What Happened to American Realty Capital (AR Global)? Every Schorsch REIT, the ARCP Scandal and What a Share Became

The roll call: every American Realty Capital vehicle and what a share became

EDGAR lists dozens of entities with “American Realty Capital” or “ARC” in their names, many of them single-property LLCs and DSTs. These are the ones that registered a public offering and filed reports with the SEC. The last column comes from each vehicle's own merger, listing or liquidation filing; where we carry a ratio through later reverse splits, that step is our arithmetic. Distributions paid along the way are not included.

Three generations show up in that table. The vehicles priced at $10 and raised from 2008 to 2014 (ARCT I and III, the first Healthcare Trust, Retail Centers, Global Trust, New York Recovery) were mostly sold or listed within a few years; the first three exited above the offering price, to Realty Income, to Ventas or to ARCP, which AR Capital itself managed until January 2014. The vehicles priced at $25 and raised from 2012 to 2015 met the 2014 scandal, the collapse of the family's broker-dealer and the office and hotel markets of 2020; none of them has returned its offering price in the filings we read. The healthcare, New York and hotel REITs each have their own page here: National Healthcare Properties, New York City REIT and Hospitality Investors Trust.

What $10,000 at the offering price became

The same exits, scaled to a $10,000 purchase at the offering price, before commissions and before the distributions each vehicle paid. Share counts come from the exchange ratios above; dollar values are given only where a filing supplies a price (our arithmetic throughout).

The gap is wide. The four REITs that exited by January 2015 (ARCT I, III and IV and the first Healthcare Trust) could return more than $11,000 per $10,000 before distributions. Of the vehicles that stayed in the family after that, those we can price range from about $1,500 (Healthcare Trust II) to $6,600 (New York Recovery REIT), with Healthcare Trust III's estimated liquidation of $7,068 to $7,124 per $10,000 at the top (our arithmetic). Our listing discount ladder puts the Global Net Lease, New York City REIT and National Healthcare Properties listings next to other non-traded REITs that went public.

How the sponsor was paid when its REITs merged into ARCP

Each AR Capital REIT gave its sponsor a subordinated distribution (a “promote”) once shareholders had their money back plus a 6% return. ARCP's closing 8-K for ARCT III says the merger returned $557.3 million to ARCT III stockholders “in addition to their initial investment”, entitling the AR Capital special limited partner to about $98.4 million; ARCT IV's closing 8-K puts that figure at about $358.3 million and the promote at about $63.2 million. In both mergers the promote was paid in operating partnership units that converted into ARCP units.

The SEC's July 2019 complaint is about how those units were counted. It alleges that the calculation departed from the formula in the proxy disclosures, including an unsupported multiplier: in the ARCT III merger the disclosed method would have given AR Capital 6,126,199 ARCP units, while the method used produced 7,261,559. Across both mergers the SEC put the excess at about 2.92 million units, plus at least $7.27 million of unsupported charges under agreements for furniture, fixtures and equipment and for “unreimbursed expenses”. The defendants settled without admitting or denying the allegations.

The head of the SEC's New York office put the case this way in the 2019 press release: “REIT managers and their professionals have an obligation to tell the truth when making disclosures to shareholders about their compensation.” Schorsch was charged with negligent violations of Sections 17(a)(2) and (3) of the Securities Act and with books-and-records violations; AR Capital and Block were charged under the antifraud provisions, Section 17(a) and Section 10(b).

The 2014 ARCP misstatement, the conviction and the class action

By February 2014, after buying Cole Real Estate Investments on February 7, 2014, ARCP had grown to be “the nation’s largest publicly-traded net lease REIT”, in the words of the SEC's 2023 order. On October 29, 2014 it announced the preliminary findings of an audit committee investigation that found intentional misconduct, said certain financial statements could no longer be relied upon, and disclosed that its CFO and chief accounting officer had resigned at the committee's request. The stock fell about 19% that day. On March 2, 2015 ARCP restated its 2012 and 2013 annual statements and several 2013 and 2014 quarters; it took the name VEREIT later in 2015.

