What happened:
- Life Time recently closed a $150 million sale-leaseback (SLB) transaction on three club properties. This strategic move freed up capital while maintaining full operational control of their facilities.
Benefits Realized:
- Boosted financial flexibility — The SLB provided liquidity they can redeploy into growth or debt reduction .
- Improved credit rating & lower borrowing costs — S&P upgraded Life Time’s rating from B+ to BB– after the transaction, reflecting lower leverage and stronger cash flow. As a result, they cut their cost of debt by ~25 bps finance.yahoo.com+2gurufocus.com+2prnewswire.com+2.
- Enhanced capital efficiency — With freed-up capital, Life Time plans additional $100 million in SLBs through 2025, further supporting expansion across its 180 clubs en.wikipedia.org+3gurufocus.com+3marketscreener.com+3.
Why This Matters for Operators/Franchisees of all Sizes:
- Access new capital without giving up control – An SLB lets you monetize existing real estate to fund updates, acquisitions, or marketing — all while keeping your facilities operationally intact.
- Improve your financial profile – Leveraging owned real estate can reduce leverage ratios and improve creditworthiness, providing access to better deal terms and lower rates.
- Scale on your terms – Whether you run one location, or a multi-unit entity, SLBs offer a scalable way to reinvest in your business — fueling growth without diluting ownership equity.
Bottom line:
- Life Time’s transaction exemplifies that a well-structured sale-leaseback isn’t just for larger scale corporations — single to mid-size operators can also unlock trapped value in their properties, boost financial strength, and accelerate growth plans.
Get in touch with our advisors for more information:
Mark Pomella | mpomella@sabcap.com | 646.809.8840
Dave Gollenberg | dgollenberg@sabcap.com | 646.809.8847
Andrew Donnelly | adonnelly@sabcap.com | 646.809.8841
More information: https://www.gurufocus.com/news/2940916/life-time-closes-on-150-million-saleleaseback-transaction-credit-rating-upgraded-by-sp-lth-stock-news
