TwoREITs linked to Nick Schorsch's AR Global are mulling a plan to purchase fivenontraded REITs also linked to the firm, in a consolidation play that wouldbring more assets under long-term advisory agreements with Schorsch's firm,Investment News reported April 26.
Underthe plan, American Finance TrustInc. and Global NetLease Inc., which are both managed by affiliates of AR Global,would purchase five other real estate companies that AR Global also manages,the publication reported, citing two sources with knowledge of thenegotiations. Schorsch and William Kahane are the controlling partners of ARGlobal, which was formerly known as AR Capital.
Schorsch,one of the dominant personalities in the nontraded REIT space in recent years,has kept a low public profile since an accounting scandal at American RealtyCapital Properties Inc. — now known as VEREIT Inc. — led to his from a host of companies wherehe once held positions.
Thepotential transactions would put more assets under the roof of American FinanceTrust and Global Net Lease, which have 20-year advisory contracts that areharder to break than the contracts at the other companies, Investment Newssaid, citing unnamed industry sources and former AR Global employees. As aconsequence, AR Global would emerge from the moves with a larger source of feerevenue over a long period of time, the sources said.
Themoves could also make the two consolidated REITs more attractive takeovertargets, the publication said.
Inparticular, the plan under consideration would call for American Finance Trustto buy four AR Global-managed REITs: Healthcare Trust Inc., , and ARCHealthcare Trust III Inc.
GlobalNet Lease would acquire American Realty Capital Global Trust II Inc.
Theacquisitions have been discussed for the past four to six weeks and would payinvestors in cash and stock, Investment News reported.
HealthcareTrust Inc. said April 22 that its board had initiated a strategic , and was in the processof hiring a financial adviser, to consider a range of options aimed atmaximizing shareholder value.