Blackwells Capital LLC, an affiliate of Blackwells Onshore, announced the release of a presentation to Global Net Lease Inc. (NYSE: GNL) and The Necessity Retail REIT Inc. (NASDAQ: RTL) shareholders that “exposes the value destructive self-dealing of both companies’ external manager, [Nicholas Schorsch-led] AR Global.”
As The DI Wire previously reported, Blackwells filed a lawsuit against AR Global in December 2022 which was followed by a countersuit. In October 2022, Blackwells originally charged AR Global with “corporate piracy of the highest order” in regards to their management of the formerly non-traded REITs after GNL rejected “a purported notice” from the stockholder that stated its intention to nominate two individuals to the company’s board of directors and to have six proposals considered at the company’s 2023 annual meeting of stockholders.
AR Global notified Blackwells Onshore that the notice did not comply with the company’s bylaws on the grounds that the nominees did not qualify for election to the company’s board and because the notice failed to comply with the terms of the company bylaws.
As well as releasing the presentation, Blackwells launched a website, StopARGlobal.com.
Highlights of the presentation include:
- The “endless cycle of self-dealing and embezzlement” by AR Global and its other managed entities to the cost, according to Blackwells, of $838 million for GNL and RTL shareholders.
- Blackwells provides an outline of how AR Global’s management agreements are “permission slips to steal money and the immediate upside for GNL and RTL shareholders that Blackwells see in terminating these agreements.”
- Blackwells also provides responses to AR Global’s “blocking” of shareholders from making director nominations at upcoming 2023 annual meetings and the “unnecessary costs of litigation to shareholders.”
Blackwells’ says the company plans to unlock shareholder value by pursuing a declaratory judgment in the Maryland Court to resolve and terminate this controversy; installing director candidates, Richard L. O’Toole and Jim Lozier; creating a strategic review committee to terminate all relationships with AR Global; appointing a shareholder rights committee and strategic asset review committee to replace the current chief executive officer; and, repealing the “existing poison pill and other anti-takeover, anti-shareholder measures.”
“We believe that GNL and RTL are deeply undervalued companies with attractive property portfolios that are being looted by a rapacious and conflicted external manager, AR Global,” Jason Aintabi, chief investment officer of Blackwells, said. “The boards of directors of both GNL and RTL have each attempted to shield themselves and AR Global from the scrutiny of their shareholders through the manipulation of corporate machinery and tactical litigation.”
As of Dec. 31, 2022, Global Net Lease Inc. owned 309 properties consisting of 39.2 million rentable square feet, which were 98.0% leased, with a weighted-average remaining lease term of 8.1 years.
As of Dec. 31, 2022, Necessity Retail REIT Inc. owned 1,044 properties, comprised of 27.9 million rentable square feet, which were 93.7% leased, including 935 single-tenant net leased commercial properties, 897 of which are retail properties, and 109 multi-tenant retail properties.
Blackwells Capital was founded in 2016 by Jason Aintabi and invests in public securities, ranging property development and management to REITs and adjacent real estate activities, including financing, origination, and managing real estate backed securities, including direct mezzanine and equity investments.