Great Wolf chief executive John Emery says the transaction allows the company to "recycle investment capital for future growth." The company expects $98.6 million in total proceeds from the transaction. Emery adds that the deal provides Great Wolf with a partner that is a significant, long-term investor in lifestyle real estate and enhances the Great Wolf Lodge brand value with extended management and licensing contracts.

CNL's COO Charlie Muller says the investment was made because the indoor waterpark resort concept is a young and growing segment of the leisure and lifestyle industry," said CNL Income Properties' chief operating officer Charlie Muller. Indeed, according to US Realty Consultants, there were just six indoor waterpark resorts with approximately 1,400 rooms operating in the US and Canada in 1994; by 2004, there were 60 such resorts with more than 15,000 rooms.

"Compared to non-waterpark resorts, this type of property typically reports higher occupancy and average daily rates [ADR], with as much as 50% of ADR coming from non-room revenue," Muller says. "These historically strong metrics make this partnership particularly attractive to our investors."