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New York, NY - American Realty Capital Trust, Inc. ("ARCT" or the "REIT") acquired a fee ownership interest in a Walgreens retail location on July 17, 2009, 100% leased under a triple-net lease structure to Walgreen Co. (NYSE: WAG). WAG is rated A+ by Standard & Poor's.
The Walgreens store contains 14,850 square feet and is located in Sealy, TX, a suburban market outside of Houston. The purchase price, excluding transaction costs, is approximately $3.8 million. The primary lease term is twenty-five years, having commenced June 18, 2007. The base annual rent is $310,000 (resulting in a capitalization rate of 8.12%). In connection with this acquisition, ARCT entered into a ten-year fixed-rate financing agreement and received proceeds of approximately $1.6 million. This financing represents approximately 40% of the total purchase price and bears interest at an initial rate of 6.55%.
"We continue to demonstrate our commitment to ARCT's core strategy to acquire only single-tenant, freestanding, properties, net leased on a long-term basis to credit worthy tenants." Following this acquisition and the Fed Ex Freight Facility purchased earlier this month, over 90% of the REIT's rent is received from investment grade tenants. This investment is a solid addition to our pharmacy portfolio as we further enhance our overall portfolio diversification," said Nicholas S. Schorsch, CEO of American Realty Capital Trust. The transaction reduces overall portfolio leverage as we move toward our goal of approximately 55%, while we continue to fully cover distributions from funds from operations.
American Realty Capital Trust, Inc., which invests in single-tenant, freestanding commercial real estate net leased long term principally to investment grade tenants, including this acquisition, will own a portfolio of 94 properties with a total purchase price of approximately $186 million, excluding acquisition related costs. ARCT anticipates rental revenues should allow the REIT to continue to cover fully distributions from funds from operations and be accretive to its annualized 6.7% distribution, paid monthly.
American Realty Capital is a real estate finance and investment firm formed by Nicholas S. Schorsch and William M. Kahane. As CEO and board member, respectively, the two were behind the growth of American Financial Realty Trust, where they acquired over 1,500 properties valued at more than $5 billion. In the last five years, ARC's executive team has collectively negotiated and closed on over $7 billion of bank branch and net-leased real estate. ARC sponsors American Realty Capital Trust, Inc., a publicly-registered, non-traded REIT acquiring single-tenant, freestanding properties net leased long term to investment grade and creditworthy tenants. Realty Capital Securities, member FINRA, SIPC, is the dealer-manager for ARCT.
This press release may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Actual results and trends could differ materially from those set forth in such statements due to various factors.
To arrange interviews with American Realty Capital executives, please contact Tony DeFazio at 484-532-7783 or tony@defaziocommunications.com.
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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