Intrawest partners with Florida REIT 

Creekside one of two Canadian properties in investment package

Florida’s CNL Income Properties has entered a partnership with Intrawest to acquire 80 per cent ownership of commercial properties at nine Intrawest resort villages, including Creekside at Whistler.

The announcement of the B.C.-based company’s plans to partner with the unlisted real estate investment trust (REIT) was made Aug. 12.

This move brings the resort development leader closer to fulfilling its mandate of becoming a "management-intensive" company. Intrawest made the decision to move from a "capital-intensive" business model 24 months ago. This change in direction is intended to improve the company’s cash flow and have its credit ratio come in line with more conservatively financed leisure companies.

"This completes an investment picture that combines a unique and compelling growth story with a business model based more on expertise and reputation than on capital," says Daniel Jarvis, Intrawest executive vice-president and chief financial officer.

Whistler’s Creekside Village is one of the nine properties to be purchased in the $160 million (U.S.) deal and one of two Canadian properties in the package. The Village at Blue Mountain in Ontario is the other Canadian property. Properties in the U.S. include the Village of Baytowne Wharf at Sandestin Golf and Beach Resort in Florida, the Village at Squaw Valley and the Village at Mammoth Mountain, both of which are in California, the Village at Copper Mountain in Colorado, the MonteLago Village at lake Las Vegas Resort in Nevada, the Village at Snowshoe Mountain in West Virginia, and the Village at Stratton in Vermont.

Intrawest will retain 20 per cent ownership and maintain its property management role in each of the villages. Resort lodging is not included in the deal.

"Creation of this partnership is another significant step in our transition to a management-intensive structure from a more capital-intensive one," said Joe Houssian, chairman, president and CEO of Intrawest. "This transaction will provide a significant recovery of capital as well as a partnership for future commercial development."

One of those future commercial developments will be the facelift to Mont Tremblant Resort. Intrawest unveiled plans last week for a 10-year, $1 billion expansion to the Quebec resort.

Houssain is optimistic about the potential the partnership with CNL Income Properties holds.

"This is a winning arrangement for both parties," said Houssian. "Our commercial properties are a natural fit for CNL Income Properties, and Intrawest maintains its relationship with the retail and commercial tenants whose presence forms an important part of our resort guests’ experiences."

CNL Income Properties’ mandate is to acquire properties and lease them on a long-term, triple-net basis. The terms of a triple-net lease requires that the lessee pay all taxes, insurance and maintenance to the lessor in addition to rent.

The unlisted REIT is committed to investing in recreational and lifestyle properties to capitalize on the expanding baby-boomer leisure market.

A REIT is essentially a corporation or business trust that combines the capital of many investors to acquire or provide financing for real estate. REITs generally do not pay corporate income tax, but must pay dividends on the amount of taxable income to investors.

The deal with Intrawest marks CNL Income Properties’ first acquisition. Assuming all subjects of the sale are met, the deal is scheduled to close before the end of the year.

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