Realty Capital Securities, LLC (RCS), the wholesaling broker dealer for Nicholas Schorsch’s American Realty Capital direct investment products, has picked up a new client. RREEF Property Trust (RPT), a public, non-traded real estate offering, through its dealer manager SC Distributors, LLC entered into an agreement with RCS to raise up to $2.25 billion of common stock.
SC Distributors will continue to act as dealer manager having sole discretion to accept or reject any subscriptions. They typically act as the dealer manager and wholesaler for similar offerings.
According to their website, they currently distribute five different alternative investments, including RPT. From the filing, it was not clear why SC Distributors outsourced wholesaling responsibilities to RCS and our calls were not immediately returned for clarification.
As wholesaler of RPT, RCS will manage the due diligence process recruiting broker dealers (BDs) to participate in the offering. They will also be charged with providing training and education to financial advisors of the participating BDs as well as marketing and sales support by way of external wholesalers and internal sales desk support.
SC Distributors will compensate RCS a sourcing fee and reimburse for pre-approved expenses in connection with the offering.
According to the filing, as part of the wholesaling agreement, RCS “will not serve as a distribution agent or otherwise participate in a selling group distributing securities in the U.S. retail market for any investment vehicle investing in a multi-sector, diversified portfolio of real estate properties located in the United States.”
RCS currently distributes 20 other direct investment products, mostly non-traded REITS and a business development company sponsored by American Realty Capital, another Schorsch entity.
RREEF Property Trust, sponsored by Deutsche Asset & Wealth Management, is a continuously offered non-traded real estate offering investing in a blended mix of properties, listed real estate securities, debt, and cash.