CNL Lifestyle Properties, a publicly registered non-traded real estate investment trust, is selling its remaining assets and liquidating and dissolving the company, upon shareholder approval, according to a filing with the Securities and Exchange Commission. The board of directors has suspended regular distributions effective fourth quarter 2016, due to the pending transaction.
The REIT entered into a purchase and sale agreement with EPR Properties (NYSE: EPR) and Ski Resort Holdings LLC for the sale of the 36 remaining ski and attractions properties in its real estate portfolio.
EPR Properties is a publicly traded REIT based in Kansas City, Missouri that oversees a $5 billion investment portfolio comprised of entertainment, recreation and education properties. Ski Resort Holdings LLC is owned by funds affiliated with Och-Ziff Real Estate.
The gross sale consideration is expected to be $830 million in a combined stock and cash transaction, comprised of approximately $647 million of non-restricted EPR common stock (78 percent) and $183 million cash (22 percent).
Stockholders of record as of November 1st will receive a special cash distribution of approximately $163 million, or $0.50 per share. The special distribution will be funded by the $85.6 million net sales proceeds from seven ski resort villages that were sold on Oct. 28th and net sales proceeds and cash on hand from prior dispositions. The payment will be made on November 10th.
CNL Lifestyle Properties, which has a net asset value of $3.05 per share, expects to pay stockholders three distributions totaling between $2.60 and $2.75 per share of common stock. This includes the cash and stock for the liquidation sale, the special cash distribution, and the cash on hand, including sales proceeds from the seven retail villages, less pro-rations, closing and transaction costs. The REIT expects to pay the final distribution by year-end 2017.
The sale and subsequent liquidation and dissolution of the company is subject to stockholders’ approval. The REIT intends to file proxy materials with the SEC, which will be mailed to stockholders once they are approved.
CNL Lifestyle Properties, which focuses on lifestyle-related industries, went effective in April 2004 and raised $2.9 billion in investor equity in multiple offerings before closing in April 2011. In December 2015, the REIT paid a special distribution of $1.30 per share for a total distribution of $422.7 million. Shares were originally sold for $10.00 each.