Market Overview

AR Capital Announces Board of Director Changes in Its Sponsored Programs

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AR Capital, LLC ("AR Capital") today
announced a number of important actions in connection with its previously
disclosed best practices initiatives to further enhance its corporate
governance profile, including changes to its sponsored programs' boards of
directors as part of its year-long 'Investor First' initiative.

American Realty Capital, LLC

As previously announced, AR Capital has undertaken a series of initiatives to
further implement corporate governance best practices in connection with its
direct investment programs, focusing on enhancing its management structures
and reducing overlap among the boards of its sponsored programs. As part of
these initiatives, AR Capital has:

o Identified, hired and promoted executives to assume senior leadership
positions, with the majority of these staffing changes announced several
weeks ago;
o Completed its board composition review and continued to implement
significant changes to the boards of each investment program to mitigate
potential conflicts, reduce complexity, and minimize overlap among
directors of its sponsored programs. AR Capital will continue to focus on
the appointment of additional independent directors; and
o Created a structure that allows AR Capital to leverage the individual
strengths of each of its founding partners and create maximum value for
investors.

As part of these initiatives, and in order to reduce complexity, AR Capital
Co-Founder, Nicholas S. Schorsch, has notified the boards of directors of RCS
Capital Corporation (NYSE: RCAP) ("RCS Capital"), New York REIT, Inc. (NYSE: NYRT) ("NYRT") and 11 non-traded REITs and direct investment programs
sponsored by AR Capital of his decision to step down from his board positions
at these companies, effective immediately. Mr. Schorsch has made this decision
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.

These actions should greatly minimize distractions and immediately eliminate
any perceived or potential conflicts created as a result of Mr. Schorsch's
involvement on the boards of AR Capital-sponsored programs or on the board of
RCS Capital whose subsidiary, Realty Capital Securities, is the wholesale
broker dealer that distributes those programs.

"Because of the solid, highly skilled management teams which we have built,
this is the right time to make these changes," said Mr. Schorsch. "AR Capital
is proud to be a shareholder of each of these companies. Over the past five
years, we have assembled some of the top talent in the industry who have been
instrumental in the continuing success of these programs, and I am completely
confident in our management teams and our independent directors. These changes
are part of the natural evolution of our businesses given our size and
continuing growth."

AR Capital is among the largest and most successful investment managers in the
direct investment industry focused on the retail investor. AR Capital has
constructed over $50 billion of investment programs and currently manages or
has in offering over $40 billion across a diversified set of offerings. Seven
programs, including those sponsored by AR Capital and others, all of which
were distributed by Realty Capital Securities, have gone full cycle,
generating more than $15 billion of gross proceeds from approximately $11
billion of equity investments.

Additionally, the following changes were announced:

The Board of Directors of NYRT has appointed Michael Happel to the role of
Chief Executive Officer, effective immediately. Mr. Happel succeeds Mr.
Schorsch, who has notified the Board of his decision to step down from his
positions as Chairman of the Board and Chief Executive Officer of NYRT.
William M. Kahane will become Executive Chairman.

Peter M. Budko will continue to devote his attention to leading and growing AR
Capital's sponsored credit programs, including Business Development
Corporation of America I and II and ARC Realty Finance Trust, Inc., as well as
other credit programs currently in registration. Mr. Budko will become
Chairman of Business Development Corporation I and II and Mr. Kahane will
become Chairman of ARC Realty Finance Trust, Inc.

Mr. Kahane is resigning 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.

The changes described above are effective immediately.

"The transitions announced today are a culmination of the hard work we have
put into developing an enhanced corporate governance structure, setting the
stage for continued growth in the new year," said Mr. Kahane, Co-Founder of AR
Capital. "We will continue to make these changes, which are part of an overall
initiative developed and announced in 2014, and are aimed at strengthening
leadership in each investment program, reducing perceived conflicts among
programs, and further focusing our "Investor First" approach. I am pleased
with the results of this work, and I am grateful to Nick for his dedication,
strategic vision and his willingness to again put investors first by
initiating and leading all of these corporate governance changes."

"As the sponsor of these non-traded programs, AR Capital remains committed to
ensuring that the highest standards of corporate governance and transparency
are met," commented Dr. Bob Froehlich, Independent Director, American Realty
Capital Healthcare Trust II, Inc. "These changes are part of AR Capital's
ongoing efforts to enhance corporate governance practices across the sponsored
programs by reducing complexity, increasing accountability and minimizing
potential conflicts of interest. The opportunities that we have before us to
drive growth across sponsored programs are a direct result of Nick's
commitment to our stakeholders."

"Nick's pioneering insight, business acumen and commitment to operating with
integrity and honesty have provided a strong foundation to build upon," said
David Gong, Independent Director, American Realty Capital - Retail Centers of
America, Inc. "His passion is contagious and his many successes for
shareholders come from truly loving what he does every single day. The moves
today are made possible because of the experienced and capable leadership at
each of the companies demonstrated by the management teams and boards of
directors. I am confident in the strength of the management teams at these
entities and their ability to deliver value for all investors. I want to thank
Nick for his extraordinary vision, tireless commitment, innovation and
unparalleled leadership, all of which have made AR Capital the most successful
investment manager in the direct investment industry focused on the retail
investor."

Posted-In: News Press Releases

 

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