CNL Growth Properties JV to Sell Property for $60 Million, Shareholders to Vote on Liquidation
A joint venture between CNL Growth Properties Inc., a publicly registered non-traded real estate investment trust, and Bainbridge Patterson Place LLC, an affiliate of The Bainbridge Companies, signed an agreement to sell Realm Patterson Place Apartments in Durham, North Carolina for approximately $60 million. The potential buyer, Patterson Multifamily Durham LP, is an unaffiliated third party.
CNL Growth Properties owns a 90 percent stake in the joint venture which was formed in June 2013. In the same month, it purchased a 22.3-acre parcel of land which it developed into the 322-unit, Class A multifamily community. The joint venture originally purchased the land for $4.5 million and had a total development budget of $40.1 million, which included the purchase of the land.
Last month, another CNL Growth Properties joint venture entered into an agreement to sell its Aura Castle Hills multifamily property in Dallas, Texas for approximately $51.25 million. Both sales are expected to close this month.
The REIT’s board previously announced its plan to dissolve and liquidate the company, upon shareholder approval. The plan of dissolution calls for disposing of all assets, which the REIT anticipates to be completed within 24 months following stockholder approval. Investors will be voting on the plan at the company’s annual meeting on August 4th.
The company said that it expects the net proceeds from liquidation to range between approximately $8.41 and $9.39 per share. The REIT previously issued special distributions of $3.00 per share in connection with the sale of five properties in 2014 and 2015. When added to the prior special distributions previously paid, the company estimates that investors could receive a total of between approximately $11.41 and $12.39 per share.
CNL Growth Properties, which commenced its initial public offering in October 2009, raised approximately $208.3 million in investor equity before terminating its follow-on offering in April 2014. As of March 31, 2016, the company owned interests in 13 Class A multifamily properties, nine of which were operational and four of which were under development, including two which were partially operational. Twelve of the company’s multifamily properties are owned through joint ventures.
