CNL Healthcare Properties II Shareholders to Vote on Dissolution Plan
July 11, 2019 | James Sprow | Blue Vault
CNL Healthcare Properties II Inc. will seek shareholder approval for its plan of complete liquidation and dissolution, as well as certain amendments to its charter, at the company’s annual stockholder meeting September 10.
The nontraded healthcare real estate investment trust said the main purpose of the dissolution plan is to maximize shareholder value by selling assets, distributing the net proceeds to stockholders and paying debts. The company estimates net proceeds from the liquidation will range between approximately $8.80 per share and $9.83 per share.
At the meeting, shareholders will also vote on three separate proposals to amend the REIT’s charter, including an amendment to exclude the distribution of interests in a liquidating trust from the definition of a roll-up transaction.
The company is also seeking amendments to eliminate the requirement in its charter to provide stockholders with a specific annual report containing audited financial statements, related party and other information, as well as to remove conditions and limitations on the exculpation and indemnification of its current or former directors and its adviser and its affiliates, among other things.
The REIT’s board recommended that stockholders approve the dissolution and charter amendment proposals at the meeting.
Blue Vault reported that CNL Healthcare Properties II, Inc., raised just $51.2 million in the public offering that began on March 2, 2016, and closed on October 1, 2018. The most recent NAV per share was $9.92 as of December 31, 2018. The REIT paid a distribution to its Class A shareholders in Q1 2019 at the rate of 5.81%, based upon the share offering price. On October 31, 2018, each Class T share and Class I share converted into Class A shares. The Class T and Class I shares converted into Class A shares on one-to-one basis because the most recently approved NAV per share was the same for all classes. The Class A shares were no longer subject to class-specific expenses associated with the Class T and Class I shares.
At March 31, 2019, the REIT owned three properties with 175 units that were 100% leased. There were 4,899,139 weighted average shares outstanding for Q1 2019. The REIT had a debt ratio of 36.6% and a weighted average rate on debt of 4.98%. The REIT’s return on assets over the trailing 12-month period was 4.53%, and all debt was at unhedged variable rates.
Sources: S&P Global, Blue Vault
Our firm has been using Blue Vault from the first year it was available.
We have found it to be a valuable tool to verify what wholesalers tell us and to dig deep into how the reported investments are really performing.
We appreciate that Blue Vault has expanded its services from initially covering REIT's to now also including BDC's.
Our clients also appreciate that we conduct this additional due diligence on their behalf.