Altea has signed a long-term lease for about 51,000 square feet at RioCan REIT’s Bayview and Broadway property in Toronto, with plans to redevelop the space into a wellness club scheduled to open in December 2027.
The deal marks the second project between Altea and RioCan and comes as the Canadian fitness and wellness operator looks for additional sites in Ontario, British Columbia and Alberta.
Leaside site selected for club
The space at 1860 Bayview Ave. in Toronto’s Leaside neighbourhood is expected to undergo redevelopment beginning in early 2027. Altea said the site met the main criteria it uses when assessing potential locations, including floor space, parking, demographics and the mix of other tenants at the property.
The club will occupy a single level, allowing Altea to include its training floor, studios, recovery facilities and lounge in one space, along with a dedicated HYROX zone. The property also has structured parking, while Altea said the surrounding area provides a dense residential population and existing demand for boutique fitness services.
The company said RioCan is developing an everyday-needs and wellness-oriented tenant mix at the property, with Altea intended to serve as a daily-use component of that offering.
“We are highly selective about real estate,” said David Wu, Co-Founder and Chief Growth Officer of Altea. “We look at 10 sites to do one deal. The floor plate, the ceiling height, the parking and the demographics all have to work. If one of them is off, we pass. Bayview has all four. No two properties are the same, so we sit down with the landlord and work out the design and the deal structure that makes a club fit their asset. This is the second time we have done that with RioCan. We expect to announce further locations in British Columbia and Alberta over the coming months, and we are actively reviewing sites.”
Expansion plans
Altea said its clubs are designed as daily-use facilities, with training, studio fitness, recovery and lounge and coworking areas housed together. The company said that model is intended to generate regular member visits and allow customers to use the facilities throughout the day.
The clubs are built without aquatic facilities, with recovery offerings including contrast therapy, sauna, cold plunge, compression and massage. Altea said that approach allows it to consider a wider range of existing retail properties for conversion and cited previous projects involving a former Lowe’s in Edmonton and a former Cineplex in Toronto’s Leslieville neighbourhood.
The new Leaside club is expected to include a full training floor and studios for Reformer Pilates, Mat Pilates, Yoga, Barre, Strength & Conditioning, LF3 small-group strength, Running + Turf with HYROX-style conditioning, Boxing and Cycle. It will also include recovery facilities, a smoothie bar and lounge and coworking space, with interiors using natural stone and wood.
“Our job is to build the best club a member has ever belonged to,” said Jeff York, Chief Executive Officer of Altea. “Everything is in one building — the studios, the training floor, recovery and the lounge — so a member isn’t paying for two or three memberships and driving between them. Members join because the place feels good, and they stay because they get fitter. That is what makes us a tenant a landlord wants for twenty years. Leaside will be built the same way.”
More sites under consideration
Altea said it is seeking properties in Ontario, British Columbia and Alberta, with flexibility around development structures that include build-to-suit projects, conversions of existing retail space and locations within mixed-use developments.
The company is generally seeking about 50,000 to 60,000 square feet for a standard club, more than 80,000 square feet for a large-format destination club and about 30,000 square feet for an urban AVANT-format location. Single-level properties are strongly preferred, while parking, ceiling heights, column spacing and the characteristics of the surrounding trade area are also part of its site criteria.
The company’s first project with RioCan, Altea Ottawa at 1660 Carling Ave., remains its largest club.
Altea currently operates four clubs in Canada in Winnipeg, Vancouver, Ottawa and Toronto, along with AVANT by Altea in Toronto’s Yorkville neighbourhood. Two additional clubs are under construction: a 125,000-square-foot location in west Edmonton targeted to open in the first quarter of 2027 and a 54,000-square-foot location at Oakridge Park in Vancouver targeted to open in the second quarter of 2027.
The company is also developing a 59,000-square-foot club at 1651 Queen St. E. in Toronto’s Leslieville neighbourhood on a former Cineplex property, with an opening targeted for 2028.
Familiarity with the location
York said he knows Leaside from his Farm Boy days.
“We opened our biggest store in Toronto there, and Longo’s put their flagship there 10 years before that. Grocers don’t do that unless the neighbourhood is strong, and the same people who shop those stores are the people who join our clubs,” he said.
“At every one of our clubs, more than 60 per cent of the members are university-educated women, and they come in three or four times a week. That’s the customer every premium retailer wants on their site, and it’s the same customer Farm Boy built its business on. There hasn’t been a premium fitness option in Leaside because no building has been big enough to support one. Bayview & Broadway gives us a space that’s already the right size and shape, on a main street, easy to get in and out of, with structured parking.”
Getting the traffic
York said members show up three or four times a week and stay an hour or more.
“Most retailers would love that kind of traffic, and the other tenants on the site benefit. When a landlord has a big empty box, an old cinema, or a podium that’s hard to lease, we can take the whole thing on a long-term lease instead of them chopping it up into small units. We’ve done conversions, taken over a grocery box, and built a club on three floors of a new tower. We build to the building,” he said.
Future expansion targets
Over the next three to four years, Altea expects to add four greenfield deals in Calgary and Edmonton using its new 85,000 square foot prototype, plus two large retail conversions in the Vancouver market, 90,000 to 100,000 square foot former retail boxes, both in development now,” said Wu.
“There’s more coming in Ontario as well. We’re not chasing a number. We’d rather open a few great clubs a year than a lot of average ones, and the pipeline right now is the deepest it’s been,” he said.
Challenges finding 50,000 to 60,000 square feet sites
Finding the square footage isn’t the hard part. It’s finding demographics, visibility, access, parking, and ceiling heights all on the same site, explained Wu.
“Most older big boxes were built for retailers who didn’t need the height, and urban sites are usually short on parking. The neighbourhoods we want tend to be built out, so we must be creative about where the club goes. Our Vancouver club is 43,000 square feet over three floors of a brand-new office building, and it’s one of our best. Bayview is a single-level former grocery box. Layer on construction costs and how long approvals take in the big cities, and that’s why we look at 10 sites for every one we sign,” he said.
Second deal with the same landlord, long-term leases, and redevelopment flexibility
“When a landlord comes back for a second deal, it’s because they’ve seen what we do to a building. We put serious capital into every club, well beyond what a typical retail tenant spends, and the landlord ends up with a completely different asset than the one we walked into,” noted York.
“Our Ottawa club was a vacant former retail box on Carling Avenue. Today it’s a 129,000-square-foot premium wellness destination with nine boutique studios, a 25-metre pool, pickleball courts, a dedicated HYROX training zone, a women’s-only fitness suite, a recovery lounge, saunas and steam rooms, a kids’ club, coworking space, and a café and bar. It’s the biggest club in the city, and it draws people to that property every day of the week.
“That’s why we need long leases. We’re not putting that kind of money into a 10-year deal. That’s why we look for landlords willing to work through the redevelopment with us. We keep doing business with asset managers who understand that trade.”
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