# EDGAR Filing Document

**Accession Number:** 0001496454
**File Stem:** 0001193125-23-075740
**Filing Date:** 2023-3
**Character Count:** 36637
**Document Hash:** 9e592586eeb0aecb8fc4622f99b3d415
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001193125-23-075740.hdr.sgml**: 20230321

**ACCESSION NUMBER**: 0001193125-23-075740

**CONFORMED SUBMISSION TYPE**: SC 14D9

**PUBLIC DOCUMENT COUNT**: 3

**FILED AS OF DATE**: 20230321

**DATE AS OF CHANGE**: 20230321

**SUBJECT COMPANY**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** CNL Healthcare Properties, Inc.
- **CENTRAL INDEX KEY:** 0001496454
- **STANDARD INDUSTRIAL CLASSIFICATION:** REAL ESTATE INVESTMENT TRUSTS [6798]
- **IRS NUMBER:** 272876363
- **STATE OF INCORPORATION:** MD
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** SC 14D9
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 005-90567
- **FILM NUMBER:** 23749812

**BUSINESS ADDRESS:**
- **STREET 1:** 450 SOUTH ORANGE AVENUE
- **CITY:** ORLANDO
- **STATE:** FL
- **ZIP:** 32801
- **BUSINESS PHONE:** (407) 650-1000

**MAIL ADDRESS:**
- **STREET 1:** 450 SOUTH ORANGE AVENUE
- **CITY:** ORLANDO
- **STATE:** FL
- **ZIP:** 32801

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** CNL Healthcare Trust, Inc.
- **DATE OF NAME CHANGE:** 20120209

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** CNL Properties Trust, Inc.
- **DATE OF NAME CHANGE:** 20110301

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** CNL Diversified Lifestyle Properties, Inc.
- **DATE OF NAME CHANGE:** 20100713
**FILED BY**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** CNL Healthcare Properties, Inc.
- **CENTRAL INDEX KEY:** 0001496454
- **STANDARD INDUSTRIAL CLASSIFICATION:** REAL ESTATE INVESTMENT TRUSTS [6798]
- **IRS NUMBER:** 272876363
- **STATE OF INCORPORATION:** MD
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** SC 14D9

**BUSINESS ADDRESS:**
- **STREET 1:** 450 SOUTH ORANGE AVENUE
- **CITY:** ORLANDO
- **STATE:** FL
- **ZIP:** 32801
- **BUSINESS PHONE:** (407) 650-1000

**MAIL ADDRESS:**
- **STREET 1:** 450 SOUTH ORANGE AVENUE
- **CITY:** ORLANDO
- **STATE:** FL
- **ZIP:** 32801

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** CNL Healthcare Trust, Inc.
- **DATE OF NAME CHANGE:** 20120209

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** CNL Properties Trust, Inc.
- **DATE OF NAME CHANGE:** 20110301

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** CNL Diversified Lifestyle Properties, Inc.
- **DATE OF NAME CHANGE:** 20100713

------

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**UNITED STATES** 

**SECURITIES AND EXCHANGE COMMISSION** 

**Washington, DC 20549** 

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**Schedule 14D-9** 

**(Rule 14d-101)** 

**SOLICITATION/RECOMMENDATION STATEMENT** 

**UNDER SECTION 14(d)(4) OF THE SECURITIES EXCHANGE ACT OF 1934** 

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## CNL HEALTHCARE PROPERTIES, INC.
**(Name of Subject Company)** 

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## CNL Healthcare Properties, Inc.
**(Name of Person Filing Statement)**

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**Common stock, $0.01 par value per share** 

**(Title of Class of Securities)** 

**12612C 108** 

**(CUSIP Number of Class of Securities)** 

**Stephen H. Mauldin** 

**President and Chief Executive Officer** 

**CNL Healthcare Properties, Inc.** 

**CNL Center at City Commons** 

**450 South Orange Avenue, 14<sup>th</sup> Floor** 

**Orlando, Florida 32801** 

**Telephone: (407) 650-1000** 

**(Name, Address and Telephone Number of Person Authorized to Receive Notice and Communications on Behalf of the Person Filing Statement)** 

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☐ Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer.

