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JENKINTOWN, PA-American Realty Capital Trust, a company formed by Nicholas Schorsch, the founder and former CEO of American Financial Realty Trust, has filed for an initial public offering of 150 million shares that could raise up to $1.5 billion before expenses. Referring to the SEC filing and a “quiet phase” following the SEC registration, Schorsch reiterates information in the filing and tells GlobeSt.com ARC will operate as a “non-traded REIT, a public company with full transparency, sold through investment advisories rather than through the stock exchange.”

As GlobeSt.com previously reported, Schorsch left locally based AFR “by mutual agreement” with its board of trustees on Aug. 17, 2006, following a precipitous drop in AFR shares that year that led to a strategic review and his immediate replacement. ARC, also based here, is a joint venture with William Kahane, who left AFR with Schorsch, and New York City-based GF Capital Management & Advisors LLC. It was formed in 2006, and Schorsch says, it “has been buying hundreds of millions in assets over the past year.”

Unlike AFR, which focuses on sale-leasebacks with financial institutions, ARC’s focus is primarily on retail or distribution facilities, but does not preclude “some office, occupied by a single tenant,” Schorsch says. Acknowledging that the strategy is similar to AFR’s he says, “we’ve expanded and broadened the platform of what we’ve done with AFR. Our focus is on the strategic niche of creditworthy, single-tenant properties net leased for 10 to 25 years, more like 15 to 25 years, which provides investors with earnings growth, great stability and geographic diversity.”

The properties are from “nationally significant names,” he adds, naming CVS, FedEx, Lowe’s and Wal-Mart as examples, and says they are freestanding assets, acquired primarily from the original company or the developer of the property. According to the ARC website, that target also includes restaurants, next to which Starbucks is mentioned; movie theater sales-leasebacks, corporate headquarter sales-leasebacks, convenience stores, gas stations and ground leases.

According to the SEC filing, the primary offering of ARC shares would be priced at $10 per share to yield net proceeds of $9 per share, before expenses. Schorsch says the registration process normally takes between four and six months.

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