Filed Pursuant to Rule 424(b)(3)
Registration No. 333-202135
AMERICAN REALTY CAPITAL NEW YORK CITY REIT II, INC.
SUPPLEMENT NO. 1, DATED JUNE 9, 2015,
TO THE PROSPECTUS, DATED MAY 18, 2015
This prospectus supplement, or this Supplement No. 1, is part of the prospectus, or the Prospectus, of American Realty Capital New York City REIT II, Inc., or the Company, dated May 18, 2015. This Supplement No. 1 supplements, modifies, supersedes and replaces certain information contained in our Prospectus and should be read in conjunction with our Prospectus. This Supplement No. 1 will be delivered with the Prospectus. Unless the context suggests otherwise, the terms “we,” “us” and “our” used herein refer to the Company, together with its consolidated subsidiaries.
The purpose of this Supplement No. 1 is to, among other things:
• | update disclosure relating to recent management changes; |
• | update our risk factors; and |
• | replace Appendix C — American Realty Capital New York City REIT II, Inc. Subscription Agreement. |
OPERATING INFORMATION
Management Updates
On June 3, 2015, Gregory W. Sullivan resigned from his roles as chief operating officer, chief financial officer and treasurer of the Company, effective as of that same date. Mr. Sullivan did not resign pursuant to any disagreement with the Company and will remain available to facilitate a smooth transition. Mr. Sullivan also resigned from his roles as chief operating officer, chief financial officer and treasurer of the Company’s advisor and property manager. Simultaneously with Mr. Sullivan’s resignation, the Company’s board of directors appointed Nicholas Radesca to serve as the Company’s interim chief financial officer and treasurer. Mr. Radesca will also serve as interim chief financial officer and treasurer of the Company’s advisor and the Company’s property manager. There are no related party transactions involving Mr. Radesca that are reportable under Item 404(a) of Regulation S-K except as described in the Prospectus. The Company intends to immediately commence a search for a permanent chief financial officer.
In connection with his appointment as interim chief financial officer, treasurer and secretary of the Company, Mr. Radesca entered into an indemnification agreement with the Company.
PROSPECTUS UPDATES
Prospectus Summary
The last sentence of the first paragraph under the heading “Who is your advisor and what will its responsibilities be?” on page 3 of the Prospectus is hereby deleted in its entirety and replaced with the following disclosure.
“Michael A. Happel and Nicholas Radesca, who are executive officers of our company, act as executive officers of our advisor.”
Risk Factors
The risk factor under the heading “Our stockholders have limited voting rights under our charter and Maryland law.” on page 43 of the Prospectus is hereby replaced with the following disclosure.
“Pursuant to Maryland law and our charter, our stockholders are entitled to vote only on the following matters: (a) election or removal of directors, without the necessity for concurrence by our board of directors; (b) amendment of the charter, without the necessity for concurrence by our board of directors as provided in Article XIII of the charter; (c) dissolution of our company, without the necessity for concurrence by our board of directors; and (d) to the extent required under Maryland law, merger, conversion or consolidation of us, a statutory share exchange or the sale or other disposition of all or substantially all of our assets. With respect to all other matters, our board of directors must first adopt a resolution declaring that a proposed action is advisable and direct that such matter be submitted to our stockholders for approval or ratification. These limitations on voting rights may limit our stockholders’ ability to influence decisions regarding our business.”
Management
The table under the heading “Executive Officers and Directors” on page 84 of the Prospectus is hereby deleted in its entirety and replaced with the following table.
“Name | Age | Position(s) | ||
William M. Kahane | 67 | Executive Chairman of the Board of Directors | ||
Michael A. Happel | 52 | Chief Executive Officer, President and Secretary | ||
Nicholas Radesca | 49 | Interim Chief Financial Officer and Treasurer | ||
David Gong | 65 | Independent Director | ||
Buddie J. Penn | 77 | Independent Director” |
Mr. Sullivan’s biography on page 86 of the Prospectus is hereby deleted in its entirety and replaced with the following biography.
“Nicholas Radesca has served as the interim chief financial officer and treasurer of our company, our advisor and our property manager since June 2015. He has served as the interim chief financial officer, treasurer and secretary of NYRT, the NYRT advisor, and the NYRT property manager since June 2015. He has also served as the interim chief financial officer and treasurer of ARC NYCR, the ARC NYCR advisor and the ARC NYCR property manager since June 2015. Mr. Radesca has also served as chief financial officer, treasurer and secretary of ARC DNAV, the ARC DNAV advisor and the ARC DNAV property manager since January 2014, November 2014 and December 2014, respectively. He has served as the chief financial officer and treasurer of AERP’s general partner since October 2013. Mr. Radesca has also served as chief financial officer and treasurer of BDCA since February 2013 and as its secretary in June 2013. Mr. Radesca also served as the chief financial officer of NYRT from February 2014 until April 2014. Prior to joining AR Capital, LLC, the parent of our sponsor, in December 2012, Mr. Radesca was employed by Solar Capital Management, LLC, from March 2008 to May 2012, where he served as the chief financial officer and corporate secretary for Solar Capital Ltd. and its predecessor company, and Solar Senior Capital Ltd., both of which are publicly traded business development companies. From 2006 to February 2008, Mr. Radesca served as the chief accounting officer at iStar Financial Inc., or iStar, a publicly traded commercial REIT, where his responsibilities included overseeing accounting, tax and SEC reporting. Prior to iStar, Mr. Radesca served in various senior accounting and financial reporting roles at Fannie Mae, Del Monte Foods Company, Providian Financial Corporation and Bank of America. Mr. Radesca has more than 20 years of experience in financial reporting and accounting and
is a licensed certified public accountant in New York and Virginia. Mr. Radesca holds a B.S. in accounting from the New York Institute of Technology and an M.B.A. from the California State University, East Bay.”
