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American Realty Said to Seek Acquisition of NorthStar

American Realty Chairman Nicholas Schorsch
American Realty, led by Nicholas Schorsch, has used acquisitions to grow from a $67 million company when it began trading in 2011 to a national U.S. landlord with a market value of almost $10 billion. Photographer: Jonathan Alcorn/Bloomberg

April 28 (Bloomberg) -- American Realty Capital Properties Inc., the largest owner of single-tenant U.S. buildings, is interested in acquiring NorthStar Realty Finance Corp., people with knowledge of the matter said.

American Realty is weighing an offer of about $20 a share, one of the people said, asking not to be identified discussing confidential information. That’s a premium of 25 percent to NorthStar’s closing price of $16.03 last week and would value the New York-based company at about $6.5 billion.

There’s no guarantee that an agreement will be reached, one of the people said. NorthStar rose 7.3 percent today to $17.20. American Realty, based in New York, fell 3 percent to $12.62. The talks were reported earlier today by the Financial Times.

American Realty, led by Nicholas Schorsch, has used acquisitions to grow from a $67 million company when it began trading in 2011 to a national U.S. landlord with a market value of almost $10 billion. The real estate investment trust’s purchase of Cole Real Estate Investments Inc. in February for about $9.85 billion, including debt, made it the biggest owner of single-tenant buildings leased to businesses such as drugstores and fast-food restaurants.

A purchase of NorthStar would add to American Realty’s nontraded REIT fundraising and management business, which it acquired with its purchase of Cole. NorthStar also owns single-tenant real estate, manufactured housing and health-care buildings.

Spinoff Plans

NorthStar said in December it would spin off its asset-management unit into a new publicly traded company. It has also been building its health-care real estate business, bringing in former HCP Inc. Chief Executive Officer Jay Flaherty as a partner and agreeing in March to acquire a $1.05 billion portfolio of senior-housing and nursing facilities.

Matt Goldstein, a spokesman for American Realty, declined to comment. Joe Calabrese, a spokesman for NorthStar, didn’t reply to two calls seeking a comment.

To contact the reporters on this story: Matthew Monks in New York at mmonks1@bloomberg.net; Jeffrey McCracken in New York at jmccracken3@bloomberg.net; Brian Louis in Chicago at blouis1@bloomberg.net

To contact the editors responsible for this story: Kara Wetzel at kwetzel@bloomberg.net; Mohammed Hadi at mhadi1@bloomberg.net Elizabeth Wollman

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