LAWRENCEVILLE, GA. – RealSource Group, a national commercial real estate brokerage company focused on retail, healthcare, automotive and education properties, announced the sale of a new construction, single-tenant net-lease investment occupied by LA Fitness at Lawrenceville Town Center, a Kroger-anchored shopping center in the Atlanta metro area. The sale price was $9,350,000, representing a cap rate of 6.30%.
RealSource’s Senior Vice President of Investment Sales, Austin Blodgett, in association with ParaSell, Inc., represented the seller, DLC Management, a New York-based developer and operator. The buyer was a private investor based in Dallas, Texas.
“We generated multiple, qualified offers and selected an experienced LA Fitness property owner, achieving a record-low cap rate for a single-tenant LA Fitness in the state of Georgia,” said Blodgett. “The buyer liked the Kroger-anchored shopping center location, especially since that Kroger was the only grocer in the immediate trade area. There is also no major full-service health club within a three-mile radius. Other factors that were important to the buyer included that this LA Fitness had a highly replaceable rent, and it was the only LA Fitness on the market under $10 million.”
Built in 2020 in Gwinnett County, the new construction, 34,000-square-foot LA Fitness building is located at 600 Gwinnett Drive in the city of Lawrenceville. The property is ideally positioned at the signalized intersection of Grayson Highway and Gwinnett Drive with a combined traffic count of approximately 44,000 cars per day.
The property benefits from visibility from the street and highway and its co-tenants Kroger supermarket and fuel station, H&R Block, O’Reilly Auto Parts, Verizon, Aaron’s, Rainbow Shops, Ameris Bank, Coast Dental, Burger King, Tidal Wave Auto Spa, Kumon and Lawrenceville Health Center. There is also a brand new 143,000-square-foot medical office building under construction located less than three miles from the property, which is expected to be completed in January 2023. Other recent developments include the award-winning, $200 million Downtown Lawrenceville SouthLawn project featuring 600 residential units and 15,000 square feet of retail (completed in late 2020) and The Enclave, a high-end townhome development featuring over 63 units (slated for 2022 completion) located one mile from Lawrenceville Town Center.
Gwinnett County has a population of about one million and an average household income is over $90,000 within a three-mile radius.
Blodgett notes, “The majority of the LA Fitness deals that have recently traded have been located in Texas, where most of the cap rate compression has been thus far. But, the sale of the LA Fitness in Lawrenceville at a cap rate of 6.30% demonstrates that cap rates for new construction LA Fitness properties are decreasing in other states as well.”
Out of the four single-tenant LA Fitness deals that have traded in Texas in the last six months, two of those properties were sold by RealSource Group. This is RealSource’s third single-tenant LA Fitness sale in the previous six months, reports Blodgett.
“We expect cap rates for LA Fitness with new long-term leases to continue to compress through the year, not only in the South and Southeastern states, but across the country in the East Coast, Midwest and the Western States.”
For the last 20 years, RealSource has served as a master broker for Fitness International, LLC, the operator of the brand names LA Fitness, LA Fitness Signature, Esporta Fitness, City Sports Club and Club Studio. With more than 740 locations across 27 states and Canada, Fitness International is best-in-class and one of the fastest-growing health club chains in the U.S.