Life Time goes full wellness, with spa offering weight-loss management, including Ozempic

Deep in the basement of Target Center under the court where the Minnesota Timberwolves have staged an impressive playoff run, Life Time is quietly testing the next offshoot of its business.

The part spa, part health clinic called Miora, where members can enjoy IV drips as well as a session in a hyperbaric oxygen chamber, may sound niche, but Life Time has proved its expansion from a gym into a high-end wellness destination with amenities such as co-working and pickleball can bring big business.

Life Time has reached a record level of retention with members who on average visit the company’s facilities more than 130 times a year, a metric that continues to improve month to month, the Chanhassen-based company said in its first-quarter earnings report. Membership dues and fees have increased almost 20% from a year ago.

“Our focus is always to deliver the best member experience and a long, long-lasting enduring business,” said Life Time founder and CEO Bahram Akradi in a call with analysts. “We reinvented this business over the last four or five years with a clear vision that the business is not going to be going forward the same as it was before.”

Just a few years ago, Life Time was in survival mode. The pandemic forced its clubs to shut down and then reopen with COVID-19 restrictions. In fall 2021, Akradi took the former private company public for the second time in its history in an effort to generate funds. After that tumultuous time, Life Time is now focused on growth with Akradi expecting Life Time to generate a cash surplus in the second quarter of this year.

“This year looks great. Retention is great. Top line is great,” he said in an interview on Wednesday. “I’m just thrilled.”

In addition to recovery equipment and skin treatments, Miora also offers hormone and peptide therapy such as the GLP-1 drugs that are typically used to treat diabetes but have gained popularity as a weight-loss aid, sparking debates about their intended use and possible side effects.

Many who might seek out the services of Miora, which opened late last year and sometimes has a waitlist for popular equipment such as the red light bed and infrared sauna, have tried traditional solutions for health ailments but their results plateaued, said Ali Yanez, senior vice president for LifeSpa and Miora.

At Miora, which is staffed by healthcare professionals like physician assistants, members can get their blood drawn to provide them with a health assessment that breaks down what is called an individual’s metabolic code to analyze areas like their hormones, thyroid health and the immune system.

“When you have the tangible data to say my lifestyle behaviors are causing my chemistry to manifest this way, driving me to feel this way, I now can create some ownership,” said Cliff Edberg, senior director of Miora.

The goal over the next few years is to roll out Miora into other major markets, Akradi said.

People are visiting Life Time clubs more often as they improve group and personal training opportunities and add programming for older members, the company said.

Another game-changer driving member visits has been Life Time’s more than 600 pickleball courts. In April, Life Time opened its first pickleball facility that was built from the ground-up on its Chanhassen campus next to its offices and athletic club. From January of 2022 to last December, Life Time saw an increase of almost 900% in terms of the number of participants at its Life Time pickleball locations.

Life Time Work, Life Time’s co-working arm it launched in 2018, has also seen some success like in Edina where the layout changed to accommodate more workers. Another opportunity Akradi sees in the future is for Life Time to manage and operate athletic clubs and possibly co-working offices in vacant office space as building amenities to help landlords reinvigorate their holdings.

“We could help the office owners substantially in certain locations,” he said.

Life Time’s luxury apartment complexes have worked in certain locations such as in Green Valley, Nev., not far from the Las Vegas strip. The rental rate in those locations is about 50% higher than the market average. There are more projects in the works in other parts of the country including Paradise Valley, Ariz.

However, plans for a Life Time Living complex in Edina near the Southdale Center still haven’t been solidified.

At many apartments, the gym is just a workout room, said Parham Javaheri, Life Time’s chief property development officer and president of club operations. But with a Life Time center across the parking lot, “it’s your way of life.”

That doesn’t mean that everything Life Time tries is a success. Akradi had dreams of opening Life Time Sports facilities where young people could learn soccer, but it never financially panned out. The Life Time soccer fields at Southdale Center’s campus were eventually converted into pickleball courts. He had also thought of creating hotels he dubbed Life Time Stay, but the current model is just a handful of long-term vacation rentals.

Another challenge is that as Life Time continues to upgrade its clubs and offer better services, its costs also increase. In the first quarter of this year, Life Time’s profit dipped more than 9% as center operations and rent grew pricier. However, Akradi attributed the drop to the fact the first quarter of 2023 was benefited by a few one-time deals such as the sale of two of Life Time’s triathlon events.

“I would be lying if I told you everything’s running perfectly,” Akradi told analysts this week. “There’s always opportunities to improve.”