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Wednesday, 16 February 2011

American Realty Aims to Take Some Properties Public with IPO

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Commercial Real Estate Direct Staff Report

American Realty Capital Advisors, a Jenkintown, Pa., investment manager led by Nicholas Schorsch, is taking a portfolio of 63 net-leased properties public through a REIT.

But unlike its other REIT offerings, which are non-traded, this one, American Realty Capital Properties Inc., will have its shares listed on Nasdaq.

The initial public offering will allow American Realty to provide liquidity to some of its early investors. The 63 properties with 768,730 square feet that the proposed REIT will own are held by 29 entities, some of whose investors include Schorsch and William M. Kahane, co-founder of American Realty. Instead of taking cash for their stakes, they will receive shares of a special class of common shares.

The properties the REIT will own are all net leased to investment-grade credit tenants.

Schorsch and Kahane had formed American Realty in 2007 soon after Schorsch had resigned as president, chief executive and vice chairman of American Financial Realty Trust, a REIT that specialized in buying bank branches and other properties leased to financial institutions.

Initially, they capitalized their investments on a one-off basis, and had raised some $51.1 million of capital through non-public programs that ultimately acquired 192 properties at a total cost of $226.6 million.

Eventually, American Realty started raising capital through the non-traded REIT market and has become among the most active players in that sector. It has nine non-traded vehicles in various stages of marketing through which it is aiming to raise up to $12.5 billion.

The proposed IPO for American Realty Capital Properties is being done as a "best efforts" offering. That is, investment banks that will be hired to raise capital will do so as agents. In other words, they won't buy shares and sell them. Instead, they'll simply market them on the REIT's behalf. American Realty, which has not yet hired investment banks, has set a $12.50/share price. It is aiming to raise a total of $110 million.

The proposed REIT will, in addition to providing liquidity to some of its existing investors, provide American Realty with another menu item to offer prospective investors.

Comments? E-mail Orest Mandzy, or call him at (267) 247-0112, Ext. 211.



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Additional Info

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  • Subject: REITS -general (REITS), Stock/Equity Offerings (IPO)
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Data Digest

 

CMBS DELINQUENCY VOLUME

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CMBS SPECIAL SERVICING VOLUME

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Top Bookrunners Domestic, Private-Label CMBS - 2017
Investment Bank #Deals Vol$mln MktShr%
Goldman Sachs 17.59 11,819.34 13.68
JPMorgan Securities 14.52 10,968.11 12.70
Citigroup 12.04 10,012.71 11.59
Wells Fargo Securities 14.02 9,936.06 11.50
Deutsche Bank 12.55 9,879.74 11.44

 

RCA CPPI

 

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CMBS 2.0 Spreads

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Top CMBS Loan Contributors - 2017
Lender #Loans Vol$mln MktShr%
Goldman Sachs 146.89 11,719.34 13.63
JPMorgan Chase Bank 117.68 10,114.14 11.76
Deutsche Bank 198.48 9,689.97 11.27
Morgan Stanley 166.18 8,539.78 9.93
Citigroup 199.05 8,088.24 9.41

 

 

 

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