NEW YORK CITY—Along with reporting strong quarterly results,American Realty Capital Properties' second-quarterearnings call Tuesday offered a peak under the hood of one of thehighest-performance muscle cars in the REITsector. To hear company president David S. Kaytell it, though, the mystery of the net leasepowerhouse's success is no mystery.

Kay, who came aboard as ARCP's president last November and soonwill succeed Nicholas Schorsch as its CEO, toldinvestors on Tuesday's call that he has spent a great deal of timewith the investment community and research analysts over the pastseveral months. “I have been asked hundreds of questions, and manyhave expressed a sense of incredulity: namely, how is thispossible?” he said. “For example, I am often asked how a company ofour size can consistently invest in properties with cap ratesmeaningfully better than our competitors. There is no alchemy here,I assure you.”

In part, said Kay, “Our ability to invest at prices better thanour peer groups results from our origination team being the largestin in the industry. We see and evaluate a very large volume ofproperties, and our sheer size virtually assures us that we seeevery marketed transaction, a large number of off-market deals andall the largest sales that fit our strategy.”