RealSource Hosts Sale of New Construction, Single Tenant LA Fitness in Houston Metro for 6.12% Cap Rate
WEST HOUSTON, TX – RealSource Group, a national commercial real estate brokerage firm focused on retail, health care, automotive and education properties, has announced the sale of a new net rental investment to Sole tenant occupied by LA Fitness located in West Houston, Texas. Although the purchase price could not be disclosed, the sale reached a cap rate of 6.12%.
RealSource vice president of investment sales Austin Blodgett, along with ParaSell, Inc., represented the seller, a private developer based in Houston. The buyer was a private investor based in San Mateo County, California, and was represented by Roger Oser at Newmark in San Francisco, California.
“This is LA Fitness’s third single-tenant property to market and sell after COVID and it sold at a 6.12% cap rate, which is a new record in the Houston MSA, ”Blodgett said. At the end of August, Blodgett organized the sale of the first LA Fitness property for sale in the United States after COVID, a new LA Fitness Signature Club at the Waterview Town Center in Richmond, Texas.
“This deal was made at a cap rate of 6.12% after the previous LA Fitness at Waterview Town Center, which sold at a cap rate of 6.60%, demonstrating the continued compression of cap rates. from LA Fitness in the Southern United States as they normalize. even more after COVID, ”Blodgett reported.
For the past 20 years, RealSource has served as the Principal Broker for Fitness International, LLC, the operator of the LA Fitness, LA Fitness Signature, Esporta Fitness, City Sports Club and Club Studio brands. With over 740 locations in 27 states and Canada, Fitness International is one of the fastest growing fitness club chains in the United States.
“The buyer is an experienced real estate developer based in Northern California and was in a significant 1031 exchange to sell one of his development projects,” said Blodgett. “He was looking for an investment opportunity in Texas and loved the growth of the Houston MSA shopping area as well as the large mall that this LA Fitness is located in. We expect this to be a long term hold for the buyer. “
Blodgett adds, “We are currently seeing some interesting trends in the stock market, such as Peloton shares (Nasdaq: PTON) which have fallen 62% in the past year and publicly traded fitness chains like Planet Fitness (Nasdaq : PLNT) up 15% compared to last year. People leave their homes and go back to the gym. As LA Fitness is the single largest investment in health clubs on credit, we expect LA Fitness’s nationwide cap rates to continue to compress through 2022, as more and more of investors are looking for high quality retail assets, especially in tax-exempt states like Texas.
About the RealSource Group
RealSource Group was founded by John Kalamaras in 1991 as a national commercial real estate brokerage firm specializing in tenant representation, investment sales and leaseback transactions. With the combination of RealSource’s rental and sales experience, an extensive network of brokers, unique technology, processes and national reach; RealSource provides our clients with consistency, high production, quality service, and measurable trading results on a nationwide platform. RealSource has processed over 850 commercial real estate transactions nationwide, RealSource has honed its platform through proven execution over the past 30 years. For more information, visit: realsource.com.
Company Name: RealSource Group
Contact: Austin Blodgett, Vice President, Investment Sales
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