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**Item 1. Subject Company Information** 

The name of the subject company is CNL Healthcare Properties, Inc., a Maryland corporation (the "Company"), and the address and telephone number of its principal executive offices are 450 South Orange Avenue, 14<sup>th</sup> Floor, Orlando, Florida 32801 and (407) 650-1000, respectively.

The title of the class of equity securities to which the tender offer relates is the shares of the Company's common stock, $0.01 par value per share. As of the close of business on March 20, 2023, there were 173,960,540 shares of the Company's unrestricted common stock issued and outstanding.

**Item 2. Identity and Background of Filing Person** 

The Company is the person filing this Schedule 14D-9. The Company's name, business address and business telephone number are set forth in Item 1 above, which information is incorporated herein by reference.

This Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule 14D-9") is being filed by the Company with respect to an unsolicited tender offer by Comrit Investments 1, Limited Partnership, a Cayman Islands Exempted Limited Partnership (the "Offeror") to purchase up to an aggregate of 8,800,000, or approximately 5.1%, of the issued and outstanding shares of common stock (the "Shares") of the Company for a price equal to $4.36 per share, without interest, in cash (the "Comrit Offer").

According to the Offeror's Schedule TO filed on March 13, 2023, its business address is 9 Ahad Ha'am Street, Tel Aviv, Israel 6129101 and its phone number is +972-3-519-9936.

**Item 3. Past Contacts, Transactions, Negotiations and Agreements** 

To the knowledge of the Company, as of the date of this Schedule 14D-9, there are no material agreements, arrangements or understandings or any actual or potential conflicts of interest between the Company or its affiliates and the executive officers, directors or affiliates of the Company, except for agreements, arrangements or understandings and actual or potential conflicts of interest discussed in Item 13. "Certain Relationships and Related Transactions, and Director Independence," in the Company's Annual Report on Form 10-K for the year ended December 31, 2022 filed with the United States Securities and Exchange Commission ("SEC") on March 10, 2023 ("2022 Annual Report"), which information is incorporated herein by reference.

To the knowledge of the Company, as of the date of this Schedule 14D-9, there are no material agreements, arrangements or understandings or any actual or potential conflicts of interest between the Company or its affiliates and the Offeror and its executive officers, directors or affiliates.

**Item 4. The Solicitation or Recommendation** 

**(a)** **Solicitation or Recommendation** 

On March 20, 2023, the Board of Directors ("Board"), after careful evaluation of the Comrit Offer and in consultation with the Company's management and outside advisors, has determined, for the reasons set forth below, to recommend that the Company's stockholders **REJECT** the Comrit Offer.

**(b)** **Reasons for the Recommendation** 

In April 2018, the Company's board of directors formed a special committee consisting solely of independent directors to consider possible strategic alternatives. Since 2018, the special committee has engaged KeyBanc Capital Markets Inc. to act as its financial advisor in connection with exploring possible strategic alternatives.

As part of executing on possible strategic alternatives, in September 2018, the Company's board of directors committed to a plan to sell 70 properties which included medical office buildings, post-acute care facilities and acute care hospitals across the US plus several skilled nursing facilities. Since April 2019, the Company completed the sale of 70 of the properties that it planned to sell as part of executing under possible strategic alternatives and sold an additional two senior housing properties. The Company used the net sales proceeds of these transactions: (1) to repay indebtedness secured by or allocated to properties sold, (2) to strategically rebalance other corporate borrowings, (3) to make a special cash distribution of approximately $347.9 million ($2.00 per share) to the stockholders and (4) retained net sales proceeds for other corporate purposes, because the Company focused on maintaining balance sheet strength and liquidity during COVID-19 to enhance financial flexibility. Additionally, in 2022, the Company's board adjusted the regular quarterly cash distribution to an amount equal to $0.0256 per share compared to $0.0512 per share that had been in effect since 2019.

------

From the inception of the COVID-19 pandemic through today, the Board continues to strategically manage and position the Company's portfolio to drive performance and value during what is now the maturation phase of the Company's lifecycle. The Company's current investment portfolio consists of interests in 70 properties, comprised of 69 seniors housing communities and one vacant land parcel adjacent to one of its seniors housing communities.

The Company, including its board of directors and special committee, continues to work actively with its financial advisor to consider its strategic alternatives.

