AR Capital, co-founded by William Kahane, has raised almost $20 billion in nontraded equity REITs since 2008 and $6.4 billion this year through September, the most in the industry, according to data from Stanger.

Another Schorsch company, RCS Capital Corp., is an investment firm with businesses including raising money for AR Capital and other nontraded REITs. That company -- whose shares have plunged 45 percent since the news of the accounting issues on Oct. 29 -- this week pulled out of a deal to buy American Realty Capital Properties’s Cole Capital private-capital management unit.

Deal Spree

American Realty Capital Properties, started in December 2010, was a company sponsored by AR Capital. It began trading in September 2011 at $12.50 a share, raising almost $70 million, and from there went on a flurry of real estate purchases that made it the largest U.S. owner of single-tenant buildings such as drugstores, banks and restaurants.

The REIT has completed more than 20 acquisitions since its inception, according to data compiled by Bloomberg. The company’s stock price rose to as high as $17.82 in May 2013. It has since fallen to $8.15, with a market value of about $7.5 billion.

“There were many people in the space who raised concerns about very rapid growth,” said Barry Vinocur, the editor of REIT Wrap, an industry newsletter. “When you grow that rapidly the risk is things may fall through the cracks. Then, there were those who downplayed those concerns saying those raising them were envious.”

Cole Purchase

American Realty Capital Properties’s acquisitions include the $9.85 billion takeover of rival Cole Real Estate Investments Inc., which Schorsch likened to a merger of baseball rivals the Boston Red Sox and New York Yankees. It also bought nontraded REITs that were started by AR Capital, buying American Realty Capital Trust III for more than $2 billion in cash and stock, and American Realty Capital Trust IV in a deal valued at $3.1 billion when it was announced.

This year, the company purchased about 500 Red Lobster locations for about $1.5 billion as part of Darden Restaurants Inc.’s sale of the restaurant chain to Golden Gate Capital.