CNL Growth Selling Multifamily Developments for Big Profit

CNL Growth Properties Inc., a publicly registered non-traded real estate investment trust, is selling two multifamily communities acquired in joint ventures with Crescent Communities, a real estate development group. CNL Growth Properties owns a 60 percent interest in both properties.

The first joint venture, known as the Crosstown joint venture, acquired a 25-acre parcel of land located in the southeast section of Tampa, Florida, upon which it developed, constructed and now operates a 344-unit Class A multifamily community called Crescent Crosstown. The land was acquired in March 2012 for $4.3 million and had a $37.1 million development budget. The Crosstown joint venture entered into an agreement with Centennial Holding Company LLC to sell the property for $58.3 million. The sale is expected to close on October 5, 2015.

The second joint venture, known as the Alexander joint venture, acquired a 22.4-acre parcel of land located in the University Research Park section of Charlotte, North Carolina upon which it developed, constructed and now operates a 320-unit Class A multifamily community called Crescent Alexander Village. The land was acquired in November 2012 for $2.4 million and had a $33.6 million development budget. The Alexander joint venture entered into an agreement with Alexander Village Acquisitions LP and intends to sell the property for approximately $52.3 million. The sale is expected to close on September 29, 2015.

CNL Growth Properties is pursuing the potential sale of a third multifamily development community, known as Crescent Cool Springs, which the company also owns through a joint venture with Crescent.

In late August, the board of the directors appointed a special committee comprised of independent directors James P. Dietz and Stephen P. Elker to oversee the process of exploring strategic alternatives.

CNL Growth Properties is a non-traded real estate investment trust that seeks commercial real estate investment opportunities in growth-oriented markets with a focus on multifamily development. As of June 30, 2015, the company owned interests in 16 Class A multifamily properties, eight of which were operational and as to which development was complete and eight of which were under development, including two of which were partially operational. CNL Growth Properties has a total of 2,026 completed apartment units and expects to have approximately 3,800 units (excluding 916 units relating to the Crosstown, Alexander Village and the Cool Springs properties which are included in real estate held for sale) once construction is completed on its properties under development.