As filed with the Securities and Exchange Commission on April 10, 2013
Registration No. 333-169533
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 5
to
Form S-11
FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933
OF SECURITIES OF CERTAIN REAL ESTATE COMPANIES
Cole Credit Property Trust IV, Inc.
(Exact Name of Registrant as Specified in Its Governing Instruments)
2325 East Camelback Road, Suite 1100
Phoenix, Arizona 85016
(602) 778-8700
(Address, Including Zip Code and Telephone Number, Including Area Code, of Registrants Principal Executive Offices)
D. Kirk McAllaster, Jr.
Executive Vice President, Chief Financial Officer and Treasurer
Cole Credit Property Trust IV, Inc.
2325 East Camelback Road, Suite 1100
Phoenix, Arizona 85016
(602) 778-8700
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent for Service)
Copies to:
Lauren Burnham Prevost, Esq.
Heath D. Linsky, Esq.
Morris, Manning & Martin, LLP
1600 Atlanta Financial Center
3343 Peachtree Road, N.E.
Atlanta, Georgia 30326-1044
(404) 233-7000
Approximate date of commencement of proposed sale to the public: As soon as practicable following effectiveness of this Registration Statement.
If any of the securities registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, check the following box: þ
If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨
If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨
If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨
If delivery of the prospectus is expected to be made pursuant to Rule 434, check the following box. ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer ¨ |
Accelerated filer ¨ | Non-accelerated filer þ | Smaller reporting company ¨ | |||
(Do not check if a smaller reporting company) |
The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant files a further amendment which specifically states that this Registration Statement will thereafter become effective in accordance with Section 8(c) of the Securities Act of 1933 or until the Registration Statement becomes effective on such date as the Commission, acting pursuant to said Section 8(c), may determine.
This Post-Effective Amendment No. 5 consists of the following:
1. | The Registrants preliminary prospectus dated April 10, 2013 which consolidates the Registrants final form of prospectus dated October 24, 2012 and all supplements to that prospectus. |
2. | Part II, included herewith. |
3. | Signatures, included herewith. |
The information in this prospectus is not complete and may be changed. We may not sell these securities pursuant to this prospectus until the registration statement filed with the SEC is effective. This prospectus is not an offer to sell these securities in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION DATED APRIL 10, 2013
PROSPECTUS
Cole Credit Property Trust IV, Inc.
Maximum Offering of 300,000,000 Shares of Common Stock
Cole Credit Property Trust IV, Inc. is a Maryland corporation that intends to invest primarily in income-producing necessity retail properties that are single-tenant or multi-tenant power centers subject to long-term triple net or double net leases with national or regional creditworthy tenants. We intend to qualify as a real estate investment trust (REIT) for federal income tax purposes, and we are externally managed by our advisor, Cole REIT Advisors IV, LLC, an affiliate of our sponsor, Cole Real Estate Investments.
We are offering up to 250,000,000 shares of our common stock in our primary offering for $10.00 per share, with discounts available for certain categories of purchasers. We also are offering under this prospectus up to 50,000,000 shares of our common stock pursuant to our distribution reinvestment plan at a purchase price during this offering of $9.50 per share. We will offer these shares until January 26, 2014, which is two years after the effective date of this offering, unless the offering is extended. We may need to renew the registration of this offering annually with certain states in which we expect to offer and sell shares. In no event will we extend this offering beyond 180 days after the third anniversary of the initial effective date, and we may terminate this offering at any time. We reserve the right to reallocate the shares we are offering between our primary offering and our distribution reinvestment plan.
See Risk Factors beginning on page 25 for a description of the principal risks you should consider before buying shares of our common stock. These risks include the following:
| The amount of distributions we may pay, if any, is uncertain. Due to the risks involved in the ownership of real estate, there is no guarantee of any return on your investment in our common stock, and you may lose your investment. |
| We are a blind pool, as we have not identified all of the properties we intend to purchase, and we have a limited operating history. |
| This investment has limited liquidity. No public market currently exists, and one may never exist, for shares of our common stock. If you are able to sell your shares, you would likely have to sell them at a substantial discount to their market value. |
| You should consider an investment in our common stock a long-term investment. If we do not successfully implement our exit strategy, you may suffer losses on your investment, or your shares may continue to have limited liquidity. |
| The offering price for our shares is not intended to reflect the book value or net asset value of our investments, or our expected cash flow. Until such time as our shares are valued by our board of directors, the price of our shares is not intended to reflect the net asset value of our shares. |
| We have paid, and may continue to pay, distributions from sources other than cash flow from operations, including borrowings and proceeds from the sale of our securities or asset sales, and we have no limits on the amounts we may pay from such other sources. Payments of distributions from sources other than cash flows from operations may reduce the amount of capital we ultimately invest in real estate and may negatively impact the value of your investment. As a result, the amount of distributions paid at any time may not reflect the current performance of our properties or our current operating cash flows. |
| This is a best efforts offering. If we are not able to raise a substantial amount of capital in the near term, we may have difficulties investing in properties and our ability to achieve our investment objectives could be adversely affected. |
| There are substantial conflicts of interest between us and our advisor and its affiliates. Key persons associated with our advisor perform similar duties for other programs sponsored by Cole Real Estate Investments that may use investment strategies similar to ours creating potential conflicts of interest when allocating investment opportunities. In addition, our advisor and its affiliates have substantial discretion in managing our operations, and we pay them substantial fees. |
| Although you will be provided with information about our investments after the investments have been made, you will be unable to evaluate the economic merit of future investments, including how the proceeds from this offering will be invested. This makes an investment in our shares speculative. |
| Our board of directors may change our investment objectives and certain investment policies without stockholder approval. |
| We expect to incur debt, which could adversely impact your investment if the value of the property securing the debt falls or if we are forced to refinance the debt during adverse economic conditions. |
| We may suffer from delays in our advisor locating suitable investments, which could adversely affect our ability to pay distributions and the value of your investment. |
| If we fail to qualify as a REIT, cash available for distributions to be paid to you could decrease materially. |
| For qualified accounts, if an investment in our shares constitutes a prohibited transaction under the Employee Retirement Income Security Act of 1974, as amended (ERISA), you may be subject to the imposition of significant excise taxes and penalties with respect to the amount invested. |
This investment involves a high degree of risk. You should purchase these securities only if you can afford a complete loss of your investment.
Neither the Securities and Exchange Commission, the Attorney General of the State of New York, nor any other state securities regulator, has approved or disapproved of our common stock, nor determined if this prospectus is truthful or complete or passed on or endorsed the merits or demerits of this offering. Any representation to the contrary is a criminal offense.
The use of projections in this offering is prohibited. Any representation to the contrary, and any predictions, written or oral, as to the amount or certainty of any future benefit or tax consequence that may flow from an investment in this program is not permitted. All proceeds from this offering are held in trust until subscriptions are accepted and funds are released.
Price to Public | Selling Commissions |
Dealer Manager Fee |
Net Proceeds (Before Expenses) |
|||||||||||||
Primary Offering Per Share |
$ | 10.00 | $ | 0.70 | $ | 0.20 | $ | 9.10 | ||||||||
Total Maximum |
$ | 2,500,000,000 | $ | 175,000,000 | $ | 50,000,000 | $ | 2,275,000,000 | ||||||||
Distribution Reinvestment Plan Per Share |
$ | 9.50 | $ | | $ | | $ | 9.50 | ||||||||
Total Maximum |
$ | 475,000,000 | $ | | $ | | $ | 475,000,000 |
The dealer manager of this offering, Cole Capital Corporation, a member firm of the Financial Industry Regulatory Authority, Inc. (FINRA), is an affiliate of our advisor and will offer the shares on a best efforts basis. The minimum investment generally is 250 shares. See the Plan of Distribution section of this prospectus for a description of such compensation. We expect that up to 10% of our gross offering proceeds, excluding proceeds from our distribution reinvestment plan, will be used to pay selling commissions, dealer manager fees and other expenses considered to be underwriting compensation.
The date of this prospectus is , 2013
An investment in our common stock is only suitable for persons who have adequate financial means and desire a long-term investment (generally, an investment horizon in excess of seven years). The value of your investment may decline significantly. In addition, the investment will have limited liquidity, which means that it may be difficult for you to sell your shares. Persons who may require liquidity within several years from the date of their investment or seek a guaranteed stream of income should not invest in our common stock.
In consideration of these factors, we have established minimum suitability standards for initial stockholders and subsequent purchasers of shares from our stockholders. These minimum suitability standards require that a purchaser of shares have, excluding the value of a purchasers home, furnishings and automobiles, either:
| a net worth of at least $250,000; or |
| a gross annual income of at least $70,000 and a net worth of at least $70,000. |
Certain states have established suitability requirements in addition to the minimum standards described above. Shares will be sold to investors in these states only if they meet the additional suitability standards set forth below:
| Alabama Investors must have a liquid net worth of at least ten times their investment in us and similar programs. |
| California Investors must have either (i) a net worth of at least $250,000, or (ii) a gross annual income of at least $75,000 and a net worth of at least $75,000. In addition, the investment must not exceed ten percent (10%) of the net worth of the investor. |
| Iowa and New Mexico Investors may not invest, in the aggregate, more than 10% of their liquid net worth in us and all of our affiliates. |
| Kansas and Massachusetts It is recommended by the office of the Kansas Securities Commissioner and the Massachusetts Securities Division that investors in Kansas and Massachusetts not invest, in the aggregate, more than 10% of their liquid net worth in this and similar direct participation investments. For purposes of this recommendation, liquid net worth is defined as that portion of net worth that consists of cash, cash equivalents and readily marketable securities. |
| Kentucky, Michigan, Oregon, Pennsylvania and Tennessee Investors must have a liquid net worth of at least 10 times their investment in us. |
| Maine The investment in us (plus any investments in our affiliates) by an investor must not exceed 10% of the net worth of the investor. |
| Nebraska Investors must have (excluding the value of their home, furnishings and automobiles) either (i) a minimum net worth of $100,000 and an annual income of $70,000, or (ii) a minimum net worth of $350,000. In addition, the investment in us must not exceed 10% of the investors net worth. |
| North Dakota Investors must have a liquid net worth of at least ten times their investment in us and our affiliates. |
| Ohio Investors may not invest, in the aggregate, more than 10% of their liquid net worth in us, our affiliates and other non-traded real estate investment programs. For purposes of this limitation, liquid net worth is defined as that portion of net worth (total assets exclusive of home, home furnishings and automobiles minus total liabilities) that is comprised of cash, cash equivalents and readily marketable securities. |
Because the minimum offering of our common stock was less than $297,500,000 Pennsylvania investors are cautioned to evaluate carefully our ability to accomplish fully our stated objectives and to inquire as to the current dollar volume of our subscription proceeds.
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In the case of sales to fiduciary accounts, the minimum suitability standards must be met by either the fiduciary account, by the person who directly or indirectly supplied the funds for the purchase of the shares, or by the beneficiary of the account.
Our sponsor and our dealer manager, which is an affiliate of our sponsor, are responsible for determining if investors meet our minimum suitability standards and state specific suitability standards for investing in our common stock. In making this determination, our sponsor and our dealer manager will rely on the participating broker-dealers and/or information provided by investors. In addition to the minimum suitability standards described above, each participating broker-dealer, authorized representative or any other person selling shares on our behalf, and our sponsor, is required to make every reasonable effort to determine that the purchase of shares is a suitable and appropriate investment for each investor.
It shall be the responsibility of your participating broker-dealer, authorized representative or other person selling shares on our behalf to make this determination, based on a review of the information provided by you,
including your age, investment objectives, income, net worth, financial situation and other investments held by you, and consider whether you:
| meet the minimum income and net worth standards established in your state; |
| can reasonably benefit from an investment in our common stock based on your overall investment objectives and portfolio structure; |
| are able to bear the economic risk of the investment based on your overall financial situation; and |
| have an apparent understanding of: |
| the fundamental risks of an investment in our common stock; |
| the risk that you may lose your entire investment; |
| the lack of liquidity of our common stock; |
| the restrictions on transferability of our common stock; |
| the background and qualifications of our advisor; and |
| the tax, including ERISA, consequences of an investment in our common stock. |
Such persons must maintain records for at least six years of the information used to determine that an investment in the shares is suitable and appropriate for each investor.
Restrictions Imposed by the USA PATRIOT Act and Related Acts
In accordance with the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (the USA PATRIOT Act), the shares offered hereby may not be offered, sold, transferred or delivered, directly or indirectly, to any Unacceptable Investor, which means anyone who is:
| a designated national, specially designated national, specially designated terrorist, specially designated global terrorist, foreign terrorist organization, or blocked person within the definitions set forth in the Foreign Assets Control Regulations of the U.S. Treasury Department; |
| acting on behalf of, or an entity owned or controlled by, any government against whom the United States maintains economic sanctions or embargoes under the Regulations of the U.S. Treasury Department; |
| within the scope of Executive Order 13224 Blocking Property and Prohibiting Transactions with Persons who Commit, Threaten to Commit, or Support Terrorism, effective September 24, 2001; |
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| a person or entity subject to additional restrictions imposed by any of the following statutes or regulations and executive orders issued thereunder: the Trading with the Enemy Act, the National Emergencies Act, the Antiterrorism and Effective Death Penalty Act of 1996, the International Emergency Economic Powers Act, the United Nations Participation Act, the International Security and Development Cooperation Act, the Nuclear Proliferation Prevention Act of 1994, the Foreign Narcotics Kingpin Designation Act, the Iran and Libya Sanctions Act of 1996, the Cuban Democracy Act, the Cuban Liberty and Democratic Solidarity Act and the Foreign Operations, Export Financing and Related Programs Appropriations Act or any other law of similar import as to any non-U.S. country, as each such act or law has been or may be amended, adjusted, modified or reviewed from time to time; or |
| designated or blocked, associated or involved in terrorism, or subject to restrictions under laws, regulations, or executive orders as may apply in the future similar to those set forth above. |
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Appendix E: Initial Subscription Agreement (Alabama Investors) |
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Appendix F: Additional Subscription Agreement (Alabama Investors) |
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Appendix G: Alternative Form of Additional Subscription Agreement |
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QUESTIONS AND ANSWERS ABOUT THIS OFFERING
Below we have provided some of the more frequently asked questions and answers relating to an offering of this type. Please see Prospectus Summary and the remainder of this prospectus for more detailed information about this offering.
Q: | What is a REIT? |
A: | In general, a REIT is a company that: |
| pays distributions to investors of at least 90% of its taxable income; |
| avoids the double taxation treatment of income that generally results from investments in a corporation because a REIT generally is not subject to federal corporate income taxes on its net income, provided certain income tax requirements are satisfied; and |
| combines the capital of many investors to acquire a large-scale diversified real estate portfolio under professional management. |
Q: | How are you different from your competitors who offer non-listed finite-life public REIT shares or real estate limited partnership units? |
A: | We believe that our sponsors disciplined investment focus on core commercial real estate and experience in managing such properties will distinguish us from other non-listed REITs. We use the term core to describe existing properties currently operating and generating income, that are leased to national and regional creditworthy tenants under long-term net leases and are strategically located. In addition, core properties typically have high occupancy rates (greater than 90%) and low to moderate leverage (0% to 50% loan to value). |
We invest primarily in income-producing necessity retail properties that are single-tenant or multi-tenant power centers, which are leased to national and regional creditworthy tenants under long-term leases, and are strategically located throughout the United States and U.S. protectorates. Necessity retail properties are properties leased to retail tenants that attract consumers for everyday needs, such as pharmacies, home improvement stores, national superstores, restaurants and regional retailers. We expect that most of our properties will be subject to triple net and double net leases, whereby the tenant is obligated to pay for most of the expenses of maintaining the property. Through our investments in core commercial real estate, we expect to achieve a relatively predictable and stable stream of income, which will provide a principal source of return for investors in our common stock, and the potential for capital appreciation in the value of our real estate assets.
For over three decades, our sponsor has developed and utilized this investment approach in acquiring and managing core commercial real estate assets in the retail sector. We believe that our sponsors experience in assembling real estate portfolios, which principally focus on national and regional creditworthy tenants subject to long-term net leases, will provide us with a competitive advantage. In addition, our sponsor has built a business of over 350 employees, who are experienced in the various aspects of acquiring, financing and managing commercial real estate, and that our access to these resources also will provide us with an advantage.
Q: | Will you invest in anything other than retail commercial properties? |
A: | Yes. We also may invest in other income-producing properties, such as office and industrial properties, which may share certain core characteristics with our retail investments, such as a principal creditworthy tenant, a long-term net lease, and a strategic location. Our sponsors disciplined investment focus on core commercial real estate historically has included office and industrial properties. To the extent that we invest in office and industrial properties, we will focus on core properties that are essential to the business operations of the tenant. We believe investments in these properties are consistent with our goal of |
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providing investors with a relatively stable stream of current income and an opportunity for capital appreciation. Our portfolio also may include other income-producing real estate, as well as real estate-related investments such as mortgage, mezzanine, bridge and other loans and securities related to real estate assets, provided that such investments do not cause us to lose our REIT status or cause us to be an investment company under the Investment Company Act of 1940, as amended (Investment Company Act). Although this is our current target portfolio, we may make adjustments to our target portfolio based on real estate market conditions and investment opportunities. We will not forgo a high quality investment because it does not precisely fit our expected portfolio composition. Our goal is to assemble a portfolio that is diversified by investment type, investment size and investment risk, which will provide attractive and reasonably stable returns to our investors. See the section of this prospectus captioned Investment Objectives and Policies Acquisition and Investment Policies for a more detailed discussion of all of the types of investments we may make. |
Q: | Generally, what are the terms of your leases? |
A: | We will seek to secure leases from creditworthy tenants before or at the time we acquire a property. We expect that many of our leases will be what is known as triple net or double net leases. Triple net leases typically require the tenant to pay all costs associated with a property in addition to the base rent and percentage rent, if any, including capital expenditures for the roof and the building structure. Double net leases typically hold the landlord responsible for the capital expenditures for the roof and structure, while the tenant is responsible for all lease payments and remaining operating expenses associated with the property. This helps ensure the predictability and stability of our expenses, which we believe will result in greater predictability and stability of our cash distributions to stockholders. Our leases generally have terms of ten or more years and include renewal options. We may, however, enter into leases that have a shorter term. |
Q: | How will you determine whether tenants are creditworthy? |
A: | Our advisor and its affiliates have a well-established underwriting process to determine the creditworthiness of our potential tenants. The underwriting process includes analyzing the financial data and other information about the tenant, such as income statements, balance sheets, net worth, cash flow, business plans, data provided by industry credit rating services, and/or other information our advisor may deem relevant. In addition, we may obtain guarantees of leases by the corporate parent of the tenant, in which case our advisor will analyze the creditworthiness of the guarantor. In many instances, especially in sale-leaseback situations, where we are acquiring a property from a company and simultaneously leasing it back to such company under a long-term lease, we will meet with the senior management to discuss the companys business plan and strategy. We may use an industry credit rating service to determine the creditworthiness of potential tenants and any personal guarantor or corporate guarantor of the tenant. We consider the reports produced by these services along with the relevant financial and other data relating to the proposed tenant before acquiring a property subject to an existing lease or entering into a new lease. |
Q: | What is the experience of your sponsor and your advisor? |
A: | References to our sponsor throughout this prospectus refer to a group of affiliated entities that, prior to April 5, 2013, were directly or indirectly controlled by Christopher H. Cole. On April 5, 2013, Cole Credit Property Trust III, Inc. (CCPT III) acquired our sponsor pursuant to a transaction whereby Cole Holdings Corporation (Cole Holdings) merged with and into CREInvestments, LLC (CREInvestments), a wholly-owned subsidiary of CCPT III. Prior to the merger, Cole Holdings was wholly owned by Mr. Christopher H. Cole, our chairman of the board, chief executive officer and president. Cole Holdings was also an affiliate of our sponsor, the parent company and indirect owner of Cole REIT Advisors IV, LLC (CR IV Advisors), our advisor, and the indirect owner of Cole Capital Corporation, our dealer manager. As a result of the merger, our advisor and dealer manager are now wholly-owned by CREInvestments. Also in connection with the merger, the property management services previously performed for us by Cole Realty Advisors, Inc. (Cole |
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Realty Advisors) have been assigned to CREI Advisors, LLC (CREI Advisors), a wholly-owned subsidiary of CREI. Despite the indirect change in control of our advisor and dealer manager, and the assignment of these property management services to CREI Advisors, we expect that the advisory, dealer manager and property management services we receive will continue without any changes in personnel or service procedures. From January 1, 2003 to December 31, 2012, our sponsor and its affiliates sponsored 66 prior programs, including 61 privately offered programs and five publicly offered REITs, which are comprised of Cole Credit Property Trust II, Inc. (CCPT II), CCPT III, Cole Corporate Income Trust, Inc. (CCIT), Cole Real Estate Income Strategy (Daily NAV), Inc. (Cole Income NAV Strategy) and this program (CCPT IV). These prior programs had raised approximately $8.1 billion from over 155,000 investors and had purchased 2,090 properties located in 47 states and the U.S. Virgin Islands at an acquisition cost of $12.5 billion as of December 31, 2012. Our program, CCIT and Cole Income NAV Strategy are each currently raising capital pursuant to their respective initial public offerings of shares of their common stock. |
For over three decades, our sponsor has developed and utilized a conservative investment approach that focuses on single-tenant commercial properties, which are leased to name-brand creditworthy tenants, subject to long-term net leases. While our sponsor has used this investment strategy primarily in the retail sector, our sponsor has also used the same investment strategy (single-tenant commercial properties subject to long-term net leases with creditworthy tenants) in the office and industrial sector. We expect that our sponsors prior experience in applying this conservative and disciplined investment strategy in both the retail and corporate sectors will provide us with a competitive advantage, as our advisor, an affiliate of our sponsor, acquires and manages, on our behalf, a portfolio of necessity retail properties. In addition, our sponsor has built an organization of over 350 employees, who are experienced in the various aspects of acquiring, financing and managing commercial real estate, and we believe that our access to these resources will also provide us with a competitive advantage. A summary of the real estate programs managed over the last ten years by our sponsor, including adverse business and other developments, is set forth in the section of this prospectus captioned Prior Performance Summary.
Our advisor is CR IV Advisors, an affiliate of our sponsor that was formed solely for the purpose of managing our company. The chief executive officer and president of our advisor, and other key personnel of our advisor, have been associated with Cole Real Estate Investments for several years. For additional information about the key personnel of our advisor, see the section of this prospectus captioned Management The Advisor.
Q: | What will be the source of your distributions? |
We have paid, and may continue to pay, distributions from sources other than cash flow from operations, including from the proceeds of this offering, from borrowings or from the sale of properties or other investments, among others, and we have no limit on the amounts we may pay from such sources. We expect that our cash flow from operations available for distribution will be lower in the initial stages of this offering until we have raised significant capital and made substantial investments. As a result, we expect that during the early stages of our operations, and from time to time thereafter, we may declare distributions from sources other than cash flows from operations. Our distributions will constitute a return of capital for federal income tax purposes to the extent that they exceed our earnings and profits as determined for tax purposes.
Q: | Do you expect to acquire properties in transactions with affiliates of your advisor? |
A: | Other than as set forth below, our board of directors has adopted a policy to prohibit acquisitions and loans from or to affiliates of our advisor. First, from time to time, our advisor may direct certain of its affiliates to acquire properties that would be suitable investments for us or our advisor may create special purpose entities to acquire properties that would be suitable investments for us. Subsequently, we may acquire such properties from such affiliates of our advisor. Any and all acquisitions from affiliates of our advisor must be approved by a majority of our directors, including a majority of our independent directors, not otherwise interested in such transaction as being fair and reasonable to us and at a price to us that is no greater than the cost of the property to the affiliate of our advisor (including acquisition fees and expenses), unless a |
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majority of the independent directors determines that there is substantial justification for any amount that exceeds such cost and that the difference is reasonable. In no event will we acquire a property from an affiliate of our advisor if the cost to us would exceed the propertys current appraised value as determined by an independent appraiser. In no event will our advisor or any of its affiliates be paid more than one acquisition fee in connection with any such transaction. |
Second, from time to time, we may borrow funds from affiliates of our advisor, including our sponsor, as bridge financing to enable us to acquire a property when offering proceeds alone are insufficient to do so and third party financing has not been arranged. Any and all such transactions must be approved by a majority of our directors, including a majority of our independent directors, not otherwise interested in such transaction as fair, competitive and commercially reasonable, and no less favorable to us than comparable loans between unaffiliated parties.
Finally, our advisor or its affiliates may pay costs on our behalf, pending our reimbursement, or we may defer payment of fees to our advisor or its affiliates, neither of which would be considered a loan.
Notwithstanding any of the foregoing, none of these restrictions would preclude us from paying our advisor or its affiliates fees or other compensation in connection with internalizing our advisor if our board of directors determines an internalization transaction is in the best interests of our stockholders. See the section of this prospectus captioned Management Compensation Becoming Self-Administered.
Q: | Will you acquire properties in joint ventures, including joint ventures with affiliates? |
A: | It is possible that we may acquire properties through one or more joint ventures in order to increase our purchasing power and diversify our portfolio of properties in terms of geographic region, property type and tenant industry group. Increased portfolio diversification reduces the risk to investors as compared to a program with less diversified investments. Our joint ventures may be with affiliates of our advisor or with non-affiliated third parties. Any joint venture with an affiliate of our advisor must be approved by a majority of our independent directors and the cost of our investment must be supported by a current appraisal of the asset. Generally, we will only enter into a joint venture in which we will approve major decisions of the joint venture. If we do enter into joint ventures, we may assume liabilities related to a joint venture that exceed the percentage of our investment in the joint venture. |
Q: | Will the distributions I receive be taxable as ordinary income? |
A: | Generally, unless your investment is held in a qualified tax-exempt account, distributions that you receive, including distributions that are reinvested pursuant to our distribution reinvestment plan, will be taxed as ordinary income to the extent they are from current or accumulated earnings and profits. We expect that some portion of your distributions in any given year may not be subject to tax because depreciation and other non-cash expenses reduce taxable income but do not reduce cash available for distribution. In addition, distributions may be made from other sources, such as borrowings in anticipation of future operating cash flows or proceeds of this offering, which would not be currently taxed. The portion of your distribution that is not currently taxable is considered a return of capital for tax purposes and will reduce the tax basis of your investment. This, in effect, defers a portion of your tax until your investment is sold or we are liquidated, at which time you likely will be taxed at capital gains rates. However, because each investors tax considerations are different, we recommend that you consult with your tax advisor. You also should review the section of this prospectus entitled Federal Income Tax Considerations. |
Q: | What will you do with the money raised in this offering before you invest the proceeds in real estate? |
A: | Until we invest the proceeds of this offering in real estate, we may invest in short-term, highly liquid or other authorized investments. We may not be able to invest the proceeds from this offering in real estate promptly and such short-term investments will not earn as high of a return as we expect to earn on our real estate investments. |
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Q: | How does a best efforts offering work? |
A: | When shares are offered to the public on a best efforts basis, the dealer manager and the broker-dealers participating in the offering are only required to use their best efforts to sell the shares and have no firm commitment or obligation to purchase any of the shares. Therefore, we may not sell all of the shares that we are offering. |
Q: | Who can buy shares? |
A: | In order to buy shares of our common stock, you must meet our minimum suitability standards, which generally require that you have either (1) a net worth of at least $70,000 and a gross annual income of at least $70,000, or (2) a net worth of at least $250,000. For this purpose, net worth does not include your home, home furnishings and automobiles. You may be required to meet certain state suitability standards. In addition, all investors must meet suitability standards determined by his or her broker or financial advisor. You should carefully read the more detailed description under Suitability Standards immediately following the cover page of this prospectus. |
Q: | For whom might an investment in our shares be appropriate? |
A: | An investment in our shares may be appropriate for you if, in addition to meeting the suitability standards described above, you seek to diversify your personal portfolio with a real estate-based investment, seek to receive current income, and seek the opportunity to achieve capital appreciation over an investment horizon of more than seven years. An investment in our shares has limited liquidity and therefore is not appropriate if you may require liquidity within several years from the date of your investment or seek a guaranteed stream of income. |
Q: | May I make an investment through my IRA or other tax-deferred account? |
A: | Yes. You may make an investment through your individual retirement account (IRA) or other tax-deferred account. In making these investment decisions, you should consider, at a minimum, (1) whether the investment is in accordance with the documents and instruments governing your IRA, plan or other account, (2) whether the investment would constitute a prohibited transaction under applicable law, (3) whether the investment satisfies the fiduciary requirements associated with your IRA, plan or other account, (4) whether the investment will generate unrelated business taxable income (UBTI) to your IRA, plan or other account, (5) whether there is sufficient liquidity for such investment under your IRA, plan or other account, and (6) the need to value the assets of your IRA, plan or other account annually or more frequently. You should note that an investment in shares of our common stock will not, in itself, create a retirement plan and that, in order to create a retirement plan, you must comply with all applicable provisions of the Internal Revenue Code of 1986, as amended (Internal Revenue Code). |
Q: | Is there any minimum investment required? |
A: | The minimum investment generally is 250 shares. You may not transfer any of your shares if such transfer would result in your owning less than the minimum investment amount, unless you transfer all of your shares. In addition, you may not transfer or subdivide your shares so as to retain less than the number of shares required for the minimum purchase. In order to satisfy the minimum purchase requirements for retirement plans, unless otherwise prohibited by state law, a husband and wife may jointly contribute funds from their separate IRAs, provided that each such contribution is made in increments of $1,000. |
After you have purchased the minimum investment amount in this offering or have satisfied the minimum purchase requirement of any other Cole-sponsored public real estate program, any additional purchase must be in increments of at least 100 shares or made pursuant to our distribution reinvestment plan, which may be in lesser amounts.
5
Q: | How do I subscribe for shares? |
A: | If you choose to purchase shares in this offering, in addition to reading this prospectus, you will need to complete and sign a subscription agreement, similar to the one contained in this prospectus as Appendix B (Appendix E for investors in Alabama), for a specific number of shares and pay for the shares at the time you subscribe. After you become a stockholder, you may purchase additional shares by completing and signing an additional investment subscription agreement, similar to the one contained in this prospectus as Appendix C (Appendix F for investors in Alabama). |
Q: | Who is the transfer agent? |
A: | The name, address and telephone number of our transfer agent is as follows: |
DST Systems, Inc.
P.O. Box 219312
Kansas City, Missouri 64121-9312
(866) 907-2653
To ensure that any account changes are made promptly and accurately, all changes, including your address, ownership type and distribution mailing address, should be directed to the transfer agent.
Q: | Will I be notified of how my investment is doing? |
A: | Yes. We will provide you with periodic updates on the performance of your investment with us, including: |
| three quarterly financial reports; |
| an annual report; |
| a annual Form 1099; |
| supplements to the prospectus during the offering period; and |
| notification to Maryland residents regarding the sources of their distributions if such distributions are not entirely from our funds from operations, which will be sent via U.S. mail in connection with every third monthly distribution statement and/or check, as applicable. |
Except as set forth above, we will provide this information to you via one or more of the following methods, in our discretion and with your consent, if necessary:
| U.S. mail or other courier; |
| facsimile; |
| electronic delivery, including email and/or CD-ROM; or |
| posting, or providing a link, on our affiliated website, which is www.colecapital.com. |
Q: | When will I get my detailed tax information? |
A: | Your Form 1099 tax information will be placed in the mail by January 31 of each year. |
Q: | Who can help answer my questions? |
A: | If you have more questions about the offering or if you would like additional copies of this prospectus, you should contact your registered representative or contact: |
Cole Capital Corporation
2325 E. Camelback Road, Suite 1100
Phoenix, Arizona 85016
(866) 907-2653
Attn: Investor Services
www.colecapital.com
6
This prospectus summary highlights some of the material information contained elsewhere in this prospectus. Because it is a summary, it may not contain all of the information that is important to you. To understand this offering fully, you should read the entire prospectus carefully, including the Risk Factors section and the financial statements, before making a decision to invest in our common stock.
Cole Credit Property Trust IV, Inc.
Cole Credit Property Trust IV, Inc. is a Maryland corporation, formed on July 27, 2010, which intends to qualify as a REIT for federal income tax purposes beginning with the taxable year ended December 31, 2012. We intend to use substantially all of the net proceeds from this offering to acquire and operate a diversified portfolio of core commercial real estate investments primarily consisting of necessity retail properties located throughout the United States, including U.S. protectorates. Our retail properties primarily have been and will be single-tenant properties and multi-tenant power centers anchored by large, creditworthy national or regional retailers. Our retail properties typically are and we expect that they will continue to be subject to long-term triple net or double net leases, which means the tenant will be obligated to pay for most of the expenses of maintaining the property. Frequently, our leases will be guaranteed by the tenants corporate parent. Through our investments in core commercial real estate, we expect to achieve a relatively predictable and stable stream of income, which will provide a principal source of return for our investors in our common stock, and the potential for capital appreciation in the value of our real estate assets.
We also may invest in other income-producing properties, such as office and industrial properties which may share certain core characteristics with our retail investments, such as a principal creditworthy tenant, a long-term net lease, and a strategic location. We believe investments in these types of office and industrial properties are consistent with our goal of providing investors with a relatively stable stream of current income and an opportunity for capital appreciation.
In addition, we may further diversify our portfolio by making and investing in mortgage, mezzanine, bridge and other loans secured, directly or indirectly, by the same types of properties that we may acquire directly. We also may acquire majority or minority interests in other entities (or business units of such entities) with investment objectives similar to ours or with management, investment or development capabilities that our advisor deems desirable or advantageous to acquire. See the section of this prospectus captioned Investment Objectives and Policies Acquisition and Investment Policies for a more detailed discussion of all of the types of investments we may make.
We believe that our sponsors experience in assembling real estate portfolios, which principally focus on national and regional creditworthy tenants subject to long-term leases, will provide us with a competitive advantage. We believe that another competitive advantage is our ability to purchase properties for cash and to close transactions quickly. Cole Capital Corporation, the broker-dealer affiliate of our sponsor, raised approximately $4.9 billion on behalf of CCPT III in CCPT IIIs public offerings, and we expect that, through its well-developed distribution capabilities and relationships with other broker-dealers, Cole Capital Corporation will be successful in raising capital on our behalf in this offering.
Our offices are located at 2325 East Camelback Road, Suite 1100, Phoenix, Arizona 85016. Our telephone number is 866-907-2653. Our fax number is 877-616-1118, and the e-mail address of our investor relations department is investorservices@colecapital.com.
Additional information about us and our affiliates may be obtained at www.colecapital.com, but the contents of that site are not incorporated by reference in or otherwise a part of this prospectus.
7
Our Sponsor and our Advisor
Our sponsor is Cole Real Estate Investments, a trade name we use to refer to a group of affiliated entities, including Cole Capital Advisors, Inc. (Cole Capital Advisors), Cole Capital Partners, LLC (Cole Capital Partners) and other affiliates of our advisor. Our advisor, CR IV Advisors, a Delaware limited liability company, is responsible for managing our affairs on a day-to-day basis, identifying and making acquisitions and investments on our behalf, and recommending to our board of directors an approach for providing our investors with liquidity. See Summary of Prior Offerings below. Our advisor will use its best efforts, subject to the oversight of our board of directors, to, among other things, manage our portfolio. Management of our portfolio will include making decisions about the active management of our portfolio, including decisions to acquire or dispose of real estate assets. Our advisor is responsible for identifying and acquiring potential real estate investments of our behalf. All acquisitions of commercial properties will be evaluated for the reliability and stability of their future income, as well as for their potential for capital appreciation. We expect that our advisor will consider the risk profile, credit quality and reputation of potential tenants and the impact of each particular acquisition as it relates to the portfolio as a whole. Our board of directors has delegated to our advisor broad authority to manage our business in accordance with our investment objectives, strategy, guidelines, policies and limitations; provided, however, that our board of directors will exercise its fiduciary duties to our stockholders by overseeing our advisors investment process.
Our Dealer Manager
Cole Capital Corporation, which we refer to as our dealer manager, is an affiliate of our sponsor and a member of FINRA. Our dealer manager has distributed shares of many of our sponsors prior real estate programs, and has built relationships with a large number of broker-dealers throughout the country, which participated in some or all of those prior offerings. Our dealer manager will distribute the shares of our common stock on a best efforts basis, and will advise us regarding this offering, manage our relationships with participating broker-dealers and financial advisors and provide assistance in connection with compliance matters relating to the offering, including compliance regarding any sales literature that we may prepare.
Our Board of Directors
We operate under the direction of our board of directors, the members of which are accountable to us and our stockholders as fiduciaries. We have three directors, Christopher H. Cole, Lawrence S. Jones and J. Marc Myers. Two of our directors, Messrs. Jones and Myers, are each independent directors. Our charter requires that a majority of our directors be independent of our advisor. Our charter also provides that our independent directors will be responsible for reviewing the performance of our advisor and determining the compensation paid to our advisor and its affiliates is reasonable. See the Conflicts of Interest Certain Conflict Resolution Procedures section of this prospectus. Our directors will be elected annually by our stockholders.
Investment Objectives
Our primary investment objectives are:
| to acquire quality commercial real estate properties, net leased under long-term leases to creditworthy tenants, which provide current operating cash flows; |
| to provide reasonably stable, current income for you through the payment of cash distributions; and |
| to provide the opportunity to participate in capital appreciation in the value of our investments. |
See the Investment Objectives and Policies section of this prospectus for a more complete description of our investment objectives and policies, and investment restrictions. We may not achieve our investment objectives. See Summary Risk Factors below.
8
Summary Risk Factors
Following are some of the risks relating to your investment:
| The amount of distributions we may pay is uncertain. Due to the risks involved in the ownership of real estate, there is no guarantee of any return on your investment in our common stock, and you may lose your investment. |
| We are a blind pool, as we have not identified all of the properties we intend to purchase with the proceeds of this offering, and we have a limited operating history. |
| This investment has limited liquidity. No public market currently exists, and one may never exist, for shares of our common stock. If you are able to sell your shares, you would likely have to sell them at a substantial discount to their market value. |
| You should consider an investment in our common stock a long-term investment. If we do not successfully implement our exit strategy, you may suffer losses on your investment, or your shares may continue to have limited liquidity. |
| The offering price for our shares is not intended to reflect the book value or net asset value of our investments, or our expected cash flow. Until such time as our shares are valued by our board of directors, the price of our shares is not intended to reflect the net asset value of our shares. |
| We have paid, and may continue to pay, distributions from sources other than cash flow from operations, including borrowings and proceeds from the sale of our securities or asset sales, and we have no limits on the amounts we may pay from such other sources. Payments of distributions from sources other than cash flows from operations may reduce the amount of capital we ultimately invest in real estate and may negatively impact the value of your investment. As a result, the amount of distributions paid at any time may not reflect the current performance of our properties or our current operating cash flows. |
| This is a best efforts offering. If we are not able to raise a substantial amount of capital in the near term, we may have difficulties investing in properties and our ability to achieve our investment objectives could be adversely affected. |
| There are substantial conflicts of interest between us and our advisor and its affiliates. Key persons associated with our advisor perform similar duties for other programs sponsored by Cole Real Estate Investments that may use investment strategies similar to ours creating potential conflicts of interest when allocating investment opportunities. In addition, our advisor and its affiliates have substantial discretion in managing our operations, and we pay them substantial fees. |
| Although you will be provided with information about our investments after the investments have been made, you will be unable to evaluate the economic merit of future investments, including how the proceeds from this offering will be invested. This makes an investment in our shares speculative. |
| Our board of directors may change our investment objectives and certain investment policies without stockholder approval. |
| We have incurred, and expect to continue to incur debt, which could adversely impact your investment if the value of the property securing the debt falls or if we are forced to refinance the debt during adverse economic conditions. |
| We may suffer from delays in our advisor locating suitable investments, which could adversely affect our ability to pay distributions and the value of your investment. |
| If we fail to qualify as a REIT, cash available for distributions to be paid to you could decrease materially. |
9
| For qualified accounts, if an investment in our shares constitutes a prohibited transaction under ERISA, you may be subject to the imposition of significant excise taxes and penalties with respect to the amount invested. |
Before you invest in us, you should carefully read and consider the more detailed Risk Factors section of this prospectus.
10
Description of Real Estate Investments
As of April 4, 2013, our investment portfolio consisted of 121 properties located in 29 states, consisting of approximately 3.5 million gross rentable square feet of commercial space. Our properties as of April 4, 2013 are listed below in order of their date of acquisition.
