CNL Lifestyle Liquidates with $830M Final Sale

by Barbra Murray

Northstar California Ski Resort

Three years after tapping investment banking firm Jefferies LLC to assist in exploring strategic alternatives to provide liquidity to stockholders, CNL Lifestyle Properties Inc. has completed the disposition of its last assets. The REIT sold its ski, attraction and entertainment properties in separate transactions with EPR Properties and funds affiliated with Och-Ziff Real Estate for an aggregate $830 million.

The sale of CNL Lifestyle’s remaining portfolio, announced in November 2016, comes 13 years after the specialty REIT was established for the purpose of investing in lifestyle-related, income-producing assets, ultimately including ski destinations, golf properties, attractions, senior housing properties and marinas. “The completion of the sale to EPR and Och-Ziff represents the 14th and final transaction since we formally launched our strategic liquidity process in early 2014 and marks a pivotal moment for the company and our shareholders. This transaction not only provides final liquidity for our investors, but also provides a strong future for these properties,” Stephen H. Mauldin, CEO of CNL Lifestyle Properties, said in a prepared statement.

For $455.5 million in stock and cash, EPR picked up a collection of 21 properties, the most prominent of which is the 3,000-acre Northstar California Ski Resort, located outside Lake Tahoe in Truckee Calif., and leased to Vail Resorts until early 2027. The remainder of the group consists of 15 waterparks and amusement parks and five small family entertainment centers, in Arkansas, Arizona, California, Florida, Hawaii, New York, North Carolina, Oklahoma, South Carolina, Texas and Washington State, respectively. The transaction marked the largest ski resorts sale in the U.S.

Och-Ziff purchased CNL Lifestyle’s final 14 ski properties for $374.5 million, with $251 million coming from EPR in the form of five-year secured debt financing. The portfolio features locations in California, Colorado, Maine, Massachusetts, New Hampshire, Tennessee, Utah, Vermont and Washington State, in addition to a single asset in British Colombia, Canada.

And that’s it for CNL Lifestyle. At a special meeting held in March, the REIT’s shareholders approved the plan of dissolution. In a letter to shareholders dated November 2, 2016, Mauldin and James Seneff, board chairmans, stated that: “Our management team and board of directors have worked tirelessly on behalf of our stockholders to drive performance at the asset level, while actively exploring the best liquidity opportunities available. We have taken very seriously our obligation to explore all liquidity options and determine the best alternative for our stockholders. We firmly believe this sale and these distributions represent the most favorable outcome for stockholders.”