Klehr Harrison Represents REIT in $400 Million Offering

The REIT assumed the assets and operations of American Financial Resources Group Inc., a real estate company led by Nicholas S. Schorsch that specialized in buying bank real estate assets. Schorsch is the REIT’s Chief Executive Officer and Vice-Chairman of the Board. 

The REIT will acquire corporate-owned real estate assets, primarily single-tenant bank branches and multi-tenant office buildings, from financial institutions and will own and manage these assets under long-term triple net leases, primarily with banks. The initial offering should allow the company to buy more than a billion dollars of bank-related assets in the next couple of years. The REIT currently holds 93 properties, including the Fidelity Building at 123 S. Broad Street in Philadelphia. 

The newly appointed Chairman is Lewis S. Ranieri, a Wall Street luminary who is recognized as one of the developers of the mortgage-backed securities market in the early 1980s. A former vice chairman at Salomon Brothers, he founded Hyperion Partners, an asset management firm, and will also continue to serve as its chairman. 

Klehr Harrison partner Keith Kaplan described the transaction as “challenging and complex from both a legal and business perspective, as it involved the simultaneous acquisition of 93 properties from numerous parties, a substantial private offering and the organization of new business entities, including the negotiation of employment agreements with key members of management and the establishment of various benefit plans.”

Klehr Harrison credited the success of the private placement to the “commitment, skill and professionalism of the REIT’s management, who developed and effectively communicated a compelling business plan” and to its placement agent, Friedman, Billings, Ramsey & Co., who “worked tirelessly to effectively position the REIT and  capitalize on market conditions.”