Schorsch’s AR Global planning $10.5B REIT consolidation

Mergers would see two of firm's REITs acquire five other AR Global entities
April 28, 2016 09:45AM

Nicholas Schorsch

From the New York website: AR Global, the scandal-hit real estate investment firm led by Nicholas Schorsch, is reportedly planning to consolidate more than half a dozen various real estate investment trusts under its management.

The move would see two of AR Global’s REITs, American Finance Trust and Global Net Lease, acquire five other real estate companies also managed by Schorsch’s firm, formerly known as American Realty Capital.

Combined, the various REITs hold almost $10.5 billion in assets, according to InvestmentNews.­

While the various mergers need to be approved by each REIT’s board, the deals would bring more assets under the management of the two acquiring REITs, which each have “difficult to break” 20-year advisory contracts with AR Global, InvestmentNews reported.

While AR Global also sponsors the REITs that would be acquired by American Finance Trust and Global Net Lease, it does not have similarly iron-clad, 20-year advisory agreements with those five companies.

As such, the mergers would bring a larger pool of management fee revenue under AR Global over a longer period of time.

AR Global and its various holdings were thrown into disarray by an accounting scandal toward the end of 2014 that saw Schorsch resign from the boards of more than a dozen affiliates managed by his firm.

Last year, the company agreed to a $378 million acquisition by private equity giant Apollo Global Management that was later called off.

A former bodyguard and driver of Schorsch’s filed suit against AR Global last week, claiming the company failed to pay him overtime and discriminated against his sleep apnea disability. [InvestmentNews]Rey Mashayekhi