Daily market intelligence on mortgages, equity raising, investment sales, and CMBS.

Wednesday, 16 February 2011

American Realty Aims to Take Some Properties Public with IPO

Written by 
Rate this item
(0 votes)

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.


“The Weekly”

“The Weekly” is Commercial Real Estate Direct’s PDF newsletter, sent to subscribers every Friday morning. With over 100 news stories published on Commercial Real Estate Direct each week, “The Weekly” features the top stories in commercial real estate that industry participants need to know first. “The Weekly” also contains:

  • Breaking mortgage, CMBS, and REIT news

  • Quarterly league tables with rankings of B-piece buyers, book runners, and lenders

  • Industry moves and changes in “The Insider“

Additional Info

  • Syndicate to Realpoint: No
  • Subject: REITS -general (REITS), Stock/Equity Offerings (IPO)
Read 943 times

Data Digest







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




cppichart FP



CMBS 2.0 Spreads


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





  • Challenging Retail Environment Weights on REITs
    Mixed economic news is weighing on retail markets, pushing REIT performance down in 2015. This week, the National Retail Federation announced that back-to-school spending is expected to be down 9.3% in 2015. This news came on the heels of a report from the Commerce Department stating that retail sales declined 0.3%...
  • US REITs Feeling Effects from Turmoil in Greece and China
    International economic forces have taken center stage this week, affecting both US stock markets and REITs. The crash in the Chinese stock market and ongoing concerns about the future of Greece in the eurozone drove markets down during the first half of the week. REITs fared better than the overall market...

  • What Does Increased Construction Mean for Apartment REITs?
    REITs so far this year have raised $17.1 billion of capital through the sale of unsecured notes, bringing the total raised over the past two and a half years to just more than $75 billion. That’s more than they raised during the previous five years. The massive volume shouldn’t be a surprise as it comes while the yield from 10-year Treasury bonds, the benchmark...
shouldn’t be a surprise as it comes while the yield from 10-year Treasury bonds, the benchmark against which most REIT’s price their bonds