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Schorsch's REIT to go public seeking to repeat past win

September 14, 2007
Philadelphia Business Journal

The founder of American Financial Realty Trust, who has established a new company, is planning for an initial public offering with the potential to raise $1.5 billion.

Nicholas Schorsch formed American Realty Capital Trust Inc., a new real estate investment trust based in Jenkintown, and intends to sell up to 150 million common shares, according to Securities and Exchange Commission documents filed Sept. 10. He founded and ran American Financial, also based in Jenkintown. That REIT focused on buying properties from financial institutions and leasing them back to the banks. That company went public in June 2003, raising more than $800 million in what was then one of the largest IPOs for a REIT.

Schorsch, 46, resigned from American Financial in August 2006, forming American Realty. So far, the new company has invested $242 million into 52 properties totaling 1.5 million square feet, according to SEC documents. It has $500 million in properties under contract that are expected to close by next April.

American Realty departs from Schorsch's earlier business model of buying properties leased to financial institutions. The new company concentrates on retail, office and industrial properties with long-term leases of 10 years or more and high-quality tenants. For example, the retail properties will be leased to prominent, national tenants such as convenience stores, drug stores, restaurants and "big box" retailers. The company will buy properties across the United States and in Puerto Rico.