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Report says REIT changes proposed by AR Global would remove investor protections

June 1, 2016


Robert A. Stanger & Co. critical of proxies firm has sent out in preparation for possible consolidations

May 31, 2016 @ 12:45 pm | By Bruce Kelly | Investment News

Nicholas Schorsch
Nicholas Schorsch

Changes proposed at seven real estate investment trusts controlled by Nicholas Schorsch’s AR Global present a “clear and present danger” to their investors by eliminating investor protections, according to a report issued Tuesday by Robert A. Stanger & Co. Inc., an investment bank that focuses on nontraded REITs.

Serious changes are afoot at AR Global. In April, InvestmentNews reported that AR Global was attempting to consolidate more than a half-dozen real estate investment trusts with almost $10.5 billion in assets. Weeks later, a former independent director of two nontraded real estate investment trusts controlled by AR Global claimed “a manifest conflict of interest” in the potential merger of one of those REITs into a related company.

The flurry of mergers, if successful, would put more assets under control of two REITs, American Finance Trust and Global Net Lease, which have unusual, difficult-to-break 20-year advisory contracts with AR Global. AR Global does not have the 20-year advisory agreements with the other REITs it manages.

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Second Annual Blue Vault Broker Dealer Educational Summit 2016
2016 Broker Dealer Educational Summit 2016
May 30, 2016

Best Due Diligence meeting in the industry. No sales pitches, senior level decision makers, meaningful discussions and the Broker Dealer networking sessions were especially useful. Thanks to Blue Vault for raising the bar!