Marcato to ARCP: Not So Fast

SAN FRANCISCO—Is American Realty Capital Properties growing too rapidly? Marcato Capital Management, one of the REIT’s largest shareholders, appears to think so. Marcato on Monday sent a letter to Leslie Michelson, ARCP’s lead independent director, citing concerns over what San Francisco-based Marcato sees as “value destroying activity.”

Marcato’s letter, which was made public Tuesday over the signature of Marcato founder and managing partner Richard McGuire, expresses frustration at ARCP’s recent equity issuance at $12 per share.  “We found it disturbing that the company would issue equity after repeatedly stating publicly that it had no intention to do so, and at a price that it has repeatedly acknowledged undervalues the shares,” McGuire writes. “Management could not have been clearer about this point on recent conference calls.”