$2.7B nontraded REIT plans sale or listing

Another large nontraded real estate investment trust that struggled in the aftermath of the real estate downturn, CNL Lifestyle Properties Inc., has signaled it is seeking a potential liquidity event, meaning a sale of the REIT or listing of its shares on a stock exchange.
With $2.7 billion in assets, CNL Lifestyle Properties announced the potential sale or listing in a filing on Tuesday with the Securities and Exchange Commission. The filing comes a month after the largest nontraded REIT, the $10 billion Inland American Real Estate Trust Inc., said it intended to spin off its lodging portfolio into a separate publicly traded company.
CNL Lifestyle was among a group of nontraded REITs launched a decade ago, sold to investors for $10 per share and saw their value erode after the credit crisis. The REIT was incorporated in 2003 and focused on buying “lifestyle” real estate such as ski resorts and golf courses, which struggled during and after the recession. At the end of last year, CNL Lifestyle’s estimated net asset value was $6.85 per share.
In a letter to investors, Stephen Mauldin, the REIT’s CEO, said the company was halting its distribution reinvestment plan and suspending its share redemption plan.
“Both of the above actions are typical for a mature company nearing a liquidity event or events — like CNL Lifestyle Properties,” he wrote. The REIT in June also signed an agreement to sell its golf portfolio of properties, with the sale expected to close by the end of the year, he wrote. Golf properties account for 19% of the REIT’s holdings.
“As we continue to explore liquidity strategies, our focus will remain on seeking attractive exit alternatives for the remainder of the property portfolio,” Mr. Mauldin wrote.
Monty Hagler, a spokesman for CNL, declined to comment.