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Life Time Fitness Exploring REIT Conversion

Owner of More Than 8 Mil SF of Fitness Facilities Looking To Spin Off Real Estate
August 25, 2014
Life Time Fitness Inc. has initiated a process to explore a potential conversion of real estate assets into a real estate investment trust (REIT).

The Chanhassen, MN-based operator of 112 health fitness centers across the country said its board of directors believes that a REIT conversion could provide substantial benefits to given its significant real estate holdings, while also supporting its long-term growth plans.

As of August 25, 2014, the company operated 112 centers under the Life Time Fitness and Life Time Athletic brands in the United States and Canada.

The company owns its 105,000 square foot, three-story corporate headquarters at 2902 Corporate Place in Chanhassen, next door to one of its large format fitness centers.

As of year-end 2013, it owned or ground leased 88 of its 108 centers totaling 10.6 million square feet. Twenty-four of those centers were in Minnesota.

The square footage figures exclude areas used for tennis courts, outdoor swimming pools and outdoor play areas.

In addition to the centers, it also operated six satellite locations, including a 15,640 square foot tennis-only facility that it owns in Minnetonka, Minnesota, a 75,450 square foot tennis-only facility that it owns in Centennial, Colorado; and four leased yoga centers in the Detroit, Michigan market.

The company said there is no assurance that it will change its current business plan or complete a REIT conversion.

Wells Fargo Securities and Guggenheim Securities are serving as the company's financial advisors. Skadden, Arps, Slate, Meagher & Flom LLP and Faegre Baker Daniels LLP are serving as its legal advisors.

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