In order to assess the adequacy of the terms and conditions of the Comrit Offer and in making its determination to recommend that the Company's stockholders reject the Comrit Offer, the Board (i) thoroughly and carefully reviewed and analyzed the terms and conditions of the Comrit Offer; (ii) consulted with the Company's management and received advice from certain outside advisors; (iii) evaluated various relevant and material factors in light of the Board's knowledge of the Company's business, financial condition, portfolio of assets, future prospects and estimated net asset value ("NAV") per share of the Company's common stock; and (iv) considered the strategic alternatives process.

The following are the material factors considered by the Board in evaluating the Comrit Offer:

The Board believes that the Comrit Offer is intended to capitalize on the lack of liquidity for shares of the Company's common stock by seeking to purchase stockholders' shares at a price significantly below their fair value in order for the Offeror to make a significant profit. Although the Company can offer no assurances, the Board and management team continue to monitor the real estate market to determine the best available options for providing further liquidity to the Company's stockholders. The Company believes that stockholders who tender their shares in the Comrit Offer (1) will be tendering at a price substantially below the Company's view of the current fair value of the shares, (2) will lose the opportunity to participate in any value for such shares in excess of the offer price or to participate in any potential future upside or growth of the Company with respect to such shares and (3) will lose the right to receive any future distributions that the Company may declare and pay.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The Comrit Offer of $4.36 per share represents a price that is approximately 37% less than the $6.92 estimated
NAV per share of the Company's common stock as of December 31, 2022 (and announced in a Current Report on Form 8-K filed with the SEC on March 9, 2023), which was determined by the
Company's Board with the assistance of an independent third-party valuation firm and which is the most recently announced estimated NAV per share. Estimated NAV per share is calculated as of a specific date, and the value of shares of common
stock will fluctuate over time as a result of, among other things, the continued impact of COVID-19, inflation and rising interest rates on the operations of the Company's seniors housing communities,
developments related to individual assets, changes in the real estate and capital markets, acquisitions or dispositions of assets, and distributions to stockholders. In addition, because shares of the Company's common stock are not listed on a
national securities exchange and there is no established trading market for shares of common stock, estimated NAV per share does not represent the: (i) the price at which shares of common stock would trade on a national securities exchange or a
third party would pay for the Company, (ii) the amount a stockholder would obtain if he or she tried to sell his or her shares of common stock, or (iii) the amount stockholders would receive if the Company liquidated its assets and
distributed the proceeds after paying all of its expenses and liabilities.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The Comrit Offer states that the Offeror is making the Comrit Offer "for investment purposes and with the
intention of making a profit from the ownership of the Shares." The Comrit Offer also states that in determining the $4.36 per share offer price, the Offeror did not make an independent appraisal of the Shares or the Company's properties
and is not qualified to appraise real estate. The Offeror did not retain an independent advisor to evaluate or render any opinion with respect to the fairness of its $4.36 per share offer to you. In fact, the Comrit Offer states that in establishing
the $4.36 offer price, the Offeror "is motivated to establish the lowest price which might be acceptable to Shareholders consistent with [Comrit's] objectives."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• By accepting the Comrit Offer, stockholders would be foregoing potential future distributions. Although the
timing and amount of distributions are within the discretion of the Board and the Board cannot provide any guarantee that the Company will maintain this rate of distributions or distributions generally in the future, stockholders that choose to
participate in the Comrit Offer by selling their Shares to the Offeror will lose the right to receive any future distributions, including any distributions made or declared after the expiration date of the Tender Offer. Our board of directors
recently declared a first quarter distribution for 2023 in the amount of $0.0256 per share.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• There is no guarantee that the Comrit Offer can or will be completed as soon as the Offeror contemplates in its
Offer to Purchase. The Comrit Offer does not initially expire until May 10, 2023 and such date may be extended by the Offeror, in its sole discretion, subject to compliance with applicable securities laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The Offeror expressly reserves the right to amend the terms of the Comrit Offer, including by decreasing the
$4.36 Offer Price or by changing the number of shares being sought or the type of consideration being paid, subject to compliance with applicable securities laws, at any time before the Comrit Offer expires.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• For any dispute, claim or controversy that a stockholder may have with the Offeror or its controlled depositary,
the Offeror requires each stockholder to agree to binding arbitration in Denver, CO. For most stockholders and their counsel, a mandatory Colorado arbitration would impose an inconvenient forum. Additionally, in any dispute between a stockholder and
Comrit or its affiliated persons, including the depositary, the prevailing party will be entitled to recover all of their costs and expenses, including attorneys' fees, arbitrator fees, expert witness fees and costs, fees and costs of the
arbitration, and any fees and costs incurred in compelling arbitration.

