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A Non-exhaustive List of REITs and BDCs Sponsored by Nick Schorsch and Cetera Financial Group

Nicholas “Nick” Schorsch was once known as the real estate investment trust (“REIT”) king. He formed and acquired many companies, including AR Global, American Capital Realty, RCS Capital Corp, and Cetera Financial Group.

Schorsch was known for his non-traded REITs. However, non-traded REITs are notorious for their high fees and commissions, and many investors claim to have been misled about the products. Though the yield can be high on these investments, they are illiquid, and investors’ money is often stuck in these securities. FINRA recently published an investor alert regarding non-traded REITs.

In addition to the non-traded REITs, Schorsch and his companies also created and sold many business development companies (“BDCs”). BDCs are alternative investments similar to a closed-end fund. The BDCs invest in emerging small- and medium-sized companies. Similar to the non-traded REITs, BDCs have recently been under increased scrutiny by FINRA. Both BDCs and non-traded REITs are typically traded by independent brokerage firms.

A List of BDCs and REITs

Here is a non-exclusive list of the BDCs and non-traded REITs Schorsch’s RCS Capital Corp has at some point sponsored according to its most recent SEC 10-K filing in 2015:

  • American Realty Capital Trust, Inc. (REIT)
  • New York REIT, Inc. (formerly American Capital New York Recovery REIT, Inc.)
  • American Realty Capital Healthcare Trust, Inc. (REIT)
  • American Realty Capital Healthcare Trust II, Inc. (REIT)
  • American Realty Capital Daily Net Asset Value Trust, Inc. (REIT)
  • American Realty Capital Trust III, Inc. (REIT)
  • American Realty Capital Trust IV, Inc. (REIT)
  • American Realty Capital Trust V, Inc. (REIT)
  • Realty Finance Trust, Inc. (REIT)
  • American Realty Capital New York City REIT, Inc.
  • Business Development Corporation of America (BDC)
  • Phillips Edison – Grocery Center REIT Inc.
  • Phillips Edison – Grocery Center REIT II, Inc.
  • American Realty Capital –Retail Centers of America, Inc. (REIT)
  • American Realty Capital Retail Centers of America II, Inc. (REIT)
  • American Realty Capital Global Trust, Inc. (REIT)
  • American Realty Capital Global Trust II, Inc. (REIT)
  • American Realty Capital Hospitality Trust, Inc. (REIT)
  • United Development Funding Income Fund V (REIT)

Many sources warn of the dangers of investing in nontraded REITs. Other industry experts say BDCs are also very risky. Consequently, in many instances BDCs and non-traded REITs are not suitable for most investors.

A broker and brokerage firm have a duty to recommend suitable investments to their customers. BDCs and REITs are securities that tailor to a very specific set of needs and can be really risky. In certain circumstances, these products may only be suitable for a small portion of the portfolio.

Contact us if You’ve Lost Money

If you invested in any of these nontraded REITs or BDCs and have sustained losses or illiquidity, you may be entitled to recover some of your investment losses. Please contact Scott Silver of the Silver Law Group for a free consultation at ssilver@silverlaw.com or toll free at (800) 975-4345 to speak to an attorney to find out how we may be able to help you recover some of your investment losses

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