CNL Lifestyle Properties, a real estate investment trust that is looking to get out of the snow business reportedly announced is considering selling more than a dozen ski resorts it currently owns from Maine to California.
It they were to go through with the transaction, estimated at a few hundreds of millions of dollars, it would mark the largest ski resort selling in the history of the sport. Steve Rice, senior managing director of CNL Financial Group, said however that selling all the resorts to one buyer is not the only option the trust is considering.
“We’re taking a studied and careful approach,” Rice told reporters, emphasizing that CNL is considering among other options listing each of the resorts on a publicly traded exchange and isn’t even excluding a public buyout.
Real estate investment trusts, or REITs, are a common investment choice for a variety of properties like office buildings, malls or hotels. According to the National Ski Areas Association, REITs only recently got involved in the ski industry, about 15 years ago. Michael Berry, president of NSAA, says CNL is one of the biggest players in the snow business, along with the Missouri-based trust EPR.
CNL Lifestyle Properties currently owns 16 ski resorts spread over several US states. They include Bretton Woods, Loon Mountain and Mount Sunapee in New Hampshire. In Maine the company owns Sunday River and Sugarloaf, while in Vermont they have Okemo Mountain. CNL also holds Crested Butte in Colorado, Brighton in Utah, and in California they own Northstar-at-Tahoe and Sierra-at-Tahoe.
The value of CNL’s real estate properties was estimated around $3 billion in 2012. The group owned over 100 water parks, ski resorts, marinas and senior housing developments, but the overall value of the properties took a dramatic downturn during the real estate market crisis that followed in the footsteps of the 2009 global economic crisis.
According to Steve Rice, CNL Financial Group is building towards an exit strategy by December 31st, currently evaluating its options not only for the ski resorts, but also for theme parks and marinas. They have entrusted an investment bank, Jefferies LLC, to help them out with the process.
In June 2014, CNL got rid of the trust’s 48 golf properties for $320 million and later that year announced the selling of its senior housing program for $790 million.
Michael Berry is convinced an eventual change in ownership for the ski resorts would go unnoticed for the customers. That is because the resort operators’ long-term leases will remain the same, and no major change will affect the resorts’ methods of operation.
Steve Kircher, president of eastern operations for Boyne Resorts – a ski resort operating company – goes as far as labeling the selling “a nonevent” for the skier, since the lease holder will remain unchanged for several more decades, no matter who owns the resort.
And skiers seem to concur. A Sunday River regular, Bob Rogowsky, said he believes in the stability of the resort so much that he purchased a retirement home there. “I wouldn’t have made that kind of financial commitment and lifetime commitment if I didn’t believe there was stability and a good future,” he replied.
Rogowsky also declared himself pleased with the changes occurred at the resort where he skies for about 80 days a year since CNL took over in 2007. Market specialists believe ski resorts can prove to be good investments only if the owners come with a long term investment plan, but they tend to be unreliable compared to other investments. They depend too much on the weather and are one the first luxuries consumers give up on during an economic crisis.
Image Source: Mail Online
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