Nontraded Schorsch REIT soon to list on public exchange

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.
JAN 16, 2014
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.

Latest News

Maryland bars advisor over charging excessive fees to clients
Maryland bars advisor over charging excessive fees to clients

Blue Anchor Capital Management and Pickett also purchased “highly aggressive and volatile” securities, according to the order.

Wave of SEC appointments signals regulatory shift with implications for financial advisors
Wave of SEC appointments signals regulatory shift with implications for financial advisors

Reshuffle provides strong indication of where the regulator's priorities now lie.

US insurers want to take a larger slice of the retirement market through the RIA channel
US insurers want to take a larger slice of the retirement market through the RIA channel

Goldman Sachs Asset Management report reveals sharpened focus on annuities.

Why DA Davidson's wealth vice chairman still follows his dad's investment advice
Why DA Davidson's wealth vice chairman still follows his dad's investment advice

Ahead of Father's Day, InvestmentNews speaks with Andrew Crowell.

401(k) participants seek advice, but few turn to financial advisors
401(k) participants seek advice, but few turn to financial advisors

Cerulli research finds nearly two-thirds of active retirement plan participants are unadvised, opening a potential engagement opportunity.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today’s choppy market waters, says Myles Lambert, Brighthouse Financial.

SPONSORED Beyond the dashboard: Making wealth tech human

How intelliflo aims to solve advisors' top tech headaches—without sacrificing the personal touch clients crave