The board of CNL Healthcare Properties II, a publicly registered non-traded real estate investment trust, has elected to not pursue a follow-on offering and close the current equity offering on October 1, 2018. The board also formed a special committee of independent directors to explore potential strategic alternatives for the company.
Strategic alternatives may include selling the company or its assets and distributing the net proceeds to shareholders; or engaging in a merger or other transaction with a third party. A liquidation of company assets or a company sale would require shareholder approval.
“We remain wholly committed to the seniors housing and healthcare real estate investment sectors, but this is the appropriate decision as we approach the outside date of our primary equity offering in March 2019,” said Stephen Mauldin, president and CEO of CNL Healthcare Properties II.
He added, “Based on our current and projected equity capital raise prospects along with a challenged environment for broker-dealers and non-traded REIT formats, we as a board unanimously concluded that identifying and pursuing opportunities to maximize value in the nearer term is in the best interest of the company and our shareholders.”
The company has also suspended its distribution reinvestment plan and stock redemption plan effective October 1, 2018. CNL Healthcare Properties II stock distributions for July, August and September will be issued around September 10, 2018, after which point there will be no further stock distributions.
CNL Healthcare Properties II commenced its $1.75 billion initial public offering in March 2016 and raised $44 million in investor equity as of the second quarter 2018, according to Summit Investment Research. The company invests in senior housing, medical office, acute care and post-acute care properties, and oversees a portfolio of three properties with an investment cost of approximately $60 million.