American Realty Capital Properties Strives for Organic Growth

Nick Schorsch, chairman and CEO of American Realty Capital Properties (NASDAQ: ARCP), joined for a CEO Spotlight video interview in Chicago at REITWeek 2013: NAREIT’s Investor Forum.

ARCP’s investment strategy is designed to generate monthly dividends from a durable and predictable level of monthly rents paid by primarily investment grade rated and other credit-worthy tenants and to provide significant growth potential. The company seeks to maintain a portfolio blend of both mid-term and long-term lease durations. American Realty Capital serves as an external advisor to ARCP. Schorsch discussed how he defines quality for his company’s property portfolio.

“Diversification, credit quality, geographic, tenant and industry diversification,” he said. “We want to be diverse by industry, by tenant and also geographically across the country. When you look at the net lease sector, you really want to have those risk-adjusted, durable returns, and that’s what most of the investors are looking for.”

Schorsch described the strategy behind his company’s acquisitions. ARCP announced in May that it had struck a deal to buy an $807 million property portfolio from GE Capital.

“We look at our portfolio from an organic-growth basis,” he said. “We have a large staff of people looking to acquire assets. We’ve been aggregating assets for a long time, so we’ve generated about $12 billion of assets in the last decade. So, we continue to look at acquiring assets on a granular basis. We also look at adding to those corporate and strategic acquisitions.”

Schorsch also discussed the company’s intent in terms of internalizing management.

“We intend to continue to carefully construct – we’re not looking to buy everything, we are looking to buy what fits out company,” he said. “There’s definitely more to come. We are continuing and have put out guidance for a least a billion dollars of new organic acquisitions from our pipeline of small assets and we are looking at a number of other strategic and corporate opportunities as the year unfolds.”