American Realty Capital Properties Inc. agreed to sell its Cole Capital private-capital management business to RCS Capital Corp. for at least $700 million to focus on its single-tenant real estate business.
American Realty could earn as much as $130 million more from the transaction depending on Cole Capital’s 2015 profit, the New York-based company said today in a statement. As part of the agreement, American Realty will act as an adviser to Cole Capital’s non-traded real estate investment trust, sharing fees with RCS Capital.
“This transaction significantly simplifies our business model and provides us a long-term economic stake in the growth and success of Cole Capital’s investment programs,” American Realty Chief Executive Officer David Kay said in the statement. The move will eliminate “considerable overhead and volatility,” he said.
American Realty, headed by Chairman Nicholas Schorsch, has been buying and selling assets to concentrate on single-tenant buildings leased to businesses such as drugstores and fast-food restaurants.