REIT sponsor controlled by Nicholas Schorsch has its first liquidity event of the year, selling shares of Global Net Lease Inc. on the New York Stock Exchange.
American Realty Capital, the nontraded real estate investment trust sponsor controlled by embattled REIT czar Nicholas Schorsch, saw its first liquidity event of the year Tuesday.
Global Net Lease Inc., formerly known as American Realty Capital Global Trust Inc., began trading on the New York Stock Exchange. At the same time as the listing, the REIT, with the ticker symbol GNL, launched a tender offer to purchase up to $125 million of its shares of common stock at $10.50 per share. At 2 p.m., shares were trading at $9.36.
Launched in 2012, Global Net Lease was sold for $10 per share. The REIT has $2.4 billion in assets and kicks off an annual distribution of 71 cents per share, according to filings with the Securities and Exchange Commission.
Mr. Schorsch is the former chairman of the board and CEO of the REIT and is the majority owner of its advisor, AR Capital, the formal name for ARC. He resigned as CEO of ARC Global October 22 and was replaced by Scott Bowman.
His resignation was days before it was revealed that another REIT he controlled, the giant net lease REIT American Realty Capital Properties Inc., with the ticker ARCP, had intentionally not corrected a $23 million accounting error over the first half of 2014. Mr. Schorsch subsequently resigned as chairman and CEO of a number of nontraded REITs and companies he controlled.
According to ARCP's most recent quarterly report, the SEC launched an investigation into the company, while the U.S. Attorney's office contacted the company about the matter. William Galvin, the Secretary of the Commonwealth of Massachusetts has also subpoenaed the company.
Mr. Schorsch's reputation first rose for his ability to create such listings or mergers as he had on Tuesday, known as “liquidity events,,” much sooner than other companies in the industry.