Property Description |
Type | Number of Tenants |
Tenant(s) |
Rentable Square Feet(1) |
Purchase Price |
|||||||||||
Advance Auto Parts |
Automotive | 1 | Advance Stores Company, Inc. |
6,000 | $ | 1,673,000 | ||||||||||
PetSmart |
Specialty Retail | 1 | PetSmart Inc. |
12,259 | 2,650,000 | |||||||||||
Nordstrom Rack |
Department Store | 1 | Nordstrom, Inc. |
44,925 | 11,998,039 | |||||||||||
Walgreens Blair, NE |
Drugstore | 1 | Walgreens Co. |
14,820 | 4,242,424 | |||||||||||
CVS Corpus Christi, TX |
Drugstore | 1 | CVS EGL South Alameda TX, LP |
11,306 | 3,400,000 | |||||||||||
CVS Charleston, SC |
Drugstore | 1 | South Carolina CVS Pharmacy, LLC |
10,125 | 2,137,778 | |||||||||||
CVS Asheville, NC |
Drugstore | 1 | North Carolina CVS Pharmacy, LLC |
10,125 | 2,365,249 | |||||||||||
OReilly Auto Parts |
Automotive | 1 | OReilly Automotive Stores, Inc. |
6,365 | 965,447 | |||||||||||
OReilly Auto Parts |
Automotive | 1 | OReilly Automotive Stores, Inc. |
6,047 | 1,130,213 | |||||||||||
Walgreens Suffolk, VA |
Drugstore | 1 | Walgreen, Co. |
14,820 | 4,925,000 | |||||||||||
Walgreens |
Drugstore | 1 | Walgreen, Co. |
14,820 | 5,223,000 | |||||||||||
Walgreens |
Drugstore | 1 | Walgreen, Co. |
14,820 | 4,477,000 | |||||||||||
Tractor Supply |
Home Improvement | 1 | Tractor Supply Company |
18,000 | 2,245,000 | |||||||||||
HEB Center |
Shopping Center | 6 | Various |
82,458 | 13,000,000 | |||||||||||
CVS Bainbridge, GA |
Drugstore | 1 | Georgia CVS Pharmacy, LLC |
10,125 | 2,650,000 | |||||||||||
Advance Auto |
Automotive | 1 | Advance Stores Company, Inc. |
6,129 | 1,344,964 | |||||||||||
AutoZone |
Automotive | 1 | AutoZone Northeast, Inc. |
7,380 | 1,620,000 | |||||||||||
Benihana Portfolio |
Restaurant | 4 | Various |
36,911 | 17,335,757 | |||||||||||
Wawa Cape May, NJ |
Convenience Store | 1 | Wawa, Inc. |
5,594 | 7,639,896 | |||||||||||
Wawa Galloway, NJ |
Convenience Store | 1 | Wawa, Inc. |
5,605 | 8,123,926 | |||||||||||
Stripes Portfolio I |
Convenience Store | 3 | Stripes LLC |
14,208 | 8,228,130 | |||||||||||
Stripes Portfolio II |
Convenience Store | 3 | Town & Country Food Stores, Inc. |
11,433 | 16,936,887 | |||||||||||
Pickn Save |
Grocery | 1 | Roundys Supermarkets, Inc. |
70,072 | 14,122,000 | |||||||||||
The Marquis |
Shopping Center | 2 | Kohls Department Stores, Inc./Dicks Sporting Goods, Inc. |
134,911 | 14,260,000 | |||||||||||
Golden Corral |
Restaurant | 1 | Golden Corral Corporation |
12,763 | 3,903,000 | |||||||||||
Ross Ft. Worth, TX |
Discount Store | 1 | Ross Dress for Less, Inc. | 32,400 | 4,900,000 | |||||||||||
CVS Irving, TX |
Drugstore | 1 | CVS Pharmacy, Inc. | 10,908 | 3,917,557 | |||||||||||
Mattress Firm |
Furniture Store | 1 | Mattress Firm, Inc. | 6,000 | 2,189,000 |
11
Property Description |
Type | Number of Tenants |
Tenant(s) |
Rentable Square Feet(1) |
Purchase Price | |||||||||||
PetSmart |
Pet Supply | 1 | PetSmart, Inc. | 25,265 | $ | 4,100,000 | ||||||||||
Walgreens Lubbock |
Drugstore | 1 | Walgreens Co. | 15,120 | 4,240,500 | |||||||||||
Walgreens Lubbock (Indiana), TX |
Drugstore | 1 | Walgreens Co. | 13,905 | 3,698,500 | |||||||||||
Kohls Hutchinson, KS |
Department Store | 1 | Kohls Illinois, Inc. | 55,000 | 3,385,000 | |||||||||||
CVS Cartersville, GA |
Drugstore | 1 | Georgia CVS Pharmacy, LLC | 13,225 | 2,616,000 | |||||||||||
Logans Roadhouse Lancaster, TX |
Restaurant | 1 | Logans Roadhouse, Inc. | 6,555 | 3,165,000 | |||||||||||
Logans Roadhouse Opelika, AL |
Restaurant | 1 | Logans Roadhouse, Inc. | 8,140 | 2,959,813 | |||||||||||
Logans Roadhouse Sanford, FL |
Restaurant | 1 | Logans Roadhouse, Inc. | 8,670 | 3,625,744 | |||||||||||
Logans Roadhouse |
Restaurant | 1 | Logans Roadhouse, Inc. | 6,533 | 3,105,000 | |||||||||||
Advance Auto |
Automotive | 1 | Advance Stores Company, Incorporated | 6,895 | 1,513,393 | |||||||||||
Mattress Firm |
Furniture Store | 1 | Mattress Firm, Inc. | 10,837 | 3,389,000 | |||||||||||
Tractor Supply |
Home and Garden | 1 | Tractor Supply Company | 19,097 | 3,943,000 | |||||||||||
Cost Plus Shopping Center Kansas City, MO |
Discount Store | 1 | Cost Plus, Inc. | 26,967 | 3,865,000 | |||||||||||
Michaels Bowling |
Sports and Hobby | 1 | Michaels Stores, Inc. | 18,391 | 3,110,000 | |||||||||||
Tractor Supply |
Home and Garden | 1 | Tractor Supply Company | 19,127 | 2,945,000 | |||||||||||
Dollar General |
Discount Store | 1 | Dolgencorp, LLC | 20,707 | 3,310,312 | |||||||||||
Dollar General |
Discount Store | 1 | Dolgencorp, LLC | 20,707 | 3,234,688 | |||||||||||
Kirklands |
Home Furnishings | 1 | Kirklands Stores, Inc. | 9,000 | 2,903,226 | |||||||||||
Dollar General Maynardville, TN |
Discount Store | 1 | Dolgencorp, LLC | 9,026 | 1,227,464 | |||||||||||
Dollar General |
Discount Store | 1 | Dolgen Midwest, LLC | 9,002 | 1,341,781 | |||||||||||
Dollar General |
Discount Store | 1 | Dolgencorp, LLC | 12,406 | 1,441,315 | |||||||||||
Dollar General |
Discount Store | 1 | Dolgencorp of Texas, Inc. | 9,026 | 1,130,795 | |||||||||||
Dollar General |
Discount Store | 1 | Dolgencorp of Texas, Inc. | 9,026 | 1,359,521 | |||||||||||
Dollar General Greenwell Springs, LA |
Discount Store | 1 | Dolgencorp, LLC | 9,026 | 1,437,205 | |||||||||||
Dollar General Breaux Bridge, LA |
Discount Store | 1 | Dolgencorp, LLC | 9,100 | 1,385,918 | |||||||||||
Tire Kingdom Tarpon Springs, FL |
Automotive | 1 | Tire Kingdom, Inc. | 6,100 | 2,087,325 | |||||||||||
Tractor Supply |
Home and Garden | 1 | Tractor Supply Company | 21,924 | 3,717,186 | |||||||||||
Hobby Lobby |
Sports and Hobby | 1 | Hobby Lobby Stores, Inc. | 55,000 | 5,500,000 | |||||||||||
Canarsie Plaza |
Shopping Center | 15 | Various | 273,878 | 124,000,000 | |||||||||||
Kohls Cedar Falls, IA |
Department Store | 1 | Kohls Department Stores, Inc. | 86,584 | 8,050,000 | |||||||||||
Big Lots Waco, TX |
Discount Store | 1 | PNS Stores, Inc. | 28,526 | 2,600,000 |
12
Property Description |
Type | Number of Tenants |
Tenant(s) |
Rentable Square Feet(1) |
Purchase Price |
|||||||||||
Costco Tallahassee, FL |
Warehouse Club | 1 | Costco Wholesale Corporation | 150,896 | $ | 9,710,000 | ||||||||||
Wal-Mart |
Discount Store | 1 | Wal-Mart Stores East, LP | 196,812 | 15,390,000 | |||||||||||
Golden Corral |
Restaurant | 1 | Golden Corral Corporation | 14,284 | 3,944,000 | |||||||||||
Old Navy & PetSmart Reynoldsburg, OH |
Apparel/Pet Supply | 2 | Old Navy, LLC/PetSmart, Inc. | 28,970 | 6,050,286 | |||||||||||
National Tire & Battery Cedar Hill, TX |
Automotive | 1 | NTW, Incorporated | 6,912 | 2,624,000 | |||||||||||
Hickory Flat Commons Canton, GA |
Shopping Center | 15 | Various | 114,751 | 19,000,000 | |||||||||||
Dollar General Independence, MO |
Discount Store | 1 | Dolgencorp, LLC | 9,100 | 1,368,151 | |||||||||||
Dollar General |
Discount Store | 1 | Dolgencorp, LLC | 9,026 | 1,157,589 | |||||||||||
Dollar General |
Discount Store | 1 | Dolgencorp of Texas, Inc. | 9,026 | 1,249,973 | |||||||||||
Dollar General |
Discount Store | 1 | Dolgencorp of Texas, Inc. | 9,026 | 1,600,767 | |||||||||||
Dollar General |
Discount Store | 1 | Dolgencorp of Texas, Inc. | 9,026 | 1,229,863 | |||||||||||
Big Lots |
Discount Store | 1 | PNS Stores, Inc. | 35,584 | 3,250,000 | |||||||||||
Home Depot North |
Home and Garden | 1 | Home Depot U.S.A, Inc. | 111,803 | 14,450,000 | |||||||||||
Walgreens Danville, VA |
Drugstore | 1 | Walgreen Co. | 14,820 | 5,890,625 | |||||||||||
Dollar General |
Discount Store | 1 | Dolgencorp, LLC | 9,026 | 1,122,742 | |||||||||||
Dollar General |
Discount Store | 1 | Dolgencorp, LLC | 9,026 | 1,249,378 | |||||||||||
Dollar General |
Discount Store | 1 | Dolgencorp, LLC | 9,002 | 1,151,081 | |||||||||||
Dollar General |
Discount Store | 1 | Dolgencorp, LLC | 9,026 | 1,253,906 | |||||||||||
Dollar General |
Discount Store | 1 | Dolgencorp, LLC | 9,026 | 1,081,206 | |||||||||||
Fairview Village |
Shopping Center | 6 | Various | 49,101 | 6,626,044 | |||||||||||
Dicks Oklahoma City (3rd Street), OK |
Sports and Hobby | 1 | Dicks Sporting Goods, Inc. | 50,018 | 8,972,306 | |||||||||||
Wallace Commons Salisbury, NC |
Shopping Center | 9 | Various | 98,509 | 12,000,000 | |||||||||||
Dicks Oklahoma City, OK |
Sports and Hobby | 1 | Dicks Sporting Goods, Inc. | 60,500 | 12,100,000 | |||||||||||
Dollar General |
Discount Store | 1 | Dolgencorp, LLC | 9,026 | 1,087,000 | |||||||||||
Dollar General |
Discount Store | 1 | DG Retail, LLC | 9,026 | 1,274,000 | |||||||||||
National Tire & Battery Montgomery, IL |
Automotive | 1 | NTW LLC | 7,964 | 3,421,000 | |||||||||||
PetSmart Edmond, OK |
Pet Supply | 1 | PetSmart, Inc. | 26,040 | 4,100,000 | |||||||||||
Spinx Simpsonville, SC |
Convenience Store | 1 | The Spinx Company, Inc. | 5,404 | 2,000,000 | |||||||||||
Logans Roadhouse |
Restaurant | 1 | Logans Roadhouse, Inc. | 7,936 | 3,939,000 | |||||||||||
Dollar Tree/Petco |
Discount Store/Pet Supply |
2 | Dollar Trees Stores, Inc./Petco Southwest, Inc. | 22,385 | 3,780,000 | |||||||||||
Advance Auto Lake Geneva, WI |
Automotive | 1 | Advance Stores Company, Incorporated | 6,895 | 1,720,300 |
13
Property Description |
Type | Number of Tenants |
Tenant(s) |
Rentable Square Feet(1) |
Purchase Price | |||||||||||
Dollar General Clay, AL |
Discount Store | 1 | Dolgencorp, LLC | 9,026 | $ | 1,310,274 | ||||||||||
Dollar General |
Discount Store | 1 | Dolgen Midwest, LLC | 9,026 | 1,298,630 | |||||||||||
Walgreens Cullman, AL |
Drugstore | 1 | Walgreen Co. | 14,550 | 6,400,000 | |||||||||||
Dollar General |
Discount Store | 1 | Dolgencorp, LLC | 9,026 | 1,026,000 | |||||||||||
Walgreens Hickory, NC |
Drugstore | 1 | Walgreen Co. | 14,820 | 6,796,875 | |||||||||||
Earth Fare |
Grocery | 1 | Earth Fare, Inc. | 24,989 | 5,247,693 | |||||||||||
Dollar General |
Discount Store | 1 | Dolgencorp, LLC | 20,707 | 3,413,608 | |||||||||||
Golds Gym Corpus Christi, TX |
Fitness | 1 | Golds Texas Holding, LP | 47,395 | 8,750,000 | |||||||||||
Bed Bath & Beyond/Golfsmith Schaumburg, IL |
Home and Garden/Sports and Hobby |
2 | Bed Bath & Beyond Inc./ Golfsmith USA, LLC | 100,773 | 12,400,000 | |||||||||||
Walgreens Huntsville, AL |
Drugstore | 1 | Walgreen Co. | 15,120 | 5,400,000 | |||||||||||
Dollar General Newark, OH |
Discount Store | 1 | Dolgen Midwest, LLC | 9,100 | 1,312,932 | |||||||||||
Dollar General Groveport, OH |
Discount Store | 1 | Dolgen Midwest, LLC | 9,026 | 1,335,616 | |||||||||||
CVS Chicago (Central Ave), IL |
Drugstore | 1 | Highland Park CVS, LLC | 12,066 | 6,960,181 | |||||||||||
Dollar General Toney, AL |
Discount Store | 1 | Dolgencorp, LLC | 9,100 | 1,080,028 | |||||||||||
Walgreens Phoenix, AZ |
Drugstore | 1 | Walgreen Arizona Drug Co. | 15,120 | 3,900,000 | |||||||||||
University Marketplace Marion, IN |
Shopping Center |
3 | Various | 86,224 | 8,070,459 | |||||||||||
Dollar General Yatesville, GA |
Discount Store | 1 | Dolgencorp, LLC | 9,026 | 1,128,958 | |||||||||||
Fourth Creek Landing Statesville, NC |
Shopping Center |
4 | Various | 67,547 | 10,285,300 | |||||||||||
CVS Florence, AL |
Drugstore | 1 | Alabama CVS Pharmacy, LLC | 10,125 | 2,973,484 | |||||||||||
Canton Marketplace Canton, GA |
Shopping Center |
38 | Various | 352,216 | 61,075,000 | |||||||||||
PetSmart Commerce, MI |
Pet Supply | 1 | PetSmart, Inc. | 26,034 | 2,789,627 | |||||||||||
Buffalo Wild Wings Warrenville, IL |
Restaurant | 1 | Blazin Wings, Inc. | 6,400 | 2,911,724 | |||||||||||
Buffalo Wild Wings Woodridge, IL |
Restaurant | 1 | Blazin Wings, Inc. | 6,400 | 2,911,724 | |||||||||||
Trader Joes Columbia, SC |
Grocery | 1 | Trader Joes East, Inc. | 13,800 | 6,037,500 | |||||||||||
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3,489,656 | $ | 700,599,783 | ||||||||||||||
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(1) | Includes square feet of buildings that are on land subject to ground leases. |
(2) | These properties were acquired by purchasing 100% of the membership interests in Cole AA North Ridgeville OH, LLC (AA North Ridgeville) and Cole PM Wilkesboro NC, LLC (PM Wilkesboro), respectively, each a Delaware limited liability company, from Series C, LLC (Series C), an affiliate of our advisor. AA North Ridgeville and PM Wilkesboro owned, as their only asset, single tenant retail buildings located in North Ridgeville, OH and Wilkesboro, NC, respectively. Series C had acquired these properties for the purpose of holding them temporarily until we were able to raise sufficient proceeds in our public |
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offering to acquire them from Series C at its acquisition cost (including acquisition related expenses). A majority of our board of directors (including a majority of our independent directors) not otherwise interested in the transactions approved the acquisitions as being fair and reasonable to us and determined that the cost to us of each property was equal to the cost of the respective property to Series C (including acquisition related expenses). In addition, the purchase price of each property, exclusive of closing costs, was less than the current appraised value of the respective property as determined by an independent third party appraiser. |
(3) | The Benihana Portfolio consists of four single-tenant commercial properties located in Florida, Illinois, Minnesota and Texas, which were purchased under individual sale-leaseback agreements with Benihana National of Florida Corp., Benihana Lombard Corp., The Samurai, Inc. and Benihana Woodlands Corp., respectively, as tenants. The properties are subject to individual lease agreements with identical terms. |
(4) | The Stripes Portfolio I consists of three single-tenant commercial properties located in Texas, which are subject to individual lease agreements with identical terms. |
(5) | The Stripes Portfolio II consists of three single-tenant commercial properties located in Texas, which are subject to individual lease agreements with identical terms. |
Borrowing Policy
Our charter limits our aggregate borrowings to 75% of the cost (before deducting depreciation or other non-cash reserves) of our gross assets, unless excess borrowing is approved by a majority of the independent directors and disclosed to our stockholders in the next quarterly report along with the justification for such excess borrowing. Our board of directors has adopted a policy to further limit our borrowings to 60% of the greater of cost (before deducting depreciation or other non-cash reserves) or fair market value of our gross assets, unless excess borrowing is approved by a majority of the independent directors and disclosed to our stockholders in the next quarterly report along with the justification for such excess borrowing. There is no limitation on the amount we may borrow against any single improved property.
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Estimated Use of Proceeds of This Offering
Depending primarily on the number of shares we sell in this offering and assuming all shares sold under our distribution reinvestment plan are sold at $9.50 per share, we estimate for each share sold in this offering that between approximately 88.1% (assuming all shares available under our distribution reinvestment plan are sold) and approximately 86.7% (assuming no shares available under our distribution reinvestment plan are sold) of gross offering proceeds will be available for the purchase of real estate and other real estate-related investments, including repayment of any indebtedness incurred in respect of such purchases. We will use the remainder of the offering proceeds to pay the costs of the offering, including selling commissions and the dealer manager fee, and fees and expenses of our advisor in connection with acquiring properties. We have paid, and may continue to pay, distributions from proceeds raised in this offering in anticipation of future cash flows, and we have not placed a limit on the amount of net proceeds we may use to pay distributions. We will not pay selling commissions or a dealer manager fee on shares sold under our distribution reinvestment plan. The table below sets forth our estimated use of proceeds from this offering:
Maximum Offering (Including Distribution Reinvestment Plan) |
Maximum Offering (Not Including Distribution Reinvestment Plan) |
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Amount | Percent | Amount | Percent | |||||||||||||
Gross Offering Proceeds |
$ | 2,975,000,000 | 100 | % | $ | 2,500,000,000 | 100 | % | ||||||||
Less Public Offering Expenses: |
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Selling Commissions and Dealer Manager Fee |
225,000,000 | 7.6 | % | 225,000,000 | 9.0 | % | ||||||||||
Other Organization and Offering Expenses |
59,500,000 | 2.0 | % | 50,000,000 | 2.0 | % | ||||||||||
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Amount Available for Investment |
2,690,500,000 | 90.4 | % | 2,225,000,000 | 89.0 | % | ||||||||||
Acquisition and Development: |
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Acquisition Fee |
52,446,394 | 1.8 | % | 43,372,320 | 1.8 | % | ||||||||||
Acquisition Expenses |
13,111,598 | 0.4 | % | 10,843,080 | 0.4 | % | ||||||||||
Initial Working Capital Reserve |
2,622,320 | 0.1 | % | 2,168,616 | 0.1 | % | ||||||||||
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Amount Invested in Assets |
$ | 2,622,319,688 | 88.1 | % | $ | 2,168,615,984 | 86.7 | % | ||||||||
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Conflicts of Interest
Our advisor will experience potential conflicts of interest in connection with the management of our business affairs, including the following:
| Our advisor and its affiliates will receive substantial fees in connection with the services provided to us, and, while those fees are approved on an annual basis by our independent directors, the approval process may be impacted by the fact that our stockholders invested with the understanding and expectation that an affiliate of Cole Real Estate Investments would act as our advisor; |
| The management personnel of our advisor, each of whom also makes investment decisions for other Cole-sponsored programs, must determine which investment opportunities to recommend to us or another Cole-sponsored program or joint venture, many of which have investment objectives similar to ours, and such persons must determine how to allocate their time and other resources among us and the other Cole-sponsored programs; and |
| We have retained CREI Advisors, an affiliate of our advisor, to manage and lease some or all of our properties. |
Our executive officers and the chairman of our board of directors also will face conflicts similar to those described above because of their affiliation with our advisor and other Cole-sponsored programs. See the Conflicts of Interest section of this prospectus for a detailed discussion of the various conflicts of interest relating to your investment, as well as the procedures that we have established to mitigate a number of these potential conflicts.
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The following chart shows the ownership structure of the various Cole entities that are affiliated with our advisor immediately prior to this offering.
(1) | CRE Investments, LLC, an affiliate of our sponsor, currently owns 20,000 shares of our common stock, which represents less than 0.1% of the outstanding shares of common stock, as of April 10, 2013. Pursuant to our charter, CRE Investments, LLC is prohibited from selling the 20,000 shares of our common stock for so long as Cole Real Estate Investments remains our sponsor; provided, however, that CRE Investments, LLC may transfer ownership of all or a portion of the 20,000 shares of our common stock to other affiliates of our sponsor. |
(2) | Our operating partnership will file its own federal tax return, separate from our federal tax return. |
Summary of Prior Offerings
The Prior Performance Summary section of this prospectus contains a discussion of the programs sponsored by Cole Real Estate Investments from January 1, 2003 through December 31, 2012. Certain financial results and other information relating to such programs with investment objectives similar to ours are also provided in the Prior Performance Tables included as Appendix A to this prospectus. The prior performance of the programs previously sponsored by Cole Real Estate Investments is not necessarily indicative of the results that we will achieve. For example, most of the prior programs were privately offered and did not bear the additional costs associated with being a publicly held entity. Therefore, you should not assume that you will experience returns comparable to those experienced by investors in prior real estate programs sponsored by Cole Real Estate Investments.
Concurrent Offerings
Our sponsor, Cole Real Estate Investments, is sponsoring CCIT and Cole Income NAV Strategy, both of which are currently raising capital pursuant to initial public offerings of shares of their common stock and one additional real estate investment program that currently is in registration for its initial public offering. For additional information regarding concurrent offerings sponsored by Cole Real Estate Investments, see the section of this prospectus captioned Conflicts of Interest Interests in Other Real Estate Programs and Other Concurrent Offerings.
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The Offering
We are offering up to 250,000,000 shares of common stock in our primary offering on a best efforts basis at $10.00 per share. Discounts are available for certain categories of purchasers, as described in the Plan of Distribution section of this prospectus. We also are offering under this prospectus up to 50,000,000 additional shares of common stock under our distribution reinvestment plan at a purchase price of $9.50 per share during this offering, and until such time as our board of directors determines a reasonable estimate of the value of our shares. Thereafter, the purchase price per share under our distribution reinvestment plan will be the most recent estimated value per share as determined by our board of directors as described in the Summary of Distribution Reinvestment Plan section of this prospectus. We reserve the right to reallocate the shares of common stock we are offering between our primary offering and our distribution reinvestment plan. We will offer shares of common stock in our primary offering until the earlier of January 26, 2014, which is two years from the effective date of this offering, or the date we sell 300,000,000 shares; provided, however, that our board of directors may terminate this offering at any time or extend the offering. If we decide to extend the primary offering beyond two years from the date of this prospectus, we will provide that information in a prospectus supplement; however, in no event will we extend this offering beyond 180 days after the third anniversary of the initial effective date. Nothing in our organizational documents prohibits us from engaging in additional subsequent public offerings of our stock. We may sell shares under the distribution reinvestment plan beyond the termination of our primary offering until we have sold 50,000,000 shares through the reinvestment of distributions, but only if there is an effective registration statement with respect to the shares. Pursuant to the Securities Act, and in some states, we may not be able to continue the offering for these periods without filing a new registration statement, or in the case of shares sold under the distribution reinvestment plan, renew or extend the registration statement in such state.
The registration statement for our initial public offering of 300,000,000 shares of common stock was declared effective by the Securities and Exchange Commission on January 26, 2012. On April 13, 2012, we satisfied the general conditions of our escrow agreement and issued 308,206 shares of our common stock in the offering, resulting in gross proceeds of approximately $3.1 million. As of April 4, 2013, we had accepted investors subscriptions for, and issued, approximately 46.0 million shares of our common stock in the offering (including shares issued pursuant to our distribution reinvestment plan), resulting in gross proceeds to us of approximately $459.0 million.
Compensation to Our Advisor and its Affiliates
Our advisor and its affiliates will receive compensation and reimbursement for services relating to this offering and the investment, management and disposition of our assets. All of the items of compensation are summarized in the table below. We will not pay a separate fee for financing, leasing or property management, although we may rely on our advisor or its affiliates to provide such services to us. See the Management Compensation section of this prospectus for a more detailed description of the compensation we will pay to our advisor and its affiliates. The selling commissions and dealer manager fee may vary for different categories of purchasers. See the Plan of Distribution section of this prospectus for a more detailed discussion of the selling commissions and dealer manager fees we will pay. The table below assumes the shares are sold through distribution channels associated with the highest possible selling commissions and dealer manager fees, and accounts for the fact that shares are sold through our distribution reinvestment plan at $9.50 per share with no selling commissions and no dealer manager fee.
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Type of Compensation |
Determination of Amount |
Estimated Amount for Maximum Offering | ||||||||
Offering Stage | ||||||||||
Selling Commissions |
We generally will pay to our dealer manager, Cole Capital Corporation, 7% of the gross proceeds of our primary offering. Cole Capital Corporation will reallow 100% of the selling commissions to participating broker-dealers. We will not pay any selling commissions with respect to sales of shares under our distribution reinvestment plan. | $175,000,000 | ||||||||
Dealer Manager Fee |
We generally will pay to Cole Capital Corporation 2% of the gross proceeds of our primary offering. Cole Capital Corporation may reallow all or a portion of its dealer manager fee to participating broker-dealers. We will not pay a dealer manager fee with respect to sales of shares under our distribution reinvestment plan. | $50,000,000
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Reimbursement of Other Organization and |
Our advisor, CR IV Advisors, will incur or pay our organization and offering expenses (excluding selling commissions and the dealer manager fee). We will then reimburse our advisor for these amounts up to 2.0% of aggregate gross offering proceeds, including proceeds from sales of shares under our distribution reinvestment plan. | $59,500,000 Of the $59,500,000, we expect to reimburse our advisor up to $25,000,000 (1.0% of the gross offering proceeds of our primary offering, or 0.8% of aggregate gross offering proceeds, including proceeds from shares issued under our distribution reinvestment plan) to cover offering expenses that are deemed to be underwriting expenses, and we expect to reimburse our advisor up to $34,500,000 (1.2% of aggregate gross offering proceeds, including proceeds from sales of shares under our distribution reinvestment plan) to cover non-underwriting organization and offering expenses. | ||||||||
Acquisition and Operations Stage | ||||||||||
Acquisition Fee |
We will pay to our advisor 2% of: (i) the contract purchase price of each property or asset; (ii) the amount paid in respect of the development, construction or improvement of each asset we acquire; (iii) the purchase price of any loan we acquire; and (iv) the principal amount of any loan we originate. | $52,446,394 assuming no debt or $209,785,575 assuming leverage of 75% of the contract purchase price. |
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Type of Compensation |
Determination of Amount |
Estimated Amount for Maximum Offering | ||||||||
Acquisition and Operations Stage | ||||||||||
Advisory Fee |
We will pay to our advisor a monthly advisory fee based upon our monthly average invested assets. Monthly average invested assets will equal the average book value of our assets invested, directly or indirectly, in equity interests in and loans secured by our real estate, before reserves for depreciation and amortization or bad debts or other similar non-cash reserves, other than impairment charges, computed by taking the average of such values at the end of each business day, over the course of the month. After our board of directors begins to determine the estimated per share value of our common stock, the monthly advisory fee will be based upon the value of our assets invested, directly or indirectly, in equity interests in and loans secured by our real estate as determined by our board of directors.
The advisory fee will be calculated according to the following fee schedule: |
The annualized advisory fee rate, and the actual dollar amounts, are dependent upon the amount of our monthly average invested assets and, therefore, cannot be determined at the present time. Based on the following assumed levels of monthly average invested assets, our annualized advisory fee will be as follows: | ||||||||
Monthly Average Invested Assets |
Annualized |
Annualized | ||||||||
$1 billion | 0.75% | $ 7,500,000 | ||||||||
$2 billion | 0.75% | $15,000,000 | ||||||||
$3 billion | 0.7333% | $22,000,000 | ||||||||
$4 billion | 0.7250% | $29,000,000 | ||||||||
$5 billion | 0.7100% | $35,500,000 | ||||||||
Monthly Average Invested Assets Range |
Annualized Fee Rate for Each Range |
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$0 $2 billion |
0.75% | |||||||||
over $2 billion $4 billion |
0.70% | |||||||||
over $4 billion |
0.65% | |||||||||
Operating Expenses |
We will reimburse our advisor for acquisition expenses incurred in acquiring each property or in the origination or acquisition of a loan. We expect these expenses to be approximately 0.5% of the purchase price of each property or the amount of each loan; provided, however, that acquisition expenses are not included in the contract purchase price of a property.
We will also reimburse our advisor for the expenses incurred in connection with its provision of advisory and administrative services, including related personnel costs and payments to third party service providers; provided, however, that we will not reimburse our advisor for the salaries and benefits paid to our personnel in connection with services for which our advisor receives acquisition fees, and we will not reimburse our advisor for salaries and benefits paid to our executive officers. |
$13,111,598 estimated for reimbursement of acquisition expenses assuming no debt or $43,048,000 estimated for reimbursement of acquisition expenses assuming leverage of 75% of the contract purchase price. For all other reimbursements, actual amounts are dependent upon the expenses incurred and, therefore, cannot be determined at the present time. |
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Type of Compensation |
Determination of Amount |
Estimated Amount for Maximum Offering | ||||||||
Liquidation/Listing Stage | ||||||||||
Disposition Fee |
For substantial assistance in connection with the sale of properties, we will pay our advisor or its affiliates an amount equal to up to one-half of the brokerage commission paid on the sale of property, not to exceed 1% of the contract price of the property sold; provided, however, in no event may the disposition fee paid to our advisor or its affiliates, when added to the real estate commissions paid to unaffiliated third parties, exceed the lesser of the customary competitive real estate commission or an amount equal to 6% of the contract sales price. | Actual amounts are dependent upon the contract price of properties sold and, therefore, cannot be determined at the present time. Because the disposition fee is based on a fixed percentage of the contract price for sold properties the actual amount of the disposition fees cannot be determined at the present time. | ||||||||
Subordinated Performance Fee |
After investors have received a return of their net capital invested and an 8% annual cumulative, non-compounded return, then our advisor will be entitled to receive 15% of the remaining net sale proceeds. We cannot assure you that we will provide this 8% return, which we have disclosed solely as a measure for our advisors incentive compensation. We will pay a subordinated fee under only one of the following events: (i) if our shares are listed on a national securities exchange; (ii) if our company is sold or our assets are liquidated; or (iii) upon termination of the advisory agreement. | Actual amounts are dependent upon results of operations and, therefore, cannot be determined at the present time. There is no limit on the aggregate amount of these payments. |
Distributions
To qualify as a REIT for federal income tax purposes, we are required to, among other things, make aggregate annual distributions to our stockholders of at least 90% of our annual taxable income (which does not necessarily equal net income as calculated in accordance with accounting principles generally accepted in the United States (GAAP)). Our board of directors may authorize distributions in excess of those required for us to maintain REIT status, depending on our present and reasonably projected future cash flow from operations and such other factors as our board of directors deems relevant. We have not established a minimum distribution level. Distributions are paid to our stockholders as of the record date or dates selected by our board of directors. We expect that our board of directors will continue to declare distributions with a daily record date, and pay distributions monthly in arrears. In the event we do not have sufficient cash flow from operations to make distributions, we may borrow, use proceeds from this offering, issue additional securities or sell assets in order to fund distributions, and we have no limits on the amounts we may pay from such other sources. Payments of distributions from sources other than cash flows from operations may reduce the amount of capital we ultimately invest in properties, and negatively impact the value of your investment. As a result, the amount of distributions paid at any time may not reflect the performance of our properties or our current operating cash flow.
Liquidity Opportunities
Following the completion of our public offering and the investment of the proceeds, we expect that our board of directors will consider potential strategic options to provide our stockholders with liquidity in connection with its oversight of our investment portfolio and operations. These options may include the sale of our company, the sale of all or substantially all of our assets, a merger or similar transaction, the listing of our shares of common stock for trading on a national securities exchange or an alternative strategy that would result in a significant increase in the opportunities for stockholders to dispose of their shares. We expect to engage in a strategy to provide our investors with liquidity at a time and in a method recommended by our advisor and
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determined by our independent directors to be in the best interests of our stockholders. As we are unable to determine what macro- or micro-economic factors may affect the decisions our board of directors make in the future with respect to any potential liquidity opportunity, we have not selected a fixed time period or determined criteria for any such decisions. As a result, while our board of directors will consider a variety of options to provide stockholders with liquidity throughout the life of this program, there is no requirement that we commence any such action on or before a specified date. Stockholder approval would be required for the sale of all or substantially all of our assets, or the sale or merger of our company.
Distribution Reinvestment Plan
Our board of directors has approved a distribution reinvestment plan, pursuant to which you may have the distributions you receive from us reinvested in additional shares of our common stock. The purchase price per share under our distribution reinvestment plan will be $9.50 per share during this offering and until such time as our board of directors determines a reasonable estimate of the value of our shares. Thereafter, the purchase price per share under our distribution reinvestment plan will be the most recent estimated value per share as determined by our board of directors. No sales commissions or dealer manager fees are paid with respect to shares sold under our distribution reinvestment plan.
If you participate in the distribution reinvestment plan, you will not receive the cash from your distributions, other than special distributions that are designated by our board of directors. As a result, you may have a tax liability with respect to your share of our taxable income, but you will not receive cash distributions to pay such liability.
Share Redemption Program
Our board of directors has adopted a share redemption program to enable you to sell your shares to us in limited circumstances. Our share redemption program would permit you to sell your shares back to us after you have held them for at least one year, subject to the significant conditions and limitations summarized below and described in more detail in the section captioned Description of Shares Share Redemption Program.
Our share redemption program includes numerous restrictions that limit your ability to sell your shares. Generally, you must have held your shares for at least one year in order to participate in our share redemption program. Subject to funds being available, we will further limit the number of shares redeemed pursuant to our share redemption program as follows: (1) we will not redeem in excess of 5% of the weighted average number of shares outstanding during the trailing 12 months prior to the end of the fiscal quarter for which the redemptions are being paid (provided, however, that while shares subject to a redemption requested upon the death of a stockholder will be included in calculating the maximum number of shares that may be redeemed, shares subject to a redemption requested upon the death of a stockholder will not be subject to the percentage cap); and (2) funding for the redemption of shares will be limited to the net proceeds we receive from the sale of shares under our distribution reinvestment plan. In an effort to accommodate redemption requests throughout the calendar year, we intend to limit quarterly redemptions to approximately 1.25% of the weighted average number of shares outstanding during the trailing 12-month period ending on the last day of the fiscal quarter (provided, however, that while shares subject to a redemption requested upon the death of a stockholder will be included in calculating the maximum number of shares that may be redeemed, shares subject to a redemption requested upon the death of a stockholder will not be subject to the percentage cap), and funding for redemptions for each quarter generally will be limited to the net proceeds we receive from the sale of shares in the respective quarter under our distribution reinvestment plan; however, our board of directors may waive these quarterly limitations in its sole discretion, subject to the 5% cap on the number of shares we may redeem during the respective trailing 12 month period. Any of the foregoing limits might prevent us from accommodating all redemption requests made in any quarter, in which case we will give priority to the redemption of deceased stockholders shares, then to requests
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for full redemption of accounts with a balance of 250 shares or less, and then the remaining redemption requests will be honored on a pro rata basis. Following such redemption period, if you would like to resubmit the unsatisfied portion of the prior redemption request for redemption, you must submit a new request for redemption of such shares prior to the last day of the new quarter. Unfulfilled requests for redemption will not be carried over automatically to subsequent redemption periods.
During the term of this offering, and until such time as our board of directors determines a reasonable estimate of the value of our shares, the redemption price per share (other than for shares purchased pursuant to our distribution reinvestment plan) will depend on the price you paid for your shares and the length of time you have held such shares as follows: after one year from the purchase date, 95% of the amount you paid for each share; after two years from the purchase date, 97.5% of the amount you paid for each share; and after three years from the purchase date, 100% of the amount you paid for each share. During this time period, the redemption price for shares purchased pursuant to our distribution reinvestment plan will be 100% of the amount you paid for each share. After such time as our board of directors has determined a reasonable estimate of the value of our shares, the per share redemption price (other than for shares purchased pursuant to our distribution reinvestment plan) will depend on the length of time you have held such shares as follows: after one year from the purchase date, 95% of the most recent estimated value of each share; after two years from the purchase date, 97.5% of the most recent estimated value of each share; and after three years from the purchase date, 100% of the most recent estimated value of each share. During this time period, the redemption price for shares purchased pursuant to our distribution reinvestment plan will be 100% of the most recent estimated value of each share.
Upon receipt of a request for redemption, we may conduct a Uniform Commercial Code search to ensure that no liens are held against the shares. We will bear any costs in conducting the Uniform Commercial Code search. We will not redeem any shares that are subject to a lien.
Our board of directors may amend, suspend or terminate the share redemption program at any time upon 30 days notice to our stockholders.
Cole Operating Partnership IV, LP
We are structured as an umbrella partnership real estate investment trust (UPREIT). As such, we expect to own substantially all of our assets through Cole Operating Partnership IV, LP (CCPT IV OP), our operating partnership. We may, however, own assets directly, through subsidiaries of CCPT IV OP or through other entities. We are the sole general partner of, and own, directly or indirectly, 100% of the partnership interest in, CCPT IV OP.
ERISA Considerations
You may make an investment in our shares through your IRA or other tax-deferred retirement account. However, any retirement plan trustee or individual considering purchasing shares for a retirement plan or an individual retirement account should read the Investment by Tax-Exempt Entities and ERISA Considerations section of this prospectus very carefully.
Description of Shares
Uncertificated Shares
Under our charter, we are authorized to issue shares of our common stock without certificates unless our board of directors determines otherwise. Therefore, we do not intend to issue shares of common stock in certificated form. Our transfer agent will maintain a stock ledger that contains the name and address of each stockholder and the number of shares that the stockholder holds. Stockholders wishing to transfer shares of our stock may request an application for transfer by contacting us. See the section of this prospectus captioned
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Where You Can Find More Information. With respect to transfers of uncertificated stock, we will continue to treat the stockholder registered on our stock ledger as the owner of the shares until the record owner and the new owner deliver a properly executed application for transfer to our transfer agent at the address set forth in the application for transfer. Any questions regarding the transferability of shares should be directed to our transfer agent, whose contact information is set forth on page 6 of this prospectus and in the application for transfer.
Stockholder Voting Rights and Limitations
We will hold annual meetings of our stockholders for the purpose of electing our directors and conducting other business matters that may be properly presented at such meetings. We may also call special meetings of stockholders from time to time. You are entitled to one vote for each share of common stock you own.
Restriction on Share Ownership
Our charter contains restrictions on ownership of the shares that prevent any one person from owning more than 9.8% in value of the aggregate of our outstanding shares or more than 9.8% (in value or number of shares, whichever is more restrictive), of the aggregate of our outstanding shares of common stock, unless exempted by our board of directors. These restrictions are designed, among other purposes, to enable us to comply with ownership restrictions imposed on REITs by the Internal Revenue Code. These restrictions may discourage a takeover that could otherwise result in a premium price to our stockholders. For a more complete description of the restrictions on the ownership of our shares, see the Description of Shares section of this prospectus. Our charter also limits your ability to transfer your shares unless the transferee meets the minimum suitability standards regarding income and/or net worth and the transfer complies with our minimum purchase requirements, which are described in the Suitability Standards section of this prospectus.
Investment Company Act Considerations
We intend to conduct our operations, and the operations of our operating partnership, and any other subsidiaries, so that no such entity meets the definition of an investment company under Section 3(a)(1) of the Investment Company Act. Under the Investment Company Act, in relevant part, a company is an investment company if:
| pursuant to Section 3(a)(1)(A), it is, or holds itself out as being, engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting or trading in securities; or |
| pursuant to Section 3(a)(1)(C), it is engaged, or proposes to engage, in the business of investing, reinvesting, owning, holding or trading in securities and owns or proposes to acquire investment securities having a value exceeding 40% of the value of its total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. Investment securities excludes U.S. Government securities and securities of majority owned subsidiaries that are not themselves investment companies and are not relying on the exception from the definition of investment company under Section 3(c)(1) or Section 3(c)(7) of the Investment Company Act. |
We intend to acquire a diversified portfolio of income-producing real estate assets; however, our portfolio may include, to a much lesser extent, other real estate-related investments. We also may acquire real estate assets through investments in joint venture entities, including joint venture entities in which we may not own a controlling interest. We anticipate that our assets generally will be held in wholly and majority-owned subsidiaries of the company, each formed to hold a particular asset. We intend to monitor our operations and our assets on an ongoing basis in order to ensure that neither we, nor any of our subsidiaries, meet the definition of investment company under Section 3(a)(1) of the Investment Company Act.
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An investment in our common stock involves various risks and uncertainties. You should carefully consider the following risk factors in conjunction with the other information contained in this prospectus before purchasing our common stock. The risks discussed in this prospectus can adversely affect our business, operating results, prospects and financial condition, and cause the value of your investment to decline. The risks and uncertainties discussed below are not the only ones we face but do represent those risks and uncertainties that we believe are most significant to our business, operating results, prospects and financial condition. You should carefully consider these risks together with all of the other information included in this prospectus before you decide to purchase any shares of our common stock.
Risks Related to an Investment in Cole Credit Property Trust IV, Inc.
We have a limited operating history. Further, we are considered to be a blind pool, as we currently have not identified all of the properties we intend to purchase. For this and other reasons, an investment in our shares is speculative.
We have a limited operating history. Since we currently have not identified all of the properties we intend to purchase with future offering proceeds, we are considered to be a blind pool. You will not be able to evaluate the economic merit of our future investments until after such investments have been made. As a result, an investment in our shares is speculative.
You should consider our prospects in light of the risks, uncertainties and difficulties frequently encountered by companies that are, like us, in their early stages of development. To be successful in this market, we and our advisor must, among other things:
| identify and acquire investments that further our investment objectives; |
| increase awareness of the Cole Credit Property Trust IV, Inc. name within the investment products market; |
| expand and maintain our network of licensed broker-dealers and others who sell shares on our behalf and other agents; |
| rely on our advisor and its affiliates to attract, integrate, motivate and retain qualified personnel to manage our day-to-day operations; |
| respond to competition for our targeted real estate and other investments as well as for potential investors; |
| rely on our advisor and its affiliates to continue to build and expand our operations structure to support our business; and |
| be continuously aware of, and interpret, marketing trends and conditions. |
We may not succeed in achieving these goals, and our failure to do so could cause you to lose all or a portion of your investment.
An investment in our shares will have limited liquidity. There is no public trading market for our shares and there may never be one; therefore, it will be difficult for you to sell your shares. You should purchase our shares only as a long-term investment.
There currently is no public market for our common stock and there may never be one. In addition, we do not have a fixed date or method for providing stockholders with liquidity. If you are able to find a buyer for your shares, you will likely have to sell them at a substantial discount to your purchase price. It also is likely that your shares would not be accepted as the primary collateral for a loan. You should purchase our shares only as a long-term investment (more than seven years) because of the generally illiquid nature of the shares. See the sections
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captioned Suitability Standards, Description of Shares Restrictions on Ownership and Transfer and Description of Shares Share Redemption Program elsewhere in this prospectus for a more complete discussion on the restrictions on your ability to transfer your shares.
You are limited in your ability to sell your shares pursuant to our share redemption program and may have to hold your shares for an indefinite period of time.
Our share redemption program includes numerous restrictions that limit your ability to sell your shares. Generally, you must have held your shares for at least one year in order to participate in our share redemption program. Subject to funds being available, we will further limit the number of shares redeemed pursuant to our share redemption program as follows: (1) we will not redeem in excess of 5% of the weighted average number of shares outstanding during the trailing 12 months prior to the end of the fiscal quarter for which the redemption is being paid (provided, however, that while shares subject to a redemption requested upon the death of a stockholder will be included in calculating the maximum number of shares that may be redeemed, shares subject to a redemption requested upon the death of a stockholder will not be subject to the percentage cap); and (2) funding for the redemption of shares will be limited to the net proceeds we receive from the sale of shares under our distribution reinvestment plan. In an effort to accommodate redemption requests throughout the calendar year, we intend to limit quarterly redemptions to approximately 1.25% of the weighted average number of shares outstanding during the trailing 12-month period ending on the last day of the fiscal quarter (provided, however, that while shares subject to a redemption requested upon the death of a stockholder will be included in calculating the maximum number of shares that may be redeemed, shares subject to a redemption requested upon the death of a stockholder will not be subject to the percentage cap), and funding for redemptions for each quarter generally will be limited to the net proceeds we receive from the sale of shares in the respective quarter under our distribution reinvestment plan; however, our board of directors may waive these quarterly limitations in its sole discretion, subject to the 5% cap on the number of shares we may redeem during the respective trailing 12 month period. Any of the foregoing limits might prevent us from accommodating all redemption requests made in any fiscal quarter or in any 12-month period. Our board of directors may amend the terms of, suspend, or terminate our share redemption program without stockholder approval upon 30 days prior written notice, and our management may reject any request for redemption. See the Description of Shares Share Redemption Program section of this prospectus for more information about the share redemption program. These restrictions severely limit your ability to sell your shares should you require liquidity, and limit your ability to recover the value you invested or the fair market value of your shares.
Three prior real estate programs sponsored by Cole Real Estate Investments have suspended redemptions under their respective share redemption programs. The board of directors of Cole Credit Property Trust, Inc. (CCPT I) determined that there was an insufficient amount of cash available for CCPT I to fulfill redemption requests during the years ended December 31, 2008, 2009, 2010, 2011 and 2012, and the year ending December 31, 2013. CCPT I continues to accept redemption requests which are considered for redemption if and when sufficient cash is available for CCPT I to fund redemptions. The board of directors of CCPT I will determine, at the beginning of each fiscal year, the maximum amount of shares that CCPT I may redeem during that year. Requests relating to approximately 261,000 shares remained unfulfilled as of December 31, 2012, representing approximately $2.0 million in unfulfilled requests, based on the most recent estimated value of CCPT Is common stock of $7.75 per share. On November 10, 2009, the board of directors of CCPT II voted to temporarily suspend CCPT IIs share redemption program other than for requests made upon the death of a stockholder, which it continued to accept. On June 22, 2010, CCPT IIs board of directors reinstated the share redemption program, with certain amendments, effective August 1, 2010. On December 6, 2012, CCPT II again suspended its share redemption program in anticipation of a potential liquidity event. During the year ended December 31, 2012 CCPT II received valid redemption requests relating to approximately 19.5 million shares, including requests that were unfulfilled and resubmitted from a previous period, and requests relating to approximately 6.1 million shares were redeemed for $56.9 million at an average price of $9.32 per share. Subsequent to December 31, 2012, CCPT II redeemed approximately 13,000 shares for $121,000 pursuant to redemption requests received on or before December 6, 2012. The remaining redemption requests relating to
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approximately 13.4 million shares went unfulfilled including those requests unfulfilled and resubmitted from a previous period.
The offering price for our shares is not based on the book value or net asset value of our investments or our expected cash flow.
The offering price for our shares is not based on the book value or net asset value of our investments or our expected cash flow. Our board of directors does not intend to provide a reasonable estimate of the value of our shares until 18 months after the end of the offering period, which could include a possible follow-on offering. Until such time as our board of directors determines a reasonable estimate of the value of our shares, the price of our shares is not intended to reflect our per share net asset value.
We may be unable to pay or maintain cash distributions or increase distributions over time.
