On the heels of opening its second local spot in San Clemente earlier this year, the Chanhassen, Minn.-based operator of supersized fitness centers has two more area locations in the works: one at Irvine’s Great Park Neighborhoods and another slated for the Brea Mall .
Both are expected to run about 125,000 square feet, nearly triple the size of a typical LA Fitness or 24 Hour Fitness location.
The privately held firm has opened or has disclosed plans for some 300,000 square feet of space in OC in recent months, the most of any area retail tenant, based on area brokerage data.
Those projects are likely to top $200 million to build out on a combined basis, if not more.
The company’s impact on the local retail real estate scene isn’t lost on Chief Executive Bahram Akradi, who founded Life Time in 1992.
“We’re less of a gym company, more of a real estate developer with the goal of building lifestyle components across the country,” Akradi said.
Akradi told the Business Journal that Life Time wants to be considered among the ranks of real estate and development companies, and is looking for large mixed-use development deals elsewhere in OC.
Adding fitness centers among developments featuring coworking, multifamily and hotel projects is a plan going forward, he said. Life Time has a dedicated team scouting real estate opportunities for new projects here, he said.
The company has a plan to open north of 20 locations over the next several years in Southern California.
The just-opened San Clemente spot is the fifth California location for Life Time, which has 151 locations in total.
Life Time’s most recently disclosed plans include a partnership with Simon Property Group Inc. (NYSE: SPG), the country’s largest shopping center REIT, for its mall in Brea.
In 2018, Simon said that a 168,000-square-foot portion of the mall—OC’s No. 3 shopping centers by sales last year and formerly home to a Sears—would be converted into a mixed-use concept. Specific details of the project weren’t disclosed.
Sears shuttered its Brea location in April 2018 as part of the retailer’s well-documented financial struggles; it also closed a location at Westminster Mall and South Coast Plaza.
Later in 2018, Simon bought the 50% interest it didn’t yet own in the Brea Sears for a reported $68 million.
Simon announced a redevelopment proposal as part of a larger portfolio revamp; it said it had “transformational redevelopment plans at five key locations,” including malls in Massachusetts, Texas, New Jersey, and Pennsylvania along with Brea.
The REIT’s proposal became more tangible last fall when Simon submitted plans to the city to demolish the Sears store and its auto service center, and replace it with retail, dining and residential components along with a high-end fitness facility.
According to city documents, the project “would result in a net increase of 149,625 square feet of retail use and 312 residential units on an approximately 17.5-acre portion of the 74-acre Brea Mall site.”
It requires a General Plan Amendment and zone change to accommodate the residential component.
Shortly after the proposal was submitted, Life Time inked a deal to lease a 125,000-square-foot space at the 1.3 million-square-foot mall. That represents the second largest retail deal in 2019, and the largest during the fourth quarter, according to a brokerage report by CBRE Group Inc.
Partnering with mall operators is a new focus for Life Time, which argues that adding mixed-use components can “help reignite the retail industry,” according to Akradi.
Elsewhere in OC, Life Time is getting closer to beginning construction on a new, stand-alone 125,000-square-foot facility at FivePoint Holdings LLC’s Great Park Neighborhoods in Irvine.
City records indicate the new location will have five pools, basketball courts, fitness classes and a “spa, salon and café that are accessible to both members and nonmembers.”
It’ll be the largest fitness facility in the city, and marks the first notable retail development at the Great Park Neighborhoods.
“We had been trying to get into Irvine for 20 years,” said Akradi, noting that working with FivePoint Chief Executive Emile Haddad was essential in getting a foot in the door.
Life Time entered the OC market in 2014 with the opening of a 128,000-square-foot site in Laguna Niguel, and it opened its second local spot about a month ago.
The company closed on a 10.4-acre site in the San Clemente hills in 2015, then home to the closed Rancho San Clemente Tennis & Fitness Club. Life Time demolished the original clubhouse building, constructing a new 45,000-square-foot single-story facility in its place.
It turned space previously used as tennis courts into a new swimming pool, restaurant, spa and classroom facilities for yoga, Pilates, cycling and group fitness. It also refurbished a portion of the tennis court space.
Life Time said it invests between $50 million to $200 million in the creation of a new club.
The San Clemente location, at 111 Avenida Vista Montana “will easily cost north of $50 million,” when all is said and done, according to Akradi.
It currently employs about 450 in Orange County, the new facilities could up that figure to 1,000.
Life Time’s parent company was once publicly traded but was taken private five years ago by affiliates of investors Leonard Green & Partners and TPG Capital in a deal valued at more than $4 billion.
In 2017, Life Time dropped the “Fitness” from its name, in a move to emphasize a diversification of product offerings, including new coworking concept Life Time Work and multifamily concept Life Time Living.
The company has opened coworking locations in Pennsylvania, Minnesota and Texas, and will debut its first apartments in Florida and Nevada later this year.
Orange County could be home to such projects in the future, with Life Time’s team of 500 employees looking for not just stand-alone gyms, but “any way for us to provide a wellness component to a project,” Akradi said.
“We are agnostic about the type of developments we pursue. Our expansion is centered on the goal of influencing healthy living, healthy aging, and a healthy way of life,” Akradi said.