After Merging with Cole Capital and Rapidly Amassing $30B In Assets, Net-Lease REIT Won't Make Any More Mergers Or Issue More Equity Capital In 2014, Schorsch Tells Shareholders
American Realty Capital Properties CEO Nicholas Schorsch will turn over his role as CEO position to ARCP President David S. Kay, according to a company memo to stockholders Friday.
Kay, who became president of the American Realty Capital (Nasdaq: ARCP
) just six months ago, takes over as CEO on Oct. 1.
"This transition will allow me to focus on long-term and strategic initiatives, while David will drive day-to-day operations and investor communications for the company. The board and I are extremely pleased with David’s leadership and accomplishments, and this transition will allow us to effectively grow the company as a team," Schorsch wrote in the letter.
Schorsch also said that ARCP will execute no further merger activity and raise no more equity capital in 2014, focusing on acquiring more core net-lease assets, selling less desirable properties and recycling the capital to grow the company.
San Francisco-based investment manager Marcato Capital Management, a major shareholder of American Realty, recently took the company to task for a recent $1.2 billion equity issuance and its string of mergers and acquisitions, culminating in the May 16 announcement that ARCP and sponsor Golden Gate Capital signed a $1.5 billion sale-leaseback transaction for 500 Red Lobster restaurant locations.
Last month, ARCP sold its shopping center portfolio to Blackstone Real Estate Partners VII, completing the culling of its multi-tenant assets, completing the process of becoming a pure-play net lease REIT.
On May 16, ARCP and sponsor Golden Gate Capital announced a $1.5 billion sale-leaseback transaction for 500 Red Lobster restaurant locations.
ARCP announced in its first-quarter conference call on May 8 that acquisitions would far exceed the market’s expectations. totaling $3.5 billion for the first six months of the year.
"The transformation of ARCP has been dramatic, and we are very pleased with what we have built," Schorsch wrote. "With the ARCP balance sheet and the Cole Capital portfolios, we manage nearly $30 billion of assets and have established the company as a global leader for pure-play net lease."
Schorsch also announced that William M. Kahane and Edward M. Weil, Jr. are resigning from the ARCP board of directors "in our continuing effort to enhance corporate governance." Kahane and Weil, Jr. will focus on their roles at Schorsch's broker-dealer RCS Capital.