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American Realty Capital Trust Inc., a newly formed company that will operate as a non-traded REIT, plans to kick off acquisition activities as a public company with a big purse of as much as $1.5 billion by selling as many as 150 million shares of common stock.
American Realty Capital, which filed documents for the IPO with the SEC yesterday, is being spearheaded by chairman & CEO Nicholas Schorsch, founder and former CEO of American Financial Realty Trust; Schorsch resigned from American Financial by mutual agreement with the board of trustees in August 2006. American Financial went public at one-year-old in 2003 and raised approximately $800 million, making it the second largest REIT IPO at the time. The REIT focused mainly on the acquisition of properties leased by financial institutions, and American Realty's focus will be similar but apparently, more broad.
"The focus of this REIT is 100 percent occupied, net-leased, single-tenant retail properties typically with leases for 10- to 25-year terms to investment grade or highly creditworthy tenants," Schorsch told CPN today. Included on the target list are pharmacies, convenience stores and other retail outlets such as FedEx centers. "We also have the ability for single-tenant office," Schorsch said. Most of the properties will be free-standing, and many of the purchases will involve sale-leaseback deals. The REIT, which will not develop any buildings, will seek assets across the country. "Our acquisitions will be geographically diverse, which allows for protection from downturns in a specific market," noted Schorsch.
In addition to offering as many as 150 million common shares at $10 per share, American Realty will offer, according to the SEC filing, "up to 25 million shares pursuant to our distribution reinvestment plan at a purchase price equal to the higher of $9.50 per share or 95 percent of the estimated value of a share of our common stock." Barring extensions, the shares will be offered for two years from the effective date of the offering.
This material does not constitute an offer to sell nor a solicitation of an offer to buy any securities described herein or otherwise. Only a prospectus for a specific securities offering makes such an offer. In that regard, the use of this material is authorized only when it is accompanied or preceded by a prospectus. Further, all information contained in this material is qualified by the terms of a current Prospectus of the offering of securities to which it relates, if any.
This material may contain forward-looking statements that involve assumptions, uncertainties and risks, some of which are set forth below. These statements are not guarantees and should not be regarded as representations that the results or conditions described in such statements, or that our objectives and/or plans, will be achieved.
A real estate investment program offering is subject to the following Risks: The failure to qualify, or maintain the requirements, to be taxed as a REIT would reduce the amount of income available for distribution and limit a REIT's ability to make distributions to its stockholders. No public market initially exists for a REIT's shares of common stock, and one may never exist for this or any other such type of real estate program. Securities are being offered on a best efforts basis. These are speculative securities and as such involve a high degree of risk. There are substantial conflicts among an offering and its sponsor, advisor, dealer manager and property manager. There is no assurance that the value of the real estate will be sufficient to return any portion of investors' original capital. Operating results will be affected by economic and regulatory changes that have an adverse impact on the real estate market and we cannot assure you that there will be growth in the value of the properties.
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Realty Capital Securities, LLC, Three Copley Place, Suite 3300, Boston, MA 02116, T 877-373-2522
American Realty Capital Trust, Inc., 405 Park Avenue, 15th Floor, New York, NY 10022, T 212-415-6500
American Realty Capital Advisors, LLC, 106 York Road, Jenkintown, PA 19046, T 215-887-2189
Realty Capital Securities, LLC (Member FINRA/SIPC), an affiliate of American Realty Capital Trust, Inc., is the dealer-manager for American Realty Capital Trust, Inc. Investors should consider a fund's investment objectives, risks, charges and expenses before investing. The Prospectus contains this as well as other important information. Carefully read and consider the information contained in the Prospectus before you invest or send money. The information on this site must be read in conjunction with the Prospectus in order to fully understand all the implications and risks of the offering of securities to which it relates. A copy of the Prospectus must be made available to you in connection with this offering.
Properties depicted in the photographs are of assets held in either American Realty Capital's current offerings or past real estate investment programs sponsored by American Realty Capital.
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