Rufrano May Take Reins at ARCP

PHOENIX—A commercial real estate veteran with a reputation as a “fixer” is reportedly the front-runner to take the reins at American Realty Capital Properties. Citing sources familiar with the search process, the Wall Street Journal reported Thursday evening that Glenn Rufrano has emerged as ARCP's lead candidate to succeed David S. Kay, who resigned as CEO this past December. Rufrano tells GlobeSt.com he cannot comment on the WSJ report; a spokesman for ARCP did not respond to requests for comment by deadline Friday afternoon.

The net lease REIT has been without a permanent CEO since this past Dec. 15, when Kay and president/COO Lisa Beeson resigned. Their departures came on the heels of heels of co-founder Nicholas Schorsch's Dec. 12 resignation as executive chairman, which was made public on Dec. 15. William Stanley, the lead independent director of ARCP's board, has served as interim CEO and chairman since then.

During a conference call Monday, Stanley said finding a new CEO was ARCP's top priority. The call coincided with the company's filing of restated earnings reports for 2013 and 2014; the disclosure in late October of accounting errors that had been deliberately concealed set in motion a series of events that culminated with the departures of the REIT's senior management team. ARCP stock has been down about 19% since the Oct. 29 disclosure, the WSJ reported.

Rufrano's background would seem to position him as a likely fit for the CEO's chair at ARCP. Now chairman and CEO of O'Connor Capital Partners, an investment, management and development firm he helped found in 1983, he succeeded Bruce Mosler as CEO of Cushman & Wakefield in 2010. Previously, he spent two years as CEO of Australia-based Centro Properties Group, and between 2000 and 2007 he was CEO of New Plan Excel Realty Trust, a shopping center REIT that traded to Centro for $6.2 billion in 2007.

Paul Adornato, an analyst with BMO Capital Markets, told the WSJ that Rufrano has a strong reputation as a turnaround specialist. During Rufrano's tenure with New Plan Excel, “he became known as a fixer and a straight-shooter with regard to righting the ship at a troubled entity,” Adornato told the WSJ.

ARCP arguably qualifies as a troubled entity, with the departure of its senior management and depressed stock prices only two of the issues facing it. Since the accounting irregularities were revealed, many financial advisers have suspended sales of non-traded REITs sponsored by ARCP's Cole Capital Advisors Inc. subsidiary. Further, ARCP is being investigated by the SEC and the US Department of Justice as well as the attorneys general of New York State and Massachusetts; the company said Monday it's cooperating with all of these investigations.