Life Time Group Holdings Inc

Our Growth Strategies and Member Experience Initiatives" of this Annual Report. To successfully expand the number of our centers, we must identify and acquire or lease sites that meet the site selection criteria we have established. We may face competition for sites that meet our criteria, and as a result, we may lose those sites or we could be forced to pay higher prices for those sites. Additionally, we must engage and negotiate with numerous third parties, including landlords, developers, sellers, contractors and governmental authorities. Their timeline and ability to move forward may differ from ours. If we are unable to cost-effectively identify and acquire or lease sites for new centers, or if our analysis of the suitability of a site is incorrect, our revenue growth rate, profits, cash flow and return on invested capital may be negatively impacted. Additionally, if we do not adapt to or anticipate the challenges relating to expanding our operations, including more diverse locations, sizes and types of buildings, executing remodels and determining timelines in new markets and spaces, we may not be able to expand profitably at our targeted returns and on the timeline or at the rate we expected. Any of these results could have a negative impact on our revenue growth rate, profits, cash flow and returns.

Our focus for new centers continues to include wealthier demographic and coastal locations for ground-up suburban builds, mall or retail locations, vertical residential and urban locations. If we are unable to leverage our brand and what we bring to these markets and locations, we may be required to pay relatively higher costs for land or lease payments. Our construction and development costs are higher to offer more luxurious amenities and features within the new centers. We have also experienced escalating construction costs more generally due to inflation. Higher gross invested capital and higher occupancy costs at these centers require increases in the value of sale-leaseback transactions or higher operating profits per center to produce our targeted rate of return. Our center operating margins may also be lower while the new centers build membership base. An increase in pre-opening expenses and lower revenue volumes characteristic of newly opened centers affect our operating margins at these new centers.

Opening new centers in existing markets attracts some memberships away from other centers in those markets, which could lead to diminished revenue and profitability. In addition, as a result of new center openings in existing markets, and because older centers represent an increasing proportion of our center base over time, our same-center revenue increases will be lower than in the past.

A significant amount of time and capital expenditures is required to develop and construct or remodel our new centers. Our ability to open new centers on schedule and on budget or at all depends on a number of factors, many of which are beyond our control. These factors include: