Even though the commercial real estate industry has recently rallied, shares of the nontraded real estate investment trust CNL Lifestyle Properties Inc. continue to plummet. According to the nontraded REIT’s filing with the SEC, as of the end of 2014 its board of directors approved a $5.20/share valuation—that’s a 24% decline from a year before when the share valuation had been modified to $6.85/share. Launched more than 10 years ago, CNL Lifestyle Properties original price was $10/per share.
Now the nontraded REIT has retained investment bank Jefferies LLC (JEF) to look at whether it makes sense to sell more of its properties or list on an exchange. Already, CNL Lifestyle Properties reached a deal in December to sell its senior housing assets portfolio to the Senior Housing Properties Trust for $790M. Proceeds from the sale will go toward paying debt, and possibly to shareholder distributions or strategic costs for enhancing properties in the CNL Lifestyle Properties portfolio.
The nontraded REIT is also considering whether to sell over a dozen ski resorts located all over the United States. Collectively, the properties are worth hundreds of millions of dollars. CNL Financial Group’s senior managing director, quoted on ABCNews.com, has said that the company is also looking at its theme parks and marinas as it explores its options.
For the last several years, the Financial Industry Regulatory Authority has intensified its probe into the way nontraded-REITs have been marketed and recommended to customers. Many investors were not properly advised of the illiquidity risks involved or of the REITs underlying financial condition. Some even bought non-traded REITs under the misunderstanding that stock prices would stay constant and they would be guaranteed steady income.
If you suspect that your financial representative made inappropriate recommendations or failed to warn you about the risks or misrepresented aspects of your investment, please contact our REIT fraud law firm today.
CNL Lifestyle Properties REIT suffers another sharp drop in value, InvestmentNews, March 12, 2015
16 Ski Resorts Worth Hundreds of Millions Could Be Sold, ABC News, March 15, 2015
More Blog Posts:
Net Asset Value of Tony Thompson’s Former Nontraded REIT Strategic Realty Trust Plunges, Stockbroker Fraud Blog, July 22, 2014
Non-traded REITS Exhibit Unbelievable Resistance to FINRA Disclosure Rules, Institutional Investor Securities Blog, March 19, 2014
Nontraded REIT Inland American Reduces Its NAV After Asset Sale, Institutional Investor Securities Blog, February 26, 2015