Repurposing real estate, transforming a community

*SPENGA Wheat Ridge owner, Stephanie Magee*

Most of the entrepreneurs I work with get into business because they excel in their industry. Having reached a point of excellence, they’re ready to take the steps to become their own boss.

For Stephanie Magee and her husband Chuck, it was the ability to step back and take a bird’s eye look at their big-picture goals that led them to open the doors of their cutting-edge west Denver-based fitness studio, SPENGA Wheat Ridge.

Their path to opening was full of twists and turns, setbacks and victories. Now, as we come into the Spring of their second year of business, we’re taking a peek at their journey in commercial real estate, business, resilience, and most importantly, the community they’ve formed as a result of their determination.

In this article, we see the project through their eyes and gain a fresh perspective on the concept of Adaptive Reuse, the practice of taking a space originally designed for one use and repurposing it into something completely different.

Making it happen meant looking beyond the obvious to spot the true potential of the building and proving that sometimes beauty in real estate, and in life, lies beneath the surface.

Today, the studio is a testament to the impact good design, planning, and consistency can have on a business and on a community.

Meet Stephanie and Chuck Magee

From the age of sixteen and throughout her college years, Stephanie Magee worked in restaurants. Her years in the industry taught her to approach work with a “service first” mindset. From there, she took roles in sales and business development, eventually finding her calling in marketing.

As Stephanie puts it, “everyone is marketing all the time.”

When her daughters were born, like many new mothers, Magee sought a career option where she could hone her skills in service, sales, business development, and marketing while applying her appreciation for systems and strategy. All of this, and she needed to do it from home.

At the same time, her experience with pregnancy shed light on the toxicity of our environmental world. With a philosophy based on preventative health and ongoing wellness, she launched a business selling doTERRA essential oils.

*Stephanie and Chuck Magee during the first days in their space*

Stephanie gained a deep appreciation for the positive impact her services and products were having on her clients. That momentum, coupled with her husband Chuck’s readiness to do something beyond his corporate job, inspired a push to their next chapter: opening a franchise business of their own.

The couple knew they wanted to do something in the wellness space and that whatever it was, it should be something that would help the community they were raising their girls in.

Unlike so many entrepreneurs, the pair approached their new venture with open eyes and an open mind. It’s so easy to get blinders on, especially when it comes to our dreams. They knew they loved fitness. They knew they needed a proven business model that they could personalize while taking advantage of systems put in place on a corporate level. They knew they needed to work on their business, not just in it. Beyond that, their options were open.

They began to explore franchise options. At the same time, Stephanie was looking for safe ways to get herself back in shape postpartum. When the concept of SPENGA as a business opportunity emerged, her first step was to visit an existing local studio to see if it was a fit for her both personally and professionally.

In January 2020, Magee took her first SPENGA session and the story began to unfold.

What is SPENGA?

The SPENGA workout combines three pillars of fitness into a 60-minute session set in a state-of-the-art facility with no shortage of bells and whistles. Students sign up through an app and arrive to kick off the workout with an intense 20-minute spin ride.

Each rider’s name appears on television monitors displayed above the instructor with four levels of watt intensity called for as they ride. New students start with lower numbers which increase as they grow stronger and attend more classes.

Following the ride, the class transitions to a 20-minute HIIT (High-Intensity Interval Training) session where the focus is on building strength and endurance. Exercises incorporate kettlebells, dumbbells, slam balls, TRX, Bosu, and plenty of body weight and cardio options.

Finally, students remove their shoes and head into the final segment of the session, a 20-minute yoga flow designed to support the areas of the body that worked in the first two segments.

You may be thinking this is a lot to pack into an hour, and you’re correct. The transition from bike to strength to the yoga mat is only possible with outstanding design and concise systems.

A full class includes 24 adults moving through a space that some of them have never been in. Without a surgical level of precision, it doesn’t work.

To make it successful, the combination of great design, space planning, and systematic business practices is crucial.

Learn about the work I do with fitness clients

Why SPENGA?

The Magees looked closely at three different franchise options. In the end, it was Stephanie’s experiences visiting SPENGA in a neighboring market that shaped their decision.

When she arrived to take her first class (her first workout postpartum), she was dealing with multiple injuries and knew she needed something low-impact.

Looking around the studio, she was struck by the diversity of the participants. She saw older people, younger people, slender people, heavy people, muscular people, and injured people. She saw caring, experienced instructors offering options to push both the strongest athlete and the least experienced person in the room.

