CNL to Form Restaurant Properties REIT

CNL Group Inc. said it reached an agreement to merge 18 partnerships it manages and other assets into a real estate investment trust with $1.5 billion in assets, forming the largest owner and financier of restaurant properties in the U.S. The combined company would own or have investments in more than 1,400 fast-food restaurant properties operated as Boston Market, Pizza Hut and Jack in the Box, among others, according to filings with the Securities and Exchange Commission. Under the agreement with investors in the partnerships, Orlando, Fla.-based CNL will have its CNL American Properties Fund Inc., a closely held REIT it manages, acquire 18 other funds for $610 million in stock, or 61 million shares valued at $10 each. Currently, two public REITs operate mainly in restaurant properties: Dallas-based U.S. Restaurant Properties Inc., which owns or has a stake in 894 properties and a total market value of about $651 million, and Scottsdale, Ariz.-based Franchise Finance Corp. of America, which has investments in more than 3,500 properties and a market value of $1.67 billion.