The Justice Department's sentencing release gives the number at the center of the case: ARCP reported adjusted funds from operations (AFFO) of $0.26 a share for the first quarter of 2014 when the correct figure was $0.23, and the second-quarter filing hid it, an intended overstatement of about $13 million of AFFO for the first half of 2014. Brian Block was convicted by a jury in June 2017 and sentenced on November 8, 2017 to 18 months in prison, three years of supervised release and a $100,000 fine. Lisa McAlister, the former chief accounting officer, pleaded guilty to securities fraud and related charges on June 29, 2016. In the SEC's parallel case Block consented in February 2018 to a $160,000 civil penalty and a permanent officer-and-director bar. VEREIT itself consented in June 2020 to an SEC cease-and-desist order with an $8,000,000 penalty.

VEREIT also paid $27.0 million to settle opt-out suits, and the class settlement contains no admission of liability, per VEREIT's 2019 10-K. The $225.0 million came from the company's “former external manager and its principals”, per VEREIT's September 2019 release. The class settlement is closed; the SEC Fair Fund is the part that was still paying in 2025, to people who bought ARCP stock on or after February 28, 2013, including in the ARCT III merger, and still held it at the close of trading on October 28, 2014.

The broker-dealer: RCS Capital

The REITs were sold through Realty Capital Securities, LLC, the dealer manager, whose listed parent was RCS Capital Corporation. In November 2015 the NYSE told RCS Capital that its stock had averaged under $1.00 for 30 trading days; it had agreed to sell its wholesale distribution business, Realty Capital Securities included, to Apollo for $6 million in cash. It filed for Chapter 11 on January 31, 2016. Its plans took effect on May 23, 2016, when, in the words of its 8-K, “all of the previously-issued common and preferred stock of the Company was deemed discharged, cancelled and extinguished”; it emerged as a private company and changed its name to Aretec Group. The last two offerings were cancelled in the same months: Retail Centers of America II on September 24, 2015, because it had not admitted any shareholders, and New York City REIT II on December 8, 2015, citing the proposed Department of Labor fiduciary standard and FINRA's Regulatory Notice 15-02.

Who runs what is left

Most surviving vehicles have cut their ties with the sponsor. Benefit Street Partners replaced the AR Global-controlled adviser of Realty Finance Trust on September 29, 2016, and a Benefit Street subsidiary became BDCA's adviser on November 1, 2016. Winthrop REIT Advisors has run New York REIT's liquidation since March 8, 2017. Global Net Lease internalized its management on September 12, 2023 by paying AR Global Investments 29,614,825 GNL shares valued at $325 million and $50 million in cash, in the same transaction that absorbed The Necessity Retail REIT (ARCT V); our Global Net Lease review follows the stock since. American Strategic Investment (the old New York City REIT) still has an adviser under common control with AR Global, and its 2025 10-K names Nicholas S. Schorsch, Jr. as chief executive. New York REIT Liquidating LLC's last asset is an interest in Worldwide Plaza in Manhattan, whose $940 million first mortgage was in monetary default as of December 2025, per its July 28, 2026 8-K.