There are many factors that can affect the availability and timing of cash distributions to our stockholders. The amount of cash available for distributions is affected by many factors, such as the performance of our advisor in selecting investments for us to make, selecting tenants for our properties and securing financing arrangements, our ability to buy properties as offering proceeds become available, rental income from our properties, and our operating expense levels, as well as many other variables. We may not always be in a position to pay distributions to you and any distributions we do make may not increase over time. In addition, our actual results may differ significantly from the assumptions used by our board of directors in establishing the distribution rate to our stockholders. There also is a risk that we may not have sufficient cash from operations to make a distribution required to maintain our REIT status.
We have paid, and may continue to pay, distributions from sources other than cash flow from operations, which may reduce the amount of capital we ultimately invest in real estate and may negatively impact the value of your investment.
To the extent that cash flow from operations is insufficient to fully cover our distributions to you, we have paid, and may continue to pay, distributions from sources other than cash flow from operations. Such sources may include borrowings, proceeds from asset sales or the sale of our securities in this or future offerings. We have no limits on the amounts we may pay from sources other than cash flows from operations.
We commenced principal operations on April 13, 2012, and began paying distributions on April 14, 2012. As of December 31, 2012, cumulative since inception, we have declared approximately $3.9 million in distributions, all of which was paid using proceeds from the issuance of common stock. As of December 31, 2012, cumulative since inception, net cash used in operating activities was $8.7 million, and reflects a reduction for real estate acquisition fees and related costs incurred and expensed of $14.4 million, in accordance with GAAP. As set forth in the Estimated Use of Proceeds section, we treat our real estate acquisition related expenses as funded by the proceeds from the offering of our shares. Therefore, for consistency, real estate acquisition related expenses are treated in the same manner (i.e., as funded by the proceeds of the offering of our shares) in describing the sources of distributions above, to the extent that acquisition expenses have reduced net cash flows from operating activities. The payment of distributions from sources other than cash provided by operating activities may reduce the amount of proceeds available for investment and operations or cause us to incur additional interest expense as a result of borrowed funds, and may cause subsequent investors to experience dilution.
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Because we have paid, and may continue to pay, distributions from sources other than our cash flows from operations, distributions at any point in time may not reflect the current performance of our properties or our current operating cash flows.
Our organizational documents permit us to make distributions from any source, including the sources described in the risk factor above. Because the amount we pay out in distributions may exceed our cash flow from operations, distributions may not reflect the current performance of our properties or our current operating cash flows. To the extent distributions exceed cash flow from operations, distributions may be treated as a return of your investment and could reduce your basis in our stock. A reduction in a stockholders basis in our stock could result in the stockholder recognizing more gain upon the disposition of his or her shares, which in turn could result in greater taxable income to such stockholder.
We may suffer from delays in locating suitable investments, which could adversely affect our ability to pay distributions to you and the value of your investment.
We could suffer from delays in locating suitable investments, particularly if the capital we raise in this offering outpaces our advisors ability to identify potential investments and/or close on acquisitions. Delays we encounter in the selection and/or acquisition of income-producing properties likely would adversely affect our ability to pay distributions to you and the value of your overall returns. The large size of our offering, coupled with competition from other real estate investors, increase the risk of delays in investing our net offering proceeds. Our stockholders should expect to wait at least several months after the closing of a property acquisition before receiving cash distributions attributable to that property. If our advisor is unable to identify suitable investments, we will hold the proceeds we raise in this offering in an interest-bearing account or invest the proceeds in short-term, investment-grade investments, which would provide a significantly lower return to us than the return we expect from our investments in real estate.
In the event we are not able to raise a substantial amount of capital in the near term, we may have difficulty investing the proceeds of this offering in properties, and our ability to achieve our investment objectives, including diversification of our portfolio by property type and location, could be adversely affected.
This offering is being made on a best efforts basis, which means that the dealer manager and the broker-dealers participating in this offering are only required to use their best efforts to sell the shares and have no firm commitment or obligation to purchase any of the shares. As a result, we may not be able to raise a substantial amount of capital in the near term. If we are not able to accomplish this goal, we may have difficulty in identifying and purchasing suitable properties on attractive terms in order to meet our investment objectives. Therefore, there could be a delay between the time we receive net proceeds from the sale of shares of our common stock in this offering and the time we invest the net proceeds. This could cause a substantial delay in the time it takes for your investment to realize its full potential return and could adversely affect our ability to pay regular distributions of cash flow from operations to you. If we fail to timely invest the net proceeds of this offering, our ability to achieve our investment objectives, including diversification of our portfolio by property type and location, could be adversely affected. In addition, subject to our investment policies, we are not limited in the number or size of our investments or the percentage of net proceeds that we may dedicate to a single investment. If we use all or substantially all of the proceeds from this offering to acquire one or a few investments, the likelihood of our profitability being affected by the performance of any one of our investments will increase, and an investment in our shares will be subject to greater risk.
You will not have the opportunity to evaluate our future investments before we make them, which makes an investment in our common stock more speculative.
While we will provide you with information on a regular basis regarding our real estate investments after they are acquired, we will not provide you with a significant amount of information, if any, for you to evaluate our future investments prior to our making them. Since we have not identified all of the properties that we intend
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to purchase with the proceeds from this offering, we are considered a blind pool, which makes your investment in our common stock speculative. We have established policies relating to the types of investments we will make and the creditworthiness of tenants of our properties, but our advisor will have wide discretion in implementing these policies, subject to the oversight of our board of directors. Additionally, our advisor has discretion to determine the location, number and size of our investments and the percentage of net proceeds we may dedicate to a single investment. For a more detailed discussion of our investment policies, see the Investment Objectives and Policies Acquisition and Investment Policies section of this prospectus.
We are dependent upon the net proceeds of this offering to conduct our proposed business activities. If we are unable to raise substantial proceeds from this offering, we may not be able to invest in a diverse portfolio of real estate and real estate-related investments and an investment in our shares will be subject to greater risk.
We are dependent upon the net proceeds of this offering to conduct our proposed activities. As such, our ability to implement our business strategy is dependent, in part, upon our dealer manager and participating broker-dealers to successfully conduct this offering and you, rather than us, will incur the bulk of the risk if we are unable to raise substantial funds. This offering is being made on a best efforts basis, whereby our dealer manager and the broker-dealers participating in this offering are only required to use their best efforts to sell shares of our common stock and have no firm commitment or obligation to purchase any of the shares of our common stock. In addition, the broker-dealers participating in this offering also may be participating in the offerings of competing REIT products, some of which may have a focus that is nearly identical to our focus, and the participating broker-dealers could emphasize such competing products to their retail clients. As a result, we do not know the amount of proceeds that will be raised in this offering, which may be substantially less than the amount we would need to achieve a broadly diversified portfolio of real estate and real estate-related investments.
If we are unable to raise substantial proceeds from this offering, we will make fewer investments, resulting in less diversification in terms of the number of investments owned, the geographic regions in which our investments are located and the types of investments that we make. In addition, our fixed operating expenses, as a percentage of gross income, would be higher, and our financial condition and ability to pay distributions could be adversely affected if we are unable to raise substantial funds in this offering and invest in a diverse portfolio of real estate and real estate-related investments.
The purchase price you pay for shares of our common stock may be higher than the value of our assets per share of common stock at the time of your purchase.
This is a fixed price offering, which means that the offering price for shares of our common stock is fixed and will not vary based on the underlying value of our assets at any time. The offering price for our shares is not based on the book value or net asset value of our current or expected investments or our current or expected operating cash flows. Therefore, the fixed offering price established for shares of our common stock may not accurately represent the current value of our assets per share of our common stock at any particular time and may be higher or lower than the actual value of our assets per share at such time. See the section of this prospectus captioned Investment Objectives and Policies Dilution of the Net Tangible Book Value of Our Shares for further discussion.
There is no fixed date or method for providing our stockholders with liquidity, and your shares may have limited liquidity for an indefinite period of time.
Due to the unpredictable nature of future macro- and micro- economic and market conditions, we have not set a fixed time period or method for providing our stockholders with liquidity. We expect that our board of directors will make that determination in the future based, in part, upon advice from our advisor. As a result, your shares may continue to have limited liquidity for an indefinite period of time and should be purchased only as a long-term investment.
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Our success depends to a significant degree upon certain key personnel of our advisor. If our advisor loses or is unable to obtain key personnel, our ability to achieve our investment objectives could be delayed or hindered, which could adversely affect our ability to pay distributions to you and the value of your investment.
Our success depends to a significant degree upon the contributions of certain executive officers and other key personnel of our advisor, each of whom would be difficult to replace. We cannot guarantee that all of these key personnel, or any particular person, will remain affiliated with us, our sponsor and/or our advisor. If any of our key personnel were to cease their affiliation with our advisor, our operating results could suffer. Further, we currently do not separately maintain key person life insurance on Mr. Cole or any other person and we may not do so in the future. We believe that our future success depends, in large part, upon our advisors ability to hire and retain highly skilled managerial, operational and marketing personnel. Competition for such personnel is intense, and we cannot assure you that our sponsor or advisor will be successful in attracting and retaining such skilled personnel. If our advisor loses or is unable to obtain the services of key personnel, our ability to implement our investment strategies could be delayed or hindered, and the value of your investment may decline.
If our board of directors elects to internalize our management functions in connection with a listing of our shares of common stock on an exchange or other liquidity event, your interest in us could be diluted, and we could incur other significant costs associated with being self-managed.
In the future, we may undertake a listing of our common stock on an exchange or other liquidity event that may involve internalizing our management functions. If our board of directors elects to internalize our management functions, we may negotiate to acquire our advisors assets and personnel. At this time, we cannot be sure of the form or amount of consideration or other terms relating to any such acquisition. Such consideration could take many forms, including cash payments, promissory notes and shares of our stock. The payment of such consideration could result in dilution of your interests as a stockholder and could reduce the net income per share and funds from operations per share attributable to your investment. Internalization transactions involving the acquisition of advisors affiliated with entity sponsors have also, in some cases, been the subject of litigation. Even if these claims are without merit, we could be forced to spend significant amounts of money defending claims, which would reduce the amount of funds available to operate our business and to pay distributions.
In addition, while we would no longer bear the costs of the various fees and expenses we expect to pay to our advisor under the advisory agreement, our direct expenses would include general and administrative costs, including legal, accounting, and other expenses related to corporate governance, including Securities and Exchange Commission reporting and compliance. We would also incur the compensation and benefits costs of our officers and other employees and consultants that we now expect will be paid by our advisor or its affiliates. In addition, we may issue equity awards to officers, employees and consultants, which awards would decrease net income and funds from operations and may further dilute your investment. If the expenses we assume as a result of an internalization are higher than the expenses we avoid paying to our advisor, our net income per share and funds from operations per share would be lower as a result of the internalization than it otherwise would have been, potentially decreasing the amount of funds available to distribute to you and the value of our shares.
As currently organized, we do not directly have any employees. If we elect to internalize our operations, we would employ personnel and would be subject to potential liabilities commonly faced by employers, such as workers disability and compensation claims, potential labor disputes and other employee-related liabilities and grievances. Upon any internalization of our advisor, certain key personnel may not remain with our advisor, but instead will remain employees of our sponsor or its affiliates.
If we internalize our management functions, we could have difficulty integrating these functions as a stand-alone entity. Currently, our advisor and its affiliates perform asset management and general and administrative
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functions, including accounting and financial reporting, for multiple entities. They have a great deal of know-how and can experience economies of scale. We may fail to properly identify the appropriate mix of personnel and capital needs to operate as a stand-alone entity. An inability to manage an internalization transaction effectively could thus result in our incurring excess costs and/or have a negative effect on our results of operations.
Our participation in a co-ownership arrangement would subject us to risks that otherwise may not be present in other real estate investments.
We may enter in co-ownership arrangements with respect to a portion of the properties we acquire. Co-ownership arrangements involve risks generally not otherwise present with an investment in real estate, such as the following:
| the risk that a co-owner may at any time have economic or business interests or goals that are or become inconsistent with our business interests or goals; |
| the risk that a co-owner may be in a position to take action contrary to our instructions or requests or our policies or objectives; |
| the possibility that an individual co-owner might become insolvent or bankrupt, or otherwise default under the applicable mortgage loan financing documents, which may constitute an event of default under all of the applicable mortgage loan financing documents or allow the bankruptcy court to reject the agreements entered into by the co-owners owning interests in the property; |
| the possibility that a co-owner might not have adequate liquid assets to make cash advances that may be required in order to fund operations, maintenance and other expenses related to the property, which could result in the loss of current or prospective tenants and otherwise adversely affect the operation and maintenance of the property, could cause a default under the mortgage loan financing documents applicable to the property and result in late charges, penalties and interest, and could lead to the exercise of foreclosure and other remedies by the lender; |
| the risk that a co-owner could breach agreements related to the property, which may cause a default under, and possibly result in personal liability in connection with, the applicable mortgage loan financing documents, violate applicable securities law, result in a foreclosure or otherwise adversely affect the property and the co-ownership arrangement; |
| the risk that a default by any co-owner would constitute a default under the applicable mortgage loan financing documents that could result in a foreclosure and the loss of all or a substantial portion of the investment made by the co-owner; |
| the risk that we could have limited control and rights, with management decisions made entirely by a third-party; and |
| the possibility that we will not have the right to sell the property at a time that otherwise could result in the property being sold for its maximum value. |
In the event that our interests become adverse to those of the other co-owners, we may not have the contractual right to purchase the co-ownership interests from the other co-owners. Even if we are given the opportunity to purchase such co-ownership interests in the future, we cannot guarantee that we will have sufficient funds available at the time to purchase co-ownership interests from the co-owners.
We might want to sell our co-ownership interests in a given property at a time when the other co-owners in such property do not desire to sell their interests. Therefore, because we anticipate that it will be much more difficult to find a willing buyer for our co-ownership interests in a property than it would be to find a buyer for a property we owned outright, we may not be able to sell our interest in a property at the time we would like to sell.
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Cybersecurity risks and cyber incidents may adversely affect our business by causing a disruption to our operations, a compromise or corruption of our confidential information, and/or damage to our business relationships, all of which could negatively impact our financial results.
A cyber incident is considered to be any adverse event that threatens the confidentiality, integrity or availability of our information resources. These incidents may be an intentional attack or an unintentional event and could involve gaining unauthorized access to our information systems for purposes of misappropriating assets, stealing confidential information, corrupting data or causing operational disruption. The result of these incidents may include disrupted operations, misstated or unreliable financial data, liability for stolen assets or information, increased cybersecurity protection and insurance costs, litigation and damage to our tenant and investor relationships. As our reliance on technology has increased, so have the risks posed to our information systems, both internal and those we have outsourced. We have implemented processes, procedures and internal controls to help mitigate cybersecurity risks and cyber intrusions, but these measures, as well as our increased awareness of the nature and extent of a risk of a cyber incident, do not guarantee that our financial results, operations, business relationships or confidential information will not be negatively impacted by such an incident.
Risks Related to Conflicts of Interest
We are subject to conflicts of interest arising out of our relationships with our advisor and its affiliates, including the material conflicts discussed below. The Conflicts of Interest section of this prospectus provides a more detailed discussion of the conflicts of interest between us and our advisor and its affiliates, and our policies to reduce or eliminate certain potential conflicts.
Our advisor and its affiliates, including our dealer manager, face conflicts of interest caused by their compensation arrangements with us, which could result in actions that are not in the long-term best interests of our stockholders.
Our advisor and its affiliates, including our dealer manager, receive substantial fees from us under the terms of the advisory agreement and dealer manager agreement. These fees could influence the judgment of our advisor and its affiliates in performing services for us. Among other matters, these compensation arrangements could affect their judgment with respect to:
| the continuation, renewal or enforcement of our agreements with our advisor and its affiliates, including the advisory agreement and the dealer manager agreement; |
| public offerings of equity by us, which entitle our dealer manager to fees and will likely entitle our advisor to increased acquisition and asset management fees; |
| property acquisitions from other Cole-sponsored real estate programs, which might entitle affiliates of our advisor to real estate commissions and possible success-based sale fees in connection with its services for the seller; |
| property acquisitions from third parties, which entitle our advisor to acquisition fees and advisory fees; |
| property dispositions, which may entitle our advisor or its affiliates to disposition fees; |
| borrowings to acquire properties, which borrowings will increase the acquisition and asset management fees payable to our advisor; |
| whether and when we seek to sell our company, liquidate our assets or list our common stock on a national securities exchange, which liquidation or listing could entitle our advisor to the payment of fees; and |
| how and when to recommend to our board of directors a proposed strategy to provide our investors with liquidity, which proposed strategy, if implemented, could entitle our advisor to the payment of fees. |
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Our advisors fee structure is principally based on the cost or book value of investments and not on performance, which could result in our advisor taking actions that are not necessarily in the long-term best interests of our stockholders.
The acquisition fee and the advisory fee we pay to our advisor are both based on the cost or book value of such investments. As a result, our advisor receives these fees regardless of the quality of such investments, the performance of such investments or the quality of our advisors services rendered to us in connection with such investments. This creates a potential conflict of interest between us and our advisor, as the interests of our advisor in receiving the acquisition fee and the advisory fee is not well aligned with our interest of acquiring real estate that is likely to produce the maximum risk adjusted returns.
Our advisor faces conflicts of interest relating to the incentive fee structure under our advisory agreement, which could result in actions that are not necessarily in the long-term best interests of our stockholders.
Pursuant to the terms of our advisory agreement, our advisor is entitled to a subordinated performance fee that is structured in a manner intended to provide incentives to our advisor to perform in our best interests and in the best interests of our stockholders. However, because our advisor does not maintain a significant equity interest in us and is entitled to receive certain fees regardless of performance, our advisors interests are not wholly aligned with those of our stockholders. Furthermore, our advisor could be motivated to recommend riskier or more speculative investments in order for us to generate the specified levels of performance or sales proceeds that would entitle our advisor to performance-based fees. In addition, our advisor will have substantial influence with respect to how and when our board of directors elects to provide liquidity to our investors, and these performance-based fees could influence our advisors recommendations to us in this regard. Our advisor also has the right to terminate the advisory agreement under certain circumstances that could result in our advisor earning a performance fee, which could have the effect of delaying, deferring or preventing a change of control.
A number of other Cole-sponsored real estate programs use investment strategies that are similar to ours, therefore our executive officers and the officers and key personnel of our advisor and its affiliates may face conflicts of interest relating to the purchase and leasing of properties, and such conflicts may not be resolved in our favor.
Our sponsor currently has simultaneous offerings of funds that have a substantially similar mix of fund characteristics, including targeted investment types, investment objectives and criteria, and anticipated fund terms. As a result, we may be seeking to acquire properties and other real estate-related investments at the same time as one or more of the other Cole-sponsored programs managed by officers and key personnel of our advisor and/or its affiliates, and these other Cole-sponsored programs may use investment strategies and have investment objectives that are similar to ours. Our executive officers and the executive officers of our advisor also are the executive officers of other Cole-sponsored REITs and/or their advisors, the general partners of Cole-sponsored partnerships and/or the advisors or fiduciaries of other Cole-sponsored programs. There is a risk that our advisors allocation of investment properties may result in our acquiring a property that provides lower returns to us than a property purchased by another Cole-sponsored program. In addition, we have acquired, and may continue to acquire, properties in geographic areas where other Cole-sponsored programs own properties. If one of the other Cole-sponsored programs attracts a tenant that we are competing for, we could suffer a loss of revenue due to delays in locating another suitable tenant. Similar conflicts of interest may arise if our advisor recommends that we make or purchase mortgage loans or participations in mortgage loans, since other Cole-sponsored programs may be competing with us for these investments. You will not have the opportunity to evaluate the manner in which these conflicts of interest are resolved before or after making your investment.
Our officers face conflicts of interest related to the positions they hold with affiliated entities, which could hinder our ability to successfully implement our business strategy and to generate returns to you.
Each of our executive officers, including Mr. Cole, who also serves as the chairman of our board of directors, also is an officer of other Cole-sponsored real estate programs and of one or more entities affiliated
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with our advisor. As a result, these individuals have fiduciary duties to us and our stockholders, as well as to these other entities and their stockholders, members and limited partners. These fiduciary duties to such other entities and persons may create conflicts with the fiduciary duties that they owe to us and our stockholders. There is a risk that their loyalties to these other entities could result in actions or inactions that are detrimental to our business and violate their fiduciary duties to us and our stockholders, which could harm the implementation of our investment strategy and our investment and leasing opportunities. Conflicts with our business and interests are most likely to arise from involvement in activities related to (i) allocation of new investments and management time and services between us and the other entities, (ii) our purchase of properties from, or sale of properties to, affiliated entities, (iii) the timing and terms of the investment in or sale of an asset, (iv) development of our properties by affiliates, (v) investments with affiliates of our advisor, (vi) compensation to our advisor and its affiliates, and (vii) our relationship with, and compensation to, our dealer manager. If we do not successfully implement our investment strategy, we may be unable to maintain or increase the value of our assets and our operating cash flows and ability to pay distributions could be adversely affected.
Our advisor and its officers and key personnel face conflicts of interest related to the positions they hold with affiliated entities, which could hinder our ability to successfully implement our business strategy and to pay distributions.
Our advisor and its officers and key personnel are officers, key personnel and partners of other real estate programs that have investment objectives, targeted assets, and legal and financial obligations similar to ours and/or the advisors to such programs, and they may have other business interests as well. In addition, we have only two executive officers, each of whom also is an officer, director and/or key person of other real estate programs that have investment objectives, targeted assets and legal and financial obligations similar to ours, and may also have other business interests. As a result, these individuals have fiduciary duties to both us and our stockholders and these other entities and their stockholders, members and limited partners. These fiduciary duties to such other entities and persons may create conflicts with the fiduciary duties that they owe to us and our stockholders. There is a risk that their loyalties to these other entities could result in actions or inactions that are detrimental to our business and violate their fiduciary duties to us and our stockholders, which could harm the implementation of our investment strategy and our investment and leasing opportunities.
Conflicts with our business and interests are most likely to arise from involvement in activities related to (i) allocation of new investments and management time and services between us and the other entities, (ii) our purchase of properties from, or sale of properties to, affiliated entities, (iii) the timing and terms of the investment in or sale of an asset, (iv) development of our properties by affiliates, (v) investments with affiliates of our advisor, (vi) compensation to our advisor and its affiliates, and (vii) our relationship with, and compensation to, our dealer manager. If we do not successfully implement our investment strategy, we may be unable to maintain or increase the value of our assets and our operating cash flows and ability to pay distributions could be adversely affected. Even if these persons do not violate their fiduciary duties to us and our stockholders, they will have competing demands on their time and resources and may have conflicts of interest in allocating their time and resources between our business and these other entities. Should such persons devote insufficient time or resources to our business, returns on our investments may suffer.
Our charter permits us to acquire assets and borrow funds from affiliates of our advisor and sell or lease our assets to affiliates of our advisor, and any such transaction could result in conflicts of interest.
Under our charter, we are permitted to acquire properties from affiliates of our advisor, provided, that any and all acquisitions from affiliates of our advisor must be approved by a majority of our directors, including a majority of our independent directors, not otherwise interested in such transaction as being fair and reasonable to us and at a price to us that is no greater than the cost of the property to the affiliate of our advisor, unless a majority of the independent directors determines that there is substantial justification for any amount that exceeds such cost and that the difference is reasonable. In no event will we acquire a property from an affiliate of our advisor if the cost to us would exceed the propertys current appraised value as determined by an independent
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appraiser. In the event that we acquire a property from an affiliate of our advisor, we may be foregoing an opportunity to acquire a different property that might be more advantageous to us. In addition, under our charter, we are permitted to borrow funds from affiliates of our advisor, including our sponsor, provided, that any such loans from affiliates of our advisor must be approved by a majority of our directors, including a majority of our independent directors, not otherwise interested in such transaction as fair, competitive and commercially reasonable, and no less favorable to us than comparable loans between unaffiliated parties. Under our charter, we are also permitted to sell and lease our assets to affiliates of our advisor, and we have not established a policy that specifically addresses how we will determine the sale or lease price in any such transaction. Any such sale or lease transaction would be subject to our general policy that governs all transactions with entities affiliated with our advisor. To the extent that we acquire any properties from affiliates of our advisor, borrow funds from affiliates of our advisor or sell or lease our assets to affiliates of our advisor, such transactions could result in a conflict of interest.
Our advisor faces conflicts of interest relating to joint ventures or other co-ownership arrangements that we enter into with other Cole-sponsored programs, which could result in a disproportionate benefit to another Cole-sponsored program.
We may enter into joint ventures with other Cole-sponsored programs for the acquisition, development or improvement of properties as well as the acquisition of real-estate related investments. Officers and key persons of our advisor also are officers and key persons of other Cole-sponsored REITs and/or their advisors, the general partners of other Cole-sponsored partnerships and/or the advisors or fiduciaries of other Cole-sponsored programs. These officers and key persons may face conflicts of interest in determining which Cole-sponsored program should enter into any particular joint venture or co-ownership arrangement. These persons also may have a conflict in structuring the terms of the relationship between us and the Cole-affiliated co-venturer or co-owner, as well as conflicts of interests in managing the joint venture.
In the event we enter into joint venture or other co-ownership arrangements with another Cole-sponsored program, our advisor and its affiliates may have a conflict of interest when determining when and whether to buy or sell a particular property, or to make or dispose of another real estate-related investment. In addition, if we become listed for trading on a national securities exchange, we may develop more divergent goals and objectives from a Cole-affiliated co-venturer or co-owner that is not listed for trading. In the event we enter into a joint venture or other co-ownership arrangement with a Cole-sponsored program that has a term shorter than ours, the joint venture may be required to sell its properties earlier than we may desire to sell the properties. Even if the terms of any joint venture or other co-ownership agreement between us and another Cole-sponsored program grant us the right of first refusal to buy such properties, we may not have sufficient funds or borrowing capacity to exercise our right of first refusal under these circumstances.
Since Mr. Cole and his affiliates control our advisor and the advisors to other Cole-sponsored programs, agreements and transactions between or among the parties with respect to any joint venture or other co-ownership arrangement will not have the benefit of arms-length negotiation of the type normally conducted between unrelated co-venturers or co-owners, which may result in the co-venturer or co-owner receiving benefits greater than the benefits that we receive. We have adopted certain procedures for dealing with potential conflicts of interest as described in the section of this prospectus captioned Conflicts of Interest Certain Conflict Resolution Procedures.
Risks Related to This Offering and Our Corporate Structure
The dealer manager is an affiliate of our advisor, therefore you will not have the benefit of an independent review of the prospectus or of us that customarily is performed in underwritten offerings.
The dealer manager, Cole Capital Corporation, is an affiliate of our advisor and, as a result, is not in a position to make an independent review of us or this offering. Accordingly, you will have to rely on your own
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broker-dealer to make an independent review of the terms of this offering. If your broker-dealer conducts an independent review of this offering, and/or engages an independent due diligence reviewer to do so on its behalf, we expect that we will pay or reimburse the expenses associated with such review, which may create conflicts of interest. If your broker-dealer does not conduct such a review, you will not have the benefit of an independent review of the terms of this offering.
Payment of fees and reimbursements to our dealer manager, and our advisor and its affiliates, reduces cash available for investment.
We pay Cole Capital Corporation, our dealer manager, up to 9% of the gross proceeds of our primary offering in the form of selling commissions and a dealer manager fee, most of which is reallowed to participating broker-dealers. We also reimburse our advisor and its affiliates for up to 2.0% of our gross offering proceeds, including proceeds from sales of shares under our distribution reinvestment plan, for other organization and offering expenses. Such payments will reduce the amount of cash we have available to invest in properties and result in a lower total return to you than if we were able to invest 100% of the gross proceeds from this offering in properties. Moreover, dealer manager fees and selling commissions are included in the $10 per share offering price, therefore our offering price does not, and is not intended to, reflect our net asset value. In addition, we intend to pay substantial fees to our advisor and its affiliates for the services they perform for us. The payment of these fees reduces the amount of cash available for investment in properties. For a more detailed discussion of the fees payable to such entities in respect of this offering, see the Management Compensation section of this prospectus.
The limit on the number of shares a person may own may discourage a takeover that could otherwise result in a premium price to our stockholders.
Our charter, with certain exceptions, authorizes our directors to take such actions as are necessary and desirable to preserve our qualification as a REIT. Unless exempted by our board of directors, no person may own more than 9.8% in value of the aggregate of our outstanding shares or more than 9.8% (in value or number of shares, whichever is more restrictive) of the aggregate of our outstanding shares of common stock. These restrictions may have the effect of delaying, deferring or preventing a change in control of us, including an extraordinary transaction (such as a merger, tender offer or sale of all or substantially all of our assets) that might provide a premium to the purchase price of our common stock for our stockholders. See the Description of Shares Restrictions on Ownership and Transfer section of this prospectus.
Our charter permits our board of directors to issue stock with terms that may subordinate the rights of common stockholders or discourage a third party from acquiring us in a manner that might result in a premium price to our stockholders.
Our charter permits our board of directors to issue up to 500,000,000 shares of stock, including 10,000,000 shares of preferred stock. In addition, our board of directors, without any action by our stockholders, may amend our charter from time to time to increase or decrease the aggregate number of shares or the number of shares of any class or series of stock that we have authority to issue. Our board of directors may classify or reclassify any unissued common stock or preferred stock and establish the preferences, conversion or other rights, voting powers, restrictions, limitations as to distributions, qualifications and terms and conditions of redemption of any such stock. Shares of our common stock shall be subject to the express terms of any series of our preferred stock. Thus, if also approved by a majority of our independent directors not otherwise interested in the transaction, our board of directors could authorize the issuance of preferred stock with terms and conditions that could have a priority as to distributions and amounts payable upon liquidation over the rights of the holders of our common stock. Preferred stock could also have the effect of delaying, deferring or preventing the removal of incumbent management or a change in control of us, including an extraordinary transaction (such as a merger, tender offer or sale of all or substantially all of our assets) that might provide a premium to the purchase price of our common stock for our stockholders. See the Description of Shares Preferred Stock section of this prospectus.
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Maryland law prohibits certain business combinations, which may make it more difficult for us to be acquired and may limit your ability to dispose of your shares.
Under Maryland law, business combinations between a Maryland corporation and an interested stockholder or an affiliate of an interested stockholder are prohibited for five years after the most recent date on which the interested stockholder becomes an interested stockholder. These business combinations include a merger, consolidation, share exchange or, in circumstances specified in the statute, an asset transfer or issuance or reclassification of equity securities. An interested stockholder is defined as:
| any person who beneficially owns 10% or more of the voting power of the corporations shares; or |
| an affiliate or associate of the corporation who, at any time within the two-year period prior to the date in question, was the beneficial owner of 10% or more of the voting power of the then outstanding voting stock of the corporation. |
A person is not an interested stockholder under the statute if the board of directors approved in advance the transaction by which he or she otherwise would have become an interested stockholder. However, in approving a transaction, the board of directors may provide that its approval is subject to compliance, at or after the time of approval, with any terms and conditions determined by our board of directors.
After the five-year prohibition, any business combination between the Maryland corporation and an interested stockholder generally must be recommended by the board of directors of the corporation and approved by the affirmative vote of at least:
| 80% of the votes entitled to be cast by holders of outstanding shares of voting stock of the corporation; and |
| two-thirds of the votes entitled to be cast by holders of voting stock of the corporation other than shares held by the interested stockholder with whom or with whose affiliate the business combination is to be effected or held by an affiliate or associate of the interested stockholder. |
These super-majority vote requirements do not apply if the corporations stockholders receive a minimum price, as defined under Maryland law, for their shares in the form of cash or other consideration in the same form as previously paid by the interested stockholder for its shares. The business combination statute permits various exemptions from its provisions, including business combinations that are exempted by the board of directors prior to the time that the interested stockholder becomes an interested stockholder. Pursuant to the statute, our board of directors has exempted any business combination involving our advisor or any affiliate of our advisor. Consequently, the five-year prohibition and the super-majority vote requirements will not apply to business combinations between us and our advisor or any affiliate of our advisor. As a result, our advisor and any affiliate of our advisor may be able to enter into business combinations with us that may not be in the best interest of our stockholders, without compliance with the super-majority vote requirements and the other provisions of the statute. The business combination statute may discourage others from trying to acquire control of us and increase the difficulty of consummating any offer. For a more detailed discussion of the Maryland laws governing us and the ownership of our shares of common stock, see the section of this prospectus captioned Description of Shares Business Combinations.
Maryland law also limits the ability of a third party to buy a large percentage of our outstanding shares and exercise voting control in electing directors.
Under its Control Share Acquisition Act, Maryland law also provides that control shares of a Maryland corporation acquired in a control share acquisition have no voting rights except to the extent approved by the corporations disinterested stockholders by a vote of two-thirds of the votes entitled to be cast on the matter. Shares of stock owned by interested stockholders, that is, by the acquirer, or officers of the corporation or employees of the corporation who are directors of the corporation, are excluded from shares entitled to vote on
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the matter. Control shares are voting shares of stock that would entitle the acquirer, except solely by virtue of a revocable proxy, to exercise voting control in electing directors within specified ranges of voting control. Control shares do not include shares the acquiring person is then entitled to vote as a result of having previously obtained stockholder approval. A control share acquisition means the acquisition of control shares. The control share acquisition statute does not apply (a) to shares acquired in a merger, consolidation or share exchange if the corporation is a party to the transaction or (b) to acquisitions approved or exempted by the charter or bylaws of the corporation. Our bylaws contain a provision exempting from the Control Share Acquisition Act any and all acquisitions of our stock by Cole Capital Advisors or any affiliate of Cole Capital Advisors. This statute could have the effect of discouraging offers from third parties to acquire us and increasing the difficulty of successfully completing this type of offer by anyone other than our advisor or any of its affiliates. For a more detailed discussion on the Maryland laws governing control share acquisitions, see the section of this prospectus captioned Description of Shares Control Share Acquisitions.
Our charter includes an anti-takeover provision that may discourage a stockholder from launching a tender offer for our shares.
Our charter requires that any tender offer, including any mini-tender offer, must comply with Regulation 14D of the Securities Exchange Act of 1934, as amended (the Exchange Act). The offering person must provide our company notice of the tender offer at least ten business days before initiating the tender offer. If the offering person does not comply with these requirements, we will have the right to redeem that persons shares and any shares acquired in such tender offer. In addition, the non-complying person shall be responsible for all of our expenses in connection with that persons noncompliance. This provision of our charter may discourage a person from initiating a tender offer for our shares and prevent you from receiving a premium to your purchase price for your shares in such a transaction.
If we are required to register as an investment company under the Investment Company Act, we could not continue our current business plan, which may significantly reduce the value of your investment.
We intend to conduct our operations, and the operations of our operating partnership and any other subsidiaries, so that no such entity meets the definition of an investment company under Section 3(a)(1) of the Investment Company Act. Under the Investment Company Act, in relevant part, a company is an investment company if:
| pursuant to Section 3(a)(1)(A), it is, or holds itself out as being, engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting or trading in securities; or |
| pursuant to Section 3(a)(1)(C), it is engaged, or proposes to engage, in the business of investing, reinvesting, owning, holding or trading in securities and owns or proposes to acquire investment securities having a value exceeding 40% of the value of its total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis (the 40% test). Investment securities excludes U.S. Government securities and securities of majority-owned subsidiaries that are not themselves investment companies and are not relying on the exception from the definition of investment company under Section 3(c)(1) or Section 3(c)(7) of the Investment Company Act. |
We intend to monitor our operations and our assets on an ongoing basis in order to ensure that neither we, nor any of our subsidiaries, meet the definition of investment company under Section 3(a)(1) of the Investment Company Act. If we were obligated to register as an investment company, we would have to comply with a variety of substantive requirements under the Investment Company Act imposing, among other things:
| limitations on capital structure; |
| restrictions on specified investments; |
| restrictions on specified investments; |
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| prohibitions on transactions with affiliates; |
| compliance with reporting, record keeping, voting, proxy disclosure and other rules and regulations that would significantly change our operations; and |
| potentially, compliance with daily valuation requirements. |
In order for us to not meet the definition of an investment company and avoid regulation under the Investment Company Act, we must engage primarily in the business of buying real estate, and these investments must be made within a year after the offering ends. If we are unable to invest a significant portion of the proceeds of this offering in properties within one year of the termination of the offering, we may avoid being required to register as an investment company by temporarily investing any unused proceeds in certificates of deposit or other cash items with low returns. This would reduce the cash available for distribution to investors and possibly lower your returns.
To avoid meeting the definition of an investment company under Section 3(a)(1) of the Investment Company Act, we may be unable to sell assets we would otherwise want to sell and may need to sell assets we would otherwise wish to retain. Similarly, we may have to acquire additional income or loss generating assets that we might not otherwise have acquired or may have to forgo opportunities to acquire interests in companies that we would otherwise want to acquire and would be important to our investment strategy. Accordingly, our board of directors may not be able to change our investment policies as our board of directors may deem appropriate if such change would cause us to meet the definition of an investment company. In addition, a change in the value of any of our assets could negatively affect our ability to avoid being required to register as an investment company. If we were required to register as an investment company but failed to do so, we would be prohibited from engaging in our business, and criminal and civil actions could be brought against us. In addition, our contracts would be unenforceable unless a court were to require enforcement, and a court could appoint a receiver to take control of us and liquidate our business.
If you do not agree with the decisions of our board of directors, you only have limited control over changes in our policies and operations and may not be able to change such policies and operations.
Our board of directors determines our major policies, including our policies regarding investments, financing, growth, debt capitalization, REIT qualification and distributions. Our board of directors may amend or revise these and other policies without a vote of the stockholders. Under the Maryland General Corporation Law and our charter, our stockholders generally have a right to vote only on the following:
| the election or removal of directors; |
| any amendment of our charter, except that our board of directors may amend our charter without stockholder approval to increase or decrease the aggregate number of our shares, to increase or decrease the number of our shares of any class or series that we have the authority to issue, to change our name, to classify or reclassify any unissued shares of common stock or preferred stock into one or more classes or series of shares and to establish the terms of such shares, and to change the name or other designation or the par value of any class or series of our stock and the aggregate par value of our stock or to effect certain reverse stock splits; provided, however, that any amendment that would materially and adversely affect the rights, preferences and privileges of the stockholders must be approved by the stockholders; |
| our dissolution; and |
| a merger or consolidation of the sale or other disposition of all or substantially all of our assets. |
All other matters are subject to the discretion of our board of directors.
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Our board of directors may change certain of our investment policies without stockholder approval, which could alter the nature of your investment.
Our charter requires that our independent directors review our investment policies at least annually to determine that the policies we are following are in the best interest of the stockholders. These policies may change over time. The methods of implementing our investment policies also may vary, as new real estate development trends emerge and new investment techniques are developed. Subject to certain limits set forth in our charter and as may be required to avoid meeting the definition of an investment company under the Investment Company Act, our investment policies, the methods for their implementation, and our other objectives, policies and procedures may be altered by our board of directors without the approval of our stockholders, unless otherwise provided in our organizational documents. As a result, the nature of your investment could change without your consent.
Our rights and the rights of our stockholders to recover claims against our officers, directors and our advisor are limited, which could reduce your and our recovery against them if they cause us to incur losses.
Maryland law provides that a director has no liability in that capacity if he or she performs his or her duties in good faith, in a manner he or she reasonably believes to be in the corporations best interests and with the care that an ordinarily prudent person in a like position would use under similar circumstances. Our charter, in the case of our directors and officers, and our charter and the advisory agreement, in the case of our advisor and its affiliates, require us, subject to certain exceptions, to indemnify and advance expenses to our directors, our officers, and our advisor and its affiliates. Our charter permits us to provide such indemnification and advance for expenses to our employees and agents. Additionally, our charter limits, subject to certain exceptions, the liability of our directors and officers to us and our stockholders for monetary damages. Although our charter does not allow us to indemnify our directors or our advisor and its affiliates for any liability or loss suffered by them or hold harmless our directors or our advisor and its affiliates for any loss or liability suffered by us to a greater extent than permitted under Maryland law or the Statement of Policy Regarding Real Estate Investment Trusts published by the North American Securities Administrators Association, also known as the NASAA REIT Guidelines, we and our stockholders may have more limited rights against our directors, officers, employees and agents, and our advisor and its affiliates, than might otherwise exist under common law, which could reduce your and our recovery against them. In addition, our advisor is not required to retain cash to pay potential liabilities and it may not have sufficient cash available to pay liabilities if they arise. If our advisor is held liable for a breach of its fiduciary duty to us, or a breach of its contractual obligations to us, we may not be able to collect the full amount of any claims we may have against our advisor. In addition, we may be obligated to fund the defense costs incurred by our directors, officers, employees and agents or our advisor in some cases, which would decrease the cash otherwise available for distribution to you. See the section captioned Management Limited Liability and Indemnification of Our Directors, Officers, Advisor and Other Agents elsewhere in this prospectus.
Your interest in us will be diluted if we issue additional shares.
Existing stockholders and potential investors in this offering do not have preemptive rights to any shares issued by us in the future. Our charter currently has authorized 500,000,000 shares of stock, of which 490,000,000 shares are designated as common stock and 10,000,000 are designated as preferred stock. Subject to any limitations set forth under Maryland law, our board of directors may increase the number of authorized shares of stock, increase or decrease the number of shares of any class or series of stock designated, or classify or reclassify any unissued shares without the necessity of obtaining stockholder approval. All of such shares may be issued in the discretion of our board of directors, except that the issuance of preferred stock must also be approved by a majority of our independent directors not otherwise interested in the transaction. Investors purchasing shares in this offering likely will suffer dilution of their equity investment in us, in the event that we (1) sell shares in this offering or sell additional shares in the future, including those issued pursuant to our distribution reinvestment plan, (2) sell securities that are convertible into shares of our common stock, (3) issue
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shares of our common stock in a private offering of securities to institutional investors, (4) issue shares of our common stock to our advisor, its successors or assigns, in payment of an outstanding fee obligation as set forth under our advisory agreement or (5) issue shares of our common stock to sellers of properties acquired by us in connection with an exchange of limited partnership interests of our operating partnership. In addition, the partnership agreement for our operating partnership contains provisions that would allow, under certain circumstances, other entities, including other Cole-sponsored programs, to merge into or cause the exchange or conversion of their interest in that entity for interests of our operating partnership. Because the limited partnership interests of our operating partnership may, in the discretion of our board of directors, be exchanged for shares of our common stock, any merger, exchange or conversion between our operating partnership and another entity ultimately could result in the issuance of a substantial number of shares of our common stock, thereby diluting the percentage ownership interest of other stockholders. Because of these and other reasons described in this Risk Factors section, you should not expect to be able to own a significant percentage of our shares.
General Risks Related to Investments in Real Estate
Our operating results will be affected by economic and regulatory changes that have an adverse impact on the real estate market in general, which may prevent us from being profitable or from realizing growth in the value of our real estate properties.
Our operating results will be subject to risks generally incident to the ownership of real estate, including:
| changes in general economic or local conditions; |
| changes in supply of or demand for similar or competing properties in an area; |
| changes in interest rates and availability of permanent mortgage funds that may render the sale of a property difficult or unattractive; |
| the illiquidity of real estate investments generally; |
| changes in tax, real estate, environmental and zoning laws; and |
| periods of high interest rates and tight money supply. |
These risk and other factors may prevent us from being profitable, or from maintaining or growing the value of our real estate properties.
Many of our properties may depend upon a single tenant, or a limited number of major tenants, for all or a majority of its rental income; therefore, our financial condition and ability to make distributions to you may be adversely affected by the bankruptcy or insolvency, a downturn in the business, or a lease termination of a single tenant.
Many of our properties may be occupied by only one tenant or derive a majority of its rental income from a limited number of major tenants and, therefore, the success of those properties will be materially dependent on the financial stability of such tenants. Such tenants face competition within their industries and other factors that could reduce their ability to make rent payments. For example, our retail tenants face competition from other retailers, as well as competition from other retail channels, such as factory outlet centers, wholesale clubs, mail order catalogs, television shopping networks and various developing forms of e-commerce. In addition, our retail properties will be located in public places, where crimes, violence and other incidents may occur. Such incidents could reduce the amount of business conducted by the tenants at our properties, thus reducing the tenants abilities to pay rent, and such incidents could also expose us to civil liability, as the property owner. Furthermore, if we invest in industrial properties, a general reduction in U.S. manufacturing activity could reduce our manufacturing tenants abilities to pay rent. Lease payment defaults by tenants could cause us to reduce the amount of distributions we pay. A default of a tenant on its lease payments to us would cause us to lose revenue
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from the property and force us to find an alternative source of revenue to meet any expenses associated with the property and prevent a foreclosure if the property is subject to a mortgage. In the event of a default by a single or major tenant, we may experience delays in enforcing our rights as landlord and may incur substantial costs in protecting our investment and re-letting the property. If a lease is terminated, we may not be able to lease the property for the rent previously received or sell the property without incurring a loss. A default by a tenant, the failure of a guarantor to fulfill its obligations or other premature termination of a lease, or a tenants election not to extend a lease upon its expiration, could have an adverse effect on our financial condition and our ability to pay distributions to you.
