Fitness Clubs Get Physical With Expansion Plans Amid Gym Bounce Back
Fitness club chain Life Time Inc. has locked down sale-leaseback agreements for four properties totaling $175M.
The deals are with an institutional real estate investor "that has entered into multiple sale-leaseback transactions with the company previously," the Minnesota-based firm said in a statement. The first two properties are slated to close before the end of March, and the latter two by the end of September.
“These transactions will allow us to continue to strengthen our balance sheet and fund the incredible growth opportunities we have in front of us,” Life Time CEO and Chairman Bahram Akradi said in the release.
Gyms were among the hardest hit by the pandemic in 2020, but over the last year have seen business return as restrictions lifted, vaccination rates rose and people grew comfortable indoors again.
Life Time isn't the only gym company in expansion mode.
Starting Strength, a boutique fitness franchise out of Idaho, is planning to expand into 20 more markets this year. The company, which bills itself as the top strength training brand in the world with 14 locations, has tapped CBRE’s Joseph AmecAngelo and Daniel Duque in Atlanta to lead leasing efforts.
The team said it's on the hunt for highly trafficked retail space between about 1K and 2K SF in urban markets.
“We look forward to working closely with Starting Strength Gyms to strategically expand the franchise into 100 locations over the next five years,” AmecAngelo said in a statement.
The return to gyms has been welcome news for brick-and-mortar fitness companies, but not so much for those home fitness programs that thrived over the pandemic, including Peloton. The company this week said it plans to lay off 2,800 people and its CEO will step down.
"Peloton's executives believed — as many did — that behavioral changes in the pandemic would stick. That does not appear to be the case as we see people reverting to their pre-pandemic routines," Timothy Hubbard, assistant professor of management at the University of Notre Dame's Mendoza College of Business, told CBS in an email.
