners and investors conducting real estate market analysis, understanding these changes is essential when evaluating tenant demand, redevelopment opportunities, and long-term leasing strategies.
Retail real estate is no longer defined solely by what people buy.
Increasingly, it is defined by how people spend their time.