New CNL Fund to Invest $3B Across Multiple CRE Sectors

June 30, 2011
By Barbra Murray, Contributing Editor

Courtesy Flickr Creative Commons user edenpictures

CNL Financial Group has introduced a new fund, CNL Properties Trust Inc., with plans of raising as much as $3 billion for investment in a diverse group of property types across the country. The fund will set its sights on lifestyle, lodging and specialty properties, and keep a special eye on senior living and healthcare assets.

CNL Properties Trust, which expects to operate as a REIT, will procure capital through a continuous offering over a two-year period, targeting the most affluent markets in the U.S. Three major themes will resonate in the fund, Byron Carlock, president and CEO of CNL Properties Trust, told CPE. First off, it is built on experience. CNL has sponsored four other REITs with great success. CNL Hotels & Resorts Inc. fetched $6.6 billion when it sold in 2006; CNL Retirement Properties Inc. was snapped up for $5.3 billion the same year; and Trustreet Properties Inc., a restaurant property investment vehicle, commanded $3 billion in 2007. Additionally, on April of this year, the company put a cap on new investors in CNL Lifestyle Properties, which boasts a $3.3 billion portfolio of various lifestyle property types including ski resorts and experiential lodging, golf courses and marinas, destination retail, amusement parks and senior living communities.

Also among the themes of the fund, Carlock added, “It has a disciplined underwriting approach to be able to deliver the distribution we’re seeking to offer our investors.” Furthermore, CNL Properties Trust is characterized by its diversification in terms of geography and asset class. “We’re seeking demographically-driven real estate; the fund seeks to find income-producing properties outside the core mix of office, retail and industrial. We’re looking at asset types that don’t get as much investment, that aren’t being chased by as much capital as traditional asset types. This is an opportunity to invest where capital is underserved.”

CNL Properties Trust will pay particular attention to seniors housing. “The most important statistic to watch is the aging baby boomer population. Their housing needs are underserved, so seniors housing is worthy of watching and investing.” The new fund will offer CNL the opportunity to catch up in this arena.

“We had been on a non-compete since we sold CNL Retirement Properties in 2006, but it was lifted in 2010 so that allowed us to go back in the market,” Carlock said. CNL sold CNL Retirement Properties Inc. and its portfolio of seniors housing and healthcare assets to Health Care Property Investors for $5.2 billion five years ago. The company began making up for lost time in the beginning of this year when CNL Lifestyle Properties’ acquired a portfolio of 29 senior living communities for $630 million through a joint venture Sunrise Senior Living Inc. “That was our reintroduction into the space and we will continue our lifestyle story with a renewed interest in healthcare real estate.”

The SEC registration for CNL Properties Trust is now in effect. CNL Securities Corp. is acting as the managing dealer for the investment offering.