Life Time, Chanhassen, Minnesota, signed a letter of intent for the sale-leaseback of four properties, the company announced on Feb. 9. Life Time did not name the institutional real estate investor with which they are signing the deal or the locations of the four properties.
The money will be used to strengthen the company’s balance sheet and for expansion, according to Life Time.
The sale and leaseback of the first two properties is expected to be completed on or before March 31, 2022, for approximately $80 million in gross proceeds to Life Time. The sale and leaseback of the other two properties is expected to be completed prior to Sept. 30, 2022, for approximately $95 million. Additional details were not disclosed.
In 2014 during its previous stint as a public company, Life Time Fitness owned so much of its real estate that it explored the conversion of its real estate assets into a real estate investment trust (REIT) as part of a strategic review, ultimately concluding the risk of achieving value for shareholders was too speculative and the risk of pursing the conversion was too high.
In June 2015, Life Time sold 29 of its then 115 buildings in a sale-leaseback agreement that netted the company $900 million. The 2015 sale-leaseback occurred soon after the company returned to private operations after a $4 billion sale of the company. Life Time once again went public in October 2021.
“We are grateful for and look forward to expanding the long-term relationship we have with this investor,” Life Time Chairman, Chief Executive Officer and Founder Bahram Akradi said in the announcement about the most recent sale-leaseback. “These transactions will allow us to continue to strengthen our balance sheet and fund the incredible growth opportunities we have in front of us."