Life Time Fitness Credit Rating & NNN Cap Rate

Metric	Details
Entity / Legal Name	Life Time Group Holdings, Inc.
S&P / Moody’s Rating	B‑ / Caa1
Investment Grade Status	Non-Investment Grade — Substantial Risk Tier
Sector	Luxury Fitness & Athletic Lifestyle
US Club Count	~170
Cap Rate Range	7.5–9.5%
Typical Lease Term	15–25 years (NNN)
Guarantee Type	Corporate (Life Time, Inc.)
Stock Ticker	LTH (NYSE)
Annual Revenue	~$2.3B (FY2024)
Typical Building Size	100,000–150,000 SF
Typical Price Range	$15,000,000–$40,000,000+

Life Time Fitness Business Overview & NNN Investment Profile

Life Time Group Holdings is the operator of Life Time — a luxury athletic lifestyle club brand offering premium gym facilities, spa services, childcare, cafes, and sports programming under one roof. Operating approximately 170 clubs across major US and Canadian metropolitan markets, Life Time targets the premium wellness consumer with average membership dues significantly above Planet Fitness or LA Fitness. The Chanhassen, Minnesota-based company went public on the NYSE in October 2021 following private equity backing from Leonard Green & Partners and TPG Capital, and continues to carry a heavily leveraged balance sheet from that era.

Substantial Risk / Non-Investment Grade: Life Time carries B‑/Caa1 ratings — placing it in the substantial risk tier, well below the investment grade threshold. The Caa1 Moody’s rating is particularly notable: Caa-level ratings indicate very high credit risk and significant potential for default absent favorable conditions. Investors receive a substantial cap rate premium for Life Time NNN leases in exchange for accepting this elevated credit uncertainty. These are exclusively institutional NNN investments given the large format and price point.

Life Time Fitness Credit Rating Analysis

Life Time’s B‑/Caa1 ratings reflect the company’s highly leveraged balance sheet — a legacy of years of private equity ownership and aggressive expansion — combined with the capital-intensive nature of its 100,000+ square foot luxury club model. Each new Life Time club requires $30 to $50 million or more in buildout investment, creating substantial debt obligations that weigh on the credit profile regardless of club-level performance. The company has been cash flow positive at the club level but has struggled to generate sufficient free cash flow after debt service to de-lever meaningfully.

The COVID-19 pandemic was particularly damaging to Life Time’s credit position. The company’s large-format, in-person luxury fitness model was completely shut down for extended periods, and the company took on significant additional debt to survive the closures. Despite a strong post-pandemic membership recovery — driven by the wellness trend and pent-up demand for premium fitness experiences — the debt burden has not been fully resolved. The Caa1 rating signals that absent continued revenue growth and debt reduction, the credit risk remains elevated.

Life Time NNN Lease Structure

Life Time NNN leases carry very long initial terms of 15 to 25 years — reflecting the company’s massive tenant improvement investment in each club and its long-term commitment to premier locations. The 100,000 to 150,000 square foot format is among the largest in the NNN market, typically in freestanding purpose-built facilities or as anchor tenants in lifestyle and mixed-use developments. The specialized fitness club format — with pools, courts, spas, childcare centers, and restaurants — creates significant re-tenanting complexity if Life Time were to vacate a location.

Life Time NNN Cap Rate & Pricing Trends

Life Time NNN properties trade at cap rates between 7.5% and 9.5% as of Q1 2026. The B‑/Caa1 rating and specialized large-format building command wide spreads relative to investment-grade fitness operators like Planet Fitness. Long-term leases (20+ years remaining) in premium demographic markets trade at the tighter end. The $15,000,000 to $40,000,000+ price range makes these exclusively institutional buyer assets — REITs, pension funds, and family offices with specific appetite for leveraged fitness credit.

Life Time NNN Investment: Pros & Cons

Pros	Cons
Premium wellness trend drives membership demand	B‑/Caa1 — substantial risk tier, potential default risk
15–25 year lease terms provide long income visibility	100–150K SF specialized format — near-impossible to re-tenant
High-income suburban markets support brand stickiness	Heavily leveraged balance sheet from PE-era debt
7.5–9.5% yields offer significant premium	$30–50M+ per club buildout creates massive debt obligations

Comparable NNN Tenants

Comparable Tenant	Rating	Cap Rate Range
Planet Fitness	BBB‑ / B3	5.5–6.5%
BJ’s Wholesale Club	BB / Ba1	6.25–7.25%

Is Life Time Fitness investment grade?

No. Life Time carries B‑ from S&P and Caa1 from Moody’s — placing it in the non-investment grade substantial risk tier. The Caa1 Moody’s rating indicates very high credit risk. These are high-yield NNN investments requiring institutional-level underwriting and high risk tolerance.

What cap rates are Life Time Fitness NNN properties trading at?

Life Time NNN properties trade at 7.5% to 9.5% as of Q1 2026. The specialized 100,000 to 150,000 SF format and $15M to $40M+ price range make these exclusively institutional buyer assets.

The Only Life Time Fitness NNN Advisor Whose Fee Comes From the Deal, Not From You

In NNN buyer representation, the listing broker typically pays a cooperating commission to the buyer’s broker. On the majority of transactions, this means there is no separate fee to you as the buyer. Where a cooperating commission is not available, our compensation is agreed upon with you in advance so there are never surprises.

Find It — Life Time NNN properties sourced with lease term, club membership trajectory, and market demographic analysis before you commit institutional capital.

Fund It — Caa1-level leveraged fitness credit requires specialized lenders. We have the relationships to find competitive terms for this asset class.

Exit It — Selling a Life Time asset? We know the institutional buyer pool for large-format luxury fitness NNN.

Get Your Free Life Time Fitness NNN Consultation →

In a 1031 exchange? Tell us your timeline — we move faster.

Related NNN Tenants

Own a Life Time Fitness Property? Capital Markets Strategies Beyond Selling

Maturing debt and considering refinancing? Our capital markets team maintains 150+ lender relationships underwriting NNN properties across investment-grade and non-investment-grade credit tiers. We structure rate-and-term refinancing, cash-out refis, and bridge-to-perm takeouts.

Evaluating a 1031 exchange or disposition? We represent both sides of Life Time Fitness NNN transactions — whether you are looking to exit at peak value, exchange into a higher-quality credit tenant, or reposition within the same sector.

Need a current valuation? We maintain live comps on Life Time Fitness NNN transactions and can produce a Broker Opinion of Value within 48 hours reflecting today’s cap rate market.

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Own multiple Life Time Fitness properties? Considering an off-market sale?

Investment Grade represents owners on confidential disposition of Life Time Fitness portfolios and individual properties through off-market direct-to-principal distribution to specialty REITs, private equity funds, and family offices. Life Time Fitness buyer demand runs deep, and portfolio sales consistently produce stronger pricing than sequential individual sales because the institutional buyer pool is structured around portfolio acquisition.

For multi-property owners considering a portfolio disposition, see Selling Investment Grade NNN Off-Market: Tenant-by-Tenant Buyer Demand. For the full off-market framework covering individual property dispositions, sale-leasebacks, and 1031 coordination, see Off-Market CRE Sales: The Complete 2026 Guide.

The pre-listing conversation is at no cost and fully confidential. Email team@investmentgrade.com or see contact Investment Grade.