As Life Time CEO Bahram Akradi paraded through his newest luxury health club the night before its grand opening, the pride of the 300 employees was palpable. High-fives, broad smiles and “whoop whoops” were exchanged all around. Had someone dumped a celebratory bucket of Gatorade over Akradi’s head, it would have fit the exuberance.
“For almost 30 years, my team members and I have focused on delivering the best customer service, and it’s paying off,” he said in a free-ranging, nearly two-hour sit-down interview before the Southdale opening. “Our brand has reached a tipping point, and it’s pulling on its own now.”
Twenty-seven years after he founded Life Time, Akradi last week opened the $43 million, multilevel complex at the Southdale Center in Edina — a concrete testament to the company’s growth from a fitness center chain to a holistic health brand that boasts high-end athletic clubs, co-working offices and pickup soccer practice facilities.
Akradi isn’t stopping, either. His next project at the Southdale shopping mall includes a bold proposal to use the former Herberger’s department store site to build a 25- or 26-story apartment tower within walking distance of his new health club. It would be the company’s first endeavor into residential development in the Twin Cities.
“My vision … was to take Southdale, which was the first enclosed mall in the United States, and reinvent it to be once again the place people want to be, they want to stay, they want to work, they want to entertain, they want to eat,” said Akradi, laying out a broad vision of growth for the company. “It has everything it needs.”
In the next two to three years, Akradi expects to open about another 30 Life Time luxury athletic clubs around the country with similar finishes as the Southdale facility. During the same time frame, he also anticipates building a couple of hotels, which he has called Life Time Stay, that would be connected to some clubs.
After 11 years as a public company, Akradi in 2015 led a $4 billion buyout deal with private equity firms Leonard Green & Partners, TPG and LNK Partners.
As quarterback and head cheerleader, Akradi, now 58, changed the namesake Life Time Fitness to Life Time in 2017 to incorporate the broader range of ideas emanating from Akradi’s creative wellspring as he “focused on building a company that’s a healthy way of life for the family and the planet.” In 2019, the company has projected nearly $2 billion in revenue.
The Southdale facility — which replaced a J.C. Penney and is the company’s 148th club in the United States and Canada — is personal for Akradi. After emigrating from Iran as a teenager and then moving to Minnesota as a young man in 1983, he lived nearby in Bloomington and often shopped at Southdale.
However, changing consumer habits have upended the traditional retail model for malls. “But they’re still in good locations with lots of access and perfect zoning,” Akradi said.
J.C. Penney’s decision to exit Southdale came at a time when Simon Property Group, the mall’s owner, was already positioning it for mixed use. All four corners of the parking lot’s underused perimeter were filled or soon would be — luxury apartments on the southeast, Homewood Suites hotel on the northeast, Shake Shack on the northwest and RH (Restoration Hardware) home furnishings on the southwest.
Life Time razed the Penney’s space and built a three-story structure (four if you include the rooftop beach club) that features a fitness center, but also a Life Time Work co-working space, Life Time Sports’ fields and practice areas for soccer, a Kids Academy for babies to tweens, two restaurants and a spa. Some of the club’s most luxurious features are the indoor basketball courts and multiple pools, including the one on the roof.
The 204,000-square-foot club is actually two buildings with the athletic club and spa in one and the co-working and soccer facilities in the other, separated by an enclosed “winter garden” corridor to the mall.
Life Time, along with Simon Property Group, is in preliminary discussions with Edina city leaders about the apartment tower proposal. Last week, Edina’s community development director said he had not received an official project submission. The project could have an uphill battle, looking at the road for other proposals for dense residential developments in recent years.
In 2017, the City Council rejected the $250 million Estelle condo towers — with one building 26 stories and the other 22 — that Ryan Cos. wanted to build across France Avenue from Southdale Center. Another apartment project, designed by DJR Architecture, farther south on France was approved in late 2018 after four years of debate and only after the project was scaled back from original proposals.
Life Time’s plan for the Herberger’s site calls for an apartment tower with about 300 apartments — and also a Kowalski’s Market and the Edina library — to open in 2022, pending city approvals. The library would move from Xerxes Avenue.
Life Time is working with Simon Property on at least 20 deals across the country that are in various stages of development, Akradi said.
He’s not shy sharing his vision of the future of malls or their anchor stores.
“I don’t know what the psychology was 30 to 40 years ago with malls enclosed like casinos, but let the light in,” he said. “And invest money in Southdale Macy’s. That mall has the best demographic in the entire state of Minnesota. You can have a top flagship store in that location.”
In the past year or so, the company has unveiled its side brands: Life Time Work, the first of which opened last year in Pennsylvania; Life Time Living developments, with several slated to open next year in Coral Gables, Fla., near Miami and outside Las Vegas; Life Time Sport, which debuted last year at the Vikings’ former practice area in Winter Park in Eden Prairie.
The next step as Akradi works to flex the power of the Life Time brand is hotels.
“The only thing that is missing … is a ‘Stay,’ starting a few hotels where they are right next door to a big, big resortlike club like [Southdale] and we just basically build grandiose lobbies, beautiful rooms and all of the other amenities you need in a hotel,” Akradi said.
Akradi said he would limit the growth of Life Time Stays to perhaps two or so locations in the next three years, including plans to build a Life Time Stay in connection with its Life Time Work and health club in Dallas’ midtown area, to be finished in 2022.
Outside of Life Time’s plans for Southdale, the company is also making changes at its own home base in Chanhassen, where about 1,300 employees work in five corporate buildings. Life Time is putting the finishing touches on a newly built 70,000-square-foot second corporate building that cost $26 million to $30 million. Life Time will move about 300 of its employees to the new building in January. The building is across the parking lot from its main 100,000-square-foot headquarters, where employees need to share space.
“We are just totally crammed in here,” said Julie Yager, senior vice president of architecture and design at Life Time. “It’s good because the company is doing so well, but it’s really hard on the team.”
The new office offers modern workplace designs similar to those in Life Time Work’s co-working offices. Akradi was convinced of the appeal of the modern updates when he toured the first Life Time Work facility in Ardmore, Pa., Yager said.
“When our first Life Time Work opened, I remember walking through that with Bahram and he turned to me and said. ‘We need to do this in Corp. 2 when we build it,’ ” Yager said.
To Akradi, Life Time employees have been the life blood of his organization’s success. “I come to work in the morning, I run into my people when I go to any of my clubs,” he said. “I’m energized. I’m excited. I’m happy. I get satisfaction out of this experience and I think it’s true for a lot of our people. It’s a great place to be.”