Life Time Work President James O'Reilly joins Yahoo Finance Live to detail how his gyms are adding a co-working option for its members.
DAVE BRIGGS: Is the future of work at the gym? We're joined by James O'Reilly, the president of Life Time Work, to tell us about this concept, which I'm working on in my home office here, James. Tell me about it, where the idea came from and how successful it's been.
JAMES O'REILLY: Sure. Thanks for having me on here. So we first observed our members working from the lobbies of our health clubs, and we were scratching our heads. There must be a better way that we can serve these folks.
We also recognize in our corporate office, we were pulling key elements of the health club experience into the office to make it more engaging and more healthy. And we said, hey, there has to be a combination of what we're doing here for our corporate office and put it out there as an offering for our Life Time members, and for also for non-Life Time members as well.
SEANA SMITH: And James, when you talk about the interest in this, I guess the companies that are taking you up on this, is it startups? Is it Fortune 500 companies? Give us a sense of the mix that you're seeing.
JAMES O'REILLY: Sure, sure. So Life Time Work is designed for established professionals, people who have lots of options out there who are-- could take a long-term lease with a landlord, but choose to come to Life Time Work because we offer a very elevated experience, and of course, the connectivity to our health clubs. We have everything from Fortune 500 companies to an independent operator to agile entrepreneurs. So it's a very wide mix of folks, all who are coming to us for this enhanced workplace experience that we're offering.
DAVE BRIGGS: So tell us about this membership, James. What all is included in it? What does it cost? And where are the offices? Where are you expanding to?
JAMES O'REILLY: Sure, so currently, we have nine locations. By the end of this year, we'll have 11 locations. And we're in Minneapolis, in Atlanta soon, in Houston, New Jersey, New York, and Miami. And we are very focused on catering to our existing population, our Life Time members, but also to lots of folks who are not currently Life Time members. When they buy into Life Time Work, they get a health club membership included, which gives them access to all 163 locations around the country.
SEANA SMITH: James, what does that expansion plan looks like? You're saying you're going to be in 11-- you're going to have 11 of these locations by the end of the year. What's the goal over the next three to five years?
JAMES O'REILLY: Yeah, so we believe this business can scale very quickly. We've been prudent and very measured, given what was going on in the world of work, where people are going to work in the future, et cetera. As the dust settles on that, we see accelerating through next year to grow to a much larger business than we are today. Currently next year, it looks like five locations locked in. And we think we can take that up significantly from there.
DAVE BRIGGS: What is the cost of the membership? And is this particularly successful in cities or more in suburbans?
JAMES O'REILLY: Great question. So entry cost is around $400, depending on the location. That includes your health club membership, and that gets you access to our lounge space, where it's unassigned seating, very social in nature, so there's a nice energy to it, particularly for folks who might otherwise be working from home or other corporate folks who might want to escape the corporate office and get some heads down work done.
As we have built out the experience, we also offer office space and open residence space for folks who want a dedicated place, but to work in an open plan environment.
SEANA SMITH: James, the people that you're seeing take advantage of this, is it largely a younger user? Is it old-- give us a sense of the age that you're typically seeing the workers take advantage of this.
JAMES O'REILLY: Great question. So typically, co-working, as I think you're referencing, might be a younger demographic in the mid 20s or early 30s. What we're seeing is our average age is around 40, 42. And that reflects the dynamics of where we're located, today's question. Predominantly suburbs right now. We have two of our nine locations open in urban centers.
And we entered those suburbs, understanding that given the run-up in co-working in urban centers, it was slightly oversaturated. As the pandemic has come on, we've seen that come down, a lot of the froth come out of those urban markets. And we're starting to see real opportunities for expansion there.
DAVE BRIGGS: Are you seeing primarily people work out and then go to work? Or do you see people actually going from the workspace into working out and then back?
JAMES O'REILLY: Right, so important note is we are either connected to our health clubs or in close proximity to them. So it's a very fluid experience between the workspace and the health club. Often, people start the day with a workout and may go over for lunch in the afternoon and then finish their day with a sauna or a spa service. And it's that sort of fluid back and forth that makes for a really great combination.
DAVE BRIGGS: Sounds good to me. Final question, James, is, I know another thing Life Time is doing is really moving ahead with pickleball. How important is that for your future growth?
JAMES O'REILLY: Look, pickleball is growing so rapidly in the US. We currently have a little over 250 courts. By the end of this year, we'll be over 500 courts. It's just a great communal sport. It's very easy to ramp up, get up the curve from beginner to intermediate. Obviously, over time, the professional level is coming on dramatically. Very exciting to watch. We think it's an incredibly exciting proposition. And we're obviously accelerating into that trend.
DAVE BRIGGS: All right, pickleball, fastest growing sport in the country. James O'Reilly, president of Life Time Work, great to have you here on Yahoo Finance. Thank you, sir.