Home Alts News $2.6 Billion Non-Traded REIT Seeks Liquidity

$2.6 Billion Non-Traded REIT Seeks Liquidity

Last week, non-traded REIT CNL Lifestyle Properties, revealed that it is planning for a liquidity event. Sponsored by CNL Capital Group, CNL Lifestyle Properties focuses on acquiring income-producing properties with a focus on lifestyle-related industries.

Organized in 2003, the company owned 148 lifestyle properties as of June 30, 2014 and had equity of approximately $2.6 billion, according to MTS Research Advisors.

The properties fall into a number of asset classes, including ski and mountain lifestyle, golf facilities, senior housing, attractions, marinas, and additional lifestyle properties.

CNL Lifestyle Properties was hit hard by the recession, which has brought its most recent NAV down to $6.85, while shares originally sold for $10 each.

The company began exploring liquidity options in March 2014 by engaging Jefferies LLC to assist in the evaluation of strategic alternatives in which would provide liquidity to investors. Since then, the REIT has signed a purchase and sale agreement to sell its golf portfolio to a third-party buyer, which it expects to close by the end of 2014.

In a letter to stockholders on September 12, 2014, President and Chief Executive Officer, Stephen H. Mauldin wrote, “As we continue to explore liquidity strategies, our focus will remain on seeking attractive exit alternatives for the remainder of our property portfolio.”

The letter also informed stockholders that the board of directors has decided to discontinue the distribution reinvestment plan (DRP) on September 26, 2014 and that beginning with third quarter distributions, participants in the DRP will receive their distributions in cash rather than common stock.

In addition, the board of directors has approved the suspension of CNL Lifestyle Properties’ share redemption plan. The company will accept redemption requests received up until the close of business on September 26, 2014.

“Both of the above actions are typical for a mature company nearing a liquidity event or events,” says Mauldin in his letter to investors.

Whether the REIT is able to list, merge or sell more of its portfolio remains to be seen.