A private investor has acquired a freestanding LA Fitness in Coconut Creek, Florida, for $14.1 million. NX3 Commercial Group represented the buyer in the transaction, which closed at a reported 6.89% capitalization rate. The property is leased to Fitness International under a long-term absolute net lease, with the current term running through January 2037.
Key takeaways
- The 41,000-square-foot health club sold for about $344 per square foot.
- The buyer was completing a Section 1031 exchange, which allows investors to defer capital-gains taxes when qualifying property is exchanged for replacement real estate.
- Fitness International has more than a decade remaining on the primary lease term, with three five-year renewal options.
The sale brings together a long-term corporate lease and a high-traffic Broward County location. NX3 said the deal reflects continued interest in Florida net-lease properties among investors seeking passive ownership and replacement assets for 1031 exchanges.
Property and lease details
The LA Fitness is located at 5501 Lyons Road on a 5.04-acre site. Built in 2004, the club has approximately 290 surface parking spaces. Its absolute net lease leaves the tenant responsible for property-related obligations, limiting the landlord’s operating responsibilities.
The lease’s primary term expires January 31, 2037, and includes three options to renew for five years each. Rent increases every five years according to the lesser of the Consumer Price Index or 12%, according to the transaction announcement. Fitness International operates LA Fitness clubs and more than 728 fitness locations across the United States and Canada.
Location and investment context
The property fronts Lyons Road near the Sawgrass Expressway, where combined traffic exceeds 120,000 vehicles per day. It is adjacent to a Publix-anchored shopping center and within a mile of Promenade at Coconut Creek and Turtle Crossing, retail destinations that include Target, Home Depot and Walmart. Average household income within one mile exceeds $125,000, the announcement said.
NX3 President Luke Thomson characterized the property’s land, location and remaining lease term as factors supporting its appeal to investors. The firm also described a broader pattern of owners moving from management-intensive properties in higher-tax states into Florida single-tenant assets. For 1031 exchange buyers, the required identification and closing deadlines can add urgency to the search for a replacement property.
Transaction representation
NX3’s Robert Zahralban, head of national net lease, and President Luke Thomson represented the buyer. Mark Thiel of Marcus & Millichap’s NNN Fitness Group represented the seller. The buyer was identified as a private investor; the seller and buyer’s identity were not disclosed.