A high concentration of our properties in a particular geographic area, or with tenants in a similar industry, would magnify the effects of downturns in that geographic area or industry.
In the event that we have a concentration of properties in any particular geographic area, any adverse situation that disproportionately affects that geographic area would have a magnified adverse effect on our portfolio. Similarly, if tenants of our properties become concentrated in a certain industry or industries, any adverse effect to that industry generally would have a disproportionately adverse effect on our portfolio.
If a major tenant declares bankruptcy, we may be unable to collect balances due under relevant leases, which could have a material adverse effect on our financial condition and ability to pay distributions to you.
We may experience concentration in one or more tenants. Any of our tenants, or any guarantor of one of our tenants lease obligations, could be subject to a bankruptcy proceeding pursuant to Title 11 of the bankruptcy laws of the United States. Such a bankruptcy filing would bar us from attempting to collect pre-bankruptcy debts from the bankrupt tenant or its properties unless we receive an enabling order from the bankruptcy court. Post-bankruptcy debts would be paid currently. If we assume a lease, all pre-bankruptcy balances owing under it must be paid in full. If a lease is rejected by a tenant in bankruptcy, we would have a general unsecured claim for damages. If a lease is rejected, it is unlikely we would receive any payments from the tenant because our claim would be capped at the rent reserved under the lease, without acceleration, for the greater of one year or 15% of the remaining term of the lease, but not greater than three years, plus rent already due but unpaid. This claim could be paid only in the event funds were available, and then only in the same percentage as that realized on other unsecured claims.
The bankruptcy of a tenant or lease guarantor could delay our efforts to collect past due balances under the relevant lease, and could ultimately preclude full collection of these sums. Such an event also could cause a decrease or cessation of current rental payments, reducing our operating cash flows and the amount available for distributions to you. In the event a tenant or lease guarantor declares bankruptcy, the tenant or its trustee may not assume our lease or its guaranty. If a given lease or guaranty is not assumed, our operating cash flows and the amounts available for distributions to you may be adversely affected. The bankruptcy of a major tenant could have a material adverse effect on our ability to pay distributions to you.
If a sale-leaseback transaction is re-characterized in a tenants bankruptcy proceeding, our financial condition could be adversely affected.
We may enter into sale-leaseback transactions, whereby we would purchase a property and then lease the same property back to the person from whom we purchased it. In the event of the bankruptcy of a tenant, a transaction structured as a sale-leaseback may be re-characterized as either a financing or a joint venture, either of which outcomes could adversely affect our financial condition, cash flow and the amount available for distributions to you.
If the sale-leaseback were re-characterized as a financing, we might not be considered the owner of the property, and as a result would have the status of a creditor in relation to the tenant. In that event, we would no longer have the right to sell or encumber our ownership interest in the property. Instead, we would have a claim
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against the tenant for the amounts owed under the lease, with the claim arguably secured by the property. The tenant/debtor might have the ability to propose a plan restructuring the term, interest rate and amortization schedule of its outstanding balance. If confirmed by the bankruptcy court, we could be bound by the new terms, and prevented from foreclosing our lien on the property. If the sale-leaseback were re-characterized as a joint venture, our lessee and we could be treated as co-venturers with regard to the property. As a result, we could be held liable, under some circumstances, for debts incurred by the lessee relating to the property.
Challenging economic conditions could adversely affect vacancy rates, which could have an adverse impact on our ability to make distributions and the value of an investment in our shares.
Challenging economic conditions, the availability and cost of credit, turmoil in the mortgage market, and declining real estate markets have contributed to increased vacancy rates in the commercial real estate sector. If we experience vacancy rates that are higher than historical vacancy rates, we may have to offer lower rental rates and greater tenant improvements or concessions than expected. Increased vacancies may have a greater impact on us, as compared to REITs with other investment strategies, as our investment approach relies on long-term leases in order to provide a relatively stable stream of income for our stockholders. As a result, increased vacancy rates could have the following negative effects on us:
| the values of our potential investments in commercial properties could decrease below the amount paid for such investments; |
| revenues from such properties could decrease due to low or no rental income during vacant periods, lower future rental rates and/or increased tenant improvement expenses or concessions; and/or |
| revenues from such properties that secure loans could decrease, making it more difficult for us to meet our payment obligations. |
All of these factors could impair our ability to make distributions and decrease the value of an investment in our shares.
Properties that have vacancies for a significant period of time could be difficult to sell, which could diminish the return on your investment.
A property may incur vacancies either by the continued default of a tenant under its leases, the expiration of a tenant lease or early termination of a lease by a tenant. If vacancies continue for a long period of time, we may suffer reduced revenues resulting in less cash to be distributed to you. In addition, because a propertys market value depends principally upon the value of the propertys leases, the resale value of a property with prolonged vacancies could decline, which could further reduce your return.
We may be unable to secure funds for future tenant improvements or capital needs, which could adversely impact our ability to pay cash distributions to you.
When tenants do not renew their leases or otherwise vacate their space, it is usual that, in order to attract replacement tenants, we will be required to expend substantial funds for tenant improvements and tenant refurbishments to the vacated space. In addition, although we expect that our leases with tenants will require tenants to pay routine property maintenance costs, we will likely be responsible for any major structural repairs, such as repairs to the foundation, exterior walls and rooftops. We will use substantially all of the gross proceeds from this offering to buy real estate and real estate-related investments and to pay various fees and expenses. We intend to reserve only approximately 0.1% of the gross proceeds from this offering for future capital needs. Accordingly, if we need additional capital in the future to improve or maintain our properties or for any other reason, we will have to obtain funds from other sources, such as cash flow from operations, borrowings, property sales or future equity offerings. These sources of funding may not be available on attractive terms or at all. If we cannot procure additional funding for capital improvements, our investments may generate lower cash flows or decline in value, or both.
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We may obtain only limited warranties when we purchase a property and would have only limited recourse in the event our due diligence did not identify any issues that lower the value of our property.
The seller of a property often sells such property in its as is condition on a where is basis and with all faults, without any warranties of merchantability or fitness for a particular use or purpose. In addition, purchase agreements may contain only limited warranties, representations and indemnifications that will only survive for a limited period after the closing. The purchase of properties with limited warranties increases the risk that we may lose some or all of our invested capital in the property, as well as the loss of rental income from that property.
Our inability to sell a property when we desire to do so could adversely impact our ability to pay cash distributions to you.
The real estate market is affected by many factors, such as general economic conditions, availability of financing, interest rates, supply and demand, and other factors that are beyond our control. We cannot predict whether we will be able to sell any property for the price or on the terms set by us, or whether any price or other terms offered by a prospective purchaser would be acceptable to us. We may be required to expend funds to correct defects or to make improvements before a property can be sold. We may not have adequate funds available to correct such defects or to make such improvements. Moreover, in acquiring a property, we may agree to restrictions that prohibit the sale of that property for a period of time or impose other restrictions, such as a limitation on the amount of debt that can be placed or repaid on that property. We cannot predict the length of time needed to find a willing purchaser and to close the sale of a property. Our inability to sell a property when we desire to do so may cause us to reduce our selling price for the property. Any delay in our receipt of proceeds, or diminishment of proceeds, from the sale of a property could adversely impact our ability to pay distributions to you.
We are exposed to risks related to increases in market lease rates and inflation, as income from long-term leases will be the primary source of our cash flows from operations.
We are exposed to risks related to increases in market lease rates and inflation, as income from long-term leases will be the primary source of our cash flows from operations. Leases of long-term duration or which include renewal options that specify a maximum rate increase may result in below-market lease rates over time if we do not accurately estimate inflation or market lease rates. Provisions of our leases designed to mitigate the risk of inflation and unexpected increases in market lease rates, such as periodic rental increases, may not adequately protect us from the impact of inflation or unexpected increases in market lease rates. If we are subject to below-market lease rates on a significant number of our properties pursuant to long-term leases, our cash flow from operations and financial position may be adversely affected.
We may not be able to sell our properties at a price equal to, or greater than, the price for which we purchased such property, which may lead to a decrease in the value of our assets.
Some of our leases will not contain rental increases over time. When that is the case, the value of the leased property to a potential purchaser may not increase over time, which may restrict our ability to sell that property, or if we are able to sell that property, may result in a sale price less than the price that we paid to purchase the property.
We may acquire or finance properties with lock-out provisions, which may prohibit us from selling a property, or may require us to maintain specified debt levels for a period of years on some properties.
A lock-out provision is a provision that prohibits the prepayment of a loan during a specified period of time. Lock-out provisions may include terms that provide strong financial disincentives for borrowers to prepay their outstanding loan balance and exist in order to protect the yield expectations of investors. We expect that many of our properties will be subject to lock-out provisions. Lock-out provisions could materially restrict us from selling
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or otherwise disposing of or refinancing properties when we may desire to do so. Lock-out provisions may prohibit us from reducing the outstanding indebtedness with respect to any properties, refinancing such indebtedness on a non-recourse basis at maturity, or increasing the amount of indebtedness with respect to such properties. Lock-out provisions could impair our ability to take other actions during the lock-out period that could be in the best interests of our stockholders and, therefore, may have an adverse impact on the value of our shares relative to the value that would result if the lock-out provisions did not exist. In particular, lock-out provisions could preclude us from participating in major transactions that could result in a disposition of our assets or a change in control even though that disposition or change in control might be in the best interests of our stockholders.
Increased operating expenses could reduce cash flow from operations and funds available to acquire investments or make distributions.
Our properties will be subject to operating risks common to real estate in general, any or all of which may negatively affect us. If any property is not fully occupied or if rents are being paid in an amount that is insufficient to cover operating expenses, we could be required to expend funds with respect to that property for operating expenses. The properties will be subject to increases in tax rates, utility costs, insurance costs, repairs and maintenance costs, administrative costs and other operating expenses. Some of our property leases may not require the tenants to pay all or a portion of these expenses, in which event we may have to pay these costs. If we are unable to lease properties on terms that require the tenants to pay all or some of the properties operating expenses, if our tenants fail to pay these expenses as required or if expenses we are required to pay exceed our expectations, we could have less funds available for future acquisitions or cash available for distributions to you.
Adverse economic and geopolitical conditions may negatively affect our returns and profitability.
Our operating results may be affected by market and economic challenges, which may result from a continued or exacerbated general economic downturn experienced by the nation as a whole, by the local economies where our properties may be located, or by the real estate industry including the following:
| poor economic conditions may result in tenant defaults under leases; |
| poor economic conditions may result in lower revenue to us from retailers who pay us a percentage of their revenues under percentage rent leases; |
| re-leasing may require concessions or reduced rental rates under the new leases; |
| changes in interest rates and availability of permanent mortgage funds that may render the sale of a property difficult or unattractive; |
| constricted access to credit may result in tenant defaults or non-renewals under leases; and |
| increased insurance premiums may reduce funds available for distribution or, to the extent such increases are passed through to tenants, may lead to tenant defaults. Increased insurance premiums may make it difficult to increase rents to tenants on turnover, which may adversely affect our ability to increase our returns. |
The length and severity of any economic slow down or downturn cannot be predicted. Our operations could be negatively affected to the extent that an economic slow down or downturn is prolonged or becomes more severe.
The United States armed conflicts in various parts of the world could have a further impact on our tenants. The consequences of any armed conflict are unpredictable, and we may not be able to foresee events that could have an adverse effect on our tenants, our business or your investment. More generally, any of these events could result in increased volatility in or damage to the United States and worldwide financial markets and economy. They also could result in higher energy costs and increased economic uncertainty in the United States or abroad.
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Our revenues will be dependent upon payment of rent by retailers, which may be particularly vulnerable to uncertainty in the local economy. Adverse economic conditions could affect the ability of our tenants to pay rent, which could have a material adverse effect on our operating results and financial condition, as well as our ability to pay distributions to you.
The current market environment may adversely affect our operating results, financial condition and ability to pay distributions.
The global financial markets have undergone pervasive and fundamental disruptions since mid-2007. The disruptions in the global financial markets had an adverse impact on the availability of credit to businesses generally. The continuing impact of the recent global economic recession has the potential to materially affect the value of our properties and other investments we make, the availability or the terms of financing that we may anticipate utilizing, and our ability to make principal and interest payments on, or refinance, any outstanding debt when due, and/or, for our leased properties, the ability of our tenants to enter into new leasing transactions or satisfy rental payments under existing leases. The current market environment also could affect our operating results and financial condition as follows:
| Debt Markets - Although there are signs of a recovery, the real estate debt markets are currently experiencing volatility as a result of certain factors, including the tightening of underwriting standards by lenders and credit rating agencies. Should overall borrowing costs increase, either by increases in the index rates or by increases in lender spreads, our operations may generate lower returns. In addition, the recent dislocations in the debt markets have reduced the amount of capital that is available to finance real estate, which, in turn: (1) limits the ability of real estate investors to make new acquisitions and to potentially benefit from reduced real estate values or to realize enhanced returns on real estate investments; (2) has slowed real estate transaction activity; and (3) may result in an inability to refinance debt as it becomes due. In addition, the state of the debt markets could have a material impact on the overall amount of capital being invested in real estate, which may result in price or value decreases of real estate assets and impact our ability to raise equity capital. |
| Real Estate Markets - The recent global economic recession has caused commercial real estate values to decline substantially. As a result, there may be uncertainty in the valuation, or in the stability of the value, of the properties we acquire that could result in a substantial decrease in the value of our properties after we purchase them. Consequently, we may not be able to recover the carrying amount of our properties, which may require us to recognize an impairment charge or record a loss on sale in earnings. |
| Government Intervention - The disruptions in the global financial markets have led to extensive and unprecedented government intervention. It is impossible to predict the actual effect of the government intervention and what effect, if any, additional interim or permanent governmental intervention may have on the global financial markets and/or the effect of such intervention on the U.S. economy. |
The failure of any bank in which we deposit our funds could reduce the amount of cash we have available to pay distributions and make additional investments.
We have diversified, and expect to continue to diversify, our cash and cash equivalents among several banking institutions in an attempt to minimize exposure to any one of these entities. However, the Federal Deposit Insurance Corporation only insures amounts up to $250,000 per depositor per insured bank. We likely will have cash and cash equivalents and restricted cash deposited in certain financial institutions in excess of federally insured levels. If any of the banking institutions in which we deposit funds ultimately fails, we may lose our deposits over $250,000. The loss of our deposits could reduce the amount of cash we have available to distribute or invest and could result in a decline in the value of your investment.
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If we suffer losses that are not covered by insurance or that are in excess of insurance coverage, we could lose invested capital and anticipated profits.
Generally, our tenants are responsible for insuring its goods and premises and, in some circumstances, may be required to reimburse us for a share of the cost of acquiring comprehensive insurance for the property, including casualty, liability, fire and extended coverage customarily obtained for similar properties in amounts that our advisor determines are sufficient to cover reasonably foreseeable losses. Tenants of single-user properties leased on a triple net basis typically are required to pay all insurance costs associated with those properties. Material losses may occur in excess of insurance proceeds with respect to any property, as insurance may not be sufficient to fund the losses. However, there are types of losses, generally of a catastrophic nature, such as losses due to wars, acts of terrorism, earthquakes, floods, hurricanes, pollution or environmental matters, which are either uninsurable or not economically insurable, or may be insured subject to limitations, such as large deductibles or co-payments. Insurance risks associated with potential terrorist acts could sharply increase the premiums we pay for coverage against property and casualty claims. Additionally, mortgage lenders in some cases insist that commercial property owners purchase specific coverage against terrorism as a condition for providing mortgage loans. It is uncertain whether such insurance policies will be available, or available at reasonable cost, which could inhibit our ability to finance or refinance our potential properties. In these instances, we may be required to provide other financial support, either through financial assurances or self-insurance, to cover potential losses. We may not have adequate, or any, coverage for such losses. The Terrorism Risk Insurance Act of 2002 is designed for a sharing of terrorism losses between insurance companies and the federal government. We cannot be certain how this act will impact us or what additional cost to us, if any, could result. If such an event damaged or destroyed one or more of our properties, we could lose both our invested capital and anticipated profits from such property.
Real estate related taxes may increase, and if these increases are not passed on to tenants, our income will be reduced.
Local real property tax assessors may reassess our properties, which may result in increased taxes. Generally, property taxes increase as property values or assessment rates change, or for other reasons deemed relevant by property tax assessors. An increase in the assessed valuation of a property for real estate tax purposes will result in an increase in the related real estate taxes on that property. Although some tenant leases may permit us to pass through such tax increases to the tenants for payment, renewal leases or future leases may not be negotiated on the same basis. Tax increases not passed through to tenants may adversely affect our income, cash available for distributions, and the amount of distributions to you.
CC&Rs may restrict our ability to operate a property.
Some of our properties will be contiguous to other parcels of real property, comprising part of the same retail center. In connection with such properties, we will be subject to significant covenants, conditions and restrictions, known as CC&Rs, restricting the operation of such properties and any improvements on such properties, and related to granting easements on such properties. Moreover, the operation and management of the contiguous properties may impact such properties. Compliance with CC&Rs may adversely affect our operating costs and reduce the amount of funds that we have available to pay distributions to you.
Our operating results may be negatively affected by potential development and construction delays and resultant increased costs and risks.
We may use proceeds from this offering to acquire properties upon which we will construct improvements. If we engage in development or construction projects, we will be subject to uncertainties associated with re-zoning for development, environmental concerns of governmental entities and/or community groups, and our builders ability to build in conformity with plans, specifications, budgeted costs, and timetables. If a builder fails to perform, we may resort to legal action to rescind the purchase or the construction contract or to compel performance. A builders performance may also be affected or delayed by conditions beyond the builders
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control. Delays in completion of construction could also give tenants the right to terminate preconstruction leases. We may incur additional risks if we make periodic progress payments or other advances to builders before they complete construction. These and other such factors can result in increased costs of a project or loss of our investment. In addition, we will be subject to normal lease-up risks relating to newly constructed projects. We also must rely on rental income and expense projections and estimates of the fair market value of property upon completion of construction when agreeing upon a price at the time we acquire the property. If our projections are inaccurate, we may pay too much for a property, and our return on our investment could suffer.
We may invest in unimproved real property. Returns from development of unimproved properties are also subject to risks associated with re-zoning the land for development and environmental concerns of governmental entities and/or community groups.
If we contract with a development company for newly developed property, our earnest money deposit made to the development company may not be fully refunded.
We may enter into one or more contracts, either directly or indirectly through joint ventures with other Cole-sponsored programs or others, to acquire real property from a development company that is engaged in construction and development of commercial real properties. Properties acquired from a development company may be either existing income-producing properties, properties to be developed or properties under development. We anticipate that we will be obligated to pay a substantial earnest money deposit at the time of contracting to acquire such properties. In the case of properties to be developed by a development company, we anticipate that we will be required to close the purchase of the property upon completion of the development of the property. At the time of contracting and the payment of the earnest money deposit by us, the development company typically will not have acquired title to any real property. Typically, the development company will only have a contract to acquire land, a development agreement to develop a building on the land and an agreement with one or more tenants to lease all or part of the property upon its completion. We may enter into such a contract with the development company even if at the time we enter into the contract, we have not yet raised sufficient proceeds in our offering to enable us to close the purchase of such property. However, we may not be required to close a purchase from the development company, and may be entitled to a refund of our earnest money, in the following circumstances:
| the development company fails to develop the property; |
| all or a specified portion of the pre-leased tenants fail to take possession under their leases for any reason; or |
| we are unable to raise sufficient proceeds from our offering to pay the purchase price at closing. |
The obligation of the development company to refund our earnest money will be unsecured, and we may not be able to obtain a refund of such earnest money deposit from it under these circumstances since the development company may be an entity without substantial assets or operations.
If we purchase an option to acquire a property but do not exercise the option, we likely would forfeit the amount we paid for such option, which would reduce the amount of cash we have available to make other investments.
In determining whether to purchase a particular property, we may obtain an option to purchase such property. The amount paid for an option, if any, normally is forfeited if the property is not purchased and normally is credited against the purchase price if the property is purchased. If we purchase an option to acquire a property but do not exercise the option, we likely would forfeit the amount we paid for such option, which would reduce the amount of cash we have available to make other investments.
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Competition with third parties in acquiring properties and other investments may reduce our profitability and the return on your investment.
We will compete with many other entities engaged in real estate investment activities, including individuals, corporations, bank and insurance company investment accounts, other REITs, real estate limited partnerships, and other entities engaged in real estate investment activities, many of which have greater resources than we do. Larger competitors may enjoy significant advantages that result from, among other things, a lower cost of capital and enhanced operating efficiencies. In addition, the number of entities and the amount of funds competing for suitable investments may increase. Any such increase would result in increased demand for these assets and therefore increased prices paid for them. If we pay higher prices for properties and other investments as a result of competition with third parties without a corresponding increase in tenant lease rates, our profitability will be reduced, and you may experience a lower return on your investment.
Our properties face competition that may affect tenants ability to pay rent and the amount of rent paid to us may affect the cash available for distributions to you and the amount of distributions.
We typically will acquire properties located in developed areas. Therefore, there likely will be numerous other retail properties within the market area of each of our properties that will compete with us for tenants. The number of competitive properties could have a material effect on our ability to rent space at our properties and the amount of rents charged. We could be adversely affected if additional competitive properties are built in close proximity to our properties, causing increased competition for customer traffic and creditworthy tenants. This could result in decreased cash flow from tenants and may require us to make capital improvements to properties that we would not have otherwise made, thus affecting cash available for distributions to you and the amount of distributions we pay.
Acquiring or attempting to acquire multiple properties in a single transaction may adversely affect our operations.
From time to time, we may acquire multiple properties in a single transaction. Portfolio acquisitions are more complex and expensive than single property acquisitions, and the risk that a multiple-property acquisition does not close may be greater than in a single-property acquisition. Portfolio acquisitions may also result in us owning investments in geographically dispersed markets, placing additional demands on our ability to manage the properties in the portfolio. In addition, a seller may require that a group of properties be purchased as a package even though we may not want to purchase one or more properties in the portfolio. In these situations, if we are unable to identify another person or entity to acquire the unwanted properties, we may be required to operate or attempt to dispose of these properties. To acquire multiple properties in a single transaction we may be required to accumulate a large amount of cash. We would expect the returns that we earn on such cash to be less than the ultimate returns on real property, therefore accumulating such cash could reduce our funds available for distributions to you. Any of the foregoing events may have an adverse effect on our operations.
If we set aside insufficient capital reserves, we may be required to defer necessary capital improvements.
If we do not have enough reserves for capital to supply needed funds for capital improvements throughout the life of the investment in a property and there is insufficient cash flow from operations, we may be required to defer necessary improvements to a property, which may cause that property to suffer from a greater risk of obsolescence or a decline in value, or a greater risk of decreased operating cash flows as a result of fewer potential tenants being attracted to the property. If this happens, we may not be able to maintain projected rental rates for affected properties, and our results of operations may be negatively impacted.
Costs of complying with environmental laws and regulations may adversely affect our income and the cash available for any distributions.
All real property and the operations conducted on real property are subject to federal, state and local laws and regulations relating to environmental protection and human health and safety. These laws and regulations
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generally govern wastewater discharges, air emissions, the operation and removal of underground and above-ground storage tanks, the use, storage, treatment, transportation and disposal of solid hazardous materials, and the remediation of contamination associated with disposals. Some of these laws and regulations may impose joint and several liability on tenants, owners or operators for the costs of investigation or remediation of contaminated properties, regardless of fault or whether the acts causing the contamination were legal. This liability could be substantial. In addition, the presence of hazardous substances, or the failure to properly remediate these substances, may adversely affect our ability to sell or rent such property or to use such property as collateral for future borrowing.
Compliance with new or more stringent laws or regulations or stricter interpretation of existing laws may require material expenditures by us. Future laws, ordinances or regulations may impose material environmental liability. Additionally, our properties may be affected by our tenants operations, the existing condition of land when we buy it, operations in the vicinity of our properties, such as the presence of underground storage tanks, or activities of unrelated third parties. In addition, there are various local, state and federal fire, health, life-safety and similar regulations that we may be required to comply with, and that may subject us to liability in the form of fines or damages for noncompliance. Any material expenditures, fines, or damages we must pay will reduce our ability to make distributions to you and may reduce the value of your investment.
From time to time, we may acquire properties, or interests in properties, with known adverse environmental conditions where we believe that the environmental liabilities associated with these conditions are quantifiable and that the acquisition will yield a superior risk-adjusted return. In such an instance, we will estimate the costs of environmental investigation, clean-up and monitoring in determining the purchase price. Further, in connection with property dispositions, we may agree to remain responsible for, and to bear the cost of, remediating or monitoring certain environmental conditions on the properties.
We may not obtain an independent third-party environmental assessment for every property we acquire. In addition, any such assessment that we do obtain may not reveal all environmental liabilities. The cost of defending against claims of liability, of compliance with environmental regulatory requirements, of remediating any contaminated property, or of paying personal injury claims would materially adversely affect our business, assets or results of operations and, consequently, amounts available for distribution to you.
Discovery of previously undetected environmentally hazardous conditions may adversely affect our operating results.
Under various federal, state and local environmental laws, ordinances and regulations, a current or previous owner or operator of real property may be liable for the cost of removal or remediation of hazardous or toxic substances on, under or in such property. The costs of removal or remediation could be substantial. Such laws often impose liability whether or not the owner or operator knew of, or was responsible for, the presence of such hazardous or toxic substances. Environmental laws also may impose restrictions on the manner in which property may be used or businesses may be operated, and these restrictions may require substantial expenditures. Environmental laws provide for sanctions in the event of noncompliance and may be enforced by governmental agencies or, in certain circumstances, by private parties. Certain environmental laws and common law principles could be used to impose liability for release of and exposure to hazardous substances, including asbestos-containing materials into the air, and third parties may seek recovery from owners or operators of real properties for personal injury or property damage associated with exposure to released hazardous substances. The cost of defending against claims of liability, of compliance with environmental regulatory requirements, of remediating any contaminated property, or of paying personal injury claims could materially adversely affect our business, assets or results of operations and, consequently, amounts available for distribution to you.
If we sell properties by providing financing to purchasers, defaults by the purchasers would adversely affect our cash flow from operations.
In some instances we may sell our properties by providing financing to purchasers. When we provide financing to purchasers, we will bear the risk that the purchaser may default on its obligations under the
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financing, which could negatively impact cash flow from operations. Even in the absence of a purchaser default, the distribution of sale proceeds, or their reinvestment in other assets, will be delayed until the promissory notes or other property we may accept upon the sale are actually paid, sold, refinanced or otherwise disposed of. In some cases, we may receive initial down payments in cash and other property in the year of sale in an amount less than the selling price, and subsequent payments will be spread over a number of years. If any purchaser defaults under a financing arrangement with us, it could negatively impact our ability to pay cash distributions to you.
Our costs associated with complying with the Americans with Disabilities Act of 1990, as amended, may affect cash available for distributions.
Our properties generally will be subject to the Americans with Disabilities Act of 1990, as amended (Disabilities Act). Under the Disabilities Act, all places of public accommodation are required to comply with federal requirements related to access and use by disabled persons. The Disabilities Act has separate compliance requirements for public accommodations and commercial facilities that generally require that buildings and services be made accessible and available to people with disabilities. The Disabilities Acts requirements could require removal of access barriers and could result in the imposition of injunctive relief, monetary penalties, or, in some cases, an award of damages. We will attempt to acquire properties that comply with the Disabilities Act or place the burden on the seller or other third party, such as a tenant, to ensure compliance with the Disabilities Act. However, we may not be able to acquire properties or allocate responsibilities in this manner. If we cannot, our funds used for Disabilities Act compliance may affect cash available for distributions and the amount of distributions to you.
A proposed change in U.S. accounting standards for leases could reduce the overall demand to lease our properties.
The existing accounting standards for leases require lessees to classify their leases as either capital or operating leases. Under a capital lease, both the leased asset, which represents the tenants right to use the property, and the contractual lease obligation are recorded on the tenants balance sheet if one of the following criteria are met: (i) the lease transfers ownership of the property to the lessee by the end of the lease term; (ii) the lease contains a bargain purchase option; (iii) the non-cancellable lease term is more than 75% of the useful life of the asset; or (iv) if the present value of the minimum lease payments equals 90% or more of the leased propertys fair value. If the terms of the lease do not meet these criteria, the lease is considered an operating lease, and no leased asset or contractual lease obligation is recorded by the tenant.
In order to address concerns raised by the SEC regarding the transparency of contractual lease obligations of lessees under the existing accounting standards for operating leases, the U.S. Financial Accounting Standards Board (the FASB) and the International Accounting Standards Board (the IASB) initiated a joint project to develop new guidelines to lease accounting. The FASB and IASB (collectively, the Boards) recently issued exposure drafts (the Exposure Drafts), which propose substantial changes to the current lease accounting standards, primarily by eliminating the concept of operating lease accounting. As a result, a lease asset and obligation would be recorded on the tenants balance sheet for all lease arrangements. In addition, the Exposure Drafts will impact the method in which contractual lease payments will be recorded. In order to mitigate the effect of the proposed lease accounting, tenants may seek to negotiate certain terms within new lease arrangements or modify terms in existing lease arrangements, such as shorter lease terms or fewer extension options, which would generally have less impact on tenant balance sheets. Also, tenants may reassess their lease-versus-buy strategies. This could result in a greater renewal risk, a delay in investing our offering proceeds, or shorter lease terms, all of which may negatively impact our operations and our ability to pay distributions to you.
The Exposure Drafts do not include a proposed effective date, are still being deliberated, and are subject to change. The Boards intend to complete their deliberations and publish a revised exposure draft during the first half of 2013; however, a final standard is not expected to be issued until 2013 or 2014.
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Risks Associated with Debt Financing
We may incur mortgage indebtedness and other borrowings, which may increase our business risks, hinder our ability to make distributions, and decrease the value of your investment.
We likely will acquire real estate and other real estate-related investments by borrowing new funds. In addition, we may incur mortgage debt and pledge all or some of our real properties as security for that debt to obtain funds to acquire additional real properties and other investments and to pay distributions to stockholders. We may borrow additional funds if we need funds to satisfy the REIT tax qualification requirement that we distribute at least 90% of our annual REIT taxable income to our stockholders. We may also borrow additional funds if we otherwise deem it necessary or advisable to assure that we maintain our qualification as a REIT for federal income tax purposes.
Our advisor believes that utilizing borrowing is consistent with our investment objective of maximizing the return to investors. There is no limitation on the amount we may borrow against any individual property or other investment. However, under our charter, we are required to limit our borrowings to 75% of the cost (before deducting depreciation or other non-cash reserves) of our gross assets, unless excess borrowing is approved by a majority of the independent directors and disclosed to our stockholders in our next quarterly report along with a justification for such excess borrowing. Moreover, our board of directors has adopted a policy to further limit our borrowings to 60% of the greater of cost (before deducting depreciation or other non-cash reserves) or fair market value of our gross assets, unless such borrowing is approved by a majority of the independent directors and disclosed to our stockholders in the next quarterly report along with a justification for such excess borrowing. Our borrowings will not exceed 300% of our net assets as of the date of any borrowing, which is the maximum level of indebtedness permitted under the NASAA REIT Guidelines; however, we may exceed that limit if approved by a majority of our independent directors. We expect that from time to time during the period of this offering we will request that our independent directors approve borrowings in excess of these limitations since we will then be in the process of raising our equity capital to acquire our portfolio. We expect that during the period of this offering, high debt levels would cause us to incur higher interest charges, would result in higher debt service payments, and could be accompanied by restrictive covenants. These factors could limit the amount of cash we have available to distribute to you and could result in a decline in the value of your investment.
We do not intend to incur mortgage debt on a particular property unless we believe the propertys projected operating cash flow is sufficient to service the mortgage debt. However, if there is a shortfall between the cash flow from a property and the cash flow needed to service mortgage debt on a property, the amount available for distributions to you may be reduced. In addition, incurring mortgage debt increases the risk of loss since defaults on indebtedness secured by a property may result in lenders initiating foreclosure actions. In that case, we could lose the property securing the loan that is in default, thus reducing the value of your investment. For tax purposes, a foreclosure of any of our properties would be treated as a sale of the property for a purchase price equal to the outstanding balance of the debt secured by the mortgage. If the outstanding balance of the debt secured by the mortgage exceeds our tax basis in the property, we would recognize taxable income on foreclosure, but would not receive any cash proceeds from the foreclosure. In such event, we may be unable to pay the amount of distributions required in order to maintain our REIT status. We may give full or partial guarantees to lenders of mortgage debt to the entities that own our properties. If we provide a guaranty on behalf of an entity that owns one of our properties, we will be responsible to the lender for satisfaction of the debt if it is not paid by such entity. If any mortgages contain cross-collateralization or cross-default provisions, a default on a single property could affect multiple properties. If any of our properties are foreclosed upon due to a default, our ability to pay cash distributions to you will be adversely affected, which could result in our losing our REIT status and would result in a decrease in the value of your investment.
High interest rates may make it difficult for us to finance or refinance properties, which could reduce the number of properties we can acquire and the amount of cash distributions we can make to you.
We run the risk of being unable to finance or refinance our properties on favorable terms or at all. If interest rates are higher when we desire to mortgage our properties or when existing loans come due and the properties
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need to be refinanced, we may not be able to finance the properties and we would be required to use cash to purchase or repay outstanding obligations. Our inability to use debt to finance or refinance our properties could reduce the number of properties we can acquire, which could reduce our operating cash flows and the amount of cash distributions we can make to you. Higher costs of capital also could negatively impact operating cash flows and returns on our investments.
Increases in interest rates could increase the amount of our debt payments and adversely affect our ability to pay distributions to you.
We may incur indebtedness that bears interest at a variable rate. To the extent that we incur variable rate debt, increases in interest rates would increase our interest costs, which could reduce our operating cash flows and our ability to pay distributions to you. In addition, if we need to repay existing debt during periods of rising interest rates, we could be required to liquidate one or more of our investments at times that may not permit realization of the maximum return on such investments.
Lenders may require us to enter into restrictive covenants relating to our operations, which could limit our ability to make distributions to you.
In connection with providing us financing, a lender could impose restrictions on us that affect our distribution and operating policies and our ability to incur additional debt. In general, our loan agreements restrict our ability to encumber or otherwise transfer our interest in the respective property without the prior consent of the lender. Loan documents we enter into may contain covenants that limit our ability to further mortgage the property, discontinue insurance coverage or replace CR IV Advisors as our advisor. These or other limitations imposed by a lender may adversely affect our flexibility and our ability to achieve our investment and operating objectives, which could limit our ability to make distributions to you.
Interest-only indebtedness may increase our risk of default and ultimately may reduce our funds available for distribution to you.
We may finance our property acquisitions using interest-only mortgage indebtedness. During the interest-only period, the amount of each scheduled payment will be less than that of a traditional amortizing mortgage loan. The principal balance of the mortgage loan will not be reduced (except in the case of prepayments) because there are no scheduled monthly payments of principal during this period. After the interest-only period, we will be required either to make scheduled payments of amortized principal and interest or to make a lump-sum or balloon payment at maturity. These required principal or balloon payments will increase the amount of our scheduled payments and may increase our risk of default under the related mortgage loan. If the mortgage loan has an adjustable interest rate, the amount of our scheduled payments also may increase at a time of rising interest rates. Increased payments and substantial principal or balloon maturity payments will reduce the funds available for distribution to our stockholders because cash otherwise available for distribution will be required to pay principal and interest associated with these mortgage loans.
Our ability to make a balloon payment at maturity is uncertain and may depend upon our ability to obtain additional financing or our ability to sell the property. At the time the balloon payment is due, we may or may not be able to refinance the loan on terms as favorable as the original loan or sell the property at a price sufficient to make the balloon payment. The effect of a refinancing or sale could affect the rate of return to stockholders and the projected time of disposition of our assets. In addition, payments of principal and interest made to service our debts may leave us with insufficient cash to pay the distributions that we are required to pay to maintain our qualification as a REIT. Any of these results would have a significant, negative impact on your investment.
To hedge against exchange rate and interest rate fluctuations, we may use derivative financial instruments that may be costly and ineffective and may reduce the overall returns on your investment.
We may use derivative financial instruments to hedge our exposure to changes in exchange rates and interest rates on loans secured by our assets and investments in commercial mortgage backed securities (CMBS).
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Derivative instruments may include interest rate swap contracts, interest rate cap or floor contracts, futures or forward contracts, options or repurchase agreements. Our actual hedging decisions will be determined in light of the facts and circumstances existing at the time of the hedge and may differ from time to time.
To the extent that we use derivative financial instruments to hedge against exchange rate and interest rate fluctuations, we will be exposed to credit risk, basis risk and legal enforceability risks. In this context, credit risk is the failure of the counterparty to perform under the terms of the derivative contract. If the fair value of a derivative contract is positive, the counterparty owes us, which creates credit risk for us. Basis risk occurs when the index upon which the contract is based is more or less variable than the index upon which the hedged asset or liability is based, thereby making the hedge less effective. Finally, legal enforceability risks encompass general contractual risks, including the risk that the counterparty will breach the terms of, or fail to perform its obligations under, the derivative contract. If we are unable to manage these risks effectively, our results of operations, financial condition and ability to pay distributions to you will be adversely affected.
Risks Associated with Investments in Mortgage, Bridge and Mezzanine Loans and Real Estate-Related Securities
Investing in mortgage, bridge or mezzanine loans could adversely affect our return on our loan investments.
We may make or acquire mortgage, bridge or mezzanine loans, or participations in such loans, to the extent our advisor determines that it is advantageous for us to do so. However, if we make or invest in mortgage, bridge or mezzanine loans, we will be at risk of defaults on those loans caused by many conditions beyond our control, including local and other economic conditions affecting real estate values, interest rate changes, rezoning, and failure by the borrower to maintain the property. If there are defaults under these loans, we may not be able to repossess and sell quickly any properties securing such loans. An action to foreclose on a property securing a loan is regulated by state statutes and regulations and is subject to many of the delays and expenses of any lawsuit brought in connection with the foreclosure if the defendant raises defenses or counterclaims. In the event of default by a mortgagor, these restrictions, among other things, may impede our ability to foreclose on or sell the mortgaged property or to obtain proceeds sufficient to repay all amounts due to us on the loan, which could reduce the value of our investment in the defaulted loan. In addition, investments in mezzanine loans involve a higher degree of risk than long-term senior mortgage loans secured by income-producing real property because the investment may become unsecured as a result of foreclosure on the underlying real property by the senior lender.
We may invest in various types of real estate-related securities.
Aside from investments in real estate, we are permitted to invest in real estate-related securities, including securities issued by other real estate companies, CMBS, mortgage, bridge, mezzanine or other loans and Section 1031 tenant-in-common interests, and we may invest in real estate-related securities of both publicly traded and private real estate companies. We are focused, however, on acquiring interests in retail and other income-producing properties. We may not have the expertise necessary to maximize the return on our investment in real estate-related securities. If our advisor determines that it is advantageous to us to make the types of investments in which our advisor or its affiliates do not have experience, our advisor intends to employ persons, engage consultants or partner with third parties that have, in our advisors opinion, the relevant expertise necessary to assist our advisor in evaluating, making and administering such investments.
Investments in real estate-related securities will be subject to specific risks relating to the particular issuer of the securities and may be subject to the general risks of investing in subordinated real estate securities, which may result in losses to us.
Our investments in real estate-related securities will involve special risks relating to the particular issuer of the securities, including the financial condition and business outlook of the issuer. Issuers of real estate-related
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equity securities generally invest in real estate or real estate-related assets and are subject to the inherent risks associated with real estate-related investments discussed in this prospectus, including risks relating to rising interest rates.
Real estate-related securities are often unsecured and also may be subordinated to other obligations of the issuer. As a result, investments in real estate-related securities are subject to risks of (1) limited liquidity in the secondary trading market in the case of unlisted or thinly traded securities, (2) substantial market price volatility resulting from changes in prevailing interest rates in the case of traded equity securities, (3) subordination to the prior claims of banks and other senior lenders to the issuer, (4) the operation of mandatory sinking fund or call/redemption provisions during periods of declining interest rates that could cause the issuer to reinvest redemption proceeds in lower yielding assets, (5) the possibility that earnings of the issuer may be insufficient to meet its debt service and distribution obligations and (6) the declining creditworthiness and potential for insolvency of the issuer during periods of rising interest rates and economic slow down or downturn. These risks may adversely affect the value of outstanding real estate-related securities and the ability of the issuers thereof to repay principal and interest or make distribution payments.
The CMBS in which we may invest are subject to all of the risks of the underlying mortgage loans, the risks of the securitization process and dislocations in the mortgage-backed securities market in general.
CMBS are securities that evidence interests in, or are secured by, a single commercial mortgage loan or a pool of commercial mortgage loans. Accordingly, these securities are subject to all of the risks of the underlying mortgage loans. In a rising interest rate environment, the value of CMBS may be adversely affected when payments on underlying mortgages do not occur as anticipated, resulting in the extension of the securitys effective maturity and the related increase in interest rate sensitivity of a longer-term instrument. The value of CMBS may also change due to shifts in the markets perception of issuers and regulatory or tax changes adversely affecting the mortgage securities market as a whole. In addition, CMBS are subject to the credit risk associated with the performance of the underlying mortgage properties. CMBS are issued by investment banks, not financial institutions, and are not insured or guaranteed by the U.S. government.
CMBS are also subject to several risks created through the securitization process. Subordinate CMBS are paid interest only to the extent that there are funds available to make payments. To the extent the collateral pool includes delinquent loans, there is a risk that interest payments on subordinate CMBS will not be fully paid. Subordinate CMBS are also subject to greater credit risk than those CMBS that are more highly rated. In certain instances, third-party guarantees or other forms of credit support can reduce the credit risk.
The value of any CMBS in which we invest may be negatively impacted by any dislocation in the mortgage-backed securities market in general. Currently, the mortgage-backed securities market is suffering from a severe dislocation created by mortgage pools that include sub-prime mortgages secured by residential real estate. Sub-prime loans often have high interest rates and are often made to borrowers with credit scores that would not qualify them for prime conventional loans. In recent years, banks made a great number of the sub-prime residential mortgage loans with high interest rates, floating interest rates, interest rates that reset from time to time, and/or interest-only payment features that expire over time. These terms, coupled with rising interest rates, have caused an increasing number of homeowners to default on their mortgages. Purchasers of mortgage-backed securities collateralized by mortgage pools that include risky sub-prime residential mortgages have experienced severe losses as a result of the defaults and such losses have had a negative impact on the CMBS market.
Federal Income Tax Risks
Failure to qualify as a REIT would adversely affect our operations and our ability to make distributions.
Morris, Manning & Martin, LLP, our legal counsel, has rendered an opinion to us that we will be organized in conformity with the requirements for qualification and taxation as a REIT under the Internal Revenue Code for
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our taxable year ended December 31, 2012 and that our proposed method of operations will enable us to meet the requirements for qualification and taxation as a REIT beginning with our taxable year ended December 31, 2012. This opinion is based upon our representations as to the manner in which we are and will be owned, invest in assets and operate, among other things. However, our qualification as a REIT will depend upon our ability to meet requirements regarding our organization and ownership, distributions of our income, the nature and diversification of our income and assets and other tests imposed by the Internal Revenue Code. Morris, Manning & Martin, LLP will not review our operations or compliance with the REIT qualification standards on an ongoing basis, and we may fail to satisfy the REIT requirements in the future. Also, the legal opinion represents Morris, Manning & Martin, LLPs legal judgment based on the law in effect as of the commencement of this offering. Morris, Manning & Martin, LLPs opinion is not binding on the Internal Revenue Service or the courts and we will not apply for a ruling from the Internal Revenue Service regarding our status as a REIT. Future legislative, judicial or administrative changes to the federal income tax laws could be applied retroactively, which could result in our disqualification as a REIT.
If we fail to qualify as a REIT for any taxable year, we will be subject to federal income tax on our taxable income at corporate rates. In addition, we would generally be disqualified from treatment as a REIT for the four taxable years following the year of losing our REIT status. Losing our REIT status would reduce our net earnings available for investment or distribution to you because of the additional tax liability. In addition, distributions to you would no longer qualify for the dividends paid deduction, and we would no longer be required to make distributions. If this occurs, we might be required to borrow funds or liquidate some investments in order to pay the applicable tax. Our failure to qualify as a REIT would adversely affect the return on your investment.
Re-characterization of sale-leaseback transactions may cause us to lose our REIT status.
We may purchase properties and lease them back to the sellers of such properties. The Internal Revenue Service could challenge our characterization of certain leases in any such sale-leaseback transactions as true leases, which allows us to be treated as the owner of the property for federal income tax purposes. In the event that any sale-leaseback transaction is challenged and re-characterized as a financing transaction or loan for federal income tax purposes, deductions for depreciation and cost recovery relating to such property would be disallowed. If a sale-leaseback transaction were so re-characterized, we might fail to satisfy the REIT qualification asset tests or the income tests and, consequently, lose our REIT status effective with the year of re-characterization. Alternatively, the amount of our REIT taxable income could be recalculated, which might also cause us to fail to meet the distribution requirement for a taxable year.
