Nontraded Schorsch REIT soon to list on public exchange

$1.7B American Realty Capital Health Care Trust in first rank of REITs set to be traded publicly

Dec 9, 2013 @ 12:15 pm

By Bruce Kelly

The $1.7 billion American Realty Capital Healthcare Trust Inc., headed by REIT mogul Nicholas Schorsch, will list its common stock on a national stock exchange in one of the first of what one analyst expects to be up to $20 billion of liquidity events of nontraded REITs over the next two years.

Kevin Gannon, president of investment bank Robert A. Stanger & Co. Inc., said ARC Healthcare Trust's listing would be, along with American Realty Capital Trust IV Inc. and Corporate Property Associates 16 Global Inc., the first to kick off the coming tide of listings of nontraded real estate trusts.

“And there's more coming,” said Mr. Gannon. “Over next two years, and maybe sooner if the financial markets stay healthy, $20 billion of deals are coming to list.”

The board of ARC Healthcare Trust said Friday it intended to begin the process to list its common stock on an exchange under the symbol HCT. It expects to provide more information about the listing in the next few weeks. The REIT earlier had said it was going to examine its long-term, strategic alternatives. Mr. Schorsch is chairman and chief executive of the REIT.

Mr. Gannon said the nontraded REIT sponsors who have performed well will be rewarded. If a REIT lists above its initial offering price, which is typically $10 per share, the REIT's sponsor has a 50% chance of a client recycling cash and investing in a new offering, Mr. Gannon said. If a REIT lists significantly below its offering price, clients are likely to reinvest with the same sponsor only 10% to 20% of the time, he said.

The rosy outlook for REIT listings comes after a strong 2013 for the product. This year saw six listings of nontraded REITs that originally raised $16.9 billion in equity, Mr. Gannon said. In total, the industry expects to raise a record $20 billion in 2013.


What do you think?

View comments

Recommended for you

Sponsored financial news

Featured video


The #MeToo movement and the financial advice industry

Attendees at the Women to Watch luncheon commend the #MeToo movement for raising awareness about the issue of sexual harassment and bringing women together.

Latest news & opinion

DOL fiduciary rule likely to live on despite appeals court loss

Future developments will hinge on whether the Labor Department continues the fight to remake the regulation its own way.

DOL fiduciary rule: Industry reacts to Fifth Circuit ruling

Groups on both sides of the fiduciary debate had plenty to say.

Fifth Circuit Court of Appeals vacates DOL fiduciary rule

In split decision, judges say agency exceeded authority.

UBS, after dumping the broker protocol, continues to see brokers come and go

The wirehouse has seen 14 individuals or teams leave and five join for a net loss of $2.4 billion in AUM

Merrill vets ready to recharge breakaway recruiting efforts

After regrouping in wake of broker-protocol exits, Snowden Lane Partners is ready to recruit wirehouse brokers and RIAs.


Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting It'll help us continue to serve you.

Yes, show me how to whitelist

Ad blocker detected. Please whitelist us or give premium a try.


Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print