In light of the factors described above, the Board has unanimously determined that the Comrit Offer is not advisable and is not in the best interests of the Company or its stockholders. Accordingly, the Board unanimously recommends that you **REJECT** the Comrit Offer and not tender your shares for purchase pursuant to the Comrit Offer.

The Board recognizes that due to the suspension of the Company's stock redemption plan, the lack of a trading market for the Company's shares and the uncertainty surrounding inflation, interest rates and the residual impacts of the COVID-19 pandemic and its effects on the Company and its industry sector and the economy as a whole, some stockholders may decide to accept the Comrit Offer based on, among other things, their individual liquidity needs. The Board acknowledges that stockholders must evaluate whether to tender their shares based on all the information available, including the factors considered by the Board and described in our filings with the SEC. The Company cannot provide assurances with respect to future strategic transactions, future distributions, the future value of its shares, which can change periodically, or to future liquidity for stockholders. While the Company remains actively engaged in pursuing strategic alternatives, at this time, the Company does not believe that market conditions will support a liquidating transaction prior to the end of 2023.

**(c)** **Intent to tender** 

All of the Company's directors and executive officers who own shares of common stock have advised the Company that they do not intend to tender any shares held of record or beneficially owned by them pursuant to the Comrit Offer. To the knowledge of the Company, none of the Company's subsidiaries or affiliates currently intends to tender shares held of record or beneficially owned by them pursuant to the Comrit Offer.

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**Item 5. Person/Assets, Retained, Employed, Compensated or Used** 

To the knowledge of the Company, neither the Company nor any person acting on its behalf has, directly or indirectly, employed, retained or agreed to compensate any person to make solicitations or recommendations to the Company's stockholders in connection with the Comrit Offer.

**Item 6. Interest in Securities of the Subject Company** 

During the 60 days prior to the filing of this Schedule 14D-9, there were no transactions involving the shares of the Company's common stock effected with any of the Company's officers, directors, affiliates or subsidiaries.

**Item 7. Purposes of the Transaction and Plans or Proposals.** 

(a) Except as set forth in this Schedule 14D-9, the Company is not undertaking and is not engaged in any negotiations in response to the Comrit Offer that relate to the Comrit Offer or other acquisition of the shares by the Company, any of the Company's subsidiaries or any other person.

(b) Except as set forth in this Schedule 14D-9, the Company is not undertaking and is not engaged in any negotiations in response to the Comrit Offer that relate to, or would result in, (i) any extraordinary transaction, such as a merger, reorganization or liquidation, involving the Company or any of the Company's subsidiaries; (ii) any purchase, sale or transfer of a material amount of assets of the Company or any of the Company's subsidiaries; or (iii) any material change in the present distribution rate or policy, or indebtedness or capitalization of the Company.

(c) Except as set forth in this Schedule 14D-9, there are no transactions, board resolutions, agreements in principle or signed contracts entered into in response to the Comrit Offer that relate to one or more of the matters referred to in this Item 7.

**Item 8. Additional Information** 

To the knowledge of the Company, there are no agreements or understanding, whether written or unwritten, between any executive officer and the Company or the Offeror concerning any type of compensation, whether present, deferred or contingent, that is based upon or otherwise relates to the Comrit Offer.

**Cautionary Note Regarding Forward-Looking Statements** 

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For further information regarding risks and uncertainties associated with the Company's business, and important factors that could cause the Company's actual results to vary materially from those expressed or implied in its forward-looking statements, please refer to the factors listed and described under "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the "Risk Factors" sections of the Company's documents filed from time to time with the SEC, including, but not limited to, the 2022 Annual Report and the Company's quarterly reports on Form 10-Q, copies of which may be obtained from the Company's website at www.cnlhealthcareproperties.com.