You may have current tax liability on distributions you elect to reinvest in our common stock.
If you participate in our distribution reinvestment plan, you will be deemed to have received, and for income tax purposes will be taxed on, the amount reinvested in shares of our common stock to the extent the amount reinvested was not a tax free return of capital. In addition, you will be treated, for tax purposes, as having received an additional distribution to the extent the shares are purchased at a discount to fair market value. As a result, unless you are a tax-exempt entity, you may have to use funds from other sources to pay your tax liability on the value of the common stock received.
Distributions payable by REITs do not qualify for the reduced tax rates that apply to other corporate distributions.
Tax legislation enacted in 2003, amended in 2005 and extended by the Tax Relief Unemployment Insurance Reauthorization, and Job Creation Act of 2010, generally reduces the maximum U.S. federal income tax rate for distributions payable by corporations to domestic stockholders that are individuals, trusts or estates to 15% prior to 2013. Distributions payable by REITs, however, generally continue to be taxed at the normal rate applicable to the individual recipient, rather than the 15% preferential rate. Our distributions will be taxed as ordinary income at the non-preferential rate, to the extent they are from our current or accumulated earnings and profits. To the
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extent distributions exceed our current or accumulated earnings and profits, they will be treated first as a tax free return of capital, reducing the tax basis in each U.S. stockholders shares (but not below zero), then the distributions will be taxed as gain from the sale of shares. You should discuss the difference in treatment of REIT distributions and regular corporate distributions with your tax advisor.
If our operating partnership fails to maintain its status as a disregarded entity or partnership, its income may be subject to taxation, which would reduce the cash available to us for distribution to you.
Our operating partnership is a disregarded entity for U.S. federal income tax purposes. Our operating partnership would lose its status as a disregarded entity for U.S. federal income tax purposes if it issues interests to a person other than us or any subsidiary we establish that is disregarded for tax purposes. If our operating partnership issues interests to a person other than us or any subsidiary we establish that is disregarded for tax purposes, we would characterize our operating partnership as a partnership for federal income tax purposes. As a disregarded entity or partnership, our operating partnership is not subject to U.S. federal income tax on its income. However, if the Internal Revenue Service were to successfully challenge the status of our operating partnership as a disregarded entity or partnership, CCPT IV OP would be taxable as a corporation. In such event, this would reduce the amount of distributions that the operating partnership could make to us. This could also result in our losing REIT status, and becoming subject to a corporate level tax on our income. This would substantially reduce the cash available to us to make distributions to you and the return on your investment.
If any of the partnerships or limited liability companies through which CCPT IV OP owns its properties, in whole or in part, loses its characterization as a partnership for federal income tax purposes, it would be subject to taxation as a corporation, thereby reducing distributions to our operating partnership. Such a re-characterization of an underlying property owner also could threaten our ability to maintain REIT status.
In certain circumstances, we may be subject to federal and state income taxes as a REIT, which would reduce our cash available for distribution to you.
Even if we qualify and maintain our status as a REIT, we may be subject to federal income taxes or state taxes. For example, net income from the sale of properties that are dealer properties sold by a REIT (a prohibited transaction under the Internal Revenue Code) will be subject to a 100% tax. We may not be able to make sufficient distributions to avoid excise taxes applicable to REITs. We may also decide to retain income we earn from the sale or other disposition of our property and pay income tax directly on such income. In that event, our stockholders would be treated as if they earned that income and paid the tax on it directly. However, stockholders that are tax-exempt, such as charities or qualified pension plans, would have no benefit from their deemed payment of such tax liability. We may also be subject to state and local taxes on our income or property, either directly or at the level of our operating partnership or at the level of the other entities through which we indirectly own our assets. Any federal or state taxes we pay will reduce our cash available for distribution to you.
Legislative or regulatory action could adversely affect the returns to our investors.
In recent years, numerous legislative, judicial and administrative changes have been made in the provisions of the federal income tax laws applicable to investments similar to an investment in our common stock. Additional changes to the tax laws are likely to continue to occur, and we cannot assure our stockholders that any such changes will not adversely affect their taxation. Such changes could have an adverse effect on an investment in our stock or on the market value or the resale potential of our assets. Our stockholders are urged to consult with their own tax advisor with respect to the impact of recent legislation on their investment in our stock and the status of legislative, regulatory or administrative developments and proposals and their potential effect on an investment in shares of our common stock.
Congress passed major federal tax legislation in 2003, with modifications to that legislation in 2005 and an extension of that legislation by the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act
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of 2010. One of the changes effected by that legislation generally reduced the maximum tax rate on qualified dividends paid by corporations to individuals to 15.0% through 2012. On January 3, 2013, President Obama signed into law the American Taxpayer Relief Act of 2012, extending such 15.0% qualified dividend rate for 2013 and subsequent taxable years for those unmarried individuals with income under $400,000 and for married couples with income under $450,000. For those with income above such thresholds, the qualified dividend rate is 20.0%. REIT distributions, however, generally do not constitute qualified dividends and consequently are not eligible for this reduced maximum tax rate. Therefore, our stockholders will pay federal income tax on our distributions (other than capital gains dividends or distributions which represent a return of capital for tax purposes) at the applicable ordinary income rate, the maximum of which is currently 39.6%. However, as a REIT, we generally would not be subject to federal or state corporate income taxes on that portion of our ordinary income or capital gain that we distribute currently to you, and we thus expect to avoid the double taxation to which other corporations are typically subject.
Although REITs continue to receive substantially better tax treatment than entities taxed as corporations, it is possible that future legislation would result in a REIT having fewer tax advantages, and it could become more advantageous for a company that invests in real estate to elect to be taxed for federal income tax purposes as a corporation. As a result, our charter provides our board of directors with the power, under certain circumstances, to revoke or otherwise terminate our REIT election and cause us to be taxed as a corporation, without the vote of our stockholders. Our board of directors has fiduciary duties to us and our stockholders and could only cause such changes in our tax treatment if it determines in good faith that such changes are in our stockholders best interest.
Complying with the REIT requirements may cause us to forego otherwise attractive opportunities.
To maintain our qualification as a REIT for federal income tax purposes, we must continually satisfy tests concerning, among other things, the sources of our income, the nature and diversification of our assets, the amounts we distribute to our stockholders and the ownership of shares of our common stock. We may be required to pay distributions to our stockholders at disadvantageous times or when we do not have funds readily available for distribution. Complying with the REIT requirements may cause us to forego otherwise attractive opportunities. In addition, we may be required to liquidate otherwise attractive investments in order to comply with the REIT requirements. Thus, compliance with the REIT requirements may hinder our ability to operate solely on the basis of maximizing profits.
Foreign purchasers of our common stock may be subject to FIRPTA tax upon the sale of their shares.
A foreign person disposing of a U.S. real property interest, including shares of a U.S. corporation whose assets consist principally of U.S. real property interests, is generally subject to the Foreign Investment in Real Property Tax Act of 1980, as amended (FIRPTA) on the gain recognized on the disposition. Such FIRPTA tax does not apply, however, to the disposition of stock in a REIT if the REIT is domestically controlled. A REIT is domestically controlled if less than 50% of the REITs stock, by value, has been owned directly or indirectly by persons who are not qualifying U.S. persons during a continuous five-year period ending on the date of disposition or, if shorter, during the entire period of the REITs existence. We cannot assure you that we will qualify as a domestically controlled REIT. If we were to fail to so qualify, gain realized by foreign investors on a sale of our shares would be subject to FIRPTA tax, unless our shares were traded on an established securities market and the foreign investor did not at any time during a specified testing period directly or indirectly own more than 10% of the value of our outstanding common stock. See the Federal Income Tax Considerations Special Tax Considerations for Non-U.S. Stockholders Sale of Our Shares by a Non-U.S. Stockholder section of this prospectus.
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For qualified accounts, if an investment in our shares constitutes a prohibited transaction under ERISA or the Internal Revenue Code, it is possible that you may be subject to the imposition of significant excise taxes and penalties with respect to the amount invested. In order to avoid triggering additional taxes and/or penalties, if you intend to invest in our shares through pension or profit-sharing trusts or IRAs, you should consider additional factors.
If you are investing the assets of a pension, profit-sharing, 401(k), Keogh or other qualified retirement plan or the assets of an IRA in our common stock, you should satisfy yourself that, among other things:
| your investment is consistent with your fiduciary obligations under ERISA and the Internal Revenue Code; |
| your investment is made in accordance with the documents and instruments governing your plan or IRA, including your plans investment policy; |
| your investment satisfies the prudence and diversification requirements of ERISA and other applicable provisions of ERISA and the Internal Revenue Code; |
| your investment will not impair the liquidity of the plan or IRA; |
| your investment will not produce UBTI for the plan or IRA; |
| you will be able to value the assets of the plan annually in accordance with ERISA requirements and applicable provisions of the plan or IRA; and |
| your investment will not constitute a prohibited transaction under Section 406 of ERISA or Section 4975 of the Internal Revenue Code. |
Failure to satisfy the fiduciary standards of conduct and other applicable requirements of ERISA and the Internal Revenue Code may result in the imposition of civil and criminal penalties and could subject the fiduciary to equitable remedies. In addition, if an investment in our shares constitutes a prohibited transaction under ERISA or the Internal Revenue Code, the fiduciary who authorized or directed the investment may be subject to the imposition of excise taxes with respect to the amount invested. For a more complete discussion of the foregoing risks and other issues associated with an investment in shares by retirement plans, see the Investment by Tax-Exempt Entities and ERISA Considerations section of this prospectus.
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements. Such statements include, in particular, statements about our plans, strategies and prospects. These forward-looking statements are not historical facts but are the intent, belief or current expectations of our business and industry. You can generally identify forward-looking statements by our use of forward-looking terminology, such as may, anticipate, expect, intend, plan, believe, seek, estimate, would, could, should and variations of these words and similar expressions. You should not rely on our forward-looking statements because the matters they describe are subject to known and unknown risks, uncertainties and other unpredictable factors, many of which are beyond our control. Our actual results, performance and achievements may be materially different from that expressed or implied by these forward-looking statements.
You should carefully review the Risk Factors section of this prospectus for a discussion of the risks and uncertainties that we believe are material to our business, operating results, prospects and financial condition. Except as otherwise required by federal securities laws, we do not undertake to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
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The following table sets forth information about how we intend to use the proceeds raised in this offering, assuming that we sell the maximum offering of 300,000,000 shares of common stock pursuant to this offering. Many of the figures set forth below represent managements best estimate since they cannot be precisely calculated at this time. Assuming a maximum offering, we expect that approximately 88.1% of the money that stockholders invest (86.7% if no shares are sold pursuant to our distribution reinvestment plan) will be used to purchase real estate or other real estate-related investments, while the remaining approximately 11.9% (13.3% if no shares are sold pursuant to our distribution reinvestment plan) will be used for working capital, and to pay costs of the offering, including selling commissions and the dealer manager fee, and fees and expenses of our advisor in connection with acquiring properties. Proceeds used to purchase real estate or other real estate-related investments include proceeds used to repay any indebtedness incurred in respect of such purchases. We have paid, and may continue to pay, distributions from proceeds raised in this offering in anticipation of future cash flows, and we have not placed a limit on the amount of net proceeds we may use to pay distributions.
Maximum Offering (Including Distribution Reinvestment Plan)(1) |
Maximum Offering (Not Including Distribution Reinvestment Plan)(2) |
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Amount | Percent | Amount | Percent | |||||||||||||
Gross Offering Proceeds |
$ | 2,975,000,000 | 100 | % | $ | 2,500,000,000 | 100 | % | ||||||||
Less Public Offering Expenses: |
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Selling Commissions and Dealer Manager Fee(3) |
225,000,000 | 7.6 | % | 225,000,000 | 9.0 | % | ||||||||||
Other Organization and Offering Expenses(4) |
59,500,000 | 2.0 | % | 50,000,000 | 2.0 | % | ||||||||||
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Amount Available for Investment(5) |
2,690,500,000 | 90.4 | % | 2,225,000,000 | 89.0 | % | ||||||||||
Acquisition and Development: |
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Acquisition Fee(6) |
52,446,394 | 1.8 | % | 43,372,320 | 1.8 | % | ||||||||||
Acquisition Expenses(7) |
13,111,598 | 0.4 | % | 10,843,080 | 0.4 | % | ||||||||||
Initial Working Capital Reserve(8) |
2,622,320 | 0.1 | % | 2,168,616 | 0.1 | % | ||||||||||
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Amount Invested in Assets(9) |
$ | 2,622,319,688 | 88.1 | % | $ | 2,168,615,984 | 86.7 | % | ||||||||
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(1) | Assumes the sale to the public of 250,000,000 shares at $10.00 per share pursuant to the primary offering and 50,000,000 shares at $9.50 per share pursuant to the distribution reinvestment plan. In the event that stockholders redeem shares pursuant to our share redemption program, the redemptions will be paid using proceeds from the sale of shares pursuant to our distribution reinvestment plan. Accordingly, the amount of proceeds from the maximum offering, including the distribution reinvestment plan, that is used to purchase real estate and other real estate-related assets, and to pay acquisition-related fees and expenses, will be reduced to the extent that proceeds from our distribution reinvestment plan are used to pay redemptions. |
(2) | Assumes the sale to the public of 250,000,000 shares at $10.00 per share pursuant to the primary offering and no shares sold pursuant to the distribution reinvestment plan. |
(3) | Includes selling commissions equal to 7% of the gross proceeds of our primary offering, which commissions may be reduced under certain circumstances, and a dealer manager fee equal to 2% of the gross proceeds of our primary offering, both of which are payable to the dealer manager, an affiliate of our advisor. The dealer manager will reallow 100% of the selling commissions to participating broker-dealers. In addition, the dealer-manager, in its sole discretion, may reallow to broker-dealers participating in this offering up to all of its dealer manager fee as marketing fees and due diligence expense allowance based on such factors as the number of shares sold by the participating broker-dealer, the participating broker-dealers level of marketing support, and bona fide conference fees incurred, each as compared to those of the other participating broker-dealers. We will not pay a selling commission or a dealer manager fee on shares purchased pursuant to our distribution reinvestment plan. The amount of selling commissions may be reduced under certain circumstances for volume discounts and other types of sales. Furthermore, we may increase the dealer manager fee to 3% of the gross proceeds of our primary offering for purchases made through certain |
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selected dealers, in which event the selling commission would be reduced to 6% of the gross proceeds of our primary offering for those purchases. See the Plan of Distribution section of this prospectus for a description of such provisions. |
(4) | Assuming we raise the maximum offering amount, we expect to reimburse our advisor up to $25,000,000 (0.8% of aggregate gross offering proceeds, including proceeds from sales of shares under our distribution reinvestment plan) to cover offering expenses that are deemed to be underwriting expenses, and we expect to reimburse our advisor up to $34,500,000 (1.2% of aggregate gross offering proceeds, including proceeds from sales of shares under our distribution reinvestment plan) to cover non-underwriting organization and offering expenses. These organization and offering expenses consist of all expenses (other than selling commissions and the dealer manager fee) to be paid by us in connection with the offering, including (i) our legal, accounting, printing, mailing and filing fees, charges of our transfer agent for account set up fees, due diligence expenses that are included in a detailed and itemized invoice (such as expenses related to a review of this offering by one or more independent due diligence reviewers engaged by broker-dealers participating in this offering); (ii) amounts to reimburse our advisor for the portion of the salaries paid to employees of its affiliates that are attributed to services rendered to our advisor in connection with preparing supplemental sales materials for us, holding educational conferences and attending retail seminars conducted by our participating broker-dealers and (iii) reimbursements for our dealer managers wholesaling costs, and other marketing and organization costs, including (a) payments made to participating broker-dealers for performing these services, (b) the dealer-managers wholesaling commissions, salaries and expense reimbursements, (c) the dealer managers due diligence costs and legal fees and (d) costs associated with business entertainment, logoed items and sales incentives. Expenses to educational conferences and retail seminars described in (ii) above, expenses relating to our dealer-managers wholesaling costs and payments to participating broker-dealers described in (iii) above and expenses described in (iii)(b) and (iii)(c) above will constitute underwriting compensation, subject to the underwriting limit of 10% of the gross proceeds of our primary offering. |
In no event will total organization and offering expenses, including selling commissions, the dealer manager fee and reimbursement of other organization and offering expenses, exceed 15% of the gross proceeds of this offering, including proceeds from sales of shares under our distribution reinvestment plan.
(5) | Until required in connection with the acquisition of real estate or other real estate-related investments, substantially all of the net proceeds of this offering and, thereafter, any working capital reserves we may have, may be invested in short-term, highly-liquid investments including government obligations, bank certificates of deposit, short-term debt obligations and interest-bearing accounts. |
(6) | Acquisition fees are defined generally as fees and commissions paid by any party to any person in connection with identifying, reviewing, evaluating, investing in and the purchase, development or construction of properties, or the making or investing in loans or other real estate-related investments. We will pay our advisor acquisition fees up to a maximum amount of 2% of the contract purchase price of each property or asset acquired. With respect to a development or a redevelopment project, we will pay our advisor an acquisition fee of 2% of the amount expended on such project. For purposes of this table, we have assumed that the aggregate contract purchase price for our assets will be an amount equal to the estimated amount invested in assets. With respect to any loan we originate or acquire, we will pay our advisor an acquisition fee of 2% of the amount of the loan. For purposes of this table, we also have assumed that no financing is used to acquire properties or other real estate assets. We may incur additional fees, such as real estate commissions, development fees, construction fees, non-recurring management fees, loan fees or points, or any fee of a similar nature. Acquisition fees do not include acquisition expenses. |
(7) | Acquisition expenses include legal fees and expenses, travel expenses, costs of appraisals, nonrefundable option payments on property not acquired, accounting fees and expenses, title insurance premiums and other closing costs and miscellaneous expenses relating to the selection, acquisition and development of real estate properties. For purposes of this table, we have assumed average expenses of 0.5% of the estimated amount invested in assets; however, expenses on a particular acquisition may be higher. Acquisition expenses are not included in the contract purchase price of an asset. Notwithstanding the foregoing, the total |
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of all acquisition expenses and acquisition fees paid by any party to any party, including any real estate commission, selection fee, development fees paid to an affiliate of our advisor, construction fee paid to an affiliate of our advisor, non-recurring management fee, loan fees or point or any fee of a similar nature, payable with respect to a particular property or investment shall be reasonable, and shall not exceed an amount equal to 6% of the contract purchase price of the property, or in the case of a mortgage loan 6% of the funds advanced, unless a majority of our directors (including a majority of our independent directors) not otherwise interested in the transaction approve fees and expenses in excess of this limit and determine the transaction to be commercially competitive, fair and reasonable to us. |
(8) | Working capital reserves typically are utilized for extraordinary expenses that are not covered by revenue generated by the property, such as tenant improvements, leasing commissions and major capital expenditures. Alternatively, a lender may require its own formula for escrow of working capital reserves. Because we expect most of our leases will be triple net or double net leases, as described elsewhere herein, we do not expect to maintain significant working capital reserves. |
(9) | Includes amounts anticipated to be invested in properties net of organization and offering expenses, acquisition fees and expenses and initial working capital reserves. |
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General
We operate under the direction of our board of directors, the members of which are accountable to us and our stockholders as fiduciaries. We have retained CR IV Advisors as our advisor to manage our day-to-day affairs and the acquisition and disposition of our investments, subject to our board of directors supervision. Our charter has been reviewed and ratified by our board of directors, including a majority of the independent directors. This ratification by our board of directors is required by the NASAA REIT Guidelines.
Our charter and bylaws provide that the number of directors on our board of directors may be established by a majority of the entire board of directors, but may not be more than 15, nor fewer than three. Our charter provides, in general, that a majority of the directors must be independent directors. An independent director is a person who is not, and within the last two years has not been, directly or indirectly associated with us or any of our affiliates or with our sponsor, our advisor or any of their affiliates by virtue of (1) ownership of an interest in our sponsor, our advisor or any of their affiliates, (2) employment by us, our sponsor our advisor or any of our or their affiliates, (3) service as an officer or director of our sponsor, our advisor or any of their affiliates, (4) performance of services, (5) service as a director of more than three REITs organized by our sponsor or advised by our advisor, or (6) maintenance of a material business or professional relationship with our sponsor, our advisor or any of their affiliates. Each director deemed to be independent pursuant to our charter also will be independent in accordance with the NASAA REIT Guidelines. There are no family relationships among any of our directors or officers, or officers of our advisor. Each director who is not an independent director must have at least three years of relevant experience demonstrating the knowledge and experience required to successfully acquire and manage the type of assets being acquired by us. At least one of our independent directors must have at least three years of relevant real estate experience. We currently have a total of three directors, including a majority of independent directors.
Each director will serve until the next annual meeting of stockholders or until his or her successor is duly elected and qualifies. Although the number of directors may be increased or decreased, a decrease will not have the effect of shortening the term of any incumbent director.
Any director may resign at any time and may be removed with or without cause by the stockholders upon the affirmative vote of at least a majority of all the votes entitled to be cast at a meeting properly called for the purpose of the proposed removal. The notice of the meeting will indicate that the purpose, or one of the purposes, of the meeting is to determine if the director shall be removed. None of the members of our board of directors, nor our advisor, nor any of their affiliates, may vote or consent on matters submitted to the stockholders regarding the removal of our advisor or any director or any of their affiliates or any transaction between us and any of them. In determining the requisite percentage in interest required to approve such a matter, shares owned by members of our board of directors and their respective affiliates will not be included.
Any vacancy created by the death, resignation, removal, adjudicated incompetence or other incapacity of a director may be filled only by a vote of a majority of the remaining directors. Any vacancy created by an increase in the number of directors must be filled by an affirmative vote of the board of directors, including a majority of the independent directors. Independent directors shall nominate replacements for vacancies in the independent director positions or to fill newly-created independent director positions. If at any time there are no directors in office, successor directors shall be elected by the stockholders. Each director will be bound by our charter and bylaws.
Our directors will not be required to devote all of their time to our business and only are required to devote the time to our affairs as their duties require. Our directors meet quarterly, in person or by teleconference, or more frequently if necessary. Consequently, in the exercise of their responsibilities, the directors will rely heavily on our advisor and on information provided by our advisor. Our directors have a fiduciary duty to our stockholders to supervise the relationship between us and our advisor. Our board of directors is empowered to fix
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the compensation of all officers that it selects and approve the payment of compensation to directors for services rendered to us.
Our board of directors has adopted written policies on investments and borrowing, the general terms of which are set forth in this prospectus. The directors may revise those policies or establish further written policies on investments and borrowings and monitor our administrative procedures, investment operations and performance to ensure that the policies are fulfilled and are in the best interests of our stockholders. During the discussion of a proposed transaction, independent directors may offer ideas for ways in which transactions may be structured to offer the greatest value to us, and our advisor will take these suggestions into consideration when structuring transactions.
In addition, our board of directors is responsible for reviewing our fees and expenses on at least an annual basis and with sufficient frequency to determine that the expenses incurred are in the best interests of the stockholders. In addition, a majority of the directors, including a majority of the independent directors, who are not otherwise interested in the transaction must approve all transactions with our advisor or its affiliates. The independent directors also will be responsible for reviewing the performance of our advisor and determining, from time to time and at least on an annual basis, that the compensation to be paid to our advisor is reasonable in relation to the nature and quality of services to be performed and that the provisions of the advisory agreement are being carried out. The independent directors will consider such factors as they deem relevant, including:
| the amount of the fees paid to our advisor in relation to the size, composition and performance of our investments; |
| the success of our advisor in generating appropriate investment opportunities; |
| rates charged to other REITs, especially REITs of similar structure, and to investors other than REITs by advisors performing similar services; |
| additional revenues realized by our advisor and its affiliates through their relationship with us, including loan administration, underwriting or broker commissions, and servicing, engineering, inspection and other fees, whether such amounts are paid by us or others with whom we do business; |
| the quality and extent of service and advice furnished by our advisor and the performance of our investment portfolio; and |
| the quality of our portfolio relative to the investments generated by our advisor for its own account. |
The advisory agreement has a one-year term and may be renewed for an unlimited number of successive one-year periods. Either party may terminate the advisory agreement upon 60 days written notice without cause or penalty. Fees payable to our advisor pursuant to the advisory agreement, including any fees that may be paid upon termination of the advisory agreement, are described below under the caption The Advisory Agreement and the section of this prospectus captioned Management Compensation.
Neither our advisor nor any of its affiliates will vote or consent to the voting of shares of our common stock they now own or hereafter acquire on matters submitted to the stockholders regarding either (1) the removal of our advisor, any director or any of their respective affiliates, or (2) any transaction between us and our advisor, any director or any of their respective affiliates. In determining the requisite percentage in interest required to approve such a matter, shares owned by our advisor and its affiliates will not be included.
Committees of our Board of Directors
Our entire board of directors will be responsible for supervising our entire business. However, our bylaws provide that our board of directors may establish such committees as our board of directors believes appropriate and in our best interests. Our board of directors will appoint the members of the committee in our board of directors discretion. Our charter and bylaws require that a majority of the members of each committee of our board of directors is comprised of independent directors.
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Audit Committee
Our board of directors has established an audit committee, currently consisting of Lawrence S. Jones and J. Marc Myers, our independent directors. Mr. Jones serves as chairman of the audit committee. The audit committee, by approval of at least a majority of its members, will select the independent registered public accounting firm to audit our annual financial statements, review with the independent registered public accounting firm the plans and results of the audit engagement, approve the audit and non-audit services provided by the independent registered public accounting firm, review the independence of the independent registered public accounting firm, consider the range of audit and non-audit fees and review the adequacy of our internal accounting controls. Our board of directors has adopted a charter for the audit committee that sets forth its specific functions and responsibilities.
Executive Officers and Directors
Our board of directors has elected Christopher H. Cole to serve as our chief executive officer and president and D. Kirk McAllaster, Jr. to serve as our executive vice president, chief financial officer and treasurer. Although most of the services Mr. McAllaster provides to our company are in his role as an executive officer of our advisor, both Messrs. Cole and McAllaster have certain duties in their capacities as executive officers of our company arising from Maryland corporate law, our charter and bylaws. We do not directly compensate Messrs. Cole or McAllaster for their services as executive officers of our company, nor do we reimburse our advisor or any affiliate of our advisor for their salaries or benefits. We have provided below certain information about our executive officers and directors.
Name |
Age* | Position(s) | ||
Christopher H. Cole |
60 | Chairman of the Board of Directors, Chief Executive Officer and President | ||
D. Kirk McAllaster, Jr. |
46 | Executive Vice President, Chief Financial Officer and Treasurer | ||
Lawrence S. Jones |
66 | Independent Director | ||
J. Marc Myers |
66 | Independent Director |
* | As of April 10, 2013. |
Christopher H. Cole has served as our chairman, chief executive officer and president since our formation in July 2010. He served as the chief executive officer of CR IV Advisors, our advisor, from its formation in July 2010 until June 2011. Mr. Cole has served as the chairman, chief executive officer and president of CCPT I since its formation in March 2004. He served as the chief executive officer of Cole REIT Advisors, LLC (CCPT I Advisors) from its formation in April 2004 until June 2011, and as its president from April 2004 until March 2007 and from October 2007 until April 2010. Mr. Cole has served as the chairman, chief executive officer and president of CCPT II since its formation in September 2004. He served as the chief executive officer of Cole REIT Advisors II, LLC (CCPT II Advisors) from its formation in September 2004 until June 2011, and as its president from September 2004 until March 2007 and from October 2007 until April 2010. Mr. Cole has served as the executive chairman of the board of CCPT III since April 5, 2013, and he also served as the chief executive officer and president of CCPT III Investments from its formation in January 2008 until April 2013. He served as the chief executive officer of Cole REIT Advisors III, LLC (CCPT III Advisors) from its formation in January 2008 until June 2011, and as its president from January 2008 until April 2010 and as its treasurer from January 2008 until September 2008. He has served as the chairman, chief executive officer and president of CCIT since its formation in April 2010. He served as the chief executive officer of Cole Corporate Income Advisors, LLC (Cole Corporate Income Advisors) from its formation in April 2010 until June 2011. Mr. Cole has served as the chairman, chief executive officer and president of Cole Office & Industrial REIT (CCIT II), Inc. (CCIT II) since its fomation in January 2013. Mr. Cole has served as the chairman, chief executive officer and president of Cole
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Income NAV Strategy since its formation in July 2010. He served as the chief executive officer of Cole Real Estate Income Strategy (Daily NAV) Advisors, LLC (Cole Income NAV Strategy Advisors) from its formation in July 2010 until June 2011.
Mr. Cole was the sole shareholder of Cole Holdings Corporation from its formation in August 2004 until April 2013 and served as its chairman since October 2007 until April 2013, and previously served as its chief executive officer from August 2004 until June 2011, as its president and treasurer from August 2004 until April 2010, and as its secretary from October 2007 to April 2010. Mr. Cole has also been engaged as a general partner in the structuring and management of real estate limited partnerships since February 1979. Mr. Cole previously served as the treasurer of Cole Realty Advisors from its formation in November 2002 until September 2009, as its chief executive officer from December 2002 until June 2011, as its president from November 2002 until March 2007 and from October 2007 until September 2009, and as its secretary from November 2002 until December 2002. Mr. Cole previously served as the treasurer of Cole Capital Partners from January 2003 until April 2010, as its chief executive officer from January 2003 until June 2011, and as its president from January 2003 to March 2007 and from October 2007 until April 2010. Mr. Cole previously served as the treasurer of Cole Capital Advisors from its formation in November 2002 until April 2010, as its chief executive officer from December 2002 until June 2011, as its president from November 2002 until March 2007 and from October 2007 until April 2010, and as its secretary from November 2002 until December 2002.
Mr. Cole has served as the chief executive officer and treasurer of the Cole Growth Opportunity Fund I GP, LLC since its formation in March 2007. Mr. Cole served as the executive vice president and treasurer of Cole Capital Corporation from December 2002 until January 2008. Mr. Cole has been the sole director of Cole Capital Corporation since December 2002. Mr. Cole was selected to serve as a director of our company because he is the chief executive officer of our company, and Mr. Coles experience and relationships in the non-traded REIT and real estate industries, along with his knowledge of the Cole Real Estate Investments organization, are believed to provide significant value to the board of directors.
D. Kirk McAllaster, Jr. has served as our executive vice president, chief financial officer and treasurer since our formation in July 2010. He also has served as executive vice president and chief financial officer (REITs and real estate funds) of CR IV Advisors since January 2012 and as its executive vice president and chief financial officer from its formation in July 2010 until January 2012. Mr. McAllaster has also served as executive vice president and chief financial officer of CCPT I and CCPT II since October 2007, as the treasurer of each since May 2011, and has been a member of the board of directors of CCPT I since May 2008. He has served as executive vice president and chief financial officer (REITs and real estate funds) of CCPT I Advisors and CCPT II Advisors since January 2012, and previously served as executive vice president and chief financial officer of each from March 2007 until January 2012, and as vice president, finance of each from December 2005 until March 2007. He has served as executive vice president, chief financial officer and treasurer of CCPT III since its formation in January 2008, and served as its secretary from January 2008 to November 2010. He also has served as executive vice president and chief financial officer (REITs and real estate funds) of CCPT III Advisors since January 2012 and as its executive vice president and chief financial officer from its formation in January 2008 until January 2012. Mr. McAllaster has served as executive vice president, chief financial officer and treasurer if CCIT since its formation in April 2010 and served as its secretary from April 2010 until August 2010 and from January 2011 until March 2011. He has served as executive vice president and chief financial officer (REITs and real estate funds) of Cole Corporate Income Advisors since January 2012 and as its executive vice president and chief financial officer from its formation in April 2010 until January 2012. He has served as the executive vice president, chief financial officer and treasurer of Cole Income NAV Strategy since its formation in July 2010. He has served as executive vice president and chief financial officer (REITs and real estate funds) of Cole Income NAV Strategy Advisors since January 2012 and as its executive vice president and chief financial officer from its formation in July 2010 until January 2012. Mr. McAllaster has served as the executive vice president, chief financial officer and treasurer of CCIT II since its formation in January 2013. He has served as executive vice president and chief financial officer (REITs and real estate funds) of Cole Corporate Income Advisors II, LLC (CCIT II Advisors) since its formation in February 2013. Mr. McAllaster has served
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as executive vice president and chief financial officer (REITs and real estate funds) of Cole Realty Advisors since January 2012 and as its treasurer since September 2009, and previously served as executive vice president and chief financial officer from March 2007 until January 2012. Mr. McAllaster has served as executive vice president and chief financial officer (REITs and real estate funds) of Cole Capital Partners and Cole Capital Advisors since January 2012, and previously served as executive vice president and chief financial officer of each from March 2007 until January 2012 and as vice president, finance of each from December 2005 until March 2007. Prior to joining Cole Real Estate Investments in May 2003, Mr. McAllaster worked for six years with Deloitte & Touche LLP, most recently as audit senior manager. He has over 20 years of accounting and finance experience in public accounting and private industry. Mr. McAllaster received a B.S. degree from California State Polytechnic University Pomona with a major in Accounting. He is a Certified Public Accountant licensed in the states of Arizona and Tennessee and is a member of the American Institute of CPAs and the Arizona Society of CPAs.
Lawrence S. Jones has served as an independent director and as the chairman of our audit committee since March 2012. Mr. Jones served as the managing director of Encore Enterprises, Inc. Equity Funds, a real estate development company, from August 2008 to April 2010. Previously, he served as a senior audit partner with PricewaterhouseCoopers LLP from September 1999 to July 2007, where he was the financial services industry leader for the Dallas and Houston markets from September 1999 to July 2006, and the firms representative to the Board of Governors of the National Association of Real Estate Investment Trusts (NAREIT) from 1999 to 2007. Prior to joining PricewaterhouseCoopers LLP, Mr. Jones served from March 1998 to June 1999 as executive vice president and treasurer of Wyndham International, Inc., an upscale and luxury hotel operating company. Mr. Jones began his career in 1972 at Coopers & Lybrand, a predecessor of PricewaterhouseCoopers LLP, and served as the partner in charge of Coopers & Lybrands national REIT practice from 1992 until March 1998. From July 1982 to June 1984, Mr. Jones served as a professional accounting fellow with the Office of the Chief Accountant of the Securities and Exchange Commission in Washington, D.C. Mr. Jones has previously served as a director of the Dallas Arts District Alliance and is currently a member of the Dallas Park and Recreation Board, the National Association of Corporate Directors, NAREIT, the Urban Land Institute (ULI) and the American Institute of Certified Public Accountants. Mr. Jones is a past-president of the Haas School of Business Alumni Association (University of California at Berkeley). He served as an independent director of Moody National REIT I, Inc. from March 2010 to February 2012. Mr. Jones received a B.A. degree in Economics and Corporate Finance from the University of California at Berkeley and a Masters Degree in Corporate Finance from the UCLA Anderson School of Management. Mr. Jones was selected to serve as a director of our company because of his extensive experience as a certified public accountant and as a real estate industry executive, with strong leadership, management and technical skills, all of which are expected to bring valuable insight to our board of directors.
J. Marc Myers has served as an independent director since January 2012. Mr. Myers co-founded Myers & Crow Company, Ltd., a real estate development company, in 1994, and is a partner of that firm. Prior to that, Mr. Myers spent 22 years with Trammell Crow Company, where he was chief executive officer of the Dallas Industrial Division and a member of its management board. Mr. Myers is active in a number of real estate organizations and is a member of the Dallas Real Estate Developer Hall of Fame. In addition, Mr. Myers serves on the board of directors for the Baylor Health Care System Foundation and is currently chairman of the board of Special Camps for Special Kids. He is a recent past chairman of the McCombs School of Business Advisory Council. He also has served on the boards of the Childrens Medical Center of Dallas and was a member of the University of Texas at Austins Commission of 125. Mr. Myers received a B.B.A and an M.B.A. from the University of Texas at Austin. After receiving his degrees, Mr. Myers served in the U.S. Army Reserves as a Second Lieutenant. Mr. Myers was selected to serve as a director of our company because of his significant leadership experience in the real estate industry, which is expected to bring valuable insight to the board of directors.
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Duties of Independent Directors
In accordance with the NASAA REIT Guidelines, a majority of our independent directors generally must approve corporate actions that directly relate to the following:
| any transfer or sale of our sponsors initial investment in us; provided, however, our sponsor may not sell its initial investment while it remains our sponsor, but our sponsor may transfer the shares to an affiliate; |
| the duties of our directors, including ratification of our charter, the written policies on investments and borrowing, the monitoring of administrative procedures, investment operations and our performance and the performance of our advisor; |
| the advisory agreement; |
| liability and indemnification of our directors, advisor and its affiliates; |
| fees, compensation and expenses, including organization and offering expenses, acquisition fees and acquisition expenses, total operating expenses, real estate commissions on the resale of property, incentive fees, and advisor compensation; |
| any change or modification of our statement of objectives; |
| real property appraisals; |
| our borrowing policies; |
| annual and special meetings of stockholders; |
| election of our directors; and |
| our distribution reinvestment plan. |
Compensation of Directors
We pay to each of our independent directors a retainer of $50,000 per year, plus an additional retainer of $7,500 to the chairman of the audit committee. We also pay $2,000 for each meeting of our board of directors or committee thereof the director attends in person ($2,500 for the attendance in person by the chairperson of the audit committee at each meeting of the audit committee) and $250 for each meeting the director attends by telephone. In the event there is a meeting of our board of directors and one or more committees thereof in a single day, the fees paid to each director will be limited to $2,500 per day ($3,000 per day for the chairperson of the audit committee if there is a meeting of such committee). All directors will receive reimbursement of reasonable out-of-pocket expenses incurred in connection with attendance at each meeting of our board of directors. Independent directors are not reimbursed by us, our sponsor, our advisor or any of their affiliates for spouses expenses to attend events to which spouses are invited. If a non-independent director is also an employee of our company or our advisor or their affiliates, we will not pay compensation for services rendered as a director. We will not compensate Mr. Cole for his service to us on the board of directors.
Limited Liability and Indemnification of Our Directors, Officers, Advisor and Other Agents
We are permitted to limit the liability of our directors and officers, and to indemnify and advance expenses to our directors, officers and other agents, only to the extent permitted by Maryland law and the NASAA REIT Guidelines. Our charter contains a provision that eliminates directors and officers liability for money damages, requires us to indemnify and, in certain circumstances, advance expenses to our directors, officers, our advisor and its affiliates and permits us to indemnify and advance expenses to our employees and agents, subject to the limitations of Maryland law and the NASAA REIT Guidelines. To the extent that our board of directors determines that the Maryland General Corporation Law conflicts with the provisions set forth in the NASAA REIT Guidelines, the NASAA REIT Guidelines will control, unless the provisions of the Maryland General Corporation Law are mandatory under Maryland law.
Maryland law permits us to include in our charter a provision limiting the liability of our directors and officers to our stockholders and us for money damages, except for liability resulting from (i) actual receipt of an improper benefit or profit in money, property or services or (ii) active and deliberate dishonesty established by a final judgment and that is material to the cause of action.
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The Maryland General Corporation Law requires us (unless our charter provides otherwise, which our charter does not) to indemnify a director or officer who has been successful in the defense of any proceeding to which he is made or threatened to be made a party by reason of his service in that capacity. The Maryland General Corporation Law allows directors and officers to be indemnified against judgments, penalties, fines, settlements and expenses actually incurred by them in connection with any proceeding unless it is established that:
| an act or omission of the director or officer was material to the cause of action adjudicated in the proceeding and was committed in bad faith or was the result of active and deliberate dishonesty; |
| the director or officer actually received an improper personal benefit in money, property or services; |
| with respect to any criminal proceeding, the director or officer had reasonable cause to believe his act or omission was unlawful; or |
| in a proceeding by us or on our behalf, the director or officer was adjudged to be liable to us or for a judgment of liability on the basis that personal benefit was improperly received (although in either case a court may order indemnification solely for expenses). |
In addition to the above limitations of the Maryland General Corporation Law, and as set forth in the NASAA REIT Guidelines, our charter further limits our ability to indemnify our directors, our advisor and its affiliates for losses or liability suffered by them or hold harmless our directors or our advisor and its affiliates for losses or liability suffered by us by requiring that the following additional conditions are met:
| the directors, our advisor or its affiliates have determined, in good faith, that the course of conduct that caused the loss or liability was in our best interests; |
| the directors, our advisor or its affiliates were acting on our behalf or performing services for us; |
| in the case of non-independent directors, our advisor or its affiliates, the liability or loss was not the result of negligence or misconduct by the party seeking indemnification; |
| in the case of independent directors, the liability or loss was not the result of gross negligence or willful misconduct by the party seeking indemnification; and |
| the indemnification or agreement to hold harmless is recoverable only out of our net assets and not from the stockholders. |
We also will agree to indemnify and hold harmless our advisor and its affiliates performing services for us from specific claims and liabilities arising out of the performance of their obligations under the advisory agreement. As a result, our stockholders and we may be entitled to a more limited right of action than they and we would otherwise have if these indemnification rights were not included in the advisory agreement.
The general effect to our stockholders of any arrangement under which we agree to insure or indemnify any persons against liability is a potential reduction in distributions resulting from our payment of premiums associated with insurance or indemnification payments in excess of amounts covered by insurance. In addition, indemnification could reduce the legal remedies available to our stockholders and us against our officers and directors. The Maryland General Corporation Law permits us to advance reasonable expenses to a director or officer upon receipt of (1) a written affirmation by the director or officer of his or her good faith belief that he or she has met the standard of conduct necessary for indemnification and (2) a written undertaking by him or her or on his or her behalf to repay the amount paid or reimbursed if it is ultimately determined that the standard of conduct was not met. However, indemnification does not reduce the exposure of directors and officers to liability under federal or state securities laws, nor does it limit the stockholders ability to obtain injunctive relief or other equitable remedies for a violation of a directors or an officers duties to us, although the equitable remedies may not be an effective remedy in some circumstances.
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The Securities and Exchange Commission and some state securities commissions take the position that indemnification against liabilities arising under the Securities Act is against public policy and unenforceable. Indemnification of our directors, our advisor or its affiliates and any persons acting as a broker-dealer participating in the sale of our securities will not be allowed for liabilities arising from or out of a violation of state or federal securities laws, unless one or more of the following conditions are met:
| there has been a successful adjudication on the merits in favor of the indemnitee of each count involving alleged securities law violations; |
| such claims have been dismissed with prejudice on the merits by a court of competent jurisdiction; or |
| a court of competent jurisdiction approves a settlement of the claims against the indemnitee and finds that indemnification of the settlement and the related costs should be made, and the court considering the request for indemnification has been advised of the position of the Securities and Exchange Commission and of the published position of any state securities regulatory authority in which our securities were offered as to indemnification for violations of securities laws. |
Our charter provides that the advancement of our funds to our directors, our advisor or our advisors affiliates for legal expenses and other costs incurred as a result of any legal action for which indemnification is being sought is permissible only if all of the following conditions are satisfied: (i) the legal action relates to acts or omissions with respect to the performance of duties or services on our behalf; (ii) our directors, our advisor or our advisors affiliates provide us with written affirmation of their good faith belief that they have met the standard of conduct necessary for indemnification; (iii) the legal action is initiated by a third party who is not a stockholder or, if the legal action is initiated by a stockholder acting in his or her capacity as such, a court of competent jurisdiction approves such advancement; and (iv) our directors, our advisor or our advisors affiliates agree in writing to repay the advanced funds to us together with the applicable legal rate of interest thereon, in cases in which such persons are found not to be entitled to indemnification.
The Advisor
Our advisor is CR IV Advisors, a Delaware limited liability company that was formed on July 27, 2010, and is an affiliate of our sponsor, Cole Real Estate Investments. Whereas CR IV Advisors was formed solely for the purpose of managing our company and has a limited operating history, certain employees within the Cole Real Estate Investments organization, which employed over 350 persons as of the date of this prospectus, perform the services required to manage our operations. These employees include the members of our advisors real estate management team. Our advisor has contractual and fiduciary responsibility to us and our stockholders.
The officers and key personnel of our advisor or certain affiliates are as follows:
Name |
Age* | Position(s) | ||
Marc T. Nemer |
40 | Chief Executive Officer and President | ||
Jeffrey C. Holland |
41 | Executive Vice President and Head of Capital Markets | ||
Chong P. Huan |
55 | Executive Vice President and Head of Technology & Infrastructure | ||
Stephan Keller |
45 | Executive Vice President and Chief Financial Officer | ||
David J. Lynn |
51 | Executive Vice President and Chief Investment Strategist | ||
D. Kirk McAllaster, Jr. |
46 | Executive Vice President and Chief Financial Officer (REITs and Real Estate Funds) | ||
John M. Pons |
49 | Executive Vice President, Secretary and General Counsel, Real Estate | ||
Thomas W. Roberts |
54 | Executive Vice President and Head of Real Estate Investments | ||
Mitchell A. Sabshon |
61 | Executive Vice President and Chief Operating Officer |
* | As of April 10, 2013. |
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The background of Mr. McAllaster is described in the Executive Officers and Directors section above. Below is a brief description of the other executive officers and key employees of CR IV Advisors.
