Blackwells Capital Attempts to Replace AR Global as External Manager of GNL
According to the DIWire this week, Blackwells Capital LLC, an activist investor, reportedly filed a preliminary proxy statement on Friday to attempt to replace AR Global (Formerly American Realty Capital) as the external manager of Global Net Lease Inc. (formerly American Realty Capital Global Trust Inc.).
Blackwells, reportedly one of the largest stockholders in GNL, claims the change is needed to protect shareholders investment in the former non-traded REIT.
In October, Blackwells reportedly nominated candidates for GNL and Necessity Retail REIT (formerly known as American Finance Trust, another former non-traded REIT sponsored by AR global), claiming changes need to be made due to the board’s “total disregard for governance norms that would otherwise protect shareholders.”
According to Blackwells, more than one out of every 10 dollars that GNL makes is spent on payments to AR Global. Since 2016, more than $200 million dollars in fees, representing more than 10% of revenues during every reporting period, have reportedly been paid to AR Global. GNL trades at almost a 50% discount to net asset value (NAV), and stockholders have reportedly seen 61% decline in share price between 2015 and 2022, according Blackwells. This is despite the fact that U.S. Diversified REIT Index returned a positive 48%, and the S&P 500 returned a positive 78% between June 2, 2015 through Oct. 21, 2022.
Global Net Lease, Inc. (NYSE: GNL) is focused on “acquiring a diversified global portfolio of commercial properties, with an emphasis on sale-leaseback transactions involving single tenant, mission critical income producing net-leased assets,” according to its website.
AR Global products ceased to be sold in 2014 after the wholesaling broker-dealer, Realty Capital Securities, was charged with proxy fraud by the Massachusetts Securities Division. To learn more see: AR Global REITs: When will they cut distributions?
The Trouble with Non-Traded REITs
Non-traded REITs are complex and high-risk investments for several reasons. First, the investment itself is unsuitably risky because it is dependent on the overall health of specific sectors of the economy.
Non-traded REITs are often less regulated than other types of investments (i.e., mutual funds, stocks, etc.) and generally pay a higher sales commissions and fees than these other products. Further, non-traded REITs are generally illiquid, severely limiting the investor’s ability to access funds should the need arise.
To learn more about investing in non-traded REITs, please see: Did your Financial Advisor Recommend Investing in Non-Traded REITs?
If you suffered losses investing in Global Net Lease you may be able to recover your losses through FINRA arbitration. Please call the securities attorneys of The White Law Group at 888-637-5510 for a free consultation.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Seattle, Washington.
The firm represents investors in FINRA arbitration claims throughout the country. For more information on the firm, visit https://www.whitesecuritieslaw.com.
Tags: AR Global REITs, Blackwells Capital proxy war, Global Net Lease information, Global Net Lease investigation, Global Net Lease lawsuit, Global Net Lease litigation, Global Net Lease merger, Global Net Lease reviews, GNL stock, Necessity Retail reit Last modified: December 5, 2022