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New York, NY, September 13, 2011 –American Realty Capital (“ARC” or the “Company”) announced today that it has repaid investors in full a total of $30.6 million comprising two note programs: ARC Income Properties, LLC (“ARCIP”) and ARC Income Properties III, LLC (“ARCIP III”). These notes were repaid from proceeds raised in connection with the successful initial public offering for American Realty Capital Properties, Inc., which was completed September 7, 2011, selling 5,580,000 shares of common stock for gross proceeds of $69,750,000. American Realty Capital Properties, Inc. (“ARCP”) trades on the NASDAQ Capital Market under the symbol “ARCP”. In May of this year, the Company paid off at par a $13 million note program, ARC Income Properties II, LLC. In December 2010, ARC repaid in full with a profit its investors in ARC Growth Fund, an equity investment vehicle.
“We could not be more pleased with the success of these two note programs,” stated Nicholas S. Schorsch, Chairman and CEO of American Realty Capital. “Our investors entrusted us with their capital, and they have earned the current income together with the timely repayment of principal they expected. We continue to build trust among our investor base.”
ARC Income Properties, LLC (“ARCIP”) was a three-year, unsecured note program paying monthly interest in excess of 9% annually from rents from a portfolio of 62 bank branches leased to Citizens Bank. Approximately one-third of the ARCIP investors elected to participate in ARCP’s discounted share program, where they were afforded the opportunity to reinvest in ARCP common shares at a discount to the IPO price.
ARC Income Properties III, LLC (“ARCIP III”) was a three-year unsecured note program paying monthly an annualized coupon of 8.5% from rents from a newly constructed distribution facility leased to Home Depot USA, Inc. Approximately one-third of the ARCIP III note holders elected to participate in ARCP’s discounted share program, in which these investors were afforded the opportunity to reinvest ARCP common shares at a discount to the IPO price.
“Earlier this year,” observed Mr. Schorsch, “ARC paid off a third note program, ARC Income Properties II, LLC,” a three-year unsecured vehicle distributing annually 9.0% from rents from a portfolio of 50 bank branches leased to PNC Bank. The total outstanding balance of approximately $13 million was repaid in full in May 2011.
Investors in another ARC fund, ARC Growth Fund, LLC, have also received a complete return of capital plus a profit. ARC Growth was a non-public real estate program formed to acquire vacant bank branches and opportunistically reposition and sell such properties. Total gross proceeds of approximately $8 million, along with debt capital, were used to acquire a portfolio of these branches. By December 2010, investors were returned 100% of their invested capital, plus a 5% return on that capital.
“As market conditions deteriorated, we found this investment strategy became severely challenged. We were satisfied to have been able to return capital fully, plus a modest return on that investment,” said Brian Block, Chief Financial Officer of American Realty Capital.
American Realty Capital Properties, Inc. is a newly organized Maryland corporation that intends to qualify as a Real Estate Investment Trust and is focused on owning and acquiring single tenant freestanding commercial real estate properties subject to medium-term net leases with high credit quality tenants.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
The statements in this press release that are not historical facts may be forward-looking statements. These forward-looking statements involve risks and uncertainties that could cause the outcome to be materially different.
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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 (Member FINRA/SIPC), is the dealer-manager for all stated proprietary offerings, an affiliate. Realty Capital Securities, LLC, Three Copley Place, Suite 3300, Boston, MA 02116, T 877-373-2522
Investors should consider a fund's investment objectives, risks, charges and expenses before investing. This sales and advertising material is neither an offer to sell nor a solicitation of an offer to buy any securities. Such an offer can only be made by the Prospectus. This material must be read in conjunction with the current Prospectus for the respective offering in order to fully understand all of 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. You must meet suitability standards in order to buy any securities described herein. Refer to the details in the applicable Prospectus. The achievement of any or all goals of any offering that may be described herein is not guaranteed. Risks for these investment program offerings typically include: no public market currently exists, and one may never exist; there is no assurance that the value of the holdings will be sufficient to return any portion of the investors original capital invested in any offering of such securities; substantial fees and expenses are typically paid to an offerings advisor, its affiliates and participating broker dealers; assets acquired with leverage have risks including loss of value and limits on flexibility needed if there are changes in the business or industry. An investment in any of these investment programs should be made only after careful review of the related prospectus. All information contained in this material is qualified by the terms of applicable Prospectus.
Other than as specifically indicated on the respective page, 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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