VEREIT

VEREIT, Inc. was an American real estate investment trust that owned and managed single-tenant commercial properties across the United States. The company developed from American Realty Capital Properties, a real estate platform established in 2010 by Nicholas Schorsch. Its portfolio was concentrated in properties leased to individual tenants, including retail stores, restaurants, offices and industrial facilities. This net-lease model generally involved long contractual leases under which tenants assumed many property-level operating expenses, while the REIT collected rental income and sought to build a diversified portfolio of income-producing real estate. The company expanded rapidly during the early 2010s through acquisitions. It bought CapLease in 2013, adding dozens of properties and more than 13 million square feet of real estate. In early 2014 it acquired 120 properties from funds managed by Fortress Investment Group for approximately $601.2 million. Later that year it acquired Cole Real Estate Investments, a transaction that made the company the largest publicly traded net-lease REIT at the time. These deals materially increased the size and variety of its holdings and broadened its presence in retail, restaurant, office and industrial real estate. That expansion was interrupted by an accounting crisis in 2014. American Realty Capital Properties disclosed a roughly $23 million accounting error and dismissed chief financial officer Brian Block. The issue led to significant investor and regulatory scrutiny, litigation and changes in the company’s leadership and corporate identity. Nicholas Schorsch resigned as chairman in December 2014. In July 2015, the company adopted the VEREIT name, derived from the Latin word veritas, meaning truth. The rebranding was intended to mark a new phase after the accounting controversy, while the company continued operating as a publicly traded net-lease REIT. VEREIT subsequently sold Cole Real Estate Investments to CIM Group in 2018 and continued managing a large portfolio of single-tenant properties. By December 31, 2020, it owned 3,831 properties totaling approximately 89.7 million square feet. Its business remained centered on real estate ownership, leasing and portfolio management rather than consumer-facing products. The company’s principal offering to investors was exposure to rental income generated by a diversified portfolio of commercial properties. The accounting episode produced years of civil litigation and criminal proceedings. In 2017, former CFO Brian Block was found guilty of securities fraud and later received an 18-month prison sentence. In 2019, defendants agreed to a settlement totaling approximately $1.025 billion, including payments by VEREIT, its former external manager and related principals, Block and former auditor Grant Thornton. VEREIT also reached a separate settlement concerning certain Securities Act claims. These events remained a defining part of the company’s corporate history. Realty Income acquired VEREIT in November 2021. The transaction ended VEREIT’s existence as an independent public company, and its shares were subsequently delisted. VEREIT therefore has a historical rather than active brand presence; its assets and operations became part of Realty Income’s broader net-lease real estate platform.

VEREIT originated in 2010 as American Realty Capital Properties, a real estate investment company founded by Nicholas Schorsch. From the beginning, its strategy was based on acquiring income-producing commercial real estate and organizing the assets within a publicly traded REIT structure. The company emphasized single-tenant properties, a segment in which leases can provide relatively predictable rental income and may assign substantial operating responsibilities to tenants. Its investment scope included retail, restaurants, offices and industrial facilities. The company pursued an aggressive acquisition strategy. In November 2013, it acquired CapLease, adding 68 properties and more than 13 million square feet to its portfolio. In January 2014, it purchased 120 properties from funds managed by Fortress Investment Group for approximately $601.2 million. In February 2014, it acquired Cole Real Estate Investments. The Cole transaction significantly expanded the company and made it the largest publicly traded net-lease REIT at that point. The company later sold Cole to CIM Group in February 2018. The expansion period was followed by a serious accounting controversy. In October 2014, American Realty Capital Properties disclosed that its financial reporting contained an approximately $23 million accounting error. Chief financial officer Brian Block was fired. The disclosure prompted investor lawsuits and broader allegations concerning executive and insider compensation, including claims that insiders had received more than $900 million in fees. Nicholas Schorsch resigned as chairman in December 2014. The company’s financial reporting, governance and external-management arrangements became central issues in subsequent litigation. In July 2015, the company changed its name to VEREIT. The new name was associated with the Latin term veritas, or truth, and represented an effort to establish a distinct identity after the accounting crisis. VEREIT continued to operate as a public REIT and remained focused on single-tenant commercial properties. Its portfolio management activities involved owning, leasing and administering properties rather than selling branded consumer goods. The legal consequences continued for several years. Former CFO Brian Block was found guilty of securities fraud in 2017 and was sentenced to 18 months in prison. In September 2019, certain defendants agreed to a settlement totaling approximately $1.025 billion. The settlement included about $738.5 million from VEREIT, $225 million from its former external manager and associated principals including Nicholas Schorsch, $12.5 million from Block and $49 million from former auditor Grant Thornton. VEREIT separately settled pending Securities Act Section 11 claims brought by plaintiffs outside the class action for $15.7 million. Despite the controversy, VEREIT retained a large operating portfolio. At the end of 2020, it owned 3,831 properties representing approximately 89.7 million square feet. These assets covered the same broad property categories that had defined the company’s business: single-tenant retail, restaurant, office and industrial properties. The portfolio made VEREIT a substantial participant in the U.S. net-lease REIT market. Realty Income acquired VEREIT in November 2021. The acquisition brought VEREIT’s properties and operations into Realty Income and ended VEREIT’s status as an independent listed company. Following the transaction, VEREIT was delisted, making the brand a historical corporate identity rather than an active standalone REIT.