The last sentence of the fourth paragraph under the sub-heading “Restricted Share Plan” on page 89 of the Prospectus is hereby replaced with the following disclosure.
“We have agreed that the aggregate amount of acquisition fees, acquisition expense reimbursements, financing coordination fees and disposition fees and subordinated distributions by our operating partnership payable to our advisor (or its assignees), together with the fair market value of any shares of restricted stock granted under our restricted share plan, in the aggregate from inception to our liquidity event, may not exceed (a) 6% of all assets’ aggregate gross contract purchase price, (b) as determined each quarter for the preceding four consecutive fiscal quarters, the greater, in the aggregate, of 2% of average invested assets and 25% of net income other than any additions to reserves for depreciation, bad debts, impairments or other similar non-cash reserves and excluding any gain from the sale of assets for that period, (c) disposition fees, if any, of up to 3% of the contract sales price of all properties that we sell and (d) 15% of remaining net sales proceeds after return of capital contributions plus payment to investors of a 6% cumulative, pre-tax, non-compounded return on the capital contributed by investors.”
The second paragraph, the table and the third paragraph under the section entitled “The Advisor” on pages 92-93 of the Prospectus are hereby deleted in their entirety and replaced with the following disclosure.
“The officers and key personnel of our advisor are as follows:
Name | Age | Position(s) | ||
Michael A. Happel | 52 | Chief Executive Officer, President and Secretary | ||
Nicholas Radesca | 49 | Interim Chief Financial Officer and Treasurer | ||
Patrick A. O’Malley | 44 | Chief Investment Officer |
The backgrounds of Messrs. Happel and Radesca are described in the “Management — General — Executive Officers and Directors” section of this prospectus. The background of Mr. O’Malley is described below.”
The section entitled “Affiliated Companies — Property Manager” on page 95 of the Prospectus is hereby deleted in its entirety and replaced with the following disclosure.
“The Property Manager
Our property manager is indirectly controlled by Messrs. Schorsch and Kahane. Mr. Happel acts as chief executive officer, president and secretary of our property manager. Mr. Radesca acts as interim chief financial officer and treasurer of our property manager. Our property manager may engage third-party property managers to manage certain of our properties, including our hotel properties.”
The first sentence under the heading “Investment Decisions” on page 98 of the Prospectus is hereby deleted in its entirety and replaced with the following disclosure.
“The primary responsibility for the investment decisions of our advisor and its affiliates, the negotiation for these investments, and the property management and leasing of these investment properties resides with Messrs. Happel and Radesca and our advisor seeks to invest in office properties and other property types located in the five boroughs of New York City on our behalf that satisfy our investment objectives.”
The second paragraph under the sub-heading “Certain Relationships and Related Transactions — Advisory Agreement” on page 98 of the Prospectus are hereby deleted in their entirety and replaced with the following disclosure.
“Michael A. Happel is the chief executive officer, president and secretary of both our company and our advisor. Nicholas Radesca is the interim chief financial officer and treasurer of both our company and our advisor. For a further description of the advisory agreement, see “—Our Advisor,” “Management Compensation” and “Conflicts of Interest.””
The following disclosure replaces the paragraph, table, and footnotes under the heading “Principal Stockholders” on page 111 of the Prospectus in its entirety.
“The following table provides, as of the date of this prospectus, information regarding the number and percentage of shares of our common stock beneficially owned by each director, each named executive officer, all directors and named executive officers as a group and any person known to us to be the beneficial owner of more than 5% of our outstanding stock. As of April 20, 2015, we had one stockholder of record and 8,888 shares of common stock outstanding. Beneficial ownership includes outstanding shares and shares which are not outstanding, but that any person has the right to acquire within 60 days after the date of this prospectus. However, any such shares which are not outstanding are not deemed to be outstanding for the purpose of computing the percentage of outstanding stock beneficially owned by any other person. Except as otherwise provided, the person named in the table has sole voting and investing power with respect to all shares beneficially owned by him.
Beneficial Owner(1) | Number of Shares Beneficially Owned | Percent of Class | ||||||
New York City II Special Limited Partnership, LLC(2) | 8,888 | 100 | % | |||||
William M. Kahane(2) | 8,888 | (4) | ||||||
Michael A. Happel | — | — | ||||||
Gregory W. Sullivan(3) | — | — | ||||||
Nicholas Radesca(3) | — | — | ||||||
David Gong | — | — | ||||||
Buddie J. Penn | — | — | ||||||
All directors and executive officers as a group (five persons) | 8,888 | (4) | 100 | % |
(1) | The business address of each individual or entity listed in the table is 405 Park Avenue, 14th Floor, New York, New York 10022. |
(2) | The special limited partner is controlled by our sponsor, which is controlled by Nicholas S. Schorsch and William M. Kahane. |
(3) | On June 3, 2015, Gregory W. Sullivan resigned from his roles as chief operating officer, chief financial officer and treasurer of the Company, effective as of that date. Simultaneously with Mr. Sullivan’s resignation, the Company’s board of directors appointed Nicholas Radesca to serve as the Company’s interim chief financial officer and treasurer. |
(4) | Includes 8,888 shares held by New York City II Special Limited Partnership, LLC.” |
Subscription Agreement
The form of subscription agreement included as Appendix C to this Supplement No. 1 hereby replaces the form of subscription agreement included as Appendix C to the Prospectus.
APPENDIX C
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