CBMR owner CNL not going away

Business will continue as usual for CBMR

In October, the Denver Post reported that CNL Lifestyle Company, which owns 16 ski resort properties and seven ski-area villages, would begin plotting the liquidation of its portfolio as early as next fall.

Its real estate investment trust (REIT), which includes Crested Butte Mountain Resort (CBMR), expires in 2015. But while the Post’s report makes it sound like big changes are on the horizon, CBMR officials say the resort’s business will continue as usual.
“We have a 40-year lease with CNL and no matter what avenue they pursue, we will still have that and it will have to be honored by any new investor,” said Erica Reiter, public relations and communications manager.
Launched in 2004, CNL Lifestyle buys ski resort properties and leases them back long-term to operators. Operators pay minimum lease payments plus a percentage of gross revenues. In exchange, they can put the revenues from the sale into capital improvements and operations instead of relying on bank loans.
According to CBMR general manager Ethan Mueller, all REITs have a life cycle with an endpoint.
The expiration of CNL’s REIT in 2015 is part of its natural cycle, and the Lifestyle Company will have several options in how it moves forward. CNL can restructure, paying out current inventors or asking them to invest for another round; it can liquidate, paying off investors and selling assets to a new investor; or it can create a new REIT and transfer all assets to that investment trust.
If CNL restructures or creates a new REIT, Mueller says, not much would change for the ski resort. CBMR would continue to operate under the current 40-year lease, under either CNL or a new investor. And if the REIT liquidates, CBMR could buy the assets back from CNL or a different third party could acquire the assets. Either way, there will be plenty of time to make decisions.
“This is obviously something that wouldn’t be a last-minute deal. Both CNL and [CBMR parent company] Triple Peaks know of the deal and it is common (actually a given) with REITs because they can only be in existence for a certain number of years,” Mueller explained.