• 2021

  Acquired by Realty Income

  [1]VEREITen.wikipedia.org

  Realty Income acquired VEREIT in November, after which VEREIT was no longer an independent listed company.

• 2020

  Portfolio reaches 3,831 properties

  [1]VEREITen.wikipedia.org

  At year-end, VEREIT reported ownership of 3,831 properties totaling approximately 89.7 million square feet.

• 2019

  Accounting-related litigation settlement

  [1]VEREITen.wikipedia.org

  Certain defendants agreed to a settlement totaling approximately $1.025 billion, alongside a separate settlement of certain Securities Act claims.

• 2018

  Cole sold to CIM Group

  [1]VEREITen.wikipedia.org

  VEREIT sold Cole Real Estate Investments to CIM Group.

• 2017

  Former CFO convicted

  [1]VEREITen.wikipedia.org

  Former CFO Brian Block was found guilty of securities fraud and later received an 18-month prison sentence.

• 2015

  VEREIT name adopted

  [1]VEREITen.wikipedia.org

  American Realty Capital Properties changed its name to VEREIT after the accounting crisis.

• 2014

  Fortress portfolio acquisition

  [1]VEREITen.wikipedia.org

  It acquired 120 properties from funds managed by Fortress Investment Group for approximately $601.2 million.

• 2014

  Cole Real Estate Investments acquisition

  [1]VEREITen.wikipedia.org

  The acquisition of Cole made the company the largest publicly traded net-lease REIT at the time.

• 2014

  Accounting controversy emerges

  [1]VEREITen.wikipedia.org

  The company disclosed an approximately $23 million accounting error and dismissed its chief financial officer.

• 2013

  CapLease acquisition

  [1]VEREITen.wikipedia.org

  The company acquired CapLease, adding 68 properties and more than 13 million square feet.

• 2010

  Company founded

  [1]VEREITen.wikipedia.org

  Nicholas Schorsch founded the company that would initially operate as American Realty Capital Properties.

A publicly traded net-lease REIT focused on diversified ownership of single-tenant retail, restaurant, office and industrial properties.

• Commercial real estate

  Single-tenant retail properties

  VEREIT owned and leased single-tenant retail properties, using long-term commercial leases to generate rental income. These assets formed one of the principal components of its diversified net-lease portfolio.

• Commercial real estate

  Restaurant properties

  The company invested in freestanding and other single-tenant restaurant properties. These properties supported its strategy of holding geographically diversified assets occupied under contractual leases.

• Commercial real estate

  Office properties

  Office buildings were included in VEREIT’s property holdings. The company managed these assets as part of a broader portfolio spanning several commercial property categories rather than concentrating exclusively on retail.

• Commercial real estate

  Industrial properties

  Industrial properties complemented VEREIT’s retail, restaurant and office assets. Their inclusion helped diversify the company’s single-tenant commercial real estate portfolio and its sources of rental income.

• 2017

  Former CFO securities-fraud conviction

  Former CFO Brian Block was convicted of securities fraud and sentenced to 18 months in prison in connection with the accounting scandal.

  Source

• 2014

  Accounting error and governance controversy

  American Realty Capital Properties disclosed an approximately $23 million accounting error, dismissed CFO Brian Block and faced allegations in litigation concerning substantial insider fees. The controversy led to leadership changes, a corporate rebrand and prolonged legal proceedings.

  Source

Read more

• 2021

  Acquisition by Realty IncomeM&A

  Background

  VEREIT remained a large U.S. net-lease REIT, with 3,831 properties and approximately 89.7 million square feet reported at the end of 2020.

  Action taken

  Realty Income acquired VEREIT in November 2021.

  Aftermath

  VEREIT ceased to operate as an independent public company and was delisted, with its assets and operations integrated into Realty Income.

  Source

• 2018

  Sale of Cole Real Estate InvestmentsM&A

  Background

  VEREIT had acquired Cole Real Estate Investments in 2014, making it a major participant in the publicly traded net-lease REIT market.

  Action taken

  VEREIT sold Cole Real Estate Investments to CIM Group.

  Aftermath

  Cole became part of CIM Group, while VEREIT continued managing its remaining commercial property portfolio.

  Source

• 2015

  Rebrand as VEREITStrategy

  Background

  The company faced intense scrutiny after disclosing an accounting error and experiencing leadership disruption.

  Action taken

  It changed its name from American Realty Capital Properties to VEREIT, a name associated with the Latin concept of truth.

  Aftermath

  The company continued operating as a publicly traded net-lease REIT under the new identity, while litigation related to the prior accounting controversy continued.

  Source

1. 1VEREITen.wikipedia.org