When the workout began, she found herself being pushed to work hard without sacrificing safety. She embraced the “survivor” exercise options offered as alternatives to more intense movements. She very quickly realized this workout was exactly what she needed.

Her fears of getting further injured in classes at other studios where all students are expected to conform to the same workout were set aside.

She noticed the space was clean, the equipment was new, the sound system was high quality, the lighting was intentional, and every area was designed with purpose from the reception to the fitness spaces to the restroom and shower facilities.

As important as the look and feel of the space are, what matters most is the impact her visits to SPENGA were having on her body, mind, and energy. Over time, her commitment to attending classes transformed her health.

Beyond the workout and design, the Magees saw SPENGA as a concept unique in the market.

As Magee puts it, “we decided to roll with what resonates”.

Take a peek at this video from SPENGA

*The strength area at SPENGA Wheat Ridge*

The process of getting open

March 2020 - Project Beginnings

Stephanie and Chuck traveled to Chicago to meet with the corporate team at SPENGA where they learned more about the company’s philosophy which is built on the pillars of culture and community rather than just a workout.

Interviews with corporate continued and they were connected with other franchisees around the nation. Financial disclosures were exchanged on both ends and a pro forma was created and updated and expanded. On March 9, 2020, they signed their franchise agreement and were ready to get started.

What no one could have predicted was the blow that the COVID-19 pandemic would deliver only a week later when nationwide lockdowns changed it all. Navigating the new world of uncertainty was tough enough for established businesses. For budding entrepreneurs, it seemed nearly impossible.

Against the odds, Stephanie and Chuck stayed the course.

Armed with guidelines on the ideal property structure and size, demographics, and other tools from SPENGA corporate, the search for the ideal west Denver location for their new business began.

September 2020 - Finding Their Space

One day as Chuck was driving around their Wheat Ridge neighborhood, he noticed a vacant space adjacent to a King Soopers. Previously a Rent-A-Center, the location had grates over the windows and an air of abandonment lingering at its door.

While far from gorgeous, Chuck could see the potential of the space. The building was located in a busy complex with heavy traffic from the surrounding neighborhood. He presented the space to Stephanie and, like her husband, she could envision making it their own.

*A view of the space pre-construction from what is now the reception area*

Parking, a factor that often presents a challenge for my clients, was abundant and the demographics made sense. Additionally, the challenge of finding a space that could tolerate the noise generated by pumping music was overcome as the grocery and liquor stores flanking the space had no qualms with the decibel levels.

The pair worked in tandem with SPENGA corporate and a local commercial broker to present an LOI (Letter of Intent) on the property. Lease negotiations began and with the assistance of a rockstar real estate attorney, the deal on the 4,095-square-foot space came into focus.

Still burdened with the havoc of the pandemic, the negotiation period was trying as the Magees fought for special lease language to help protect them in the case of future closures and other unpredictable challenges. The concept of pandemic language was new to both the Tenant and Landlord but eventually, they were able to reach a compromise.

Leasing is an art form and the idea I stress to my clients always comes back to the concept of advocacy. When a client signs a representation agreement with a broker, that broker becomes an agent to the client. It is our duty as their agent to protect their interests, defend their assets, honor their timeline, and fight for as many options in the lease agreement as possible.

Advocacy by your real estate broker

Many people don’t realize that as a client with exclusive representation by a licensed broker, they have the right to advocacy apart from that which they receive from an attorney.

This isn’t to say an attorney doesn’t have a place in the transaction. They do. An attorney provides counsel on aspects of the agreement that are outside the scope of what a real estate broker is permitted to do.

There is never a scenario where I don't recommend my client consult with an attorney. However, there is a great deal an informed broker can do on their behalf during the negotiation process without incurring expenses to the client. The broker is paid by the Landlord, not the Tenant, as a success fee upon closing. An attorney, on the other hand, is typically paid hourly by the client.

Learn more about my leasing services!

*Stephanie Magee with one of her daughters in front of the future studio*

February 15, 2021 - Lease Execution

At last, on February 15, 2021, Stephanie and Chuck executed their lease agreement. As is common in leasing, the Landlord contributed funds toward the buildout, known as a “TI” or Tenant Improvement allowance. These funds were allocated to reimburse them for specific expenses related to the project.