Marc T. Nemer served as a director from March 2012 until April 2013. He has served as chief executive officer of CR IV Advisors since June 2011 and as its president since its formation in July 2010. Mr. Nemer has served as chief executive officer of Cole Holdings Corporation since June 2011 and as its president since April 2010. He has served as president, secretary and treasurer of Cole Capital Corporation since January 2008. Mr. Nemer has served as a member of the boards of directors of CCPT I and CCPT III since May 2010, as a member of the board of directors of Cole Income NAV Strategy since January 2012 and as a member of the board of directors of CCIT from January 2011 until April 2013. Mr. Nemer has served as chief executive officer of CCPT I Advisors and CCPT II Advisors since June 2011 and as president of each since April 2010, and previously served as executive vice president and managing director of capital markets of each from March 2008 until April 2010, and as executive vice president, securities and regulatory affairs of each from October 2007 until March 2008. He has served as chief executive officer of CCPT III Advisors since June 2011 and its president since April 2010, and previously served as executive vice president and managing director of capital markets from September 2008 until April 2010, and as executive vice president, securities and regulatory affairs from its formation in January 2008 until September 2008. He has served as chief executive officer and president of CCIT II Advisors since its formation in February 2013. Mr. Nemer has served as chief executive officer of Cole Corporate Income Advisors since June 2011 and as its president since its formation in April 2010. Mr. Nemer has served as the chief executive officer of Cole Income NAV Strategy Advisors since June 2011 and as its president since its formation in July 2010. Mr. Nemer has served as chief executive officer for Cole Realty Advisors since June 2011, and previously served as its executive vice president and managing director of capital markets from March 2008 to June 2011, as its executive vice president, securities and regulatory affairs from October 2007 until March 2008, and as its vice president, legal services and compliance from March 2007 until October 2007. He has served as chief executive officer of Cole Capital Advisors and Cole Capital Partners since June 2011 and as president of each since April 2010, and previously served as executive vice president and managing director of capital markets of each from March 2008 to April 2010, as executive vice president, securities and regulatory affairs of each from October 2007 until March 2008 and as vice president, legal services and compliance of each from March 2007 until October 2007. Mr. Nemer also served as legal counsel to Cole Capital Advisors from February 2006 to March 2007. Prior to joining Cole Real Estate Investments, Mr. Nemer was an attorney with the international law firm Latham & Watkins LLP, where he specialized in securities offerings (public and private), corporate governance, and mergers and acquisitions from July 2000 until February 2006. Prior to that, Mr. Nemer worked at the international law firm Skadden, Arps, Slate, Meagher & Flom LLP, where he worked as an attorney in a similar capacity from August 1998 until July 2000. Mr. Nemer earned a J.D. from Harvard Law School in 1998 and a B.A. from the University of Michigan in 1995.
Jeffrey C. Holland has served as executive vice president and head of capital markets of CR IV Advisors since January 2011. In this role, he provides strategic direction and oversees external and internal sales, marketing, broker-dealer relations, due diligence and securities operations. He also serves as executive vice president and head of capital markets of Cole Capital Advisors, Cole Capital Partners, CCPT I Advisors, CCPT II Advisors, CCPT III Advisors, Cole Corporate Income Advisors, CCIT II Advisors and Cole Income NAV Strategy Advisors. Prior to joining Cole Real Estate Investments in December 2010, Mr. Holland held several roles at BlackRock, Inc.s U.S. retail division, an asset management business focused on financial advisor-intermediated distribution channels, including chief operating officer from 2008 to 2010 and co-head of product development and management from 2006 to 2008. Prior to joining BlackRock, Mr. Holland served as vice president, consulting services, for Raymond James & Associates from 2003 to 2006. Mr. Holland served at Capital Resource Advisors from 1999 to 2003, most recently as director in the Business Strategies Group. From 1996 to 1999, he worked as an engagement manager for McKinsey & Company, Inc. Mr. Holland earned a J.D. from Harvard Law School and a B.A. from the University of Puget Sound.
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Chong P. Huan has served as executive vice president and head of technology & infrastructure of CR IV Advisors since January 2012, and previously served as executive vice president and chief technology officer of CR IV Advisors from January 2011 to January 2012. In this role, he is responsible for oversight of all facilities and technology operations, including facilities management, technology infrastructure and application development, strategic planning and information management. He also serves as executive vice president and head of technology & infrastructure of Cole Capital Advisors, Cole Capital Partners, CCPT I Advisors, CCPT II Advisors, CCPT III Advisors, Cole Corporate Income Advisors, CCIT II Advisors and Cole Income NAV Strategy Advisors. Prior to joining Cole Real Estate Investments, Mr. Huan served as principal and founder of CIR Solutions LLC, an information technology consulting firm, from 2009 to 2010. Mr. Huan served as chief technology officer and managing director for Citi Global Investment Research from 2007 to 2009. Prior to joining Citi Global Investment Research, he served as senior information officer and vice president of AIG Investment in 2007, chief information officer and senior managing director of New York Life Investment Management from 2000 to 2006, and head of information technology in the Americas with UBS Private Banking and Asset Management from 1996 to 2000. Mr. Huan holds an Executive Masters in technology management from The Wharton School, University of Pennsylvania and an M.B.A. from Northeastern University, and received a B.S. in engineering with honors from Oxford, U.K. He is also a Moore Fellow at the University of Pennsylvanias School of Engineering and Applied Sciences.
Stephan Keller has served as executive vice president and chief financial officer of our advisor since January 2012. In this role, he is responsible for leading our advisors accounting and reporting functions. He also focuses on corporate strategy, corporate business planning, treasury, controls and corporate financing activities. Mr. Keller also serves as executive vice president and chief financial officer of Cole Capital Advisors, Cole Capital Partners, CCPT I Advisors, CCPT II Advisors, CCPT III Advisors, Cole Corporate Income Advisors, CCIT II Advisors and Cole Income NAV Strategy Advisors. Prior to joining Cole Real Estate Investments as executive vice president and chief financial officer in November 2011, Mr. Keller worked for UBS AG from 1992 to 2011, including serving as vice chairman, investment banking of the Financial Institutions Group from 2010 to 2011, group treasurer from 2006 to 2010, chief risk officer of UBS Investment Bank from 2004 to 2006 and chief risk officer for the U.S. Wealth Management business from 2002 to 2004. Mr. Keller received his M.B.A. from the University of St. Gallen, Switzerland.
David J. Lynn has served as executive vice president and chief investment strategist of CR IV Advisors since January 2013. In this role, he is responsible for leading our advisors real estate investment strategy and continually enhancing Cole Real Estate Investments product offerings. He also works on a broad range of initiatives across the Cole Real Estate Investments organization, including serving as the firms economist. Dr. Lynn also serves as executive vice president and chief investment strategist of Cole Capital Advisors, Cole Capital Partners, CCPT I Advisors, CCPT II Advisors, CCPT III Advisors, Cole Corporate Income Advisors, CCIT II Advisors and Cole Income NAV Strategy Advisors. Prior to joining Cole Real Estate Investments in January 2013, Dr. Lynn was the chief executive officer and founder of LCM, LLC, a real estate investment management firm, during 2012, and a managing director, partner, global head and founder of the Investment Strategy and Research Group, and generalist portfolio manager with Clarion Partners, a commercial real estate investment manager, from 2007 to 2012. Prior to joining Clarion Partners, Dr. Lynn was managing director, global head of strategy and research and portfolio manager with AIG Global Real Estate from 2005 to 2007; senior director, development with Avalonbay, Inc., a REIT specializing in Class A multifamily and mixed-use properties, from 2002 to 2005; and vice president of GE Capital Real Estate/Bidcom.com JV, a real estate technology firm, from 1999 to 2001. Dr. Lynn also previously served as vice president, investment and development, of Keppel Corporation, a real estate investment firm based in Singapore, from 1995 to 1999; national development manager for the property development and management division of Target Corporation from 1991 to 1994; and development manager for The Boston Redevelopment Authority from 1988 to 1991. Dr. Lynn earned a Ph.D. from the London School of Economics, with a specialization in financial economics; an MBA from the MIT Sloan School of Business; an MA in City and Regional Planning and Real Estate from Cornell University; and a BA from the University of California at Berkeley.
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John M. Pons has served as the executive vice president and general counsel, real estate of CR IV Advisors since its formation in July 2010, and as its secretary since January 2011. Mr. Pons served as secretary for CCPT I from March 2004 to January 2011, and was a member of its board of directors from March 2004 until May 2010. He has served as executive vice president, general counsel and secretary of CCPT I Advisors since September 2008, and previously served as executive vice president, chief administrative officer, general counsel and secretary from October 2007 until September 2008, as executive vice president, chief operating officer, general counsel and secretary from March 2007 until October 2007, as senior vice president and general counsel from December 2005 until March 2007, as senior vice president and counsel from August 2005 until December 2005, and as vice president, counsel and secretary from March 2004 until August 2005. Mr. Pons served as secretary of CCPT II from its formation in September 2004 until November 2010. He served as a member of CCPT IIs board of directors from September 2004 until November 2004. Mr. Pons has served as executive vice president and general counsel of CCPT II Advisors since September 2008 and as its secretary since January 2011, and previously served as executive vice president, chief administrative officer, general counsel and secretary from October 2007 until September 2008, as executive vice president, chief operating officer, general counsel and secretary from March 2007 until October 2007, as senior vice president and general counsel from December 2005 until March 2007, as senior vice president and counsel from August 2005 until December 2005, and as vice president, counsel and secretary from September 2004 until August 2005. Mr. Pons has served as executive vice president and general counsel of CCPT III Advisors since its formation in January 2008 and as its secretary since January 2011, and previously served as its chief operating officer from January 2008 until May 2008. He has served as executive vice president and general counsel, real estate of Cole Corporate Income Advisors since its formation in April 2010 and as its secretary since January 2011. Mr. Pons has served as executive vice president and general counsel, real estate of Cole Income NAV Strategy Advisors since July 2010, and as its secretary since January 2011. He has served as executive vice president, secretary and general counsel, real estate of CCIT II Advisors since its formation in February 2013. Mr. Pons has served as executive vice president, general counsel and secretary of Cole Realty Advisors since September 2008, and previously served as executive vice president, chief administrative officer, general counsel and secretary from October 2007 until September 2008, as executive vice president, chief operating officer and general counsel from March 2007 until October 2007, and as senior vice president from January 2006 until March 2007. He has served as executive vice president, general counsel and secretary of Cole Capital Partners and Cole Capital Advisors since September 2008, and previously served for each as executive vice president, chief administrative officer, general counsel and secretary from October 2007 until September 2008, as executive vice president, chief operating officer and general counsel from March 2007 until October 2007, as senior vice president and general counsel from December 2005 until March 2007, as senior vice president and counsel from August 2005 until December 2005, and as vice president and counsel from September 2003 until August 2005. Prior to joining Cole Real Estate Investments in September 2003, Mr. Pons was an associate general counsel and assistant secretary with GE Capital Franchise Finance Corporation from December 2001. Before attending law school, Mr. Pons was a Captain in the United States Air Force where he served from 1988 until 1992. Mr. Pons received a B.S. degree in Mathematics from Colorado State University and a M.S. degree in Administration from Central Michigan University before earning his J.D. (Order of St. Ives) in 1995 at the University of Denver.
Thomas W. Roberts has served as executive vice president and head of real estate investments of CR IV Advisors since January 2013, and previously served as executive vice president and managing director of real estate of CR IV Advisors from July 2010 to January 2013. He has served as president of Cole Realty Advisors since September 2009. He has served as executive vice president and managing director of real estate or, since January 2013, head of real estate investments, of CCPT I Advisors, CCPT II Advisors, CCPT III Advisors, CCIT II Advisors, Cole Capital Partners and Cole Capital Advisors since September 2009. He has served as executive vice president and managing director of real estate or, since January 2013, head of real estate investments, of Cole Corporate Income Advisors since its formation in April 2010, and of Cole Income NAV Strategy Advisors since July 2010. Prior to joining Cole Real Estate Investments, Mr. Roberts served as president and chief executive officer of Opus West Corporation, a Phoenix-based real estate developer, from March 1993 until May 2009. Mr. Roberts also worked as vice president, real estate development for the Koll Company from 1986 until 1990. In July 2009, Opus West Corporation filed for Chapter 11 bankruptcy protection. Mr. Roberts received a B.S. from Arizona State
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University. Mr. Roberts has been active in many professional and community organizations including the Greater Phoenix Economic Council, International Council of Shopping Centers, National Association of Industrial and Office Properties, Young Presidents Organization, ULI, Phoenix Boys and Girls Club, and Xavier College Preparatory Board of Trustees.
Mitchell A. Sabshon has served as executive vice president and chief operating officer of CR IV Advisors since January 2011. In this role, he is responsible for corporate finance, asset management, property management, leasing and high yield portfolio management. He also works on a broad range of initiatives across the Cole Real Estate Investments organization, including issues pertaining to corporate and portfolio strategy, product development and systems. He also serves as executive vice president and chief operating officer of Cole Capital Advisors, Cole Capital Partners, CCPT I Advisors, CCPT II Advisors, CCPT III Advisors, Cole Corporate Income Advisors, CCIT II Advisors and Cole Income NAV Strategy Advisors. Prior to joining Cole Real Estate Investments in November 2010, Mr. Sabshon served as managing partner and chief investment officer of EndPoint Financial LLC, an advisory firm providing acquisition and finance advisory services to equity investors, from 2008 to 2010. Mr. Sabshon served as chief investment officer and executive vice president of GFI Capital Resources Group, Inc., a national owner-operator of multifamily properties, from 2007 to 2008. Prior to joining GFI, Mr. Sabshon served with Goldman Sachs & Company from 2004 to 2007 and from 1997 to 2002 in several key strategic roles, including president and chief executive officer of Goldman Sachs Commercial Mortgage Capital and head of the Insurance Client Development Group. From 2002 to 2004, Mr. Sabshon was executive director of the U.S. Institutional Sales Group at Morgan Stanley. Mr. Sabshon held various positions at Lehman Brothers Inc. from 1991 to 1997, most recently as senior vice president in the Real Estate Investment Banking Group. Prior to joining Lehman Brothers, Mr. Sabshon was an attorney in the Real Estate Structured Finance group of Skadden, Arps, Slate, Meagher & Flom LLP. Mr. Sabshon received his J.D. from Hofstra University School of Law and a B.A. from George Washington University.
In addition to the officers and key personnel listed above, our advisor employs personnel who have extensive experience in selecting, managing and selling commercial properties similar to the properties sought to be acquired by us. As of the date of this prospectus our advisor is the sole limited partner of our operating partnership.
The Advisory Agreement
CR IV Advisors is an entity created by our sponsor for the sole purpose of managing the day-to-day operations of our company. We entered into an advisory agreement with CR IV Advisors on January 20, 2012. Many of the services performed by our advisor in managing our day-to-day activities pursuant to the advisory agreement are summarized below. We believe that our advisor currently has sufficient staff and experience so as to be capable of fulfilling the duties set forth in the advisory agreement, along with the duties owed to other real estate programs managed by affiliates of our advisor. This summary is provided to illustrate the material functions that CR IV Advisors will perform for us as our advisor, and it is not intended to include additional services that may be provided to us by third parties, for which they will be separately compensated either directly by us or by our advisor and reimbursed by us. In the event that our advisor engages a third party to perform services that we have engaged our advisor to perform pursuant to the advisory agreement, such third party will be compensated by the advisor out of its advisory fee.
Under the terms of the advisory agreement, our advisor undertakes to use its commercially reasonable best efforts to present to us investment opportunities consistent with our investment policies and objectives as adopted by our board of directors. In its performance of this undertaking, CR IV Advisors, either directly or indirectly by engaging an affiliate or an unaffiliated third party, shall, among other duties and subject to the supervision of our board of directors:
| find, evaluate, present and recommend to us investment opportunities consistent with our investment policies and objectives; |
| serve as our investment and financial advisor and provide research and economic and statistical data in connection with our assets and our investment policies; |
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| provide the daily management and perform and supervise the various administrative functions reasonably necessary for our management and operations; |
| investigate, select, and, on our behalf, engage and conduct business with such third parties as the advisor deems necessary to the proper performance of its obligations under the advisory agreement; |
| consult with, and provide information to, our officers and board of directors and assist the board of directors in formulating and implementing our financial policies; |
| structure and negotiate the terms and conditions of our real estate acquisitions, sales or joint ventures; |
| review and analyze each propertys operating and capital budget; |
| acquire properties and make investments on our behalf in compliance with our investment objectives and policies; |
| arrange, structure and negotiate financing and refinancing of properties; |
| enter into leases of property and service contracts for assets and, to the extent necessary, perform all other operational functions for the maintenance and administration of such assets, including the servicing of mortgages; |
| prepare and review on our behalf, with the participation of one designated principal executive officer and principal financial officer, all reports and returns required by the Securities and Exchange Commission, Internal Revenue Service and other state or federal governmental agencies; and |
| dispose of properties on our behalf in compliance with our investment objectives and policies, and at the appropriate time, advise our board of directors on the timing and method of providing our investors with liquidity. |
It is the duty of our board of directors to evaluate the performance of our advisor before entering into or renewing the advisory agreement, and the criteria used in such evaluation shall be reflected in the minutes of the board of directors meeting at which such evaluation was conducted. Our board of directors has approved the renewal of our advisory agreement with Cole REIT Advisors IV, LLC for a term ending November 30, 2013. The advisory agreement may be renewed for an unlimited number of successive one-year periods thereafter. Additionally, either party may terminate the advisory agreement upon 60 days written notice without cause or penalty. After termination of the advisory agreement, our advisor will not be entitled to any further compensation, however it will be entitled to receive all unpaid reimbursements of expenses, subject to certain limitations, and all fees payable to the advisor that accrued prior to the termination of the advisory agreement. A subordinated performance fee also may be payable, as discussed below. Our charter does not permit us to enter into an advisory agreement that includes terms that would impose a penalty, such as a termination fee, on the party that elects to terminate the agreement. If we elect to terminate the agreement, we must obtain the approval of a majority of our independent directors. In the event of the termination of our advisory agreement, our advisor is required to cooperate with us and take all reasonable steps requested by us to assist our board of directors in making an orderly transition of the advisory function.
We pay our advisor a monthly advisory fee based upon our monthly average invested assets, equal to the following amounts: (i) an annualized rate of 0.75% will be paid on our average invested assets that are between $0 and $2 billion; (ii) an annualized rate of 0.70% will be paid on our average invested assets that are between $2 billion and $4 billion; and (iii) an annualized rate of 0.65% will be paid on our average invested assets that are over $4 billion. Monthly average invested assets will equal the average book value of our assets invested, directly or indirectly, in equity interests in and loans secured by our real estate, before reserves for depreciation and amortization or bad debts or other similar non-cash reserves, other than impairment charges, computed by taking the average of such values at the end of each business day, over the course of the month. After our board of directors begins to determine the estimated per share value of our common stock, the average invested assets will be based upon the aggregate valuation of our invested assets, as reasonably estimated by our board of directors. Any portion of this fee may be deferred and paid in a subsequent period upon the mutual agreement of us and our advisor.
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We also pay our advisor acquisition fees equal to 2% of: (i) the contract purchase price of each property or asset that we acquire; (ii) the amount paid in respect of the development, construction or improvement of each asset we acquire; (iii) the purchase price of any loan we acquire; and (iv) the principal amount of any loan we originate. Any portion of the acquisition fee may be deferred and paid in a subsequent period upon the mutual agreement of us and our advisor. We are prohibited from paying more than 6% of the contract price of a property, or in the case of a mortgage loan, 6% of the funds advanced, in acquisition fees, including development fees, construction fees and acquisition expenses, unless otherwise approved by a majority of our board of directors, including a majority of the independent directors, not otherwise interested in the transaction, as commercially competitive, fair and reasonable to us, although we intend to limit such payments below 6%.
If our advisor or its affiliates provides a substantial amount of services (as determined by a majority of our independent directors) in connection with the sale of properties, we will pay our advisor or its affiliate a disposition fee in an amount equal to up to one-half of the brokerage commission paid on the sale of properties, not to exceed 1% of the contract price of the properties sold; provided, however, in no event may the disposition fee paid to our advisor or its affiliates, when added to the real estate commissions paid to unaffiliated third parties, exceed the lesser of the customary competitive real estate commission or an amount equal to 6% of the contract sales price.
Additionally, we will be required to pay to our advisor, in cash, a non-interest bearing promissory note or shares of our common stock (or any combination thereof), at our election, subordinated fees based on a percentage of proceeds or stock value in the event of our sale of assets or the listing of our common stock on a national securities exchange, but only if, in the case of our sale of assets, our investors have received, from regular distributions plus special distributions paid from proceeds of such sale, a return of their net capital invested and an 8% annual cumulative, non-compounded return or, in the case of the listing of our common stock, the market value of our common stock plus the distributions paid to our investors exceeds the sum of the total amount of capital raised from investors plus the amount of distributions necessary to generate an 8% annual cumulative, non-compounded return to investors. Upon termination of the advisory agreement, we may incur an obligation to pay to our advisor a subordinated performance fee, in cash, a non-interest bearing promissory note or our shares, at our election, similar to that which our advisor would have been entitled had the portfolio been liquidated (based on an independent appraised value of the portfolio) on the date of termination.
Other than the fees described above, neither the advisor nor its affiliates will be entitled to any additional fees for managing or leasing our properties.
We reimburse our advisor for the expenses incurred in connection with its provision of advisory and administrative services, such as the portion of the salaries paid to employees of Cole Real Estate Investments who are dual employees of our advisor (including executive officers and key personnel of our advisor who are not also executive officers of our company) that are attributed to services rendered by our advisor in connection with our operations, including non-offering related legal and accounting services; provided, however, that we will not reimburse our advisor for the salaries and benefits paid to our executive officers, or for personnel costs in connection with services for which the advisor receives acquisition fees.
Officers, employees and affiliates of our advisor engage in other business ventures and, as a result, their resources will not be dedicated exclusively to our business. However, pursuant to the advisory agreement, our advisor will be required to devote sufficient resources to our administration to discharge its obligations. The Cole Real Estate Investments organization has over 350 full-time employees, many of whom may dedicate a portion of their time to providing services on behalf of our advisor. Our advisor is responsible for a pro rata portion of each employees compensation based upon the approximate percentage of time the employee dedicates to our advisor.
Our advisor may assign the advisory agreement to an affiliate upon approval of a majority of our board of directors, including a majority of our independent directors. We may assign or transfer the advisory agreement to a successor entity; provided that at least a majority of our independent directors determines that any such
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successor advisor possesses sufficient qualifications to perform the advisory function and to justify the compensation payable to the advisor. Our independent directors will base their determination on the general facts and circumstances that they deem applicable, including the overall experience and specific industry experience of the successor advisor and its management. Other factors that will be considered are the compensation to be paid to the successor advisor and any potential conflicts of interest that may occur.
The fees payable to our advisor under the advisory agreement are described in further detail in the Management Compensation section of this prospectus. We also describe in that section our obligation to reimburse our advisor for organization and offering expenses, advisory and administrative services, and payments made by our advisor to third parties in connection with potential acquisitions.
Our advisors principal assets will be its cash balances and its advisory agreement with our company, and the revenues associated with such agreement. In addition, we expect that our advisor will be covered by an errors and omissions insurance policy. If our advisor is held liable for a breach of its fiduciary duty to us, or a breach of its contractual obligations to us, we expect that the liability would be paid by our advisor from its cash balances or by the insurance policy. However, our advisor is not required to retain cash to pay potential liabilities and it may not have sufficient cash available to pay liabilities if they arise. In such event, and if insurance proceeds are insufficient, we may not be able to collect the full amount of any claims we may have against our advisor.
Affiliated Dealer Manager
Cole Capital Corporation, our dealer manager, is a member firm of FINRA. Cole Capital Corporation was organized in December 1992 for the purpose of participating in and facilitating the distribution of securities of real estate programs sponsored by Cole Real Estate Investments, its affiliates and its predecessors.
Cole Capital Corporation provides certain wholesaling, sales, promotional and marketing assistance services to us in connection with the distribution of the shares offered pursuant to this prospectus. It may also sell a limited number of shares at the retail level. The compensation we pay to Cole Capital Corporation in connection with this offering is described in the section of this prospectus captioned Management Compensation. See also Plan of Distribution Compensation We Will Pay for the Sale of Our Shares.
Cole Capital Corporation is an indirect wholly-owned subsidiary of CCPT III. Cole Capital Corporation is an affiliate of our advisor. The backgrounds of the officers of Cole Capital Corporation are described in the The Advisor section above.
Investment Decisions
The primary responsibility for the investment decisions of our advisor and its affiliates, the negotiation for the purchase and sale of these investments, and the management of our assets resides with Marc T. Nemer and the other executive officers and key personnel of our advisor. The backgrounds of the officers of our advisor are described in the The Advisor section above. Our board of directors is responsible for supervising and monitoring the activities of our advisor.
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We have no paid employees. Our advisor and its affiliates manage our day-to-day affairs. The following table summarizes all of the compensation and fees we will pay to our advisor and its affiliates, including amounts to reimburse their costs in providing services. We will not pay a separate fee for financing, leasing or property management, although we may rely on our advisor or its affiliates to provide such services to us. The selling commissions may vary for different categories of purchasers. See the Plan of Distribution section of this prospectus. This table assumes the shares are sold through distribution channels associated with the highest possible selling commissions and dealer manager fee.
Type of Compensation(1) |
Determination of Amount |
Estimated Amount for Maximum Offering(2) | ||||||||
Offering Stage | ||||||||||
Selling Commissions Cole Capital Corporation(3) | We generally will pay to our affiliated dealer manager, Cole Capital Corporation, 7% of the gross proceeds of our primary offering. Cole Capital Corporation will reallow 100% of selling commissions to participating broker-dealers. We will not pay any selling commissions with respect to sales of shares under our distribution reinvestment plan. | $175,000,000 | ||||||||
Dealer Manager Fee Cole Capital Corporation(3) | We generally will pay to Cole Capital Corporation 2% of the gross proceeds of our primary offering. Cole Capital Corporation may reallow all or a portion of its dealer manager fee to participating broker-dealers. We will not pay a dealer manager fee with respect to sales of shares under our distribution reinvestment plan. | $50,000,000 | ||||||||
Reimbursement of Other Organization and Offering Expenses CR IV Advisors(4) | Our advisor will incur or pay our organization and offering expenses (excluding selling commissions and the dealer manager fee). We will then reimburse our advisor for these amounts up to 2.0% of gross offering proceeds, including proceeds from sales of shares under our distribution reinvestment plan. | $59,500,000 Of the $59,500,000, we expect to reimburse our advisor up to $25,000,000 (1.0% of the gross offering proceeds of our primary offering, or 0.8% of aggregate gross offering proceeds, including proceeds from shares issued under our distribution reinvestment plan) to cover offering expenses that are deemed to be underwriting expenses, and we expect to reimburse our advisor up to $34,500,000 (1.2% of aggregate gross offering proceeds, including proceeds from sales of shares under our distribution reinvestment plan) to cover non-underwriting organization and offering expenses. | ||||||||
Acquisition and Operations Stage | ||||||||||
Acquisition Fee CR IV Advisors(5) | In consideration for finding, evaluating, structuring and negotiating our real estate acquisitions, we will pay to our advisor up to 2% of: (i) the contract purchase price of each property or asset; (ii) the amount paid in respect of the development, construction or improvement of each asset we acquire; (iii) the purchase price of any loan we acquire; and (iv) the principal amount of any loan we originate. | $52,446,394 assuming no debt or $209,785,575 assuming leverage of 75% of the contract purchase price. |
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Type of Compensation(1) |
Determination of Amount |
Estimated Amount for Maximum Offering(2) | ||||||||
Advisory Fee CR IV Advisors(6) | In consideration for the day-to-day management of our company, we will pay to our advisor a monthly advisory fee based upon our monthly average invested assets. Monthly average invested assets will equal the average book value of our assets invested, directly or indirectly, in equity interests in and loans secured by our real estate, before reserves for depreciation and amortization or bad debts or other similar non-cash reserves, other than impairment charges, computed by taking the average of such values at the end of each business day, over the course of the month. After our board of directors begins to determine the estimated per share value of our common stock, the monthly advisory fee will be based upon the value of our assets invested, directly or indirectly, in equity interests in and loans secured by our real estate as determined by our board of directors.
The advisory fee will be calculated according to the following fee schedule:
|
The annualized advisory fee rate, and the actual dollar amounts, are dependent upon the amount of our monthly average invested assets and, therefore, cannot be determined at the present time. Based on the following assumed levels of monthly average invested assets, our annualized advisory fee will be as follows:
| ||||||||
Monthly Average Invested Assets |
Annualized |
Annualized | ||||||||
$1 billion | 0.75% | $ 7,500,000 | ||||||||
$2 billion | 0.75% | $15,00,000 | ||||||||
$3 billion | 0.7333% | $22,000,000 | ||||||||
$4 billion | 0.7250% | $29,000,000 | ||||||||
$5 billion | 0.7100% | $35,500,000 | ||||||||
Monthly Average Invested Assets Range |
Annualized Fee Rate for Each Range |
|||||||||
$0 $2 billion |
0.75% | |||||||||
over $2 billion $4 billion |
0.70% | |||||||||
over $4 billion |
0.65% | |||||||||
Operating Expenses CR IV Advisors(7) |
We will reimburse our advisor for acquisition expenses incurred in the process of acquiring each property or in the origination or acquisition of a loan. We expect these expenses will be approximately 0.5% of the purchase price of each property or of the amount of each loan; provided, however, that acquisition expenses are not included in the contract purchase price of a property.
We also will reimburse our advisor for the expenses incurred in connection with its provision of advisory and administrative services, including related personnel costs and payments to third party service providers; provided, however, that we will not reimburse our advisor for the salaries and benefits paid to personnel in connection with services for which our advisor receives acquisition fees, and we will not reimburse our advisor for salaries and benefits paid to our executive officers. |
$13,111,598 estimated for reimbursement of acquisition expenses assuming no debt or $43,048,000 estimated for reimbursement of acquisition expenses assuming leverage of 75% of the contract purchase price. |
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Type of Compensation(1) |
Determination of Amount |
Estimated Amount for Maximum Offering(2) | ||||||||
Liquidity/Listing Stage | ||||||||||
Disposition Fee CR IV Advisors or its affiliates(8) |
For substantial assistance in connection with the sale of properties, we will pay our advisor or its affiliates an amount equal to up to one-half of the brokerage commission paid on the sale of property, not to exceed 1% of the contract price of the properties sold; provided, however, in no event may the disposition fee paid to our advisor or its affiliates, when added to the real estate commissions paid to unaffiliated third parties, exceed the lesser of the customary competitive real estate commission or an amount equal to 6% of the contract sales price. | Actual amounts are dependent upon the contract price of properties sold and, therefore, cannot be determined at the present time. Because the disposition fee is based on a fixed percentage of the contract price for sold properties the actual amount of the disposition fees cannot be determined at the present time. | ||||||||
Subordinated Performance Fee CR IV Advisors(9) |
After investors have received a return of their net capital invested and an 8% annual cumulative, non-compounded return, then our advisor will be entitled to receive 15% of the remaining net sale proceeds. We cannot assure you that we will provide this 8% return, which we have disclosed solely as a measure for our advisors incentive compensation. We will pay a subordinated fee under only one of the following events: (i) if our shares are listed on a national securities exchange; (ii) if our company is sold or our assets are liquidated; or (iii) upon termination of the advisory agreement. | Actual amounts are dependent upon results of operations and, therefore, cannot be determined at the present time. There is no limit on the aggregate amount of these payments. |
(1) | We will pay all fees, commissions and expenses in cash, other than the subordinated performance fee, which we may pay in cash, common stock, a non-interest bearing promissory note or any combination of the foregoing, as we may determine in our discretion. |
(2) | The estimated maximum dollar amounts are based on the sale to the public of 250,000,000 shares at $10.00 per share and 50,000,000 shares at $9.50 per share pursuant to our distribution reinvestment plan. |
(3) | These payments are underwriting compensation. Underwriting compensation paid from any source in connection with this offering may not exceed 10% of the gross proceeds of the primary offering. Selling commissions and, in some cases, the dealer manager fee, will not be charged with regard to shares sold to or for the account of certain categories of purchasers. See the Plan of Distribution section of this prospectus. |
(4) | These organization and offering expenses consist of all expenses (other than selling commissions and the dealer manager fee) to be paid by us in connection with the offering, including: (i) our legal, accounting, printing, mailing and filing fees, charges of our transfer agent for account set up fees, due diligence expenses that are included in a detailed and itemized invoice (such as expenses related to a review of this offering by one or more independent due diligence reviewers engaged by broker-dealers participating in this offering); (ii) amounts to reimburse our advisor for the portion of the salaries paid to employees of its affiliates that are attributed to services rendered to our advisor in connection with preparing supplemental sales materials for us, holding educational conferences and attending retail seminars conducted by our participating broker-dealers; and (iii) reimbursements for our dealer managers wholesaling costs, and other marketing and organization costs, including (a) payments made to participating broker-dealers for performing these services, (b) the dealer-managers wholesaling commissions, salaries and expense reimbursements, (c) the dealer managers due diligence costs and legal fees and (d) costs associated with business entertainment, logoed items and sales incentives. Expenses relating to educational conferences and retail seminars described in (ii) above, expenses relating to our dealer-managers wholesaling costs and payments to participating broker-dealers described in (iii) above and expenses described in (iii)(b) and (iii)(c) above will constitute underwriting compensation, subject to the underwriting limit of 10% of the gross proceeds of our primary offering. |
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The estimated maximum reimbursement for other organization and offering expenses, $59,500,000, is calculated based upon gross offering proceeds including proceeds from our distribution reinvestment plan. The $25,000,000 portion of the estimated maximum reimbursement for other organization and offering expenses that we expect will be used to cover offering expenses that are deemed to be underwriting expenses equals 0.8% of aggregate gross offering proceeds, including proceeds from shares issued under our distribution reinvestment plan. However, because we do not take proceeds from the sale of shares under our distribution reinvestment plan into account when we calculate the maximum amount we will pay for underwriting compensation, the table also indicates that the $25,000,000 that we expect will be used to cover offering expenses that are deemed to be underwriting expenses equals 1.0% of the gross offering proceeds of our offering, excluding proceeds from our distribution reinvestment plan (which we refer to in this prospectus as our primary offering). In no event will total organization and offering expenses, including selling commissions, the dealer manager fee and reimbursement of other organization and offering expenses, exceed 15% of the gross proceeds of this offering, including proceeds from sales of shares under our distribution reinvestment plan.
(5) | Any portion of this fee may be deferred and paid in a subsequent period upon the mutual agreement of us and our advisor. Pursuant to our charter, in accordance with the NASAA REIT Guidelines, our total of all acquisition fees and expenses relating to any purchase, including fees and expenses paid to third parties, shall not exceed 6% of the contract purchase price unless a majority of our directors (including a majority of our independent directors) not otherwise interested in the transaction approve fees and expenses in excess of this limit and determine the transaction to be commercially competitive, fair and reasonable to us. Included in the computation of such fees will be any real estate commission, acquisition fee, development fee, construction fee, non-recurring management fee, loan fees or points, or any fee of a similar nature. On a quarterly basis, we will review the total acquisition fees and expenses relating to each purchase to ensure that such fees and expenses do not exceed 6% of the contract purchase price. For a description of the duties of our advisor pursuant to the advisory agreement, including acquisition services, see the section of this prospectus captioned Management The Advisory Agreement. |
(6) | Any portion of this fee may be deferred and paid in a subsequent period upon the mutual agreement of us and our advisor. An assets book value typically will equal its cost. However, in the event that an asset suffers an impairment, we will reduce the real estate and related intangible assets and liabilities to their estimated fair market value. See the section captioned Managements Discussion and Analysis of Financial Condition and Results of Operations Application of Critical Accounting Policies Investment in and Valuation of Real Estate and Related Assets on our Annual Report on Form 10-K for the year ended December 31, 2012, incorporated by reference into this prospectus for additional information. For a description of the duties of our advisor pursuant to the advisory agreement, including day-to-day advisory services, see the section of this prospectus captioned Management The Advisory Agreement. |
(7) | We reimburse our advisor for the portion of the salaries paid to employees of Cole Real Estate Investments who are dual employees of our advisor, including executive officers and key personnel of our advisor who are not also executive officers of our company, that are attributed to services rendered by our advisor in connection with our operations, including non-offering related legal and accounting services. |
Additional services may be provided to us by third parties, for which they will be separately compensated either directly by us or by our advisor and reimbursed by us. In the event that our advisor engages a third party to perform services that we have engaged our advisor to perform pursuant to the advisory agreement, such third parties will be compensated by the advisor out of its advisory fee.
We will not reimburse our advisor for any amount by which the operating expenses (which exclude, among other things, the expenses of raising capital, interest payments, taxes, non-cash items such as depreciation, amortization and bad debt reserves, and acquisition fees and acquisition expenses) paid during the four preceding fiscal quarters exceeds the greater of (i) 2% of average invested assets, or (ii) 25% of net income other than any additions to reserves for depreciation, bad debt or other similar non-cash reserves and excluding any gain from the sale of assets for that period. We will perform the above calculation on a quarterly basis to ensure that the operating expense reimbursements are within these limitations. Acquisition expenses are accounted for separately.
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We lease our office space from an affiliate of our advisor and share the space with other Cole-related entities. The amount we will pay under the lease will be determined on a monthly basis based upon on the allocation of the overall lease cost to the approximate percentage of time, size of the area that we utilize and other resources allocated to us.
(8) | Although we are most likely to pay disposition fees to CR IV Advisors or its affiliates at the time of our liquidation, these fees may be earned during our operational state if we sell properties prior to our liquidation. |
(9) | We will pay a subordinated performance fee under only one of the following alternative events: (i) if our shares are listed on a national securities exchange, our advisor will be entitled to a subordinated performance fee equal to 15% of the amount, if any, by which (1) the market value of our outstanding stock plus distributions paid by us prior to listing, exceeds (2) the sum of the total amount of capital raised from investors and the amount of distributions necessary to generate an 8% annual cumulative, non-compounded return to investors; (ii) if our company is sold or our assets are liquidated, our advisor will be entitled to a subordinated performance fee equal to 15% of the net sale proceeds remaining after investors have received a return of their capital invested and an 8% annual cumulative, non-compounded return; or (iii) upon termination of the advisory agreement, our advisor may be entitled to a subordinated performance fee similar to that to which it would have been entitled had the portfolio been liquidated (based on an independent appraised value of the portfolio) on the date of termination. Under our charter, we could not increase these success-based fees without the approval of a majority of our independent directors, and any increase in these fees would have to be reasonable. Our charter provides that these subordinated fees are presumptively reasonable if they do not exceed 15% of the balance of such net proceeds or such net market value remaining after investors have received a return of their net capital contributions and an 8% per year cumulative, non-compounded return. |
The subordinated performance fee likely will be paid in the form of a non-interest bearing promissory note that will be repaid from the net sale proceeds of each sale after the date of the termination or listing, although, at our discretion, we may pay this fee with cash or shares of our common stock, or any combination of the foregoing. At the time of such sale, we may, however, again at our discretion, pay all or a portion of such non-interest bearing promissory note with shares of our common stock. If shares are used for payment, we do not anticipate that they will be registered under the Securities Act and, therefore, will be subject to restrictions on transferability. Any portion of the subordinated performance fee that our advisor receives prior to our listing will offset the amount otherwise due pursuant to the subordinated performance fee payable upon listing. In no event will the amount paid to our advisor under the non-interest bearing promissory note, if any, exceed the amount considered presumptively reasonable by the NASAA REIT Guidelines. Any subordinated performance fee payable in respect of net sale proceeds that is not paid at the date of sale because investors have not received their required minimum distribution will be deferred and paid at such time as the subordination conditions have been satisfied.
The market value of our outstanding stock will be calculated based on the average market value of the shares issued and outstanding at listing over the 30 trading days beginning 180 days after the shares are first listed. We have the option to cause our operating partnership to pay the subordinated performance fee in the form of stock, cash, a non-interest bearing promissory note or any combination thereof. In the event the subordinated performance fee is earned by our advisor, any previous payments of the subordinated participation in net sale proceeds will offset the amounts due pursuant to the subordinated performance fee, and we will not be required to pay our advisor any further subordinated participation in net sale proceeds.
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The following table summarizes the compensation, fees and reimbursements paid to our advisor and its affiliates related to the offering stage during the following periods:
For the Year
Ended December 31, 2012 |
For the Year
Ended December 31, 2011 |
|||||||
Offering Stage: |
||||||||
Selling commissions |
$ | 20,107,376 | $ | | ||||
Selling commissions reallowed by Cole Capital Corporation |
$ | 20,107,376 | $ | | ||||
Dealer manager fee |
$ | 5,943,769 | $ | | ||||
Dealer manager fee reallowed by Cole Capital Corporation |
$ | 3,104,306 | $ | | ||||
Other organization and offering expenses |
$ | 5,982,774 | $ | |
As of December 31, 2012, our advisor had paid organization and offering costs in connection with our ongoing public offering, which were not included in our financial statements because such costs were not a liability to us as they exceeded 2% of gross proceeds from our ongoing public offering. As we raise additional proceeds from our ongoing public offering, those costs may become payable.
The following table summarizes any compensation, fees and reimbursements paid to our advisor and its affiliates related to the acquisition and operations stage during the respective periods reflected below.
For the Year
Ended December 31, 2012 |
For the Year
Ended December 31, 2011 |
|||||||
Acquisition and Operations Stage: |
||||||||
Acquisition fees and expenses |
$ | 10,341,657 | $ | | ||||
Advisory fees and expenses |
$ | 812,322 | $ | | ||||
Operating expenses |
$ | 137,573 | $ | |
CR IV Advisors agreed to waive its rights to advisory fees for the first two months of operations and to expense reimbursements for five of the months between April 13, 2012, when we commenced operations, and December 31, 2012. During the year ended December 31, 2012 and for the year ended December 31, 2011, no compensation, fees or reimbursements were incurred for services provided by our advisor and its affiliates related to the liquidity/listing stage.
At least a majority of our independent directors must determine, from time to time but at least annually, that our total fees and expenses are reasonable in light of our investment performance, net assets, net income and the fees and expenses of other comparable unaffiliated REITs. Each such determination will be reflected in the minutes of our board of directors. The total operating expenses (as defined in the NASAA REIT Guidelines) of the company will not exceed, in any four consecutive fiscal quarters, the greater of 2% of the Average Invested Assets (as defined in the NASAA REIT Guidelines) or 25% of Net Income (as defined in the NASAA REIT Guidelines), unless our independent directors determine, based on unusual and non-recurring factors, that a higher level of expense is justified. In such an event, we will send notice to each of our stockholders within 60 days after the end of the fiscal quarter for which such determination was made, along with an explanation of the factors our independent directors considered in making such determination. Our independent directors shall also supervise the performance of our advisor and the compensation that we pay to it to determine that the provisions of our advisory agreement are being carried out.
Each such determination will be recorded in the minutes of our board of directors and based on the factors that the independent directors deem relevant, including the factors listing in the Management General section of this prospectus.
Since our advisor and its affiliates are entitled to differing levels of compensation for undertaking different transactions on our behalf, our advisor has the ability to affect the nature of the compensation it receives by undertaking different transactions. However, our advisor is obligated to exercise good faith and integrity in all its dealings with respect to our affairs pursuant to the advisory agreement. See the Management The Advisory Agreement section of this prospectus.
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Becoming Self-Administered
Because our advisor manages our day-to-day operations, we are considered externally managed. We believe that it will be in the best interests of our stockholders for the foreseeable future for us to be externally managed, therefore we do not expect to hire and pay for the services of skilled personnel with expertise in real estate finance, acquisition and management that are dedicated solely to managing our operations and properties. We believe that the arrangements set forth in the advisory agreement with CR IV Advisors enable us to balance our real estate expertise needs, our personnel needs and our operating costs. For example, we are able to draw on the services of the executive officers and other personnel of our advisor on an as needed basis rather than having to hire similar individuals on a full-time basis.
If we elect to internalize our operations, we would employ personnel and would be subject to potential liabilities commonly faced by employers, such as workers disability and compensation claims, potential labor disputes and other employee-related liabilities and grievances. Upon any internalization of our advisor, certain key personnel may not become employed by us, but instead will remain employees of our sponsor or its affiliates. However, such personnel do not have restrictions by contract or otherwise that may affect their ability to be employed by us, or otherwise provide services to us.
