Healthcare REIT Snaps Up Wellness Centers in $100M Sale-Leaseback Deal
- Aug 28, 2008
Four wellness centers operated by Life Time Fitness Inc. have come under the ownership of Senior Housing Properties Trust, courtesy of a $100 million deal. Life Time Fitness will continue to occupy the properties under a triple-net lease agreement through its subsidiary, LTF Real Estate Co. The deal calls for the company to pay SNH rent totaling $9.1 million per-year, in addition to fixed increases over the life of the lease, which is scheduled to expire in 2028. The assets account for a total of nearly 460,000 square feet in Georgia, Illinois, Nebraska and Texas.Developed between 2005 and 2007 the Life Time Fitness assets in the Midwest include a 109,000-square-foot center on nearly 11 acres in Romeoville, Ill., and a 114,000-square-foot facility occupying 12 acres in Omaha, Nebr. In the south, the grouping includes a nearly 110,000-square-foot property occupying a 12-acre parcel in Alpharetta, Ga., and a 125,000-square-foot property sited on 13 acres in Allen, Tex., both of which were developed in 2006. While the initial term of the fitness lease is for 20 years, the full term of the agreement is for 50 years, as it encompasses six renewal options, each for a five-year period. SNH relied on its revolving credit facility to finance the acquisition. The company has been pumping up its portfolio a great deal over the last few months. In May, SNH revealed that it had entered into a series of agreements to buy 48 medical office, clinic and biotech lab properties from HRPT Properties Trust for an aggregate $565 million. In June, July and August, SNH acquired 28 of the assets at a total purchase price of $232.9 million. A Newton, Mass.-based REIT, SNH owns independent and assisted living communities, nursing facilities, rehabilitation hospitals, medical office buildings and wellness centers across the U.S. The REIT was created by HRPT in 1998 and spun out to HRPT shareholders the following year as an entirely separate entity. Headquartered in Chanhassen, Minn., Life Time Fitness, as of June 26, operated 74 centers in 17 states, with one-third of the centers located in its home state. The company’s portfolio of facilities encompassed 7.3 million square feet at the close of the second quarter.