As part of the lease negotiations, your broker will ask for as much TI support as possible from the Landlord. Sometimes the amount is set as a lump sum that’s conveyed at the start of the project. In other cases, some or all of the amount can be treated as a loan that is amortized and rolled into the rent to be paid in portions over the term of the lease.

Beyond the TI allowance, your broker will request a period of free rent in which the construction process takes place. If you’ve ever been involved in a construction project, you know that there are two key things that there never seem to be enough of – time and money. While these Landlord provisions are helpful, there’s a limit to what’s reasonable and the responsibility to get the project done ultimately falls on the Tenant.

May 2021 - The Construction Phase

After many months of deliberation, the building permits were finally submitted to the municipality. What was once a twelve-week waiting period pre-pandemic took months longer. When the permits finally came through, the project encountered construction delays lasting another three months.

*The project slowly began to take shape*

When the actual work at SPENGA Wheat Ridge finally got underway, a construction management company determined by SPENGA Corporate helped guide the project, ensuring the construction met the design standards set forth by their franchise agreement while adapting to the unique features of the building.

Meanwhile, the Magees turned their attention to the task of launching their new studio to the market. With their variable timeline front of mind, Stephanie began with the piece she knew mattered most, interviewing and getting commitments from her opening team of instructors. She knew that the investment of time, funds, effort, and energy wouldn’t matter without the right people leading the classes.

As important as it is to have great teachers, those teachers also need students. Calling on her background in marketing, Magee managed to sign an impressive 380 new members during an intense pre-sale effort while construction carried on.

Just as things were looking up, their progress was rocked by the emergence of the OMICRON variant. Following this second wave of infection, just 215 of those 380 new members stayed committed to their membership agreements. All the while, the studio doors remained unopened.

As the months rolled on, the financial impacts of an extended construction period combined with not opening with the membership count that they needed, the question became, “how long can we make it?”

Through countless tears and unparalleled perseverance, Stephanie and Chuck weathered the storm.

As she explained it, “The project was no longer just about us. We now had a staff depending on us for employment. We had students looking to us for the wellness and community they had so desperately been missing during the lockdown.”

“The project was no longer just about us. We now had a staff depending on us for employment. We had students looking to us for the wellness and community they had so desperately been missing during the lockdown.”

— Stephanie Magee

December 12, 2021 - Open at Last

Twenty months after their trip to Chicago, the doors to SPENGA Wheat Ridge opened. The Magees found themselves at the end of one chapter and the beginning of another.

Having spent over ten years working, coaching, and managing in the fitness industry, I know how much time, effort, and energy it takes to run a studio. Finding and training the right instructors is time-consuming. Marketing your brand and making your potential customers aware of your existence is challenging and expensive. Converting prospects to members is a constant effort that depends on every aspect of their experience within your walls.

Today, SPENGA Wheat Ridge has become a core piece of the lifestyle of its members, instructors, and support staff. I myself am a committed member, making my way to the studio four to five days a week before the sun rises.

Stephanie and Chuck’s perseverance has paid off and our community is a better place to live because of them.

Opening a business is tough. My hope in sharing their story is to inspire others who dream of making their goals a reality. It can be done and people like the Magees are proof of that.

If you’re interested in opening a business of your own in Denver, get in touch with me and we can discuss how you too can make it happen. I’ll be with you every step of the way.

Lessons from Stephanie for aspiring entrepreneurs

Building a business through a franchise model is a way of streamlining things, but you still have to apply the most important aspect of any business operation: consistency.
The skills you’ve acquired in your past career path, even if they come from a different industry, can guide you on your venture.
While we do our best to predict the future, those predictions are usually based on what has happened in the past. Yes, there are patterns in economics but there are also things outside of anyone’s control. Be ready to roll with it.
Dive deep into the financials of other franchisees and business owners in your industry. If she could do it over, Stephanie would have dug deeper into the books. It wouldn’t have changed their choice of franchise, but it would have changed their financial plan.
However much time or money you think your project is going to take, it’s going to take more.
Explore financing options! There are multiple ways to make a commercial deal work. A broker like me can help.
Consider working with a CPA who focuses on your industry BEFORE you open.
A business attorney is a crucial part of finalizing your lease negotiations, but a thorough commercial real estate professional can guide you much of the way at no expense to you.
The people that shape your community make it all worth it. Create the culture and the rest will follow.