American Realty Capital Trust Goes Public, Lists on NASDAQ

February 17, 2012

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After spending a year considering strategic alternatives to maximize shareholder value, American Realty Capital Trust Inc., the flagship REIT of investment advisory firm American Realty Capital, has decided to take on the form of a self-administered REIT.

February 17, 2012
By Barbra Murray, Contributing Editor

A Walgreens in Sealy, Texas, one of the properties in ARCT's portfolio.

After spending a year considering strategic alternatives to maximize shareholder value, American Realty Capital Trust Inc., the flagship REIT of investment advisory firm American Realty Capital, has decided to internalize the management services provided by its advisor, American Realty Capital Advisors L.L.C. With the internalization, ARCT will take on the form of a self-administered REIT.

Additionally, a company spokesperson told Commercial Property Executive, “The board of directors decided it was in the best interest of the shareholders to list.” Pending completion of the process, ARCT’s common stock will be listed on the NASDAQ Global Select Market.

Before settling on internalization, ARCT explored a few options for maximizing shareholder value, including merging with a listed third party or selling the portfolio. ARCT’s 15.6 million-square-foot national portfolio consists of single-tenant and freestanding retail, industrial and office assets primarily leased to creditworthy tenants. Additionally something can be said of the group of properties that can rarely be said about most commercial real estate portfolios: it is 100 percent occupied.

“The timing is right for a publicly-traded, triple-net lease REIT,” the spokesperson noted. The timing, simply put, is all about yield.

“Investors are hungry for income and yield and they’re looking for high-yielding properties with corporate tenants,” he said. “Capital rates are at cyclical highs, if not historic highs, and interest rates are at historic lows, and that is another reason why management has decided to take the company public.”

ARCT also plans a tender offer of shares of common stock from stockholders valued between $200 million and $250 million. The company will fund the offer through the use of cash on hand and funds drawn under its unsecured revolving credit facility with RBS Citizens N.A.