8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 
FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): May 31, 2013

AMERICAN REALTY CAPITAL PROPERTIES, INC.

(Exact name of registrant as specified in its charter)

Maryland	001-35263	45-2482685
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S. Employer Identification No.)

405 Park Avenue

New York, New York 10022

(Address, including zip code, of principal executive offices)

(212) 415-6500

Registrant’s telephone number, including area code: 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01. Entry Into a Material Definitive Agreement. 

Purchase and Sale Agreement with Certain Subsidiaries of GE Capital

On May 31, 2013, American Realty Capital Properties, Inc. (the “Company”), through ARC Properties Operating Partnership, L.P., entered into a purchase and sale agreement to acquire a portfolio comprised of 471 properties including 468 restaurants (including three other revenue generating assets) and three retail tenants located in 44 states representing 2,136,025 square feet. The sellers of the properties are subsidiaries of GE Capital. None of the sellers has a material relationship with the Company and the acquisition is not an affiliated transaction. Pursuant to the terms of the purchase and sale agreement, the Company’s obligation to close upon the acquisition remains subject to the Company’s satisfactory due diligence and other customary conditions to closing. Accordingly, as of the date of this report, and until the closing of the purchase of the properties, there can be no assurance that the Company will acquire the properties. The purchase and sale agreement contains customary representations and warranties by the sellers.

The properties are leased to 137 tenant groups. The leases are net, whereby the tenants are to pay substantially all operating expenses, including all costs to maintain and repair the roof and structure of the building, and the cost of all capital expenditures, in addition to base rent. The original term of the leases is a weighted average 18.6 years with a weighted average of 6.2 years currently remaining. The annualized rental income for the portfolio will be approximately $55.6 million, or approximately $26.01 per rentable square foot. The contract purchase price of the portfolio is approximately $807.3 million, exclusive of closing costs.

Item 8.01. Other Events.

On May 31, 2013, the Company issued a press release announcing its entry into a purchase and sale agreement to acquire a portfolio of 471 net lease properties from certain subsidiaries of GE Capital. The Company also announced that, with this acquisition, it has accelerated its previously forecasted $1.1 billion of acquisitions for 2013 by five months and expects to complete such acquisitions by the end of the second quarter of 2013. The Company also maintains a strong pipeline of additional acquisitions for 2013.

A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K.

Item 9.01. Financial Statements and Exhibits.

(d)     Exhibits

Exhibit No.	Description
99.1	Press Release dated May 31, 2013

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

	AMERICAN REALTY CAPITAL PROPERTIES, INC.
May 31, 2013	By:	/s/ Nicholas S. Schorsch
	Name:	Nicholas S. Schorsch
	Title:	Chief Executive Officer

EX-99.1

 

IMMEDIATE RELEASE

American Realty Capital Properties Accelerates 2013 Forecasted Acquisitions with Agreement to Acquire $807 Million GE Capital Portfolio, Creating Pro Forma Enterprise Value of Approximately $6.9 Billion.

Acquisition Will Further Diversify ARCP’s Net Lease Portfolio by Adding 471 Net Lease Properties

Announced 2013 Acquisitions Will Create a Portfolio of 1,264 Net Lease Properties

New York, New York, May 31, 2013 – American Realty Capital Properties, Inc. (“ARCP” or the “Company”) (NASDAQ: “ARCP”) announced today that it has entered into an agreement to purchase from GE Capital a $807 million portfolio of 471 net lease properties comprised primarily of nationally recognized restaurants. The 471 property portfolio includes assets net leased to tenants who operate restaurants including: IHOP; Jack in the Box; Golden Corral; Burger King; Arby’s; Taco Bell; Applebee’s; Wendy’s; Logan’s Roadhouse; and Denny’s. These ten national brands constitute approximately 64% of the net operating income of the portfolio to be acquired.

