NNN Profile: 24 Hour Fitness

24 Hour Fitness is an American fitness club chain that has the highest number of members for all gyms worldwide. 24 offers a wide range of performance, nutritional, and fitness apparel products for both men and women. Gym equipment includes free weights and cardio machines, with premier locations having a pool, raquetball, and basketball courts. 24 Hour Fitness is a privately owned company with a market capitalization of $2 billion.

Headquartered in San Ramon, California, with 430 gyms across the United States, 24 Hour Fitness is a promising net leased investment because of their B2 credit rating, good liquidity profile, and sizeable cash flow, which will allow the company to fund new club openings without increasing debt. Primary lease terms are typically 15 year triple net leases with 5-year renewal options. For 2017, cap rates and sales prices averaged 6.50% and $12,000,000 respectively.

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