What a holder can do with this

• If you held ARCP or VEREIT stock at the close on October 28, 2014 (including shares received in the ARCT III merger): you may be an eligible claimant in the SEC Fair Fund, which pays pro rata and skips payments under $10. The SEC's page names Kurtzman Carson Consultants as fund administrator (ARCapitalFairFund.com, 1-866-727-6411). Only people who filed claims are paid.
• If you held ARCT I, ARCT III, ARCT IV, VEREIT or the first Healthcare Trust: you were paid cash or hold Realty Income or Ventas shares. Your tax basis follows the original purchase through each exchange; ARCT IV's Series F preferred was redeemed at $25.00 in August 2021, a taxable sale.
• If you hold Global Net Lease, National Healthcare Properties or American Strategic Investment: these are listed stocks you can sell on any trading day. A loss against the $10 or $25 you paid is realized only when you sell, and whether the company as it is today is worth holding is a separate question from what the sponsor did.
• If you held Hospitality Investors Trust: your shares became a contingent value right. Its 8-K says “The maximum amount of payments made per CVR will not be permitted to exceed $6.00”, adds that a holder with a basis above $6.00 may be able to claim a loss for the difference, and warns that the law is uncertain.
• If you held New York REIT: you hold LLC units; liquidating distributions totalled $65.98 per post-split unit through March 28, 2025, and what is left depends on the Worldwide Plaza interest.

This is analysis of public documents, not investment, legal or tax advice.

FAQ

Sources, read on October 7, 2026: American Realty Capital Trust (CIK 1410997) 10-K for 2011, December 2012 merger proxy and January 22, 2013 8-K; American Realty Capital Properties / VEREIT (CIK 1507385) 8-Ks of March 6, 2013 and January 3, 2014, 10-K for 2014 (0001507385-15-000030), 8-K of September 9, 2019 and its exhibit (0001193125-19-241101), October 15, 2019 settlement-notice exhibit, 10-Ks for 2019 (0001507385-20-000034) and 2020 (0001507385-21-000042), July 16, 2021 Series F redemption release and November 1, 2021 8-K (0001104659-21-132409); American Realty Capital Trust III merger proxy; American Realty Capital Trust IV closing 8-K (0001144204-14-000507); American Realty Capital Healthcare Trust 10-K for 2013 and January 20, 2015 8-K; Healthcare Trust III 2017 proxy and December 26, 2017 8-K; Daily Net Asset Value Trust 10-K for 2014; Global Trust II 2016 merger proxy; Global Net Lease 10-K for 2015, 8-Ks of December 22, 2016, February 28, 2017 and September 12, 2023 (0001104659-23-100026), 10-K for 2025 and June 1, 2026 S-4 (0001104659-26-068543); Retail Centers of America 2016 merger proxy; American Finance Trust 10-K for 2017 and 8-Ks of February 21, 2017 and July 19, 2018; Healthcare Trust II / National Healthcare Properties 10-Ks for 2014 and 2025, April 2026 prospectus (0001628280-26-026541), second-quarter 2026 10-Q (0001561032-26-000055) and September 10, 2026 8-K; New York Recovery REIT / New York REIT Liquidating LLC 10-Ks for 2013 and 2024 (0000950170-25-047685) and 8-Ks of November 7, 2018 and July 28, 2026; New York City REIT / American Strategic Investment 10-Ks for 2015, 2020 and 2025; Hospitality Investors Trust 10-K for 2015 and July 1, 2021 8-K (0001104659-21-087898); Benefit Street Partners Realty Trust 10-K for 2016 and October 21, 2021 8-K; Business Development Corporation of America 10-K for 2016 and January 24, 2024 8-K; Business Development Corporation of America II 2016 proxy; Phillips Edison Grocery Center REIT I 10-K for 2014 and REIT II November 16, 2018 8-K; Retail Centers of America II and New York City REIT II 2015 8-Ks; RCS Capital Corporation 8-Ks of November 12, 2015, February 4, 2016 and May 25, 2016; EDGAR company records (former names); in SEC v. AR Capital, LLC, et al., No. 19-cv-6603 (S.D.N.Y.), the complaint, AR Capital's final judgment, the distribution plan and the SEC's August 2023 and September 2025 disbursement motions; SEC press release 2019-133, Litigation Releases 24537 and 24046, the SEC's harmed-investors page for the case and Release 34-97854; and the U.S. Attorney's Office (S.D.N.Y.) press release 17-361 of November 8, 2017. Per-share conversions, sums and percentages are our arithmetic and exclude distributions. This is analysis of public documents, not investment, legal or tax advice.