Nicholas S. Schorsch, Chief Executive Officer and Chairman of ARCP commented, “This transaction allows us to deliver on our promise to acquire $1.1 billion of properties, consistent with our investment strategy, and do so earlier than expected in 2013 at a cap rate in excess of 7%. This acquisition solidifies the Company’s position as the fastest growing single tenant net lease REIT. We are pleased to have forged this agreement to purchase a portion of the formerly publicly traded Trustreet Properties Inc. portfolio from GE Capital which bolsters and further diversifies significantly our net lease portfolio.”

Mike Weil, President of ARCP added, “This portfolio acquisition underscores our ability to identify and purchase a diversified pool of assets anchored by brand name tenants paying rents which are accretive to our earnings.” Mr. Weil continued, “Following this transaction, our portfolio will be among the strongest net lease REIT programs available to the investor, diversified across industry, geographical location and tenant.”

“With approximately $355 million in acquisitions closed year-to-date, as a result of this announced acquisition, once closed, ARCP will exceed its previously announced $1.1 billion of 2013 forecasted purchases by the end of the second quarter of 2013, five months earlier than expected. Our pipeline of additional acquisitions for 2013 remains strong. Following the close of all of our announced target acquisitions, we expect to own a portfolio comprised of 1,264 properties which is 69% investment grade. We will use low-cost financing and equity as necessary,” stated Brian S. Block, Chief Financial Officer of the Company.

Strategic and Financial Benefits of Expected 2013 ARCP Portfolio Transactions

Strategic Portfolio Construction. This portfolio acquisition significantly advances ARCP’s investment objectives by growing its net lease portfolio consistent with its investment strategy and further reduces its credit concentration by adding 137 new tenants. ARCP’s expected 2013 portfolio will include more than 225 distinct tenants.

High Portfolio Occupancy and Balance of Lease Duration. The Company reasonably expects its portfolio to remain approximately 100% occupied. The average remaining lease duration on the entire portfolio would be 9.0 years, reflecting the Company’s strong balance of mid-term and long-term lease durations. Only modest lease rollover would occur until 2018.

Increased Size and Scale. Once ARCP completes its expected 2013 acquisitions, its portfolio of 1,264 net lease properties, containing over 30.0 million rentable square feet, will be one of the largest net lease portfolios among public REITs.

Available Financing. ARCP expects to use currently available debt to consummate the GE Capital transaction, supporting ARCP’s strategy of finding accretive transactions to prudently expands its portfolio.

Increased Diversification/Reduced Concentration. 2013 pro forma rental revenue generated by ARCP’s largest 10 tenants will decline from 60% to 36%. The Company’s portfolio would include tenants located in 48 states plus Puerto Rico spanning 27 industries.

The table attached as Annex A hereto shows ARCP’s improved top ten tenant concentration following the close of its announced 2013 acquisitions. ARCP’s top tenants will remain 100% investment grade.

Important Notice

ARCP is a publicly traded Maryland corporation listed on The NASDAQ Global Select Market that qualified as a real estate investment trust for U.S. federal income tax purposes for the taxable year ended December 31, 2011, focused on acquiring and owning single tenant freestanding commercial properties subject to net leases with high credit quality tenants. Additional information about ARCP can be found on its website at www.arcpreit.com. The Company may disseminate important information regarding the company and its operations, including financial information, through social media platforms such as Twitter, Facebook and LinkedIn.

The statements in this press release that are not historical facts may be forward-looking statements. These forward-looking statements involve risks and uncertainties that could cause the outcome to be materially different. In addition, words such as “anticipate,” “believe,” “expect” and “intend” indicate a forward-looking statement, although not all forward-looking statements include these words.

For more information about this announcement, please contact Tony DeFazio at 484-342-3600 or tdefazio@ddcworks.com.

Contacts
From: Anthony J. DeFazio	For: Brian S. Block, EVP & CFO
Diccicco Battista Communications	American Realty Capital Properties, Inc.
tdefazio@ddcworks.com	bblock@arlcap.com
Ph: 484-342-3600	Ph: 212-415-6500

ANNEX A