All written and oral forward-looking statements attributable to the Company or persons acting on its behalf are qualified in their entirety by this cautionary note. Forward-looking statements speak only as of the date on which they are made, and the Company undertakes no obligation to, and expressly disclaims any obligation to, publicly release the results of any revisions to its forward-looking statements to reflect new information, changed assumptions, the occurrence of unanticipated subsequent events or circumstances, or changes to future operating results over time, except as otherwise required by law.

**Item 9. Exhibits** 

The following exhibits are filed as part of this Schedule 14D-9:

---

| | |
|:---|:---|
| **Exhibit**<br> **No.** | **Description** |
| 99(a)(1) | [Letter to the Company's Stockholders dated March 21, 2023\*](d436205dex99a1.htm) |
| 99(a)(2) | [Email to Financial Professionals dated March 21, 2023\*](d436205dex99a2.htm) |
| 99(e)(1) | Excerpts from the Company's 2022 Annual Report filed with the SEC on March 10, 2023\*\* |

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\* Included in copy mailed to stockholders.

\*\* Those sections of the Company's 2022 Annual Report specified in Items 3 and 8 hereto are incorporated herein by reference.

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**SIGNATURE** 

After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

March 21, 2023

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| | |
|:---|:---|
| CNL Healthcare Properties, Inc. | CNL Healthcare Properties, Inc. |
| By: | /s/ Stephen H. Mauldin |
| Name: Stephen H. Mauldin | Name: Stephen H. Mauldin |
| Title: President and Chief Executive Office | Title: President and Chief Executive Office |

---

## Ex-99.A1

**Exhibit 99(a)(1)** 

March 21, 2023

Dear fellow shareholder:

Please be aware that **an organization that we are NOT affiliated with,** Comrit Investments I, LP (Comrit), **launched an unsolicited tender offer** to purchase up to 8,800,000 shares of CNL Healthcare Properties common stock. The Comrit offer is $4.36 per share, 37% less than our current $6.92 estimated net asset value (NAV) per share as of Dec. 31, 2022.<sup>1</sup> *To reiterate, we are not affiliated with Comrit or its offer.*

**Following a thorough evaluation of the offer, <u>our board of directors (Board) unanimously recommends that shareholders REJECT Comrit's offer</u>. You do not need to do anything to reject the offer.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• This is Comrit's fifth tender offer within the past three years. <u>Our Board believes that the unsolicited tender offer represents yet another opportunistic attempt to purchase shares at a low price and make a profit</u> <u>, primarily due to continued macroeconomic effects, volatility and inflation</u> <u>— much of which are trailing impacts</u> <u>from the pandemic.</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our Board believes that the tender offer price is substantially lower than the current fair value of the shares
and that shareholders who tender their shares will lose the opportunity to participate in any potential recovery or growth of the company with respect to such shares and lose the right to receive any future distributions that may be declared and
paid.<sup>2</sup>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• In March 2023, CNL Healthcare Properties announced the results of its estimated NAV per share as of Dec. 31,
2022, which was negatively impacted by a challenged and disrupted economic and transaction environments replete with persistent inflationary pressures, meaningfully higher interest rates and a tighter lending environment, as well as higher discount
rates applied to future cash flows.

**Why Reject the Comrit Offer?** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The Comrit tender offer of **$4.36 per share is 37% less than the $6.92 estimated NAV per share, as of Dec. 31, 2022. <sup>2</sup>** Our estimated NAV is based on a robust and detailed process typically conducted no less frequently than annually with the expert assistance of a leading independent
advisory and appraisal firm.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Comrit determined its offer price based on its analysis and concedes that it did not obtain current independent
valuations or appraisals for CNL Healthcare Properties' assets and did not retain an independent advisor to evaluate or render an opinion on the fairness of the $4.36 offer price.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• None of CNL Healthcare Properties' directors, executive officers, affiliates or subsidiaries intend to sell
their shares to Comrit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The Comrit offer specifies that any distributions made after May 10, 2023, will be assigned to them.
Therefore, if you accept their tender offer, you will not receive any potential future distributions. Our board of directors declared a distribution for the first quarter of 2023, which is anticipated to be paid before the end of March.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Comrit, in its own words, states that it is <u>" **making the offer for investment purposes and with the intention of making a profit from the ownership of the shares." Further, Comrit is "motivated to establish the lowest price which might be acceptable to shareholders consistent with their objective**."</u> 

For these and other reasons stated in our Schedule 14D-9 filing with the Securities and Exchange Commission (SEC) found at sec.gov, **<u>our Board unanimously concluded that the Comrit offer is not advisable and is not in the best interest of shareholders or CNL Healthcare Properties</u>.** In addition to this letter, I encourage you to carefully read our Schedule 14D-9 before making any decision to tender your shares.

