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Non-Traded REIT Reduces NAV

CNL Lifestyle Properties, Inc. (Lifestyle Properties) recently reported a reduced net asset value (NAV) as a result of new information made available during attempts to find a suitable buyer.

In March 2014, Lifestyle Properties engaged Jeffries, an investment banking and advisory firm, to assist with evaluating strategic alternatives that could provide liquidity to its shareholders.

According to the REIT, “Based on discussions between Jefferies and more than 150 potential buyers over the course of the last year, the [REIT] has determined that the value of its assets is lower than the NAV per share of common stock as of December 31, 2013.”

{global-ad-in-article} The NAV per share was $6.85 as of December 31, 2013.

Following the IPA Practice Guideline 2013-01, Valuations of Publicly Registered Non-Listed REITs, Lifestyle Properties engaged CBRE Capital Advisors, Inc. (CBRE), an investment banking firm, to provide valuation analysis of the REIT’s properties individually and in aggregate, among other considerations, and an estimated NAV per share of the REIT’s common stock.

As a result of CBRE’s analysis, the board of directors of Lifestyle Properties approved the new estimated NAV per share to be $5.20 as of December 31, 2014.

The REIT strategically sold property during the year in order to refine its portfolio. One such disposition announced in December resulted in selling all of its senior housing properties in a $790 million transaction. In September, Lifestyle Properties sold 46 of its 48 golf properties.

Advisors were first informed of the NAV drop on March 10, 2015. Communications were sent to investors today. On Monday, March 16th, the REIT will hold a webinar that will discuss the valuation for shareholders and advisors at 3pm EST.

As a result of the new findings, the REIT will also reduce its quarterly cash distribution to $.05 per share beginning Q1 2015 and its advisor will continue to recognize certain wavers and reductions in advisory fees such as eliminating acquisition fees on equity, performance fees, debt acquisition fees, and disposition fees. These reductions became effective April 1, 2014.

To register for the REIT’s webinar, click here.