Nontraded REIT signals liquidity on the way

Phillips Edison-ARC Shopping Center REIT Inc. has hired advisers to evaluate alternatives

Jul 25, 2014 @ 12:21 pm

By Bruce Kelly

shopping center, nicholas schorsch, REIT, nontraded REIT, liquidity event
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Another nontraded real estate investment trust has signaled it is getting in line for a liquidity event.

Phillips Edison-ARC Shopping Center REIT Inc., with $1.8 billion in assets, said on Thursday it had tapped Bank of America Merrill Lynch and RCS Capital as advisers for the REIT's “evaluation of possible strategic alternatives.” RCS Capital is the the investment bank and capital markets group of Realty Capital Securities.

(Don't miss: Liquidity events heating up REIT market this summer)

Launched in 2010, the REIT is sponsored by both Phillips Edison & Co., an investor in shopping centers, and AR Capital, one of the real estate companies controlled by American Realty Capital chairman and chief executive Nicholas Schorsch. The REIT is currently valued at $10 per share.

When a nontraded REIT hires investment banks to explore strategic alternatives, it is a signal that the REIT is considering a merger or listing on a stock exchange.

After a slow start in the beginning of the year, which saw two listings of nontraded REITs in April, June and July have seen a flurry of mergers and listing activity by nontraded REITs and related companies.

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