Our Board recognizes that you may elect to accept the Comrit tender offer based on your personal liquidity needs or financial situation, and other factors. These include the suspension of the company's stock redemption plan, the lack of a current trading market for our shares, and to a lesser extent, uncertainty related to the broader economy. Our Board is aware that shareholders must evaluate whether to tender their shares based on all the information available, including the factors considered by our Board and described in our filing with the SEC.

In deciding, please keep in mind that our Board or company cannot assure future distributions or our share's value, which can change periodically, or forward-looking liquidity timing and amounts for shareholders. If you have questions regarding the tender offer, please contact your financial professional. As always, thank you for your confidence and continued support in CNL Healthcare Properties.

Sincerely,

Stephen H. Mauldin

President & Chief Executive Officer

cc: Financial professional

Forward-looking statements are based on current expectations and may be identified by words such as *believes, anticipates, expects, may, could,* and terms of similar substance, and speak only as of the date made. Actual results could differ materially due to risks and uncertainties that are beyond the company's ability to control or accurately predict, including the amount and timing of anticipated future distributions, estimated per share net asset value of the company's stock, and/or other matters. The company's forward-looking statements are not guarantees of future performance. Shareholders and financial advisors should not place undue reliance on forward-looking statements.

<sup>1</sup> The estimated NAV per share is only an estimate based on a snapshot in time and several assumptions and estimates which can be considered inherently imprecise. The NAV is based on numerous assumptions concerning industry, business, economic and regulatory conditions, all of which are subject to changes. Throughout the valuation process, the valuation committee, our advisor and senior members of management reviewed, confirmed, and approved the processes and methodologies and their consistency with real estate industry standards and best practices. 

<sup>2</sup> Distributions are not guaranteed in frequency or amount. Distributions have been and may in the future be paid by borrowings, shareholder proceeds and income. For the year ended Dec. 31, 2022, 100% of regular cash distributions were covered by operating cash flow as defined by GAAP. The company's distribution is subsidized by expense waivers that will be reimbursed to the advisor in the form of restricted stock. For the years ended Dec. 31, 2021, 2020, 2019, Dec. 31, 2018, Dec. 31, 2017, approximately 100%, 100%, 100%, 83%, 91%, respectively, of total distributions were covered by operating cash flow and approximately 0%, 0%, 0%, 17%, 9%, respectively, were funded by offering proceeds.

## Ex-99.A2

**Exhibit 99(a)(2)** 

**FA Email** 

**Subject: CNL Healthcare Properties Responds to Third-Party Tender Offer** 

**Date: March 21, 2023** 

**FOR BROKER-DEALER AND RIA USE ONLY. Not for general use with the public.** 

Dear Financial Professional:

On March 13, 2023, Comrit Investments I, LP filed another unsolicited tender offer with the Securities and Exchange Commission (SEC) to purchase 8,800,000 shares of CNL Healthcare Properties' common stock from shareholders. **CNL Healthcare Properties is not affiliated with Comrit and its offer.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Comrit's current offer is $4.36 per share, <u>which is 37% lower than the current $6.92 per share estimated net asset value (NAV) as of Dec. 31, 2022</u>.<sup>1</sup>The tender offer is for approximately 5.06% of the outstanding shares as of March 8, 2023.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **After careful evaluation, the company's board of directors <u>unanimously recommends that shareholders reject Comrit's tender offer</u>. To reject the offer, no action is required by shareholders**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• This is Comrit's fifth tender offer within the past three years. <u>The board of directors believes that the unsolicited tender offer represents another opportunistic attempt to purchase shares at a low price and make a profit, primarily due to continued macroeconomic effects, volatility and inflation — much of which are trailing impacts from the pandemic</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The company's board believes that the tender offer price is substantially lower than the current fair value
of the shares and that shareholders who tender their shares will lose the opportunity to participate in any potential recovery or growth of the company with respect to such shares and lose the right to receive any future distributions that may be
declared and paid.<sup>2</sup>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• In March 2023, CNL Healthcare Properties announced the results of its estimated NAV per share as of Dec. 31,
2022, which was negatively impacted by a challenged and disrupted economic and transactions environments replete with persistent inflationary pressures, meaningfully higher interest rates and a tighter lending environment, as well as higher discount
rates applied to future cash flows.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The board of directors' recommendation was included in the company's response filing with the SEC on
March 21, 2023. A copy of the filing can be found on the SEC's website at sec.gov and on cnlhealthcareproperties.com, along with the letter to shareholders that will be mailed on or about March 29, 2023.