We may become self-administered in the future in connection with a listing of our shares of common stock on an exchange or other liquidity event, if our board of directors determines that it would be in the best interests of our stockholders. Although there is no prerequisite that publicly-traded REITs be self-administered, we understand that most of the publicly-traded REITs are self-administered and that the market price for our shares may suffer in the event that we list our shares for trading and remain externally managed. Thus, our board of directors likely will not consider listing our shares on a national exchange until it believes that our assets and income can support an internalized management and operating staff within the context of the returns that we are paying, or seek to pay, to our stockholders. If our board of directors reaches such determination, we will likely consider various methods for internalizing these functions. One method would be for us to acquire, or consider acquiring, our advisor through a business combination. At this time, we cannot be sure of the form or amount of consideration or other terms relating to such acquisition, however, we expect that we would not acquire our advisor if we could not retain key personnel of our advisor. If we pursue a business combination with our advisor, our board of directors will have a fiduciary duty to act in our best interests, which will be adverse to the interests of our advisor. To fulfill its fiduciary duty, our board of directors will take various procedural and substantive actions which may include forming a committee comprised entirely of independent directors to evaluate the potential business combination, and granting the committee the authority to retain its own counsel and advisors to evaluate the potential business combination. For a description of some of the risks related to an internalization transaction, see Risk Factors Risks Related to an Investment in Cole Credit Property Trust IV, Inc.
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We are subject to various conflicts of interest arising out of our relationship with CR IV Advisors, our advisor, and its affiliates, including conflicts related to the arrangements pursuant to which we will compensate our advisor and its affiliates. While our independent directors must approve the engagement of CR IV Advisors as our advisor, the fees payable to CR IV Advisors in connection with the services provided to us, and any subsequent decision to continue such engagement, the ability of our independent directors to negotiate on our behalf may be adversely impacted by the fact that our board of directors recognizes that our stockholders invested with the understanding and expectation that an affiliate of Cole Real Estate Investments would act as our advisor. See the Management Compensation section of this prospectus. Some of the potential conflicts of interest in our transactions with our advisor and its affiliates, and certain conflict resolution procedures set forth in our charter, are described below.
Our officers and affiliates of our advisor will try to balance our interests with the interests of other Cole-sponsored programs to whom they owe duties. However, to the extent that these persons take actions that are more favorable to other entities than to us, these actions could have a negative impact on our financial performance and, consequently, on distributions to you and the value of your investment. In addition, our directors, officers and certain of our stockholders may engage for their own account in business activities of the types conducted or to be conducted by our subsidiaries and us. For a description of some of the risks related to these conflicts of interest, see the Risk Factors Risks Related to Conflicts of Interest section of this prospectus.
Our independent directors have an obligation to function on our behalf in all situations in which a conflict of interest may arise. Furthermore, all of our directors have a fiduciary obligation to act on behalf of our stockholders.
Interests in Other Real Estate Programs and Other Concurrent Offerings
Affiliates of our advisor act as an advisor to, and our executive officers and at least one of our directors act as officers and/or directors of, CCPT I, CCPT II, CCPT III, CCIT, Cole Income NAV Strategy and one additional real estate investment program that currently is in registration for its initial public offering, all of which are REITs distributed and managed by affiliates of our advisor. In addition, all of these REITs employ our sponsors investment strategy, which focuses on single-tenant corporate properties subject to long term net leases to creditworthy tenants. CCPT I, CCPT II and CCPT III, like us, focus primarily on the retail sector, while CCIT focuses primarily on the office and industrial sector and Cole Income NAV Strategy focuses primarily on commercial properties in the retail, office and industrial sectors. Nevertheless, the common investment strategy used by each REIT would permit them to purchase certain properties that also may be suitable for our portfolio.
CCPT I and CCPT II are no longer offering shares for investment and are not currently pursuing the acquisition of additional properties. In the event CCPT I or CCPT II sells one or more of its assets, either company may seek to acquire additional properties, which may be similar to properties in which we invest. On January 22, 2013, CCPT II entered into an Agreement and Plan of Merger with Spirit Realty Capital, Inc., a publicly listed REIT. The transaction is expected to close during the third quarter of 2013. CCPT III is no longer offering shares for investment to the public; however, CCPT III continues to invest in real estate. CCPT III is an active investor in real estate and real estate-related investments, and the investment objective and strategy of CCPT III overlaps with our investment objective and strategy, thereby increasing the likelihood of potential acquisitions being appropriate for CCPT III and for us. CCIT commenced an initial public offering of up to $2.975 billion of shares of common stock in February 2011. Cole Income NAV Strategy commenced an initial public offering of up to $4.0 billion of shares of common stock in December 2011. CCIT and Cole Income NAV Strategy are active investors in real estate and real estate-related investments, and, although CCIT focuses primarily on the office and industrial sector, and Cole Income NAV Strategy focuses on commercial properties in the retail, office and industrial sectors, we anticipate that many investments that will be appropriate for
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investment by us also will be appropriate for investment by CCIT and Cole Income NAV Strategy. The additional real estate investment program sponsored by Cole Real Estate Investments that is currently seeking registration for its initial public offering is seeking to register up to $3.0 billion in shares of its common stock. See Certain Conflict Resolution Procedures below.
In addition, during the period from January 1, 2003 to December 31, 2012, an affiliate of our advisor had issued approximately $114.2 million of debt pursuant to four private offerings, the proceeds of which were used to acquire single and multi-tenant properties in various states. In addition, during the same period, Cole Real Estate Investments sponsored 53 tenant-in-common and Delaware Statutory Trust real estate programs, 52 of which are still in operation as of December 31, 2012. Cole Real Estate Investments also sponsored Cole Growth Opportunity Fund I, L.P. (CGOF), which is currently operating. CGOF does not have similar investment objectives to this program. Affiliates of our advisor may, from time to time, sponsor additional tenant-in-common and/or Delaware statutory trust real estate programs, which may invest in, and compete for, properties that would be suitable investments under our investment criteria. During the period from January 1, 2003 to December 31, 2012, affiliates of our advisor and of our executive officers also served as officers and directors of general partners of two limited partnerships that have invested in unimproved and improved real properties located in various states, including Cole Credit Property Fund, LP (CCPF) and Cole Credit Property Fund II, LP (CCPF II). See the Prior Performance Summary section of this prospectus. Affiliates of our executive officers and entities owned or managed by such affiliates also may acquire or develop real estate for their own accounts, and have done so in the past. Furthermore, affiliates of our executive officers and entities owned or managed by such affiliates intend to form additional real estate investment entities in the future, whether public or private, which can be expected to have the same or similar investment objectives and targeted assets as we have, and such persons may be engaged in sponsoring one or more of such entities at approximately the same time as our shares of common stock are being offered. Our advisor, its affiliates and affiliates of our executive officers are not obligated to present to us any particular investment opportunity that comes to their attention, even if such opportunity is of a character that might be suitable for investment by us. Our advisor and its affiliates likely will experience conflicts of interest as they simultaneously perform services for us and other Cole-sponsored real estate programs.
Any Cole-sponsored real estate program, whether or not currently existing, could compete with us in the sale or operation of our assets. We will seek to achieve any operating efficiencies or similar savings that may result from affiliated management of competitive assets. However, to the extent that such programs own or acquire property that is adjacent, or in close proximity, to a property we own, our property may compete with the other programs property for tenants or purchasers.
Although our board of directors adopted a policy limiting the types of transactions that we may enter into with our advisor, its affiliates, and other Cole-sponsored real estate programs, we may enter into certain such transactions, which are subject to an inherent conflict of interest. Similarly, joint ventures involving affiliates of our advisor or other Cole-sponsored programs also gives rise to conflicts of interest. In addition, our board of directors may encounter conflicts of interest in enforcing our rights against any affiliate in the event of a default by or disagreement with an affiliate or in invoking powers, rights or options pursuant to any agreement between us and our advisor, any of its affiliates or another Cole-sponsored real estate program.
In addition, we will rely on Cole Capital Corporation, our affiliated dealer manager, for the distribution of our shares of common stock to investors in this offering. Cole Capital Corporation currently distributes shares of common stock of CCIT and Cole Income NAV Strategy. We anticipate that Cole Capital Corporation may be required to hire additional personnel to manage our offering as well as any future concurrent offering. If our dealer manager is unable to sufficiently hire personnel to manage concurrent offerings, our dealer manager will face conflicts of interest allocating resources to our offering, which may have a negative effect on our ability to raise capital in this offering. Moreover, if the compensation our dealer manager or its personnel receive in the connection with concurrent offerings differs, our dealer manager and/or its personnel may have an incentive to devote more effort to the offering that results in a higher level of compensation.
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Other Activities of Our Advisor and its Affiliates
We rely on our advisor, CR IV Advisors, for the day-to-day operation of our business. As a result of the interests of members of its management in other Cole-sponsored programs and the fact that they also are engaged, and will continue to engage, in other business activities, our advisor and its officers, key persons and respective affiliates may have conflicts of interest in allocating their time between us and other Cole-sponsored programs and other activities in which they are involved. However, our advisor believes that it and its affiliates have sufficient personnel to discharge fully their responsibilities to all of the Cole-sponsored programs and other ventures in which they are involved.
In addition, each of our executive officers, including Christopher H. Cole, who also serves as the chairman of our board of directors, also is an executive officer or director of our advisor, our dealer manager and/or other affiliated entities. As a result, each of our executive officers owes fiduciary duties to these other entities, as applicable, which may conflict with the fiduciary duties that he owes to us and our stockholders.
Transactions with Our Advisor and its Affiliates
Our board of directors has adopted a policy to prohibit acquisitions and loans from or to affiliates of our advisor, other than as set forth below. From time to time, our advisor may direct certain of its affiliates to acquire properties that would be suitable investments for us or our advisor may create special purpose entities to acquire properties that would be suitable investments for us. Subsequently, we may acquire such properties from such affiliates of our advisor. Any and all acquisitions from affiliates of our advisor must be approved by a majority of our directors, including a majority of our independent directors, not otherwise interested in such transaction as being fair and reasonable to us and at a price to us that is no greater than the cost of the property to the affiliate of our advisor (including acquisition fees and expenses), unless a majority of the independent directors determines that there is substantial justification for any amount that exceeds such cost and that the difference is reasonable. In no event will we acquire a property from an affiliate of our advisor if the cost to us would exceed the propertys current appraised value as determined by an independent appraiser. In no event will our advisor or any of its affiliates be paid more than one acquisition fee in connection with any such transaction. Moreover, our advisor will not receive an acquisition fee if an affiliated entity will receive a disposition fee in connection with such transaction. Conversely, an affiliated entity will not receive an acquisition fee if our advisor will receive a disposition fee in connection with the sale of a property to an affiliate.
From time to time, we may borrow funds from affiliates of our advisor, including our sponsor, as bridge financing to enable us to acquire a property when offering proceeds alone are insufficient to do so and third party financing has not been arranged. Any and all such transactions must be approved by a majority of our directors, including a majority of our independent directors, not otherwise interested in such transaction as fair, competitive and commercially reasonable, and no less favorable to us than comparable loans between unaffiliated parties; provided, however, that our advisor or its affiliates may pay costs on our behalf, pending our reimbursement, or we may defer payment of fees to our advisor or its affiliates, neither of which would be considered a loan. Notwithstanding any of the foregoing, none of these restrictions would preclude us from internalizing our advisor if our board of directors determines an internalization transaction is in the best interests of our stockholders.
Acquiring, Leasing and Reselling of Properties
There is a risk that a potential investment would be suitable for one or more Cole-sponsored programs, in which case the officers of our advisor and the advisors of the other programs will have a conflict of interest allocating the investment opportunity to us or another program. There is a risk that the advisors will choose a property that provides lower returns to us than a property purchased by another Cole-sponsored program. However, in such event, our advisor and the advisors of the other programs, with oversight by their respective boards of directors, will determine which program will be first presented with the opportunity. See Certain Conflict Resolution Procedures for details of the factors used to make that determination. Additionally, our
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advisor may cause a prospective tenant to enter into a lease for property owned by another Cole-sponsored program. In the event that these conflicts arise, our best interests may not be met when persons acting on our behalf and on behalf of other Cole-sponsored programs decide whether to allocate any particular property to us or to another Cole-sponsored program.
Conflicts of interest will exist to the extent that we may acquire, or seek to acquire, properties in the same geographic areas where properties owned by other Cole-sponsored programs are located. In such a case, a conflict could arise in the acquisition or leasing of properties in the event that we and another Cole-sponsored program were to compete for the same properties or tenants, or a conflict could arise in connection with the resale of properties in the event that we and another Cole-sponsored program were to attempt to sell similar properties at the same time including in particular in the event another Cole-sponsored program liquidates at approximately the same time as us. Conflicts of interest may also exist at such time as we or our affiliates managing property on our behalf seek to employ developers, contractors or building managers, as well as under other circumstances. Our advisor will seek to reduce conflicts relating to the employment of developers, contractors or building managers by making prospective employees aware of all such properties seeking to employ such persons. In addition, our advisor will seek to reduce conflicts that may arise with respect to properties available for sale or rent by making prospective purchasers or tenants aware of all such properties. However, these conflicts cannot be fully avoided in that there may be established differing compensation arrangements for employees at different properties or differing terms for resales or leasing of the various properties.
Affiliated Dealer Manager
Since Cole Capital Corporation, our dealer manager, is an affiliate of our advisor, we will not have the benefit of an independent due diligence review and investigation of the type normally performed by an unaffiliated, independent underwriter in connection with the offering of securities. Accordingly, you will have to rely on your own broker-dealer to make an independent review of the terms of this offering. If your broker-dealer conducts an independent review of this offering and/or engages an independent due diligence reviewer to do so on its behalf, we expect that we will pay or reimburse the expenses associated with such review, which may create conflicts of interest. If your broker-dealer does not conduct such a review, you will not have the benefit of an independent review of the terms of this offering. See the Plan of Distribution section of this prospectus.
Affiliated Property Manager
Our properties are, and we anticipate that properties we acquire in the future will be, managed and leased by our property manager, CREI Advisors, an affiliate of our advisor, pursuant to property management and leasing agreements. We expect CREI Advisors to also serve as property manager for properties owned by other real estate programs sponsored by Cole Real Estate Investments, some of which may be in competition with our properties.
Joint Venture and Co-ownership Arrangements with Affiliates of Our Advisor
We may enter into joint ventures or other co-ownership arrangements with other Cole-sponsored programs (as well as other parties) for the acquisition, development or improvement of properties and other investments. See the Investment Objectives and Policies Acquisition and Investment Policies Joint Venture Investments section of this prospectus. Our advisor and its affiliates may have conflicts of interest in determining which Cole-sponsored program should enter into any particular joint venture or co-ownership agreement. The co-venturer or co-owner may have economic or business interests or goals which are or which may become inconsistent with our business interests or goals. In addition, should any such joint venture be consummated, our advisor may face a conflict in structuring the terms of the relationship between our interests and the interest of the co-venturer or co-owner, and in managing the joint venture or other co-ownership arrangement. Since our advisor and its affiliates will negotiate the terms of any agreements or transactions
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between us and a Cole-sponsored co-venturer or co-owner, we will not have the benefit of arms-length negotiation of the type normally conducted between unrelated co-venturers or co-owners. However, in such event, a majority of our board of directors, including a majority of our independent directors, not otherwise interested in the joint venture, must approve the joint venture as being fair and reasonable to us and on substantially the same terms and conditions as those received by the other joint venturers, and the cost of our investment must be supported by a current appraisal of the asset.
Receipt of Fees and Other Compensation by Our Advisor and Its Affiliates
A transaction involving the purchase or sale of properties, or the purchase or sale of any other real estate-related investment, will likely result in the receipt of fees and other compensation by our advisor and its affiliates, including acquisition and advisory fees, disposition fees, and the possibility of subordinated performance fees. Subject to oversight by our board of directors, our advisor will have considerable discretion with respect to all decisions relating to the terms and timing of all transactions. Therefore, our advisor may have conflicts of interest concerning certain actions taken on our behalf, particularly due to the fact that acquisition fees will generally be based on the cost of the investment and payable to our advisor and its affiliates regardless of the quality of the properties acquired. Similarly, until such time as our board of directors provides an estimate of the value of our shares, the advisory fees will be based on the cost of our investment, regardless of the quality of the properties acquired or services provided to us. Basing acquisition fees and advisory fees on the cost or estimated value of the investment may influence our advisors decisions relating to property acquisitions.
In advising our board of directors with respect to pursuing a liquidity event, our advisor and its affiliates may have conflicts of interest due to the fees and other consideration they may receive under alternative liquidity events, such as the listing of our shares of common stock on a national exchange, the sale of our company or the liquidation of our assets. In each event, a subordinated performance fee would be paid to our advisor only after our investors have received a return of their net capital invested and an 8% annual cumulative, non-compounded return. However, in the event our shares of common stock are listed on a national exchange, we may internalize our management functions. One method for internalizing our management functions would be for us to acquire our advisor through a business combination, which could result in significant payments to our advisor or its affiliates. Such payments would be made irrespective of whether our investors have received a return of their net capital invested and an 8% annual cumulative, non-compounded return. Therefore, our advisor may have an incentive to recommend a listing transaction rather than a liquidation transaction. See the Management Compensation section of this prospectus.
In addition, the sale of our shares of common stock in this offering will result in dealer manager fees to Cole Capital Corporation, our dealer manager and an affiliate of our advisor.
Each transaction we enter into with our advisor or its affiliates is subject to an inherent conflict of interest. Our board of directors may encounter conflicts of interest in enforcing our rights against any affiliate in the event of a default by or disagreement with an affiliate or in invoking powers, rights or options pursuant to any agreement between us and any affiliate.
Certain Conflict Resolution Procedures
In order to reduce or eliminate certain potential conflicts of interest, our charter contains a number of restrictions relating to (1) transactions we may enter into with our advisor and its affiliates, (2) certain future offerings, and (3) allocation of investment opportunities among Cole-sponsored programs. Conflict resolution provisions in our charter and policies adopted by our board of directors include, among others, the following:
| We will not purchase or lease properties from our sponsor, our advisor, any of our directors or any of their respective affiliates unless a majority of the directors, including a majority of the independent directors, not otherwise interested in such transaction determines that such transaction is fair and reasonable to us and at a price to us no greater than the cost of the property to the seller or lessor, unless |
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there is substantial justification for any amount that exceeds such cost and such excess amount is determined to be reasonable. In no event will we acquire any property at an amount in excess of its current appraised value. We will not sell or lease properties to our sponsor, our advisor, any of our directors or any of their respective affiliates unless a majority of the directors, including a majority of the independent directors, not otherwise interested in the transaction determines that the transaction is fair and reasonable to us. |
| We will not make any loans to our sponsor, our advisor, any of our directors or any of their respective affiliates, except that we may make or invest in mortgage loans involving our sponsor, our advisor, our directors or their respective affiliates, provided, among other things, that an appraisal of the underlying property is obtained from an independent appraiser and the transaction is approved by a majority of the directors, including a majority of the independent directors, not otherwise interested in such transaction as fair and reasonable to us and on terms no less favorable to us than those available from unaffiliated third parties. In addition, our sponsor, our advisor, any of our directors and any of their respective affiliates will not make loans to us or to joint ventures in which we are a joint venture partner unless approved by a majority of our directors, including a majority of the independent directors, not otherwise interested in the transaction as fair, competitive and commercially reasonable, and no less favorable to us than comparable loans between unaffiliated parties. |
| Our advisor and its affiliates will be entitled to reimbursement, at cost, for actual expenses incurred by them on behalf of us or joint ventures in which we are a joint venture partner; provided, however, our advisor must reimburse us for the amount, if any, by which our total operating expenses, including the advisor asset management fee, paid during the immediately prior four consecutive fiscal quarters exceeded the greater of: (i) 2% of our average invested assets for such year, or (ii) 25% of our net income, before any additions to reserves for depreciation, bad debts or other similar non-cash reserves and excluding any gain from the sale of our assets, for such year. |
| In the event that an investment opportunity becomes available that may be suitable for both us and one or more other Cole-sponsored program, and for which more than one of such entities has sufficient uninvested funds, then our advisor and the advisors of the other programs, with oversight by their respective boards of directors, will examine the following factors, among others, in determining the entity for which the investment opportunity is most appropriate: |
| the investment objective of each entity; |
| the anticipated operating cash flows of each entity and the cash requirements of each entity; |
| the effect of the acquisition both on diversification of each entitys investments by type of property, geographic area and tenant concentration; |
| the amount of funds available to each program and the length of time such funds have been available for investment; |
| the policy of each entity relating to leverage of properties; |
| the income tax effects of the purchase to each entity; and |
| the size of the investment. |
If, in the judgment of the advisors, the investment opportunity may be equally appropriate for more than one program, then the entity that has had the longest period of time elapse since it was offered an investment opportunity will first be offered such investment opportunity.
If a subsequent development, such as a delay in the closing of the acquisition or a delay in the construction of a property, causes any such investment, in the opinion of the advisors, to be more appropriate for an entity other than the entity that committed to make the investment, the advisors may determine that another Cole-sponsored program will make the investment. Our board of directors, including the independent directors, has a
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duty to ensure that the method used for the allocation of the acquisition of properties by two or more programs seeking to acquire similar types of properties is applied fairly to us.
| We will not enter into any other transaction with our sponsor, our advisor, any of our directors or any of their affiliates, including the acceptance of goods or services from our sponsor, our advisor, any of our directors or any of their affiliates, unless a majority of our directors, including a majority of the independent directors, not otherwise interested in the transaction approve such transaction as fair and reasonable to us and on terms and conditions not less favorable to us than those available from unaffiliated third parties. |
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INVESTMENT OBJECTIVES AND POLICIES
Investment Objectives
Our primary investment objectives are:
| to acquire quality commercial real estate properties, net leased under long-term leases to creditworthy tenants, which provide current operating cash flows; |
| to provide reasonably stable, current income for you through the payment of cash distributions; and |
| to provide the opportunity to participate in capital appreciation in the value of our investments. |
We may not achieve any of these objectives. See the Risk Factors section of this prospectus.
Our Potential Competitive Strengths
We believe that we will be able to distinguish ourselves from other owners, operators and acquirers of retail and other income-producing properties. We believe our long-term success will be supported through the following potential competitive strengths:
| Coles Disciplined Investment Approach. Mr. Cole began investing in commercial real estate in 1979, focusing primarily on retail and office properties, and raw land in the metropolitan Phoenix area. From 1979 until the end of 1999, Mr. Cole, together with various investment partners, acquired 78 commercial properties and raw land. During that time, Mr. Cole founded what is now Cole Real Estate Investments. From 2003 until the end of 2012, our sponsors real estate programs acquired 2,090 commercial properties, predominantly in the retail sector. See the section of this prospectus captioned Prior Performance Summary for a discussion of the historical experience of the real estate programs managed over the last ten years by our sponsor. Under Mr. Coles leadership, our sponsor developed an investment approach that focuses on acquiring single-tenant necessity corporate properties subject to long-term net leases to creditworthy tenants. In addition, our sponsors investment strategy targets properties that typically have high occupancy rates (greater than 90%) and low to moderate leverage (0% to 50% loan to value). While our sponsor historically has applied its investment approach predominantly in the retail sector, our sponsor has utilized this investment approach in the office and industrial sectors as well. We expect that our advisor will apply this disciplined investment approach to our investments in necessity retail and other income-producing properties. |
| Experienced Advisor. Mr. Roberts, our advisors executive vice president and head of real estate investments, has more than 25 years of commercial real estate experience, and leads a team of experienced real estate industry professionals. Additionally, our advisors executive management team has extensive public company operating experience, with several of its senior executives having held senior positions at publicly held REITs. |
| Successful Credit Underwriting Experience. Our sponsor has demonstrated an ability to successfully underwrite the tenants that occupy the real estate assets of Cole-sponsored real estate programs. The combined portfolios of CCPT I, CCPT II, CCPT III, CCIT and Cole Income NAV Strategy had a 98% occupancy rate as of December 31, 2012. |
| Strong Industry Relationships. We believe that our advisors extensive network of industry relationships with the real estate brokerage, development and investor communities will enable us to successfully execute our acquisition and investment strategies. These relationships augment our advisors ability to source acquisitions in off-market transactions outside of competitive marketing processes, capitalize on development opportunities and capture repeat business and transaction activity. Our advisors strong relationships with the tenant and leasing brokerage communities are expected to aid in attracting and retaining tenants. |
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| Ability to Purchase Properties for Cash. We expect that one of our competitive advantages will be our ability to purchase properties for cash and to close transactions quickly. We believe our ability to purchase properties for cash will expedite our acquisition process and make us an attractive purchaser to potential sellers of properties. While we have not yet raised a substantial amount of capital, Cole Capital Corporation, the broker-dealer affiliate of our sponsor, has successfully raised capital for other Cole-sponsored real estate programs, and we expect that, through its well-developed distribution capabilities and relationships with other broker-dealers, Cole Capital Corporation will be successful in selling shares on our behalf. |
While we believe that these factors will help distinguish us from our competitors and contribute to our long-term success, there is no guarantee that they will provide us with any actual competitive advantages.
Liquidity Opportunities
Following the completion of our public offering and the investment of the proceeds, we expect that our board of directors will consider potential strategic options to provide our stockholders with liquidity in connection with its oversight of our investment portfolio and operations. These options may include the sale of our company, the sale of all or substantially all of our assets, a merger or similar transaction, the listing of our shares of common stock for trading on a national securities exchange or an alternative strategy that would result in a significant increase in the opportunities for stockholders to dispose of their shares. We expect to engage in a strategy to provide our investors with liquidity at a time and in a method recommended by our advisor and determined by our independent directors to be in the best interests of our stockholders. As we are unable to determine what macro- or micro- economic factors may affect the decisions our board of directors make in the future with respect to any potential liquidity opportunity, we have not selected a fixed time period or determined criteria for any such decisions. As a result, while our board of directors will consider a variety of options to provide stockholders with liquidity throughout the life of this program, there is no requirement that we commence any such action on or before a specified date. Stockholder approval would be required for the sale of all or substantially all of our assets, or the sale or merger of our company.
Acquisition and Investment Policies
Types of Investments
We invest primarily in income-producing necessity retail properties that are single-tenant or multi-tenant power centers, which are leased to national and regional creditworthy tenants under long-term leases, and are strategically located throughout the United States and U.S. protectorates. Necessity retail properties are properties leased to retail tenants that attract consumers for everyday needs, such as pharmacies, home improvement stores, national superstores, restaurants and regional retailers.
For over three decades, our sponsor, Cole Real Estate Investments, has developed and utilized this investment approach in acquiring and managing core commercial real estate assets primarily in the retail sector but in the office and industrial sectors as well. We believe that our sponsors experience in assembling real estate portfolios, which principally focus on national and regional creditworthy tenants subject to long-term leases, will provide us with a competitive advantage. In addition, our sponsor has built a business of over 350 employees, who are experienced in the various aspects of acquiring, financing and managing commercial real estate, and that our access to these resources also will provide us with an advantage.
We also may invest in other income-producing properties, such as office and industrial properties, which may share certain core characteristics with our retail investments, such as a principal creditworthy tenant, a long-term net lease, and a strategic location. We believe investments in these types of office and industrial properties, which are essential to the business operations of the tenant, are consistent with our goal of providing investors with a relatively stable stream of current income and an opportunity for capital appreciation.
We may further diversify our portfolio by making and investing in mortgage, bridge or mezzanine loans, or in participations in such loans, secured directly or indirectly by the same types of commercial properties that we
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may acquire directly, and we may invest in other real estate-related securities. We may acquire properties under development or that require substantial refurbishment or renovation. We also may acquire majority or minority interests in other entities (or business units of such entities) with investment objectives similar to ours or with management, investment or development capabilities that our advisor deems desirable or advantageous to acquire. We will not forgo a high quality investment because it does not precisely fit our expected portfolio composition. Our board of directors has broad discretion to change our investment policies in order for us to achieve our investment objectives.
Many of our properties are and we anticipate that future properties will be leased to tenants in the chain or franchise retail industry, including but not limited to convenience stores, drug stores and restaurant properties, as well as leased to large national retailers as stand alone properties or as part of so-called power centers, which are comprised of big box national, regional and local retailers. Our advisor will monitor industry trends and identify properties on our behalf that serve to provide a favorable return balanced with risk. Our management is expected primarily to target regional or national name brand retail businesses with established track records. We generally intend to hold each property for a period in excess of seven years.
We believe that our general focus on the acquisition of a large number of single-tenant and multi-tenant necessity retail properties net leased to creditworthy tenants presents lower investment risks and greater stability than other sectors of todays commercial real estate market. By acquiring a large number of single-tenant and multi-tenant retail properties, we believe that lower than expected results of operations from one or a few investments will not necessarily preclude our ability to realize our investment objective of cash flow from our overall portfolio. We believe this approach can result in less risk to investors than an investment approach that targets other asset classes. In addition, we believe that retail properties under long-term triple net and double net leases offer a distinct investment advantage since these properties generally require less management and operating capital, have less recurring tenant turnover and, with respect to single-tenant properties, often offer superior locations that are less dependent on the financial stability of adjoining tenants. In addition, since we intend to acquire properties that are geographically diverse, we expect to minimize the potential adverse impact of economic slow downs or downturns in local markets. Our management believes that a portfolio consisting of both freestanding, single-tenant retail properties and multi-tenant retail properties anchored by large national retailers will enhance our liquidity opportunities for investors by making the sale of individual properties, multiple properties or our investment portfolio as a whole attractive to institutional investors and by making a possible listing of our shares attractive to the public investment community.
To the extent feasible, we will seek to achieve a well-balanced portfolio diversified by geographic location, age and lease maturities of the various properties. We will pursue properties leased to tenants representing a variety of retail industries to avoid concentration in any one industry. These industries may include all types of retail establishments, such as big box retailers, convenience stores, drug stores and restaurant properties. We also will seek to diversify our tenants among national, regional and local brands. We generally expect to target properties with lease terms in excess of ten years. We may acquire properties with shorter lease terms if the property is in an attractive location, if the property is difficult to replace, or if the property has other significant favorable attributes. We expect that these investments will provide long-term value by virtue of their size, location, quality and condition, and lease characteristics. We currently expect that substantially all of our acquisitions will be in the United States, including U.S. protectorates.
Many retail companies today are entering into sale-leaseback arrangements as a strategy for applying capital that would otherwise be applied to their real estate holdings to their core operating businesses. We believe that our investment strategy will enable us to take advantage of the increased emphasis on retailers core business operations in todays competitive corporate environment as many retailers attempt to divest from real estate assets.
There is no limitation on the number, size or type of properties that we may acquire or on the percentage of net proceeds of this offering that may be invested in a single property. The number and mix of properties
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comprising our portfolio will depend upon real estate market conditions and other circumstances existing at the time we acquire properties, and the amount of proceeds we raise in this offering. We are not restricted to investments in corporate properties. We will not forego a high quality investment because it does not precisely fit our expected portfolio composition. See Other Possible Investments below for a description of other types of real estate and real estate-related investments we may make.
We intend to incur debt to acquire properties where our advisor determines that incurring such debt is in our best interests. In addition, from time to time, we may acquire some properties without financing and later incur mortgage debt secured by one or more of such properties if favorable financing terms are available. We will use the proceeds from these loans to acquire additional properties. See Borrowing Policies below for a more detailed description of our borrowing intentions and limitations.
Real Estate Underwriting Process
In evaluating potential property acquisitions consistent with our investment objectives, our advisor will apply a well-established underwriting process to determine the creditworthiness of potential tenants. Similarly, our advisor will apply credit underwriting criteria to possible new tenants when we are re-leasing properties in our portfolio. Many of the tenants of our properties are and we expect will continue to be national or regional retail chains that are creditworthy entities having high net worth and operating income. Our advisors underwriting process includes analyzing the financial data and other available information about the tenant, such as income statements, balance sheets, net worth, cash flow, business plans, data provided by industry credit rating services, and/or other information our advisor may deem relevant. Generally, these tenants must have a proven track record in order to meet the credit tests applied by our advisor. In addition, we may obtain guarantees of leases by the corporate parent of the tenant, in which case our advisor will analyze the creditworthiness of the guarantor. In many instances, especially in sale-leaseback situations, where we are acquiring a property from a company and simultaneously leasing it back to the company under a long-term lease, we will meet with the senior management to discuss the companys business plan and strategy.
When using debt rating agencies, a tenant typically will be considered creditworthy when the tenant has an investment grade debt rating by Moodys of Baa3 or better, credit rating by Standard & Poors of BBB- or better, or its payments are guaranteed by a company with such rating. Changes in tenant credit ratings, coupled with future acquisition and disposition activity, may increase or decrease our concentration of creditworthy tenants in the future.
Moodys ratings are opinions of future relative creditworthiness based on an evaluation of franchise value, financial statement analysis and management quality. The rating given to a debt obligation describes the level of risk associated with receiving full and timely payment of principal and interest on that specific debt obligation and how that risk compares with that of all other debt obligations. The rating, therefore, provides one measure of the ability of a company to generate cash in the future.
A Moodys debt rating of Baa3, which is the lowest investment grade rating given by Moodys, is assigned to companies which, in Moodys opinion, have adequate financial security. However, certain protective elements may be lacking or may be unreliable over any given period of time. A Moodys debt rating of AAA, which is the highest investment grade rating given by Moodys, is assigned to companies that, in Moodys opinion, have exceptional financial security. Thus, investment grade tenants will be judged by Moodys to have at least adequate financial security, and will in some cases have exceptional financial security.
Standard & Poors assigns a credit rating to companies and to each issuance or class of debt issued by a rated company. A Standard & Poors credit rating of BBB-, which is the lowest investment grade rating given by Standard & Poors, is assigned to companies that, in Standard & Poors opinion, exhibit adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the company to meet its financial commitments. A Standard & Poors credit rating of
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AAA+, which is the highest investment grade rating given by Standard & Poors, is assigned to companies that, in Standard & Poors opinion, have extremely strong capacities to meet their financial commitments. Thus, investment grade tenants will be judged by Standard & Poors to have at least adequate protection parameters, and will in some cases have extremely strong financial positions.
While we will utilize ratings by Moodys and Standard & Poors as one factor in determining whether a tenant is creditworthy, our advisor will also consider other factors in determining whether a tenant is creditworthy, for the purpose of meeting our investment objectives. Our advisors underwriting process also will consider information provided by other debt or credit rating agencies, such as Dun & Bradstreet, along with our advisors own analysis of the financial condition of the tenant and/or the guarantor, the operating history of the property with the tenant, the tenants market share and track record within the tenants industry segment, the general health and outlook of the tenants industry segment, the strength of the tenants management team and the terms and length of the lease at the time of the acquisition. These factors may cause us to consider a prospective tenant to be creditworthy even if it does not have an investment grade rating.
Description of Leases
We expect, in most instances, to continue to acquire tenant properties with existing double net or triple net leases. Net leases means leases that typically require tenants to pay all or a majority of the operating expenses, including real estate taxes, special assessments and sales and use taxes, utilities, maintenance, insurance and building repairs related to the property, in addition to the lease payments. Triple net leases typically require the tenant to pay all costs associated with a property in addition to the base rent and percentage rent, if any, including capital expenditures for the roof and the building structure. Double net leases typically hold the landlord responsible for the capital expenditures for the roof and structure, while the tenant is responsible for all lease payments and remaining operating expenses associated with the property. We expect that double net and triple net leases will help ensure the predictability and stability of our expenses, which we believe will result in greater predictability and stability of our cash distributions to stockholders. Not all of our leases will be net leases. In respect of multi-tenant properties, we expect to have a variety of lease arrangements with the tenants of these properties. Since each lease is an individually negotiated contract between two or more parties, each lease will have different obligations of both the landlord and tenant. Many large national tenants have standard lease forms that generally do not vary from property to property. We will have limited ability to revise the terms of leases to those tenants. We expect that multi-tenant office space is likely to be subject to gross leases. Gross leases means leases that typically require the tenant to pay a flat rental amount and we would pay for all property charges regularly incurred as a result of our owning the property. Not all of our leases will be net leases. When spaces in a property become vacant, existing leases expire, or we acquire properties under development or requiring substantial refurbishment or renovation, we anticipate entering into net leases.
Typically, we expect to enter into leases that have terms of ten years or more. We may acquire properties under which the lease term has partially expired. We also may acquire properties with shorter lease terms if the property is in an attractive location, if the property is difficult to replace, or if the property has other significant favorable real estate attributes. Under most commercial leases, tenants are obligated to pay a predetermined annual base rent. Some of the leases also will contain provisions that increase the amount of base rent payable at points during the lease term. We expect that many of our leases will contain periodic rent increases. Generally, the leases require each tenant to procure, at its own expense, commercial general liability insurance, as well as property insurance covering the building for the full replacement value and naming the ownership entity and the lender, if applicable, as the additional insured on the policy. Tenants will be required to provide proof of insurance by furnishing a certificate of insurance to our advisor on an annual basis. The insurance certificates will be tracked and reviewed for compliance by our advisors property and risk management departments. As a precautionary measure, we may obtain, to the extent available, secondary liability insurance, as well as loss of rents insurance that covers one year of annual rent in the event of a rental loss.
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Some leases may require that we procure insurance for both commercial general liability and property damage; however, generally the premiums are fully reimbursable from the tenant. In such instances, the policy will list us as the named insured and the tenant as the additional insured.
We do not expect to permit leases to be assigned or subleased without our prior written consent. If we do consent to an assignment or sublease, generally we expect the terms of such consent to provide that the original tenant will remain fully liable under the lease unless we release that original tenant from its obligations.
We may purchase properties and lease them back to the sellers of such properties. While we intend to use our best efforts to structure any such sale-leaseback transaction so that the lease will be characterized as a true lease and so that we are treated as the owner of the property for federal income tax purposes, the Internal Revenue Service could challenge this characterization. In the event that any sale-leaseback transaction is re-characterized as a financing transaction for federal income tax purposes, deductions for depreciation and cost recovery relating to such property would be disallowed, and in certain circumstances, we could lose our REIT status. See the Federal Income Tax Considerations Sale-Leaseback Transactions section of this prospectus.
Investment Decisions
Our advisor has substantial discretion with respect to the selection of our specific investments, subject to our investment and borrowing policies, and our policies are approved by our board of directors. In pursuing our investment objectives and making investment decisions on our behalf, our advisor evaluates the proposed terms of the investment against all aspects of the transaction, including the condition and financial performance of the asset, the terms of existing leases and the creditworthiness of the tenant, and property location and characteristics. Because the factors considered, including the specific weight we place on each factor, vary for each potential investment, we do not, and are not able to, assign a specific weight or level of importance to any particular factor.
Our advisor will procure and review an independent valuation estimate on the proposed investment. In addition, our advisor, to the extent such information is available, will consider the following:
| tenant rolls and tenant creditworthiness; |
| a property condition report; |
| unit level store performance; |
| property location, visibility and access; |
| age of the property, physical condition and curb appeal; |
| neighboring property uses; |
| local market conditions, including vacancy rates; |
| area demographics, including trade area population and average household income; |
| neighborhood growth patters and economic conditions; |
| presence of nearby properties that may positively or negatively impact store sales at the subject property; and |
| lease terms, including length of lease term, scope of landlord responsibilities, presence and frequency of contractual rental increases, renewal option provisions, exclusive and permitted use provisions, co-tenancy requirements and termination options. |
Our advisor will review the terms of each existing lease by considering various factors, including:
| rent escalations; |
| remaining lease term; |
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| renewal option terms; |
| tenant purchase options; |
| termination options; |
| scope of the landlords maintenance, repair and replacement requirements; |
| projected net cash flow yield; and |
| projected internal rates of return. |
Our board of directors has adopted a policy to prohibit acquisitions from affiliates of our advisor except in limited circumstances. See the section of this prospectus captioned Conflicts of Interest Transactions with Our Advisor and its Affiliates.
Conditions to Closing Our Acquisitions
Generally, we condition our obligation to close the purchase of any investment on the delivery and verification of certain documents from the seller or developer, including, where appropriate:
| plans and specifications; |
| surveys; |
| evidence that title to the property can be freely sold or otherwise transferred to us, subject to such liens and encumbrances as are acceptable to our advisor; |
| financial statements covering recent operations of properties having operating histories; |
| title and liability insurance policies; and |
| certificates of the tenant attesting that the tenant believes that, among other things, the lease is valid and enforceable. |
In addition, we will take such steps as we deem necessary with respect to potential environmental matters. See the section of this prospectus captioned Environmental Matters below.
We may enter into purchase and sale arrangements with a seller or developer of a suitable property under development or construction. In such cases, we will be obligated to purchase the property at the completion of construction, provided that the construction conforms to definitive plans, specifications, and costs approved by us in advance. In such cases, prior to our acquiring the property, we generally would receive a certificate of an architect, engineer or other appropriate party, stating that the property complies with all plans and specifications. If renovation or remodeling is required prior to the purchase of a property, we expect to pay a negotiated maximum amount to the seller upon completion. We do not currently intend to construct or develop properties or to render any services in connection with such development or construction but we may do so in the future.
In determining whether to purchase a particular property, we may, in accordance with customary practices, obtain an option to purchase such property. The amount paid for an option, if any, normally is forfeited if the property is not purchased and normally is credited against the purchase price if the property is purchased.
In the purchasing, leasing and developing of properties, we are subject to risks generally incident to the ownership of real estate. See the Risk Factors General Risks Related to Investments in Real Estate section of this prospectus.
Ownership Structure
Our investments in real estate generally take the form of holding fee title or a long-term leasehold estate. We have acquired, and expect to continue to acquire, such interests either directly through our operating partnership or indirectly through limited liability companies, limited partnerships or other entities owned and/or
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controlled by our operating partnership. We may acquire properties by acquiring the entity that holds the desired properties. We also may acquire properties through investments in joint ventures, partnerships, co-tenancies or other co-ownership arrangements with third parties, including the developers of the properties or affiliates of our advisor. See the section captioned Our Operating Partnership Agreement in this prospectus and the Joint Venture Investments section below.
Joint Venture Investments
We may enter into joint ventures, partnerships, co-tenancies and other co-ownership arrangements with affiliated entities of our advisors, including other real estate programs sponsored by affiliates of our advisor, and other third parties for the acquisition, development or improvement of properties or the acquisition of other real estate-related investments. We may also enter into such arrangements with real estate developers, owners and other unaffiliated third parties for the purpose of developing, owning and operating real properties. In determining whether to invest in a particular joint venture, our advisor will evaluate the underlying real property or other real estate-related investment using the same criteria described above in Investment Decisions for the selection of our real property investments. Our advisor also will evaluate the joint venture or co-ownership partner and the proposed terms of the joint venture or a co-ownership arrangement.
Our general policy is to invest in joint ventures only when we will have an option or contract to purchase, or a right of first refusal to purchase, the property held by the joint venture or the co-venturers interest in the joint venture if the co-venturer elects to sell such interest. In the event that the co-venturer elects to sell all or a portion of the interests held in any such joint venture, however, we may not have sufficient funds to exercise our right of first refusal to buy the other co-venturers interest in the joint venture. In the event that any joint venture with an affiliated entity holds interests in more than one asset, the interest in each such asset may be specially allocated between us and the joint venture partner based upon the respective proportion of funds deemed invested by each co-venturer in each such asset.
Our advisors officers and key persons may have conflicts of interest in determining which Cole-sponsored program should enter into any particular joint venture agreement. The co-venturer may have economic or business interests or goals that are or may become inconsistent with our business interests or goals. In addition, our advisors officers and key persons may face a conflict in structuring the terms of the relationship between our interests and the interest of the affiliated co-venturer and in managing the joint venture. Since some or all of our advisors officers and key persons will also advise the affiliated co-venturer, agreements and transactions between us and any other Cole-sponsored co-venturer will not have the benefit of arms-length negotiation of the type normally conducted between unrelated co-venturers, which may result in the co-venturer receiving benefits greater than the benefits that we receive. In addition, we may assume liabilities related to the joint venture that exceed the percentage of our investment in the joint venture.
We may enter into joint ventures with other Cole real estate programs, or with our sponsor, our advisor, one or more of our directors, or any of their respective affiliates, only if a majority of our directors (including a majority of our independent directors) not otherwise interested in the transaction approve the transaction as being fair and reasonable to us and on substantially the same terms and conditions as those received by unaffiliated joint venturers, and the cost of our investment must be supported by a current appraisal of the asset.
Development and Construction of Properties
We may invest in properties on which improvements are to be constructed or completed or which require substantial renovation or refurbishment. We expect that joint ventures would be the exclusive vehicle through which we would invest in build-to-suit properties. Our general policy is to structure them as follows:
| we may enter into a joint venture with third parties who have an executed lease with the developer who has an executed lease in place with the future tenant whereby we will provide a portion of the equity or debt financing; |
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| we would accrue a preferred return during construction on any equity investment; |
| the properties will be developed by third parties; and |
| consistent with our general policy regarding joint venture investments, we would have an option or contract to purchase, or a right of first refusal to purchase, the property or co-investors interest. |
It is possible that joint venture partners may resist granting us a right of first refusal or may insist on a different methodology for unwinding the joint venture if one of the parties wishes to liquidate its interest.
