American Realty raises more than any other nontraded REIT
Among nontraded real estate investment trusts, American Realty Capital Properties reigns supreme, the Wall Street Journal reported.
The firm, based at 405 Park Avenue, raised $3.6 billion over the first six months of the year from its nine unlisted REITs, including New York Recovery REIT. Last year, the REITs raised $2.6 billion, again putting it ahead of the competition.
Some have questioned how effectively CEO Nicholas Schorsch can invest large amounts of money – and whether acquiring properties with lower credit-quality tenants is too risky, if another recession hits.
“I’m somewhat suspicious of these guys,” David Bax, a financial planner in Las Vegas, told the Journal. “When they are bringing in that much money over a short period, I wonder how careful they are investing it.”
Schorsch told the newspaper he has never had a single default. The firm’s biggest REITs own about 2,800 properties and have produced double-digit returns since 2011, the report said.
Earlier this month, SL Green agreed to sell off a 347,000-square-foot, fully leased office property at 333 West 34th Street for $220 million to a unit of American Realty Capital. The commercial property investor also bought 447 properties mostly used by fast food restaurants from GE Capital for $774 million, as previously reported. It closed its $2.2 billion deal to buy CapLease in May. [WSJ] – Mark Maurer