STAMFORD, CT—Land and Buildings founder Jonathan Litt plans to nominate a slate of directors to the board of American Residential Properties Inc. if the single-family REIT doesn't outline a clear path for increasing shareholder value by year's end. Litt stated his intentions in a letter to ARPI's CEO, Stephen Schmitz, that was made public on Monday.

Land and Buildings, which has taken activist positions in other REITs, disclosed in an SEC filing this past Friday that it had taken a 7.4% ownership stake in Scottsdale, AZ-based ALPI. "We believe ARPI stock has approximately 45% upside to a $24 NAV and that upside grows every day as home prices continue to rise," Litt, who serves as Land and Buildings' CIO, wrote to Schmitz. "However, we are disappointed by both the company's poor operational performance and its lack of a clear strategic plan."

In his letter, Litt recalled ARPI management's first-quarter projection that NOI would climb into the low 60% range by year's end. Instead, its Q3 NOI declined by 450 basis points to 49.7%, while its publicly traded peers—American Homes 4 Rent, Silver Bay Realty and Starwood Waypoint Residential—improved by an average of 110 bps to 59.1% during the quarter. "This sharp deterioration is occurring despite a concerted effort by management to stabilize the portfolio and despite a lack of acquisitions diluting the margin or taking attention away from the existing portfolio," wrote Litt.

Litt asserted that ARPI, which went public in 2013, has "insufficient scale to operate efficiently." As of Sept. 30, the Company owned 8,938 single-family homes across 12 states, and approximately 94.3% of its portfolio was leased. However, Litt noted that among the 17 metro areas in which it operates, only four have a concentration of 1,000 homes or more.

Since joining the board of Mack-Cali Realty Corp. in early 2014, Litt has sought to implement change at other REITs in which Land and Buildings has shares. Later that same year, he pushed for an all-new board at Associated Estates Realty Corp., which merged with a real estate fund managed by Brookfield Asset Management this past summer. He has also sought changes at Macerich Co. and MGM Resorts. An ARPI spokesman did not respond to GlobeSt.com's requests for comment by early Monday afternoon.