CNL Healthcare Properties II has announced that its board of directors elected to close the current equity offering by Oct. 1 and will not pursue a follow-on offering. The board also formed a committee of independent directors to explore potential strategic alternatives for the non-traded real estate investment trust (REIT), including a possible sale of the company.
Those alternatives may include selling the company or its assets, or seeking a merger or transaction with another company. A liquidation or sale of some or all of the company’s assets would require shareholder approval, CNL noted.
Since its launch in mid-2016, CNL Healthcare Properties II has invested in approximately $60 million worth of health care properties, including two new private-pay communities in Florida and an on-campus medical office building in Kansas.
The Sept. 6 announcement comes a little more than two months after CNL Healthcare Properties — which is sponsored by private investment management firm CNL Financial Group — similarly began exploring strategic alternatives. As of June, CNL Healthcare Properties’ portfolio spanned 34 states and included 72 senior housing communities. Real estate investment banking groups HFF Securities L.P. and KeyBanc Capital Markets Inc. were brought on to act as advisors.
CNL Healthcare Properties II will suspend its distribution reinvestment and stock redemption plans by Oct. 1, and CNL Healthcare Properties II stock distributions for the months of July, August and September will be issued by or around Sept. 10.
“We remain wholly committed to the seniors housing and healthcare real estate investment sectors, but this is the appropriate decision as we approach the outside date of our primary equity offering in March 2019,” stated Stephen Mauldin, president and CEO of CNL Healthcare Properties II, in a press release. “Based on our current and projected equity capital raise prospects along with a challenged environment for broker-dealers and non-traded REIT formats, we as a board unanimously concluded that identifying and pursuing opportunities to maximize value in the nearer term is in the best interest of the company and our shareholders.”
CNL Healthcare had not responded to a request for additional comment as of Friday afternoon.
Written by Tim Regan