Monday, June 18, 2012

Reality Bites

I saw this InvestmentNews article over the weekend.  It was published on Tuesday, June 12, 2012.  The article starts with the following:
While a number of nontraded real estate investment trusts have recently posted sharp decreases in valuations, one of the largest, the $3 billion CNL Lifestyle Properties Inc., will steer clear of such results, according to its CEO, Stephen Mauldin.

“You have seen some disasters in the nontraded space,” he said after a presentation to investors Tuesday afternoon in New York. “We're not one of them.”
The article reported on CNL Lifestyle's CEO's presentation at a REIT conference.  I am not sure how CNL Lifestyle's CEO could make this claim without a third party value, especially since Lifestyle raised and invested capital during the real estate boom and has had issues with certain of its properties. 

On Thursday, June 14, CNL Lifestyle filed an 8-K, recanting its CEO's statements, the bulk of which is presented below:
In response to an article published on June 12, 2012 in Investment News commenting on the presentation given by CNL Lifestyle Properties, Inc. (the “Company”) at REITWEEK 2012, NAREIT’s Investor Forum, in New York, New York, the Company wishes to confirm that as previously reported in the Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2012 (the “Form 10-Q”), it is in the process of engaging a third-party valuation consultant to assist in determining the per share value of the Company’s common stock and has not yet received any preliminary valuation information. As previously announced, on or prior to October 9, 2012 the Company will provide an estimate of its per share value to assist broker dealers seeking to comply with Financial Industry Regulatory Authority (“FINRA”) rules. Accordingly, the Company is unable to comment on the ultimate valuation of its common stock, of which the current third-party valuation exercise will be a part.
The Company also stated that no determinations had been made by its Board of Directors regarding any change in distributions or distribution policy and that the Board would consider the factors described in the Form 10-Q in making any determinations concerning future distributions and distribution policy.
Apparently, after the exuberance of speaking in front of an industry conference, someone went back and re-read Lifestyle's 2011 10-K and 2012's first quarter 10-Q and returned to reality. 

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