**Why Reject the Tender Offer?** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **The board of directors unanimously concluded that the offer is not advisable and is not in the best interests of CNL Healthcare Properties or its shareholders**.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Comrit determined its offer price based on its analysis and concedes that it did not obtain current independent
valuations or appraisals for CNL Healthcare Properties' assets and did not retain an independent advisor to evaluate or render an opinion on the fairness of the $4.36 offer price. On the other hand, CNL Healthcare Properties' estimated NAV
is based on a robust and detailed process typically conducted no less frequently than annually with the expert assistance of a leading independent advisory and appraisal firm.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• None of CNL Healthcare Properties' directors, executive officers, affiliates or subsidiaries intend to sell
their shares to Comrit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The Comrit offer specifies that any distributions on tendered shares made after May 10, 2023, will be
assigned to them. Therefore, if shareholders accept Comrit's offer they will not receive any potential future distributions. The company's board of directors declared a distribution for the first quarter of 2023, which is anticipated to be
paid before the end of March.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Comrit, in its own words, states that it is " <u>**making the offer for investment purposes and with the intention of making a profit from the ownership of the shares." Further, they are "motivated to establish the lowest price which might be acceptable to shareholders consistent with their objective.** "</u> 

The company's board of directors recognizes that shareholders may elect to accept the Comrit tender offer based on their individual liquidity needs, financial situation, and other factors. These include the suspension of the company's stock redemption plan, the lack of a current trading market for shares, and to a lesser extent, uncertainty related to the broader economy. The company remains actively engaged in its pursuit of strategic alternatives; however, at this time, it believes that market conditions do not support a liquidating transaction before the end of 2023.

Please review the Schedule 14D-9 filed March 21, 2023. For additional information, please contact your sales representative directly or call CNL Client Services at 866-650-0650, option 2.

**FOR BROKER-DEALER AND RIA USE ONLY. Not for general use with the public.** 

See SEC filing for complete details. This information is derived from the issuer's public filings and does not replace or supersede any information provided therein.

Forward-looking statements are based on current expectations and may be identified by words such as *believes, anticipates, expects, may, could* and terms of similar substance, and speak only as of the date made. Actual results could differ materially due to risks and uncertainties that are beyond the company's ability to control or accurately predict, including the amount and timing of anticipated future distributions, estimated per share net asset value of the company's stock and/or other matters. The company's forward-looking statements are not guarantees of future performance. Shareholders and financial advisors should not place undue reliance on forward-looking statements.

<sup>1</sup> The estimated NAV per share is only an estimate based on a snapshot in time and several assumptions and estimates which can be considered inherently imprecise. The NAV is based on numerous assumptions with respect to industry, business, economic and regulatory conditions, all of which are subject to changes. Throughout the valuation process, the valuation committee, our advisor and senior members of management reviewed, confirmed and approved the processes and methodologies and their consistency with real estate industry standards and best practices. 

<sup>2</sup> Distributions are not guaranteed in frequency or amount. Distributions have been and may in the future be paid by borrowings, shareholder proceeds and income. For the year ended Dec. 31, 2022, 100% of regular cash distributions were covered by operating cash flow as defined by GAAP. The company's distribution is subsidized by expense waivers that will be reimbursed to the advisor in the form of restricted stock. For the years ended Dec. 31, 2021, 2020, 2019, Dec. 31, 2018, Dec. 31, 2017, approximately 100%, 100%, 100%, 83%, 91%, respectively, of total distributions were covered by operating cash flow and approximately 0%, 0%, 0%, 17%, 9%, respectively, were funded by offering proceeds. 

CHP-0323-2739969-BD