Skip to content

American Realty Capital Healthcare Trust III Announces Review of Strategic Alternatives

American Realty Capital Healthcare Trust III, Inc., a publicly registered, non-traded real estate investment trust, announced that its board of directors has initiated a review process to identify, examine, and consider a range of strategic alternatives.

The board established a special committee comprised of the board’s independent directors to conduct a review of strategic alternatives and address potential conflicts of interest. The committee has engaged SunTrust Robinson Humphrey, Inc. as financial advisor and has retained Shapiro Sher Guinot and Sandler, P.A. as special legal counsel in connection with such strategic review process. The board has not made a decision to enter into any transaction at this time.

Last week, Healthcare Trust, Inc. (formerly known as American Realty Capital Healthcare Trust II) announced that it is also exploring a range of strategic alternatives.

Industry reports indicate that AR Global, the successor business to AR Capital, is seeking to consolidate seven real estate investment trusts with nearly $10.5 billion in assets. Both American Realty Capital Healthcare Trust III and Healthcare Trust are sponsored by AR Global and have been identified as potential targets of the rumored consolidation.

According to a report by Investment News, two unnamed industry sources, including former AR Global employees, said that non-traded REIT American Finance Trust, (which is externally managed by AR Global under a 20-year contract), would acquire Healthcare Trust, Realty Finance Trust, American Realty Capital – Retail Centers of America, and American Realty Capital Healthcare Trust III, while publicly-traded Global Net Lease (NYSE: GNL) would acquire American Realty Capital Global Trust II.

AR Capital-related companies have struggled to raise equity after an ARC-affiliate, American Realty Capital Properties, intentionally filed inaccurate financial reports in October 2014. The firm eventually severed ties with the parent company and rebranded itself as Vereit (NYSE: VER).

After being hit with fraud charges by the state of Massachusetts relating to a proxy voter scandal, another affiliate, Realty Capital Securities, paid a multimillion dollar fine and agreed to terminate its business. AR Capital terminated its offerings and stopped selling new investment products at the end of 2015.

American Realty Capital Healthcare Trust III raised $166 million prior to the cancellation of its offering following the ARC-related scandals and owns a portfolio of 19 properties valued at $128 million as of December 31, 2015.

Click here to visit The DI Wire directory sponsor page.