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Largest Owner of U.S. Ski Areas Assesses Ownership Options; Resorts' Long-Term Leases Not Affected

Bretton WoodsCNL Lifestyle Properties, Inc., owner of the largest number of ski resorts in the country, is currently assessing how best to liquefy its assets as the end of the real estate investment trust (REIT) term draws near. CNL is a non-traded REIT that invests in a diverse collection of lifestyle and other income‐producing assets, including ski and mountain lifestyle properties, attractions, senior housing and marinas.

The company owns 16 ski resorts and eight commercial resort villages, including Okemo, Jiminy Peak, and Mount Sunapee in the east and Stevens Pass and Northstar-at-Tahoe in the west.

Regardless of how the liquidity event or events occur, the ski resorts are leased to operating companies who hold long term leases – generally 40 years. The leases, which all began five to 10 years ago, have over 30 years to run. There might be a new owner of the ski resort, but there can be no change to the operator’s detailed business terms for continuing to operate the ski resort as a lessee.

These leases can offer long-term stability for resorts. Rice added, “It is really more of a background financial event rather than a change in the guest-facing operating company that is hiring and supervising the staff and determining season pass policies and marketing programs and service standards and all the rest that comes into running a multi-faceted ski resort.”

A REIT is similar to a mutual fund in that individual investors pool their money together and a manager decides which real estate to buy and which to sell. Unlike a mutual fund, REITs must dissolve at some point. Often REITs last five to 10 years before they are dissolved and the money is returned to the investors. For CNL Lifestyle Properties, Inc, a “liquidity event” needs to be underway by the end of 2015.

Steve Rice, Senior Managing Director in charge of CNL Lifestyle Properties’ ski portfolio and long-time ski industry veteran, told SnoCountry.com that this liquidity event could happen in a number of ways. They are considering a sale of the assets, but another option they are evaluating would be listing on a nationally registered stock exchange as an IPO. CNL could also continue to own the properties in their current structure as an unlisted REIT.

“We like the ski business a great deal  - it has been a strong performer for us, an excellent investment, and we think there is still room for potential in the industry,” Rice told us.

Sugarloaf MaineBoyne Resorts is CNL’s largest ski tenant with Sugarloaf, Sunday River and Loon in the east and Big Sky, Brighton, Crystal Mountain and The Summit at Snoqualmie in the west.

CNL has made it a priority to reinvest resort revenue as a benefit to both guests and shareholders. “As owner we have always been the entity that has invested in new lifts, new base lodges, snowmaking expansion, and other infrastructure in our ski resorts,” Rice said.

CNL’s largest single location for additional capital investment in their ski portfolio, beyond the initial purchase price in 2007, is The Omni Mount Washington Resort, home of Bretton Woods. They have invested over $50 million in that property, including the replacement of the Omni Mount Washington Hotel’s iconic red roof, creation of a spa/conference center, and building the high-country Stickney Cabin.

“This 1,500-acre property surrounded by the White Mountain National Forest is something we are very proud of because we have not only brought it back, but brought it now forward, to levels of operation it had never seen before. We are very proud of what we’ve been able to accomplish there through our investment and through Omni’s outstanding management of these assets- it has been a great partnership.”

As CNL investigates liquidity options, it continues to invest in its ski holdings, such as finishing a brand new lift at Snoqualmie Summit in Washington, one of the nation’s largest’s day ski resorts. They have also invested well into six figures for additional high efficiency low-energy HKD snow guns at Sunday River, Sugarloaf, and Bretton Woods.

Photos: Top -- CNL investments include the replacement of the Omni Mount Washington Hotel’s iconic red roof. (Bretton Woods); Right -- Sugarloaf, Maine also part of the CNL group of resorts (Sugarloaf) ; Bottom -- Big Sky in Montana is part of the CNL portfolio of ski resorts (Big Sky)

Big Sky Resort



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