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Fitness Center

24 Hour Fitness |

1000 E Broad St, Falls Church, VA 22042

Listing Price: $21,605,846

Cap Rate
6.50%
Tenant Name
24 Hour Fitness
Years Remaining On Lease
14.5
Guarantor
Corporate Guarantee
Rentable SF
48,636
Lease Type
Triple Net (NNN)
Rent Per Square Feet
$28.88

Investment Overview

Marcus & Millichap, on behalf of ownership, is pleased to exclusively offer for sale the fee simple interest in this 24 Hour Fitness in Falls Church, Virginia. This is a rare single-tenant property in a coveted Northern Virginia suburb which exudes elements of a long-term covered land play with significant development upside. The 3.087-acre parcel is located inside the Capital Beltway only seven miles from Washington, DC, and six miles from the forthcoming Amazon HQ2 in Crystal City, Virginia. The Tenant, 24 Hour Fitness USA, Inc., executed an initial 15-year NN lease which commenced on September 21, 2012. In November 2020, the Tenant elected to extend the term of their lease through 2035, adding eight additional years, in exchange for several building upgrades to be performed by Landlord along with an adjustment to their next rental increase. Additionally, the lease was converted to NNN with all maintenance and repair obligations to be the responsibility of the tenant further benefitting the Landlord with a passive ownership structure. The Tenant has 10% rental increases in 2025 and 2030 with all extension options in their original lease removed leaving flexibility and upside for the Landlord at the end of the firm term of the lease. Although the tenant recently went through a Bankruptcy Filing, this recent lease extension and restructuring is a strong indication that the performance of this unit is exceptional; other national and regional brands have repeatedly expressed strong interest in this location. Headquartered in San Ramon, California, 24 Hour Fitness is the 3rd largest fitness chain by revenue, based upon 2019 pre-Covid revenue, with $1.47 billion and more than 280 locations across 11 states. According to Placer.ai geofencing data, in 2019 this location ranked in the top 20 percent of 24 Hour Fitness locations across the country by customer traffic with 494 thousand visits per year, and was the top ranked store in the state of Virginia. While gyms were significantly affected by the Covid-19 Pandemic, pre-Covid the health club sector was impervious to online competition faced by brick-and-mortar retailers as it is part of the experiential category and “Amazon proof.” In 2019, U.S. health club revenue increased to a record $35 billion, up from $32.3 billion in 2018. The fitness industry has been growing with high price point, boutique fitness operators, while 24 Hour Fitness is offering the same boutique classes at monthly price points more accessible to everyday consumers.

Investment Highlights

  • 10% Increases Every Five Years
  • High Residual 3-Acre Parcel
  • 15 Years Remaining

Exclusively Listed By

  • Dean Zang

    Executive Managing Director Investments

    (202) 536-3754

    Email Dean

    License(s): MD: 665335, VA: 0225239201

    Washington, D.C.

  • Mark Thiel

    Senior Managing Director Investments

    (858) 373-3206

    Email Mark

    License(s): CA: 01469342

    San Diego

Broker of Record

  • Dawson Rinder

    Associate Regional Manager

    (804) 205-5008

    License(s) VA: 0225215181

    Virginia

Listing Price: $21,605,846

Cap Rate
6.50%
Tenant Name
24 Hour Fitness
Years Remaining On Lease
14.5
Guarantor
Corporate Guarantee
Rentable SF
48,636
Lease Type
Triple Net (NNN)
Rent Per Square Feet
$28.88

Investment Highlights

  • 10% Increases Every Five Years
  • High Residual 3-Acre Parcel
  • 15 Years Remaining

Investment Overview

Marcus & Millichap, on behalf of ownership, is pleased to exclusively offer for sale the fee simple interest in this 24 Hour Fitness in Falls Church, Virginia. This is a rare single-tenant property in a coveted Northern Virginia suburb which exudes elements of a long-term covered land play with significant development upside. The 3.087-acre parcel is located inside the Capital Beltway only seven miles from Washington, DC, and six miles from the forthcoming Amazon HQ2 in Crystal City, Virginia. The Tenant, 24 Hour Fitness USA, Inc., executed an initial 15-year NN lease which commenced on September 21, 2012. In November 2020, the Tenant elected to extend the term of their lease through 2035, adding eight additional years, in exchange for several building upgrades to be performed by Landlord along with an adjustment to their next rental increase. Additionally, the lease was converted to NNN with all maintenance and repair obligations to be the responsibility of the tenant further benefitting the Landlord with a passive ownership structure. The Tenant has 10% rental increases in 2025 and 2030 with all extension options in their original lease removed leaving flexibility and upside for the Landlord at the end of the firm term of the lease. Although the tenant recently went through a Bankruptcy Filing, this recent lease extension and restructuring is a strong indication that the performance of this unit is exceptional; other national and regional brands have repeatedly expressed strong interest in this location. Headquartered in San Ramon, California, 24 Hour Fitness is the 3rd largest fitness chain by revenue, based upon 2019 pre-Covid revenue, with $1.47 billion and more than 280 locations across 11 states. According to Placer.ai geofencing data, in 2019 this location ranked in the top 20 percent of 24 Hour Fitness locations across the country by customer traffic with 494 thousand visits per year, and was the top ranked store in the state of Virginia. While gyms were significantly affected by the Covid-19 Pandemic, pre-Covid the health club sector was impervious to online competition faced by brick-and-mortar retailers as it is part of the experiential category and “Amazon proof.” In 2019, U.S. health club revenue increased to a record $35 billion, up from $32.3 billion in 2018. The fitness industry has been growing with high price point, boutique fitness operators, while 24 Hour Fitness is offering the same boutique classes at monthly price points more accessible to everyday consumers.

Exclusively Listed By

  • Dean Zang

    Executive Managing Director Investments

    (202) 536-3754

    Email Dean

    License(s): MD: 665335, VA: 0225239201

    Washington, D.C.

  • Mark Thiel

    Senior Managing Director Investments

    (858) 373-3206

    Email Mark

    License(s): CA: 01469342

    San Diego

Broker of Record

  • Dawson Rinder

    Associate Regional Manager

    (804) 205-5008

    License(s): VA: 0225215181

    Virginia

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