LA Fitness is a chain of health clubs.
LA Fitness is an attractive net lease tenant because of its ability to draw members to the gym a few times a week, increasing vehicle and foot traffic in the surrounding area. LA Fitness clubs help elevate nearby businesses. LA Fitness tends to cater to a more affluent clientele. LA Fitness leases tend to be for a long periods with strong increases, and gives investors an asset with built-in inflation protection. LA Fitness tends to trade at higher price points, and this can limit the buyer pool for these assets.
Additionally, LA Fitness commonly operates in larger buildings in order to accommodate all of the amenities they offer, such as pools, saunas, etc. Any large format building can be difficult to backfill if the tenant leaves, however, gyms are growing in popularity as an option to fill vacant anchor tenant space and are attractive to investors as they are insulated from online disruptions other retailers are experiencing. Gyms of all sizes have opened up to accommodate the large growth in memberships over the past few years.
LA Fitness started as a single gym in Southern California, in 1984. Today they have over 690 locations in 32 states and Canada. LA Fitness offers members weights and cardio equipment in addition to group fitness classes. Locations will often have pools, saunas, basketball courts, and personal trainers available for members as well. LA Fitness is owned by two private equity firms: Seidler Equity Partners and Madison Dearborn Partners.