Life Time Fitness
Acquisition funded exit strategy for institutional investor while preserving continuity for the tenant
Tenant Description: Market-leading fitness operator with a premium lifestyle and fitness brand
Total Investment: $322 million
Transaction Type: Acquisition of existing lease*
Location: U.S. (nine states)
Facility Type: 10 fitness facilities
W. P. Carey completed the $322 million acquisition of 10 fitness facilities located in the U.S. The portfolio, totaling 1.3 million square feet, is net leased to Life Time Fitness, a premium lifestyle brand and fitness operator. Life Time is a market leader, with a significant revenue share of the total U.S. fitness industry and a dominant presence in the high-end club segment. At the time of purchase, Life Time was also a pre-existing tenant, with W. P. Carey having previously acquired two Life Time facilities in Arizona and Maryland in 2008. After the transaction, Life Time ranked as W. P. Carey’s third-largest tenant by annualized base rent (ABR).
The portfolio consists of large-format premium fitness centers that have a longstanding and stable operating history. The facilities feature amenities such as certified personal training, basketball and pickleball courts, yoga and Pilates studios, saunas, spas and large indoor/outdoor aquatics centers.
The assets are master leased on a triple-net basis for a remaining term of 9.5 years with built-in rent increases.
*In an acquisition of an existing lease, W. P. Carey will acquire a single-tenant property subject to an existing net lease. This type of transaction enables the previous property owner to achieve a number of different objectives depending on their needs. For example, exit a property that no longer fits its strategy, liquidate a finite-life fund or generate proceeds to invest in new properties or for M&A activity.
This acquisition highlights the advantage of W. P. Carey’s scale and access to capital, which enables us to efficiently execute large, multi asset transactions. Life Time’s strong credit profile, along with the quality and desirable locations of these assets, made them an ideal addition to our growing retail portfolio.