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CNL Growth Continues Liquidation Plan with Latest Potential Sales

CNL Growth Properties, a publicly registered non-traded REIT, has agreed to sell three of its joint venture-owned Texas multifamily properties for a combined $137.7 million, according to a filing with the Securities and Exchange Commission.

CNL Growth and AHC Fairfield Operator LLC formed a joint venture in September 2013 to purchase a 12.8-acre parcel of land in the Houston suburb of Cypress, Texas to develop a 294-unit multifamily community known as Fairfield Ranch. The development budget was approximately $33 million, and CNL Growth owns an 80 percent interest in the property.

Ilan Investments LLC recently agreed to purchase the property for approximately $39.9 million, and has paid into escrow a $1 million earnest money deposit. The company anticipates the closing will occur on June 23rd.

In February 2014, a joint venture with Hunt Realty Investments and Trinsic Residential Group L.P. purchased an 11.2-acre parcel of land located within The Rim, a mixed-use development in northwest San Antonio in order to build a 308-unit multifamily community known as Aura at The Rim. The total development budget was $39 million and CNL Growth owns a 54 percent interest in the property.

BES Acquisitions LLC recently agreed to purchase the property for approximately $48 million and paid a $0.5 million earnest money deposit into escrow. The closing is expected to occur on July 14th.

In December 2013, CNL Growth and MCRT Spring Town LLC formed a joint venture to purchase a 19.5-acre parcel of land located in the Houston suburb of Spring, Texas on which to develop a 396-unit multifamily community known as Modera at Spring Town Center. The property had a total development budget of $46 million, and CNL Growth holds a 95 percent interest in the joint venture.

Abbey Residential LLC has agreed to purchase the property for approximately $49.8 million and paid a $1 million earnest money deposit. The sale is expected to close around June 23rd.

The potential sales are part of CNL Growth’s ongoing liquidation plan that was approved by stockholders in August 2016. Last month, the REIT agreed to sell an Arizona multifamily property for $41.8 million.

CNL Growth Properties, formerly known as Global Growth Trust, commenced its $1.5 billion initial public offering in October 2009. In April 2013, the REIT closed the offering after raising approximately $94.2 million and changed its name to CNL Growth Properties. In August 2013, the company initiated a follow-on offering and refined its investment focus on multifamily development projects in the Southeast and Sun Belt regions of the U.S. The combined offerings raised a total of $208 million in investor equity. CNL Growth Properties’ portfolio currently consists of six class A multifamily properties.

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