A private investor has acquired a single-tenant LA Fitness property in Coconut Creek, Florida, for $14.1 million. The 41,000-square-foot club, located on Lyons Road near the Sawgrass Expressway, sold at a reported 6.89% capitalization rate. The buyer used the purchase as part of a 1031 exchange, according to brokerage NX3 Commercial Group.
Key takeaways
- The property at 5501 Lyons Road sold for $14.1 million, or about $344 per square foot.
- Fitness International occupies the building under an absolute net lease through January 2037.
- The 2004-built health club sits on 5.04 acres and has approximately 290 parking spaces.
- NX3 Commercial Group represented the buyer; Mark Thiel of Marcus & Millichap represented the seller.
A long-term lease anchors the deal
The lease to Fitness International, the parent company of LA Fitness, leaves the tenant responsible for property expenses and maintenance, according to the transaction announcement. The buyer takes over with more than 10 years remaining on the primary lease term and no landlord responsibilities under the absolute net structure.
The agreement also includes three five-year renewal options. Rent increases every five years are tied to the lesser of the Consumer Price Index or 12%, the brokerage said.
Property sits in a busy retail corridor
Built in 2004, the fitness club occupies a site fronting Lyons Road near the Sawgrass Expressway. Combined traffic on the two routes exceeds 120,000 vehicles per day, according to NX3. The property backs onto a Publix-anchored shopping center and is within a mile of Promenade at Coconut Creek and Turtle Crossing, which includes Target, Home Depot and Walmart.
Average household income within one mile of the site exceeds $125,000, the brokerage reported. NX3 President Luke Thomson said the property’s size, location and lease duration were important features for investors seeking a durable asset.
Buyer used a 1031 exchange
NX3 said the buyer was a private investor completing a 1031 exchange, a process that allows eligible investors to defer capital-gains taxes by reinvesting proceeds from a property sale into qualifying replacement real estate. Exchange buyers generally face firm identification and closing deadlines, which can influence the timing and selection of acquisitions.
The brokerage described the transaction as part of a broader pattern it is seeing: investors shifting proceeds from management-intensive properties in higher-tax states into passive, single-tenant assets in Florida. That characterization reflects NX3’s view of current investor activity rather than a measure of the market as a whole.