04/07/2014 | By Sarah Borchersen-Keto
American Realty Capital Healthcare Trust, Inc. (NASDAQ: HCT), which was created in 2011 as a public non-listed REIT, began trading April 7 on the NASDAQ Global Select Market.
In early trading on April 7, the share price of ARC Healthcare stock gained about 5 percent. The company also announced a tender offer to purchase up to $150 million in common stock from its shareholders.
“We have strong capitalization, a very focused strategy and (we are) a proven acquirer of high-quality assets. We feel really good about our ability to grow our company on an external basis,” ARC Healthcare CEO Tom D'Arcy told REIT.com.
ARC Healthcare is “a little more nimble, a little more focused,” than the largest health care REITs, according to Nicholas Schorsch, executive chairman of ARC Healthcare’s board of directors. At the same time, about 63 percent of its tenancies have investment-grade ratings, which the company estimates to be about double that of its nearest peer.
Schorsch said he anticipates that ARC Healthcare could eventually fall somewhere between the midsize health care REITs that hold $2 to $3 billion in assets and the largest health care REITs that own around $30 billion in assets. As of now, the company has an enterprise value of about $3 billion.
“I don’t think there’s a limitation as to what size we want to be, but we want to own assets we believe will perform well for decades to come,” Schorsch said.
ARC Healthcare primarily focuses on best-in-class medical office buildings and housing for private-pay senior citizens. The company invested $1.3 billion in those segments of the health care sector last year.
“They have the most attractive underlying fundamentals in healthcare today,” D’Arcy said. The REIT also owns other health care properties, including hospitals and post-acute care facilities. The portfolio has a weighted average remaining lease term of 10.7 years.
ARC Healthcare estimates that REITs’ ownership of health care assets ranges from 24 percent in the skilled nursing segment to 2 percent in the hospital segment. Schorsch predicted that opportunities for ARC Healthcare to increase its holdings in these segments will arise as hospitals and large health care systems seek to move assets off their balance sheets and redeploy capital into their operating businesses. “That’s how we’re going to access those assets for decades to come,” he said.