Great Wolf to sell interest in Sandusky and Dells resorts

Posted Thursday, October 6, 2005 9:33 AM | Contributed by Jeff

Great Wolf is selling a 70% interest in its Sandusky and Dells resorts to CNL Income Properties Inc. in order to generate cash and "recycle investment capital for future growth." The company will continue to operate and license its brand to the new majority owner of the two resorts.

Read more from Crain's Cleveland Business.

Thursday, October 6, 2005 1:10 PM
Interesting. Does anyone else notice that those are the only two markets in which Great Wolf has competition?

Wonder what's going on?

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Thursday, October 6, 2005 6:29 PM
If you can't stand the heat, get out of the kitchen... ;)

Seriously, though, if that were the issue than wouldn't they just sell them outright and license the brand, instead of retaining a 30% interest? Although, this does mean that if they go under or even underperform to expectations (presumably due to competition) they can claim that it wasn't their fault, because they weren't in charge, etc.

Or maybe we're analyzing things too much. :)

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Saturday, October 8, 2005 1:50 AM
I think its kinda strange too. So they're using the capital to expand? Did I read that right? Their stock price has taken a beating lately.
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Saturday, October 8, 2005 10:11 AM
The concept of "sale-leaseback" is pretty common in the hotel industry. Where a company develops a hotel propery, sells it to another investor, then either leases it back to operate, or gets a management contract to operate it. The Mariott Corporation are masters at this...

A lot of hotel companies (who aren't set up as REITs) use this strategy to help fund continued growth.

Joel

*** This post was edited by JZarley 10/8/2005 10:13:36 AM ***

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Sunday, October 9, 2005 12:21 AM
K-Mart does that as well. Our former local K-Mart was built by the company about 10 years ago, but they sold the building and leased it. That helped to put the store under, and they didn't even last 10 years. Wal-Mart opens on the same spot (different building) at the end of this month...
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