Vereit, the struggling real estate investment trust formerly known as American Realty Capital Properties, continues to make baby steps towards normalcy. The company made $337.8 million in revenue in the first quarter of 2016, it announced Thursday, narrowly beating investor expectations and sending its share price to the highest level in almost a year.
The REIT, which primarily owns retail and restaurant properties across the U.S., sold $295.2 million in assets during the quarter, including several Red Lobster chain restaurants. It managed to slightly reduce its debt load to 6.7 times gross earnings, down from 7 in the previous quarter and 7.4 last summer.
American Realty Capital Properties, part of the REIT empire founded by Nicholas Schorsch, abruptly fell from grace in late 2014 after it admitted to intentionally concealing accounting errors that overstated its earnings. Schorsch was later forced to cut all ties to the publicly traded company, which had been nominally separate from his firm American Realty Capital.
In March 2015, ARCP hired Glenn Rufrano, former New York head of Cushman & Wakefield, as its new CEO. Rufrano renamed the company and embarked on a series of asset sales to pay off its mountain of expensive short-term debt.
On the earnings call, an analyst asked Rufrano when the REIT would switch from disposition to acquisition mode. “We don’t know when that is but we know how to gauge it,” Rufrano said. “There will be a point in time when our cost of capital gets adequate so that we can get on the offense.”