By William Morris - Finance & Commerce
February 1, 2019
Turns out, even gyms have to keep up with the Joneses.
The LA Fitness club at 4175 76th St. W in Edina has been sold for $13.65 million, according to Colliers International Vice President Jeff Budish, who brokered the deal. The sale closed Friday, and no certificate of real estate value was immediately available.
The seller is an entity connected to California-based Goldrich Kest, while the buyer is VEREIT of Phoenix, Arizona. Neither returned messages Friday seeking comment. Hennepin County values the property at $7.146 million for tax purposes.
According to county records, the property was last sold in December 2007 for $15.025 million.
The sale comes after LA Fitness completed a major interior renovation in late 2018 and signed a 12-year extension on its lease, Budish said in an interview. That project was driven at least in part by increasing competition in Edina’s France Avenue Corridor, including the Life Time Athletic Southdale club soon to open in a former J.C. Penny store at Southdale Center.
The renovation made the club more attractive to buyers as well as better positioned in its local market, Budish said.
“I would say [this club] is built out better than any of the other LA Fitness clubs in town,” he said.
The Edina LA Fitness location is substantially larger than most of the chain’s clubs, at about 63,000 square feet, Budish said. In other circumstances, the club might have looked for a smaller, purpose-built space in the neighborhood, but in Edina, that option isn’t economical, he said.
“Really what it is, is a testament to land prices in Edina and other available options in Edina,” he said. “If this were Maple Grove, they probably would’ve moved to a new location. In Edina, on France Avenue, there aren’t really any other options.”
The Life Time club at Southdale Center will be about 120,000 square feet and will offer such amenities as indoor and rooftop swimming pools.
Colliers has seen increasing competition in the fitness club market recently, Budish said. Planet Fitness has opened a number of Twin Cities locations, while pricier chains such as LA Fitness and Life Time have become popular assets for investors. Although different chains offer a range of amenities and price points, there could still be bottlenecks in certain submarkets, he said.
“I think there’s going to be a consolidation of certain levels of clubs,” Budish said. “I think in some markets, if you have three of those concept right next to each other, it’s going to be difficult.”
VEREIT, the buyer of the Edina club, has been active in the Twin Cities in recent months, including paying $37.8 million in November for the Brooklyn Center Topgolfand a former Walmart building in Blaine for $14 million.