Nicholas Schorsch, the co-founder of AR Capital LLC, resigned from the boards of RCS Capital Corp., New York REIT Inc. and 11 nontraded real estate investment trusts and direct investment programs sponsored by AR Capital.
Schorsch, 53, will leave the companies immediately to focus on strategy and “potential liquidity events of closed programs sponsored by AR Capital,” the company said in a statement today. Some of Schorsch’s companies have been under scrutiny since accounting inaccuracies were disclosed at American Realty Capital Properties Inc., or ARCP, leading to his resignation from that board earlier this month.
“I am completely confident in our management teams and our independent directors,” Schorsch said in the statement. “These changes are part of the natural evolution of our businesses given our size and continuing growth.”
Investment products managed by AR Capital, primarily its nontraded REITs, have raised about $20 billion in equity mainly from individual investors since 2008, investment bank Robert A. Stanger & Co. said. Closely held AR Capital currently has about 10 products being sold to investors including the New York City REIT and a hotel REIT. AR Capital has generated more than $600 million in fees since it began in 2007, according to Stanger.
The accounting woes at ARCP hurt companies led by Schorsch and prompted some broker-dealers to suspend selling nontraded REITs sponsored by ARCP’s Cole Capital and some AR Capital nontraded REITs.