NEW YORK CITY—In the wake of several weeks of turmoil at AR Capital, company co-founder Nicholas Schorsch has notified the boards of directors of RCS Capital Corp., New York REIT and 11 non-traded REITs and direct investment programs sponsored by AR Capital that he is stepping down from his board positions at these entities. The move includes Schorsch's departure from his role as chairman and CEO or NYRT.
According to the company, Schorsch is moving on “in order to focus his attention on strategic initiatives and potential liquidity events of closed programs sponsored by AR Capital, and new strategies for the future suite of AR Capital investment programs.” Meanwhile, William Kahane also is stepping down from his role as a director of RCS Capital to “lead the further growth and development of AR Capital-sponsored real estate programs and listed companies.”
Working to fill the void, the board of directors of NYRT has appointed Michael Happel to the role of CEO. Kahane will become executive chairman. Peter Budko will become chairman of Business Development Corp. I and II while Kahane will become chairman of ARC Realty Finance Trust. All of the changes are effective immediately.
Says Scorsch, “These changes are part of the natural evolution of our businesses given our size and continuing growth. I am completely confident in our management teams and our independent directors.”
Happel returns the praise. “As a proven industry leader and innovator, Nick has been instrumental in the firm's tremendous success since the company's inception, offering invaluable insights and unparalleled business expertise to position NYRT as a leader in the New York City commercial real estate market.”
He adds, “NYRT will continue to strive to capitalize on growth opportunities to further solidify the Company's leading platform, and to unlock the significant value-creation potential in the New York City market. I am excited to build on NYRT's track record of excellence and growth.”
The announcements comes on the heels of a challenging time for the largest REIT in the net lease space. In late October, it disclosed accounting irregularities, leading to a plunge in the value of its stock and the replacement of its CFO and chief accounting officer, and shortly thereafter RCS Capital cancelled its planned $700-million acquisition of the Cole Capital business. ARCP filed a breach-of-contract suit against RCAP and subsequently settled the dispute. Earlier this month, Schorsch, Kay and president/COO Lisa Beeson resigned, and later that same week former chief accounting officer Lisa McAlister filed a defamation suit that named Scorsch, Kay and ARCP itself as defendants.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Rayna Katz
Rayna Katz is a seasoned business journalist whose extensive experience includes coverage of the lodging sector, travel and the culinary space. She was most recently content director for a business-to-business publisher, overseeing four publications. While at Meeting News, a travel trade publication, she received a Best Reporting award for a story on meeting cancellations in New Orleans during Hurricane Katrina.
