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CNL Income Properties Acquires Sugarloaf/usa And Sunday River Resorts In Maine
- Thread starter Greg
- Start date
Can't wait to hear how the SL/SR contingent feels about this.
Now your hills are owned by real estate companies too.
Now your hills are owned by real estate companies too.
millerm277
Active member
Doesn't look like a problem...they just want to own it, Boyne is going to be responsible for pretty much everything that goes on there....
They already own a bunch of other areas, and aren't involved at them either.
They already own a bunch of other areas, and aren't involved at them either.
trtaylor
Member
The general vibe regarding the CNL/Boyne deal on both the Sunday River and Sugarloaf forums is quite positive.
That's because BobR is over there...JK Bob.
So CNL finances the deal and just lets Boyne run everything and keep its' capital separate? Sweet deal for Boyne. CNL has no say in any of the day to day decisions?
How does that work?
thebigo
Well-known member
I dont know if this is the case. If you hunt around the CNL website they are not necessarily real estate developers. Besides Boyne and CNL partner at a number of other resorts including Brighton and a scenic chairlift in TE. Neither have any real estate potential.
Nice to have big pockets in the background supplying the bucks.
What does CNL get out of these arrangements?
millerm277
Active member
I'd guess a cut of the profits? Or some fee each year for Boyne to be allowed to operate the area?
ctenidae
Active member
Im in ur hillz, groomin all ur bumpz!1!
Probably so...I would then guess that CNL could, after the lease agreement expires, demand more of a cut or fee if they choose in the lease renewal. I'm sure Boyne won't eat that if it were to happen.
Who would pay for that increase?
Uh oh. You get my drift. Boyne is "running" the show, CNL pulls the strings.
Us 2 old farts are going to have to spend a day sliding around on some hill this coming season.
thebigo
Well-known member
I would guess it is a cut of the operating profits. CNL has a very large and diverse portfolio including malls, ski areas and even a harley davison dealership.
CNL Holdings
eastcoastpowderhound
New member
Both Boyne and CNL are privately held...but in this case its sorta like CNL is the board of directors in a public co and Boyne is the senior management team. Or you can look at CNL as the bank holding your mortgage... From what I hear, lease payments like this are in the neighborhood of 2% of gross revenue.
This could be the day...3/21/08 if my old mind remembers correctly?
ctenidae
Active member
CNL buys the property, then leases it on either a triple-net or gross basis. Gross basis means the owner (CNL) pays all expenses associated with ownership (insurance, utilities, repairs, and sometimes taxes). Given the cost of insurance and utilities for a ski area, I'm guessing those are on triple-net, which means Boyne pays rent and all the bills.
We generally structure our leases to provide for the payment of a minimum annual base rent with periodic increases in rent over the lease term. In addition, our leases provide for the payment of percentage rent generally based on a percentage of gross revenues at the property over certain thresholds.
Check out the picture on page 3 of their annual report:
http://www.cnl.com/documents/cip/2006AnnualReport_043007.pdf
CNL is clearly well ahead of the curve in the ski department.
Assume I own property and a season pass at Sunday River and have for the past 10 years.
As my advisor, do you think I should be happy to have CNL on board?
millerm277
Active member
I'd say definitely yes. They work together at other successful resorts, and I can't find much negative about them anywhere (unlike Powdr...).
ctenidae
Active member
I don't think CNL will have any affect on you whatsoever, unless the lease rates are so onerous as to make it impossible for Boyne to make any improvements or maintain service levels. Unless Boyne is stupid, I don't think that will happen. Boyne is the only portion of that transaction that concerns you. If you like Boyne, then you should be happy to have CNL on board.
That said, there is an outside chance that CNL has go/no go rights on capital expenditures and improvements, but it seems unlikely, ro that they would excersise them to the detriment of the ski area if they did.
My problem is I have no experience with Boyne although they have presented a good front in the initial days after the season ended. They seem like they want to improve SR and have presented some aggressive plans. Maybe I was asleep at the wheel and missed the announcement about CNL, but their role here comes as a total surprise.
I'm not a fan of silent partners because they usually aren't.