In the event that we elect to engage in development or construction projects, in order to help ensure performance by the builders of properties that are under construction, completion of such properties will be guaranteed at the contracted price by a completion guaranty, completion bond or performance bond. Our advisor may rely upon the substantial net worth of the contractor or developer or a personal guarantee accompanied by financial statements showing a substantial net worth provided by an affiliate of the person entering into the construction or development contract as an alternative to a completion bond or performance bond. Development of real estate properties is subject to risks relating to a builders ability to control construction costs or to build in conformity with plans, specifications and timetables. See the Risk Factors General Risks Related to Investments in Real Estate section of this prospectus.
We may make periodic progress payments or other cash advances to developers and builders of our properties prior to completion of construction only upon receipt of an architects certification as to the percentage of the project then completed and as to the dollar amount of the construction then completed. We intend to use such additional controls on disbursements to builders and developers as we deem necessary or prudent. We may directly employ one or more project managers, including our advisor or an affiliate of our advisor, to plan, supervise and implement the development of any unimproved properties that we may acquire. Such persons would be compensated directly by us or through an affiliate of our advisor and reimbursed by us. In either event, the compensation would reduce the amount of any construction fee, development fee or acquisition fee that we would otherwise pay to our advisor or its affiliate.
In addition, we may invest in unimproved properties, provided that we will not invest more than 10% of our total assets in unimproved properties or in mortgage loans secured by such properties. We will consider a property to be an unimproved property if it was not acquired for the purpose of producing rental or other operating cash flows, has no development or construction in process at the time of acquisition and no development or construction is planned to commence within one year of the acquisition.
Environmental Matters
All real property and the operations conducted on real property are subject to federal, state and local laws and regulations relating to environmental protection and human health and safety. These laws and regulations generally govern wastewater discharges, air emissions, the operation and removal of underground and above-ground storage tanks, the use, storage, treatment, transportation and disposal of solid and hazardous materials, the presence and release of hazardous substances and the remediation of contamination associated with disposals. State and federal laws in this area are constantly evolving, and we intend to take commercially reasonable steps to protect ourselves from the impact of these laws.
We generally will not purchase any property unless and until we also obtain what is generally referred to as a Phase I environmental site assessment and are generally satisfied with the environmental status of the property. However, we may purchase a property without obtaining such assessment if our advisor determines the assessment is not necessary because there is an existing recent Phase I site assessment. A Phase I environmental site assessment basically consists of a visual survey of the building and the property in an attempt to identify areas of potential environmental concerns, visually observing neighboring properties to assess surface conditions or activities that may have an adverse environmental impact on the property interviewing the key site manager
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and/or property owner, contacting local governmental agency personnel and performing an environmental regulatory database search in an attempt to determine any known environmental concerns in, and in the immediate vicinity of, the property. A Phase I environmental site assessment does not generally include any sampling or testing of soil, ground water or building materials from the property and may not reveal all environmental hazards on a property.
In the event the Phase I site assessment uncovers potential environmental problems with a property, our advisor will determine whether we will pursue the investment opportunity and whether we will have a Phase II environmental site assessment performed. The factors we may consider in determining whether to conduct a Phase II site assessment include, but are not limited to, (i) the types of operations conducted on the property and surrounding property, (ii) the time, duration and materials used during such operations, (iii) the waste handling practices of any tenants or property owners, (iv) the potential for hazardous substances to be released into the environment, (v) any history of environmental law violations on the subject property and surrounding property, (vi) any documented environmental releases, (vii) any observations from the consultant that conducted the Phase I environmental site assessment, and (viii) whether any party (i.e. surrounding property owners, prior owners or tenants) may be responsible for addressing the environmental conditions. We will determine whether to conduct a Phase II environmental site assessment on a case by case basis.
We expect that some of the properties that we acquire may contain, at the time of our investment, or may have contained prior to our investment, underground storage tanks for the storage of petroleum products and other hazardous or toxic substances. All of these operations create a potential for the release of petroleum products or other hazardous or toxic substances. Some of our potential properties may be adjacent to or near other properties that have contained or then currently contain underground storage tanks used to store petroleum products or other hazardous or toxic substances. In addition, certain of our potential properties may be on or adjacent to or near other properties upon which others, including former owners or tenants of our properties, have engaged, or may in the future engage, in activities that may release petroleum products or other hazardous or toxic substances.
From time to time, we may acquire properties, or interests in properties, with known adverse environmental conditions where we believe that the environmental liabilities associated with these conditions are quantifiable and that the acquisition will yield a superior risk-adjusted return. In such an instance, we will estimate the costs of environmental investigation, clean-up and monitoring in determining the purchase price. Further, in connection with property dispositions, we may agree to remain responsible for, and to bear the cost of, remediating or monitoring certain environmental conditions on the properties.
Other Possible Investments
Although we expect to invest primarily in real estate, our portfolio may also include other real estate-related investments, such as mortgage, mezzanine, bridge and other loans and securities related to real estate assets, frequently, but not necessarily always, in the corporate sector, to the extent such assets do not cause us to lose our REIT status or cause us to be an investment company under the Investment Company Act. We may make adjustments to our target portfolio based on real estate market conditions and investment opportunities. Thus, to the extent that our advisor presents us with high quality investment opportunities that allow us to meet the REIT requirements under the Internal Revenue Code and do not cause us, our operating partnership, or any other subsidiaries to meet the definition of an investment company under the Investment Company Act, our portfolio composition may vary from what we initially expect. Our board of directors has broad discretion to change our investment policies in order for us to achieve our investment objectives.
Investing in and Originating Loans. The criteria that our advisor will use in making or investing in loans on our behalf is substantially the same as those involved in acquiring properties for our portfolio. We do not intend to make loans to other persons, to underwrite securities of other issuers or to engage in the purchase and sale of any types of investments other than those relating to real estate. However, unlike our property investments
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which we expect to hold in excess of seven years, we expect that the average duration of loans will typically be one to five years.
We do not expect to make or invest in loans that are not directly or indirectly secured by real estate. We will not make or invest in mortgage loans on any one property if the aggregate amount of all mortgage loans outstanding on the property, including our loan, would exceed an amount equal to 85% of the appraised value of the property, as determined by an independent third party appraiser, unless we find substantial justification due to other underwriting criteria. We may find such justification in connection with the purchase of loans in cases in which we believe there is a high probability of our foreclosure upon the property in order to acquire the underlying assets and in which the cost of the loan investment does not exceed the fair market value of the underlying property. We will not invest in or make loans unless an appraisal has been obtained concerning the underlying property, except for those loans insured or guaranteed by a government or government agency. In cases in which a majority of our independent directors so determine and in the event the transaction is with our advisor, any of our directors or their respective affiliates, the appraisal will be obtained from a certified independent appraiser to support its determination of fair market value.
We may invest in first, second and third mortgage loans, mezzanine loans, bridge loans, wraparound mortgage loans, construction mortgage loans on real property, and loans on leasehold interest mortgages. However, we will not make or invest in any loans that are subordinate to any mortgage or equity interest of our advisor or any of its or our affiliates. We also may invest in participations in mortgage loans. A mezzanine loan is a loan made in respect of certain real property but is secured by a lien on the ownership interests of the entity that, directly or indirectly, owns the real property. A bridge loan is short term financing, for an individual or business, until permanent or the next stage of financing, can be obtained. Second mortgage and wraparound loans are secured by second or wraparound deeds of trust on real property that is already subject to prior mortgage indebtedness. A wraparound loan is one or more junior mortgage loans having a principal amount equal to the outstanding balance under the existing mortgage loan, plus the amount actually to be advanced under the wraparound mortgage loan. Under a wraparound loan, we would generally make principal and interest payments on behalf of the borrower to the holders of the prior mortgage loans. Third mortgage loans are secured by third deeds of trust on real property that is already subject to prior first and second mortgage indebtedness. Construction loans are loans made for either original development or renovation of property. Construction loans in which we would generally consider an investment would be secured by first deeds of trust on real property for terms of six months to two years. Loans on leasehold interests are secured by an assignment of the borrowers leasehold interest in the particular real property. These loans are generally for terms of from six months to 15 years. The leasehold interest loans are either amortized over a period that is shorter than the lease term or have a maturity date prior to the date the lease terminates. These loans would generally permit us to cure any default under the lease. Mortgage participation investments are investments in partial interests of mortgages of the type described above that are made and administered by third-party mortgage lenders.
In evaluating prospective loan investments, our advisor will consider factors such as the following:
| the ratio of the investment amount to the underlying propertys value; |
| the propertys potential for capital appreciation; |
| expected levels of rental and occupancy rates; |
| the condition and use of the property; |
| current and projected cash flow of the property; |
| potential for rent increases; |
| the degree of liquidity of the investment; |
| the propertys income-producing capacity; |
| the quality, experience and creditworthiness of the borrower; |
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| general economic conditions in the area where the property is located; |
| in the case of mezzanine loans, the ability to acquire the underlying real property; and |
| other factors that our advisor believes are relevant. |
In addition, we will seek to obtain a customary lenders title insurance policy or commitment as to the priority of the mortgage or condition of the title. Because the factors considered, including the specific weight we place on each factor, will vary for each prospective loan investment, we do not, and are not able to, assign a specific weight or level of importance to any particular factor.
We may originate loans from mortgage brokers or personal solicitations of suitable borrowers, or may purchase existing loans that were originated by other lenders. Our advisor will evaluate all potential loan investments to determine if the security for the loan and the loan-to-value ratio meets our investment criteria and objectives. Most loans that we will consider for investment would provide for monthly payments of interest and some may also provide for principal amortization, although many loans of the nature that we will consider provide for payments of interest only and a payment of principal in full at the end of the loan term. We will not originate loans with negative amortization provisions.
We do not have any policies directing the portion of our assets that may be invested in construction loans, mezzanine loans, bridge loans, loans secured by leasehold interests and second, third and wraparound mortgage loans. However, we recognize that these types of loans are riskier than first deeds of trust or first priority mortgages on income-producing, fee-simple properties, and we expect to minimize the amount of these types of loans in our portfolio, to the extent that we make or invest in loans at all. Our advisor will evaluate the fact that these types of loans are riskier in determining the rate of interest on the loans. We do not have any policy that limits the amount that we may invest in any single loan or the amount we may invest in loans to any one borrower. We are not limited as to the amount of gross offering proceeds that we may use to invest in or originate loans.
Our loan investments may be subject to regulation by federal, state and local authorities and subject to various laws and judicial and administrative decisions imposing various requirements and restrictions, including among other things, regulating credit granting activities, establishing maximum interest rates and finance charges, requiring disclosures to customers, governing secured transactions and setting collection, repossession and claims handling procedures and other trade practices. In addition, certain states have enacted legislation requiring the licensing of mortgage bankers or other lenders and these requirements may affect our ability to effectuate our proposed investments in loans. Commencement of operations in these or other jurisdictions may be dependent upon a finding of our financial responsibility, character and fitness. We may determine not to make loans in any jurisdiction in which the regulatory authority determines that we have not complied in all material respects with applicable requirements.
Investment in Other Real Estate-Related Securities. To the extent permitted by Section V.D.2 of the NASAA REIT Guidelines, and subject to the limitations set forth in this prospectus and in our charter, we may invest in common and preferred real estate-related equity securities of both publicly traded and private real estate companies. Our board of directors (including all of our independent directors) has authorized us to invest in preferred real estate-related equity securities, provided that such investments do not exceed the limitations contained in any credit facility or other agreement to which we are a party. Real estate-related equity securities are generally unsecured and also may be subordinated to other obligations of the issuer. Our investments in real estate-related equity securities will involve special risks relating to the particular issuer of the equity securities, including the financial condition and business outlook of the issuer.
We may also make investments in CMBS to the extent permitted by the NASAA REIT Guidelines. CMBS are securities that evidence interests in, or are secured by, a single commercial mortgage loan or a pool of commercial mortgage loans. CMBS are generally pass-through certificates that represent beneficial ownership
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interests in common law trusts whose assets consist of defined portfolios of one or more commercial mortgage loans. They are typically issued in multiple tranches whereby the more senior classes are entitled to priority distributions from the trusts income. Losses and other shortfalls from expected amounts to be received on the mortgage pool are borne by the most subordinate classes, which receive payments only after the more senior classes have received all principal and/or interest to which they are entitled. CMBS are subject to all of the risks of the underlying mortgage loans. We may invest in investment grade and non-investment grade CMBS classes. Our board of directors has adopted a policy to limit any investments in non-investment grade CMBS to not more than 10% of our total assets.
Borrowing Policies
Our advisor believes that utilizing borrowing is consistent with our investment objective of maximizing the return to investors. By operating on a leveraged basis, we have more funds available for investment in properties. This allows us to make more investments than would otherwise be possible, resulting in a more diversified portfolio.
At the same time, our advisor believes in utilizing leverage in a moderate fashion. While there is no limitation on the amount we may borrow against any single improved property, our charter limits our aggregate borrowings to 75% of the cost (or 300% of net assets) (before deducting depreciation or other non-cash reserves) unless excess borrowing is approved by a majority of the independent directors and disclosed to our stockholders in the next quarterly report along with the justification for such excess borrowing. Consistent with our advisors approach toward the moderate use of leverage, our board of directors has adopted a policy to further limit our borrowings to 60% of the greater of cost (before deducting depreciation or other non-cash reserves) or fair market value of our gross assets, unless excess borrowing is approved by a majority of the independent directors and disclosed to our stockholders in the next quarterly report along with a justification for such excess borrowing. For example, our independent directors may find that we are justified in exceeding these limitations on borrowings during the offering stage, as we will be in the process of raising our equity capital to build our portfolio. Higher debt levels during the offering stage may enable us to acquire properties earlier than we might otherwise be able to acquire them if we were to adhere to these debt levels, which could yield returns that are accretive to the portfolio. In addition, as we will be in the offering stage, more equity could be raised in the future to reduce the debt levels to within the limitations described herein. After we have acquired a substantial portfolio, our advisor will target a leverage of 50% of the greater of cost (before deducting depreciation or other non cash reserves) or fair market value of our gross assets.
Our advisor will use its best efforts to obtain financing on the most favorable terms available to us. Our advisor will have substantial discretion with respect to the financing we obtain, subject to our borrowing policies, which will be approved by our board of directors. Lenders may have recourse to assets not securing the repayment of the indebtedness. Our advisor may refinance properties during the term of a loan only in limited circumstances, such as when a decline in interest rates makes it beneficial to prepay an existing mortgage, when an existing mortgage matures or if an attractive investment becomes available and the proceeds from the refinancing can be used to purchase such investment. The benefits of the refinancing may include increased cash flow resulting from reduced debt service requirements and an increase in property ownership if some refinancing proceeds are reinvested in real estate.
Our ability to increase our diversification through borrowing may be adversely impacted if banks and other lending institutions reduce the amount of funds available for loans secured by real estate. When interest rates on mortgage loans are high or financing is otherwise unavailable on a timely basis, we may purchase properties for cash with the intention of obtaining a mortgage loan for a portion of the purchase price at a later time. To the extent that we do not obtain mortgage loans on our properties, our ability to acquire additional properties will be restricted and we may not be able to adequately diversify our portfolio.
We may not borrow money from any of our directors or from our advisor or its affiliates unless such loan is approved by a majority of the directors not otherwise interested in the transaction (including a majority of the
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independent directors) as fair, competitive and commercially reasonable and no less favorable to us than a comparable loan between unaffiliated parties.
Disposition Policies
We intend to hold each property we acquire for an extended period, generally in excess of seven years. Holding periods for other real estate-related investments may vary. Regardless of intended holding periods, circumstances might arise that could cause us to determine to sell an asset before the end of the expected holding period if we believe the sale of the asset would be in the best interests of our stockholders. The determination of whether a particular asset should be sold or otherwise disposed of will be made after consideration of relevant factors, including prevailing and projected economic conditions, current tenant rolls and tenant creditworthiness, whether we could apply the proceeds from the sale of the asset to make other investments, whether disposition of the asset would increase cash flow, and whether the sale of the asset would be a prohibited transaction under the Internal Revenue Code or otherwise impact our status as a REIT. The selling price of a property that is net leased will be determined in large part by the amount of rent payable under the lease. If a tenant has a repurchase option at a formula price, we may be limited in realizing any appreciation. In connection with our sales of properties we may lend the purchaser all or a portion of the purchase price. In these instances, our taxable income may exceed the cash received in the sale.
Investment Limitations, in General
Our charter places numerous limitations on us with respect to the manner in which we may invest our funds or issue securities. Until we list our shares on a national securities exchange, we:
| will not borrow in excess of 75% of the aggregate cost (or 300% of net assets) (before deducting depreciation or other non-cash reserves) of our gross assets, unless excess borrowing is approved by a majority of our independent directors and disclosed to our stockholders in our next quarterly report along with the justification for such excess borrowing (although our board of directors has adopted a policy to reduce this limit from 75% to 60%); |
| will not make investments in unimproved property or mortgage loans on unimproved property in excess of 10% of our total assets; |
| will not make or invest in mortgage loans unless an appraisal is obtained concerning the underlying property, except for those mortgage loans insured or guaranteed by a government or government agency; |
| will not make or invest in mortgage loans, including construction loans, on any one property if the aggregate amount of all mortgage loans on such property would exceed an amount equal to 85% of the appraised value of such property unless substantial justification exists for exceeding such limit because of the presence of other underwriting criteria; |
| will not invest in indebtedness secured by a mortgage on real property that is subordinate to the lien or other indebtedness of our advisor, any director, our sponsor or any of our affiliates; |
| will not invest in real estate contracts of sale, otherwise known as land sale contracts, unless the contract is in recordable form and is appropriately recorded in the chain of title; |
| will not invest in commodities or commodity futures contracts, except for futures contracts when used solely for the purpose of hedging in connection with our ordinary business of investing in real estate assets and mortgages; |
| will not issue equity securities on a deferred payment basis or other similar arrangement; |
| will not issue debt securities in the absence of adequate cash flow to cover debt service; |
| will not issue shares that are assessable after we have received the consideration for which our board of directors authorized their issuance; |
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| will not issue equity securities redeemable solely at the option of the holder (which restriction has no effect on our share redemption program or the ability of our operating partnership to issue redeemable partnership interests); |
| will not issue options or warrants to our advisor, our directors, our sponsor or any of their respective affiliates except on the same terms as such options or warrants are sold to the general public and provided that such options or warrants do not exceed ten percent of our outstanding shares on the date of grant; |
| will not make any investment that we believe will be inconsistent with our objectives of remaining qualified as a REIT unless and until our board of directors determines, in its sole discretion, that REIT qualification is not in our best interests; |
| will not invest in indebtedness secured by a mortgage on real property which is subordinate to the lien of other indebtedness, except where the amount of the subordinated debt, plus the amount of the senior debt, does not exceed 90% of the appraised value of such property, if after giving effect thereto, the value of all such investments of our company (as shown on our books in accordance with generally accepted accounting principles, after all reasonable reserves but before provision for depreciation) would not then exceed 25% of our tangible assets (and the value of all investments in this type of subordinated debt will be limited to 10% of our tangible assets); |
| will not engage in securities trading, or engage in the business of underwriting or the agency distribution of securities issued by other persons; |
| will not acquire interests in any entity holding investments or engaging in activities prohibited by Article IX of our charter, except for investments in which we hold a non-controlling interest or investments in publicly-traded entities; and |
| will continually review our investment activity to ensure that we are not classified as an investment company under the Investment Company Act. |
In addition, our charter includes many other investment limitations in connection with transactions with affiliated entities or persons, which limitations are described in the Conflicts of Interest section of this prospectus. Our charter also includes restrictions on roll-up transactions, which are described under the Description of Shares section of this prospectus.
Investment Limitations to Avoid Registration as an Investment Company
We intend to conduct our operations, and the operations of our operating partnership, and any other subsidiaries, so that no such entity meets the definition of an investment company under Section 3(a)(1) of the Investment Company Act. Under the Investment Company Act, in relevant part, a company is an investment company if:
| pursuant to Section 3(a)(1)(A), it is, or holds itself out as being, engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting or trading in securities; or |
| pursuant to Section 3(a)(1)(C), it is engaged, or proposes to engage, in the business of investing, reinvesting, owning, holding or trading in securities and owns or proposes to acquire investment securities having a value exceeding the 40% test. Investment securities excludes U.S. Government securities and securities of majority-owned subsidiaries that are not themselves investment companies and are not relying on the exception from the definition of investment company under Section 3(c)(1) or Section 3(c)(7) of the Investment Company Act. |
We intend to acquire a diversified portfolio of income-producing real estate assets; however, our portfolio may include, to a much lesser extent, other real estate-related investments. We also may acquire real estate assets through investments in joint venture entities, including joint venture entities in which we may not own a
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controlling interest. We anticipate that our assets generally will continue to be held in wholly and majority-owned subsidiaries of the company, each formed to hold a particular asset. We intend to monitor our operations and our assets on an ongoing basis in order to ensure that neither we, nor any of our subsidiaries, meet the definition of investment company under Section 3(a)(1) of the Investment Company Act.
We believe that neither we nor our operating partnership will be considered investment companies under Section 3(a)(1)(A) of the Investment Company Act because neither of these entities will engage primarily or hold themselves out as being engaged primarily in the business of investing, reinvesting or trading in securities. Rather, we, through our operating partnership, will be primarily engaged in non-investment company businesses related to real estate. Consequently, we expect that we and our operating partnership will be able to conduct our respective operations such that neither entity will be required to register as an investment company under the Investment Company Act.
In addition, because we are organized as a holding company that will conduct its business primarily through our operating partnership, which in turn is a holding company that will conduct its business through its subsidiaries, we intend to conduct our operations, and the operations of our operating partnership and any other subsidiary, so that we will not meet the 40% test under Section 3(a)(1)(C) of the Investment Company Act.
In order for us to not meet the definition of an investment company and avoid regulation under the Investment Company Act, we must engage primarily in the business of buying real estate, and these investments must be made within a year after the offering ends. If we are unable to invest a significant portion of the proceeds of this offering in properties within one year of the termination of the offering, we may avoid being required to register as an investment company by temporarily investing any unused proceeds in certificates of deposit or other cash items with low returns. This would reduce the cash available for distribution to investors and possibly lower your returns.
To avoid meeting the definition of an investment company under Section 3(a)(1) of the Investment Company Act, we may be unable to sell assets we would otherwise want to sell and may need to sell assets we would otherwise wish to retain. Similarly, we may have to acquire additional income or loss generating assets that we might not otherwise have acquired or may have to forgo opportunities to acquire interests in companies that we would otherwise want to acquire and would be important to our investment strategy. In addition, a change in the value of any of our assets could negatively affect our ability to avoid being required to register as an investment company. If we were required to register as an investment company but failed to do so, we would be prohibited from engaging in our business, and criminal and civil actions could be brought against us. In addition, our contracts would be unenforceable unless a court were to require enforcement, and a court could appoint a receiver to take control of us and liquidate our business.
If we are required to register as an investment company under the Investment Company Act, we would become subject to substantial regulation with respect to our capital structure (including our ability to use borrowings), management, operations, transactions with affiliated persons (as defined in the Investment Company Act), and portfolio composition, including restrictions with respect to diversification and industry concentration and other matters. Compliance with the Investment Company Act would, accordingly, limit our ability to make certain investments and require us to significantly restructure our business plan.
Change in Investment Policies
Our charter requires that our independent directors review our investment policies at least annually to determine that the policies we follow are in the best interests of our stockholders. Each determination and the basis therefor shall be set forth in the minutes of the meetings of our board of directors. The methods of implementing our investment policies also may vary as new real estate development trends emerge and new investment techniques are developed.
Generally, our board of directors may revise our investment policies without the concurrence of our stockholders. However, our board of directors will not amend our charter, including any investment policies that
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are provided in our charter, without the concurrence of a majority of the outstanding shares, except for amendments that do not adversely affect the rights, preferences and privileges of our stockholders.
Real Property Investments
We engage in the acquisition and ownership of commercial properties throughout the United States. We invest primarily in retail and other income-producing commercial properties located throughout the United States.
As of April 4, 2013 we, through separate wholly-owned limited liability companies and limited partnerships, owned 121 properties located in 29 states, consisting of approximately 3.5 million gross rentable square feet of commercial space. The properties generally were acquired through the use of proceeds from our initial public offering and proceeds from our revolving credit facility. Our properties as of April 4, 2013 are listed below in order of date of acquisition.
Property Description |
Date Acquired | Year Built |
Purchase Price |
Fees Paid to Sponsor(1) |
Initial Yield(2) |
Average Yield(3) |
Physical Occupancy |
|||||||||||||||||
Advance Auto Parts |
April 13, 2012 | 2008 | $ | 1,673,000 | $ | 33,460 | 8.30 | % | 8.30 | % | 100 | % | ||||||||||||
PetSmart Wilkesboro, NC(4) |
April 13, 2012 | 2011 | 2,650,000 | 53,000 | 8.10 | % | 8.33 | % | 100 | % | ||||||||||||||
Nordstrom Rack Tampa, FL |
April 16, 2012 | 2010 | 11,998,039 | 239,961 | 7.41 | % | 7.41 | % | 100 | % | ||||||||||||||
Walgreens Blair, NE |
April 18, 2012 | 2008 | 4,242,424 | 84,848 | 6.60 | % | 6.60 | % | 100 | % | ||||||||||||||
CVS Corpus Christi, TX |
April 19, 2012 | 1998 | 3,400,000 | 68,000 | 6.75 | % | 6.75 | % | 100 | % | ||||||||||||||
CVS Charleston, SC |
April 26, 2012 | 1998 | 2,137,778 | 42,756 | 6.75 | % | 6.75 | % | 100 | % | ||||||||||||||
CVS Asheville, NC |
April 26, 2012 | 1998 | 2,365,249 | 47,305 | 6.75 | % | 6.75 | % | 100 | % | ||||||||||||||
OReilly Auto Parts |
May 8, 2012 | 2012 | 965,447 | 19,309 | 7.05 | % | 7.19 | % | 100 | % | ||||||||||||||
OReilly Auto Parts |
May 8, 2012 | 2011 | 1,130,213 | 22,604 | 7.05 | % | 7.38 | % | 100 | % | ||||||||||||||
Walgreens Suffolk, VA |
May 14, 2012 | 2007 | 4,925,000 | 98,500 | 6.70 | % | 6.70 | % | 100 | % | ||||||||||||||
Walgreens Springfield, IL |
May 14, 2012 | 2007 | 5,223,000 | 104,460 | 6.70 | % | 6.70 | % | 100 | % | ||||||||||||||
Walgreens Montgomery, AL |
May 14, 2012 | 2006 | 4,477,000 | 89,540 | 6.70 | % | 6.70 | % | 100 | % | ||||||||||||||
Tractor Supply Cambridge, MN |
May 14, 2012 | 2012 | 2,245,000 | 44,900 | 8.02 | % | 8.85 | % | 100 | % | ||||||||||||||
HEB Center Waxahachie, TX |
June 27, 2012 | 1997 | 13,000,000 | 260,000 | 7.19 | % | 7.26 | % | 99 | % | ||||||||||||||
CVS Bainbridge, GA |
June 27, 2012 | 1998 | 2,650,000 | 53,000 | 7.00 | % | 7.00 | % | 100 | % | ||||||||||||||
Advance Auto Starkville, MS |
June 29, 2012 | 2011 | 1,344,964 | 26,899 | 7.60 | % | 7.60 | % | 100 | % | ||||||||||||||
AutoZone Philipsburg, PA |
July 27, 2012 | 2010 | 1,620,000 | 32,400 | 6.85 | % | 6.85 | % | 100 | % | ||||||||||||||
Benihana Portfolio Various (5) |
August 21, 2012 | Various | 17,335,757 | 346,715 | 7.85 | % | 7.85 | % | 100 | % | ||||||||||||||
Wawa Cape May, NJ |
August 29, 2012 | 2005 | 7,639,896 | 152,798 | 6.75 | % | 6.75 | % | 100 | % | ||||||||||||||
Wawa Galloway, NJ |
August 29, 2012 | 2005 | 8,123,926 | 162,479 | 6.75 | % | 6.75 | % | 100 | % | ||||||||||||||
Stripes Portfolio I Various (6) |
August 30, 2012 | Various | 8,228,130 | 164,563 | 7.14 | % | 7.14 | % | 100 | % | ||||||||||||||
Stripes Portfolio II Various (7) |
August 30, 2012 | Various | 16,936,887 | 338,738 | 7.14 | % | 7.14 | % | 100 | % | ||||||||||||||
Pickn Save Sheboygan, WI |
September 6, 2012 | 2012 | 14,122,000 | 282,440 | 7.67 | % | 8.05 | % | 100 | % | ||||||||||||||
The Marquis Williamsburg, VA |
September 21, 2012 | 2007 | 14,260,000 | 285,200 | 7.02 | % | 7.11 | % | 100 | % | ||||||||||||||
Golden Corral Garland, TX |
September 21, 2012 | 2012 | 3,903,000 | 78,060 | 8.00 | % | 8.41 | % | 100 | % | ||||||||||||||
Ross Ft. Worth, TX |
October 4, 2012 | 2010 | 4,900,000 | 98,000 | 7.27 | % | 7.27 | % | 100 | % | ||||||||||||||
CVS Irving, TX |
October 5, 2012 | 2000 | 3,917,557 | 78,351 | 6.55 | % | 6.55 | % | 100 | % | ||||||||||||||
Mattress Firm Jonesboro, AR |
October 5, 2012 | 2012 | 2,189,000 | 43,780 | 8.20 | % | 8.85 | % | 100 | % | ||||||||||||||
PetSmart Baton Rouge, LA |
October 11, 2012 | 1999 | 4,100,000 | 82,000 | 8.21 | % | 8.21 | % | 100 | % | ||||||||||||||
Walgreens Lubbock (82nd), TX |
October 11, 2012 | 2000 | 4,240,500 | 84,810 | 7.11 | % | 7.11 | % | 100 | % | ||||||||||||||
Walgreens Lubbock (Indiana), TX |
October 11, 2012 | 1998 | 3,698,500 | 73,970 | 7.17 | % | 7.17 | % | 100 | % | ||||||||||||||
Kohls Hutchinson, KS |
October 19, 2012 | 2012 | 3,385,000 | 67,700 | 6.50 | % | 6.50 | % | 100 | % | ||||||||||||||
CVS Cartersville, GA |
October 22, 2012 | N/A(8) | 2,616,000 | 52,320 | 6.25 | % | 6.25 | % | 100 | % |
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Property Description |
Date Acquired | Year Built |
Purchase Price | Fees Paid to Sponsor(1) |
Initial Yield(2) |
Average Yield(3) |
Physical Occupancy |
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Logans Roadhouse |
October 23, 2012 | 2011 | $ | 3,165,000 | $ | 63,300 | 7.70 | % | 8.97 | % | 100 | % | ||||||||||||
Logans Roadhouse Opelika, AL |
October 23, 2012 | 2005 | 2,959,813 | 59,196 | 7.86 | % | 8.96 | % | 100 | % | ||||||||||||||
Logans Roadhouse Sanford, FL |
October 23, 2012 | 1999 | 3,625,744 | 72,515 | 7.86 | % | 8.97 | % | 100 | % | ||||||||||||||
Logans Roadhouse Troy, OH |
October 23, 2012 | 2011 | 3,105,000 | 62,100 | 7.70 | % | 8.98 | % | 100 | % | ||||||||||||||
Advance Auto Corydon, IN |
October 26, 2012 | 2012 | 1,513,393 | 30,268 | 7.75 | % | 7.75 | % | 100 | % | ||||||||||||||
Mattress Firm Pineville, NC |
October 29, 2012 | 2000 | 3,389,000 | 67,780 | 8.25 | % | 8.78 | % | 100 | % | ||||||||||||||
Tractor Supply Newnan, GA |
November 6, 2012 | 2009 | 3,943,000 | 78,860 | 7.10 | % | 8.04 | % | 100 | % | ||||||||||||||
Cost Plus Shopping Center Kansas City, MO |
November 13, 2012 | 2001 | 3,865,000 | 77,300 | 7.66 | % | 7.80 | % | 93 | % | ||||||||||||||
Michaels Bowling Green, KY |
November 20, 2012 | 2012 | 3,110,000 | 62,200 | 7.70 | % | 8.01 | % | 100 | % | ||||||||||||||
Tractor Supply Spencer, WV |
November 20, 2012 | 2012 | 2,945,000 | 58,900 | 7.13 | % | 7.88 | % | 100 | % | ||||||||||||||
Dollar General Hanceville, AL |
November 21, 2012 | 2012 | 3,310,312 | 66,206 | 7.40 | % | 7.47 | % | 100 | % | ||||||||||||||
Dollar General Piedmont, AL |
November 21, 2012 | 2012 | 3,234,688 | 64,694 | 7.40 | % | 7.48 | % | 100 | % | ||||||||||||||
Kirklands Jonesboro, AR |
November 27, 2012 | 2012 | 2,903,226 | 58,065 | 7.75 | % | 8.13 | % | 100 | % | ||||||||||||||
Dollar General Maynardville, TN |
November 30, 2012 | 2012 | 1,227,464 | 24,549 | 7.65 | % | 7.73 | % | 100 | % | ||||||||||||||
Dollar General Lima, OH |
November 30, 2012 | 2012 | 1,341,781 | 26,836 | 7.30 | % | 7.38 | % | 100 | % | ||||||||||||||
Dollar General Whitwell, TN |
November 30, 2012 | 2012 | 1,441,315 | 28,826 | 7.30 | % | 7.38 | % | 100 | % | ||||||||||||||
Dollar General Cleveland, TX |
November 30, 2012 | 2012 | 1,130,795 | 22,616 | 7.30 | % | 7.37 | % | 100 | % | ||||||||||||||
Dollar General Brownsville, TX |
November 30, 2012 | 2012 | 1,359,521 | 27,190 | 7.30 | % | 7.37 | % | 100 | % | ||||||||||||||
Dollar General |
November 30, 2012 | 2012 | 1,437,205 | 28,744 | 7.30 | % | 7.37 | % | 100 | % | ||||||||||||||
Dollar General |
November 30, 2012 | 2012 | 1,385,918 | 27,718 | 7.30 | % | 7.37 | % | 100 | % | ||||||||||||||
Tire Kingdom Tarpon Springs, FL |
November 30, 2012 | 2003 | 2,087,325 | 41,747 | 7.35 | % | 8.18 | % | 100 | % | ||||||||||||||
Tractor Supply Canon City, CO |
November 30, 2012 | 2012 | 3,717,186 | 74,344 | 7.25 | % | 7.81 | % | 100 | % | ||||||||||||||
Hobby Lobby Mooresville, NC |
November 30, 2012 | 2012 | 5,500,000 | 110,000 | 7.50 | % | 8.00 | % | 100 | % | ||||||||||||||
Canarsie Plaza Brooklyn, NY |
December 5, 2012 | 2011 | 124,000,000 | 2,480,000 | 6.50 | % | 7.40 | % | 96 | % | ||||||||||||||
Kohls Cedar Falls, IA |
December 7, 2012 | 2001 | 8,050,000 | 161,000 | 7.29 | % | 7.29 | % | 100 | % | ||||||||||||||
Big Lots Waco, TX |
December 10, 2012 | 2012 | 2,600,000 | 52,000 | 7.68 | % | 7.95 | % | 100 | % | ||||||||||||||
Costco Tallahassee, FL |
December 11, 2012 | N/A(8) | 9,710,000 | 194,200 | 6.20 | % | 6.20 | % | 100 | % | ||||||||||||||
Wal-Mart Tallahassee, FL |
December 11, 2012 | N/A(8) | 15,390,000 | 307,800 | 6.20 | % | 6.20 | % | 100 | % | ||||||||||||||
Golden Corral Houston, TX |
December 12, 2012 | 2012 | 3,944,000 | 78,880 | 8.00 | % | 8.57 | % | 100 | % | ||||||||||||||
Old Navy & PetSmart |
December 14, 2012 | 2012 | 6,050,286 | 121,006 | 7.47 | % | 7.68 | % | 100 | % | ||||||||||||||
National Tire & Battery |
December 18, 2012 | 2006 | 2,624,000 | 52,480 | 6.85 | % | 6.85 | % | 100 | % | ||||||||||||||
Hickory Flat Commons Canton, GA |
December 18, 2012 | 2008 | 19,000,000 | 380,000 | 6.13 | % | 6.84 | % | 96 | % | ||||||||||||||
Dollar General Independence, MO |
December 18, 2012 | 2012 | 1,368,151 | 27,363 | 7.30 | % | 7.37 | % | 100 | % | ||||||||||||||
Dollar General Rayne, LA |
December 18, 2012 | 2012 | 1,157,589 | 23,152 | 7.30 | % | 7.37 | % | 100 | % | ||||||||||||||
Dollar General Conroe, TX |
December 18, 2012 | 2012 | 1,249,973 | 24,999 | 7.30 | % | 7.37 | % | 100 | % | ||||||||||||||
Dollar General Houston, TX |
December 18, 2012 | 2012 | 1,600,767 | 32,015 | 7.30 | % | 7.37 | % | 100 | % | ||||||||||||||
Dollar General Lubbock, TX |
December 18, 2012 | 2012 | 1,229,863 | 24,597 | 7.30 | % | 7.37 | % | 100 | % | ||||||||||||||
Big Lots San Angelo, TX |
December 19, 2012 | 2012 | 3,250,000 | 65,000 | 7.66 | % | 8.04 | % | 100 | % | ||||||||||||||
Home Depot North Canton, OH |
December 20, 2012 | 1998 | 14,450,000 | 289,000 | 6.62 | % | 6.88 | % | 100 | % | ||||||||||||||
Walgreens Danville, VA |
December 21, 2012 | 2012 | 5,890,625 | 117,813 | 6.40 | % | 6.40 | % | 100 | % | ||||||||||||||
Dollar General Ashville, AL |
December 21, 2012 | 2012 | 1,122,742 | 22,455 | 7.40 | % | 7.40 | % | 100 | % | ||||||||||||||
Dollar General Geneva, AL |
December 21, 2012 | 2012 | 1,249,378 | 24,988 | 7.40 | % | 7.47 | % | 100 | % | ||||||||||||||
Dollar General Harvest, AL |
December 21, 2012 | 2012 | 1,151,081 | 23,022 | 7.40 | % | 7.47 | % | 100 | % | ||||||||||||||
Dollar General Huntsville, AL |
December 21, 2012 | 2012 | 1,253,906 | 25,078 | 7.40 | % | 7.40 | % | 100 | % | ||||||||||||||
Dollar General Kinston, AL |
December 21, 2012 | 2012 | 1,081,206 | 21,624 | 7.40 | % | 7.47 | % | 100 | % |
110
Property Description |
Date Acquired | Year Built |
Purchase Price | Fees Paid to Sponsor(1) |
Initial Yield(2) |
Average Yield(3) |
Physical Occupancy |
|||||||||||||||||
Fairview Village Cary, NC |
December 21, 2012 | 2010 | $ | 6,626,044 | $ | 132,521 | 8.93 | % | 9.07 | % | 90 | % | ||||||||||||
Dicks Oklahoma City |
December 21, 2012 | 2012 | 8,972,306 | 179,446 | 7.11 | % | 7.11 | % | 100 | % | ||||||||||||||
Wallace Commons Salisbury, NC |
December 31, 2012 | 2009 | 12,000,000 | 240,000 | 6.52 | % | 8.02 | % | 100 | % | ||||||||||||||
Dicks Oklahoma City, OK |
December 31, 2012 | 2012 | 12,100,000 | 242,000 | 7.25 | % | 7.36 | % | 100 | % | ||||||||||||||
Dollar General Park Hill, OK |
January 4, 2013 | 2012 | 1,087,000 | 21,740 | 7.40 | % | 7.47 | % | 100 | % | ||||||||||||||
Dollar General Pueblo, CO |
January 4, 2013 | 2012 | 1,274,000 | 25,480 | 7.41 | % | 7.48 | % | 100 | % | ||||||||||||||
National Tire & Battery |
January 15, 2013 | 2007 | 3,421,000 | 68,420 | 7.00 | % | 7.00 | % | 100 | % | ||||||||||||||
PetSmart Edmond, OK |
January 23, 2013 | 1998 | 4,100,000 | 82,000 | 8.40 | % | 8.40 | % | 100 | % | ||||||||||||||
Spinx Simpsonville, SC |
January 24, 2013 | 2012 | 2,000,000 | 40,000 | 8.50 | % | 10.07 | % | 100 | % | ||||||||||||||
Logans Roadhouse Bristol, VA |
January 29, 2013 | 2001 | 3,939,000 | 78,780 | 8.58 | % | 9.64 | % | 100 | % | ||||||||||||||
Dollar Tree/Petco Humble, TX |
January 31, 2013/February 11, 2013 |
2011 | 3,780,000 | 75,600 | 8.44 | % | 8.44 | % | 100 | % | ||||||||||||||
Advance Auto Lake Geneva, WI |
February 6, 2013 | 2012 | 1,720,300 | 34,406 | 7.10 | % | 7.10 | % | 100 | % | ||||||||||||||
Dollar General Clay, AL |
February 8, 2013 | 2012 | 1,310,274 | 26,205 | 7.30 | % | 7.37 | % | 100 | % | ||||||||||||||
Dollar General Woodville, OH |
February 8, 2013 | 2013 | 1,298,630 | 25,973 | 7.30 | % | 7.37 | % | 100 | % | ||||||||||||||
Walgreens Cullman, AL |
February 22, 2013 | 2012 | 6,400,000 | 128,000 | 6.25 | % | 6.25 | % | 100 | % | ||||||||||||||
Dollar General Bokchito, OK |
February 27, 2013 | 2013 | 1,026,000 | 20,520 | 7.40 | % | 7.40 | % | 100 | % | ||||||||||||||
Walgreens Hickory, NC |
February 28, 2013 | 2009 | 6,796,875 | 135,938 | 6.40 | % | 6.40 | % | 100 | % | ||||||||||||||
Earth Fare Huntersville, NC |
February 28, 2013 | 2011 | 5,247,693 | 104,954 | 7.50 | % | 7.91 | % | 100 | % | ||||||||||||||
Dollar General Nashville, GA |
March 1, 2013 | 2013 | 3,413,608 | 68,272 | 7.40 | % | 7.47 | % | 100 | % | ||||||||||||||
Golds Gym Corpus Christi, TX |
March 6, 2013 | 2006 | 8,750,000 | 175,000 | 8.65 | % | 9.10 | % | 100 | % | ||||||||||||||
Bed Bath & Beyond/Golfsmith Schaumburg, IL |
March 8, 2013 | 1997 | 12,400,000 | 248,000 | 7.57 | % | 8.02 | % | 100 | % | ||||||||||||||
Walgreens Huntsville, AL |
March 15, 2013 | 2001 | 5,400,000 | 108,000 | 7.47 | % | 7.47 | % | 100 | % | ||||||||||||||
Dollar General Newark, OH |
March 15, 2013 | 2012 | 1,312,932 | 26,259 | 7.30 | % | 7.37 | % | 100 | % | ||||||||||||||
Dollar General Groveport, OH |
March 15, 2013 | 2012 | 1,335,616 | 26,712 | 7.30 | % | 7.37 | % | 100 | % | ||||||||||||||
CVS Chicago (Central Ave), IL |
March 20, 2013 | 2008 | 6,960,181 | 139,204 | 6.32 | % | 6.32 | % | 100 | % | ||||||||||||||
Dollar General Toney, AL |
March 21, 2013 | 2012 | 1,080,028 | 21,601 | 7.40 | % | 7.47 | % | 100 | % | ||||||||||||||
Walgreens Phoenix, AZ |
March 22, 2013 | 2001 | 3,900,000 | 78,000 | 7.34 | % | 7.34 | % | 100 | % | ||||||||||||||
University Marketplace Marion, IN |
March 22, 2013 | 2012 | 8,070,459 | 161,409 | 7.68 | % | 7.98 | % | 100 | % | ||||||||||||||
Dollar General Yatesville, GA |
March 25, 2013 | 2013 | 1,128,958 | 22,579 | 7.40 | % | 7.40 | % | 100 | % | ||||||||||||||
Fourth Creek Landing Statesville, NC |
March 26, 2013 | 2012 | 10,285,300 | 205,706 | 7.50 | % | 7.65 | % | 100 | % (9) | ||||||||||||||
CVS Florence, AL |
March 27, 2013 | 1998 | 2,973,484 | 59,470 | 6.60 | % | 6.60 | % | 100 | % | ||||||||||||||
Canton Marketplace Canton, GA |
March 28, 2013 | 2009 | 61,075,000 | 1,221,500 | 8.67 | % | 8.92 | % | 91 | % | ||||||||||||||
PetSmart Commerce, MI |
March 28, 2013 | 1996 | 2,789,627 | 55,793 | 7.95 | % | 8.42 | % | 100 | % | ||||||||||||||
Buffalo Wild Wings Warrenville, IL |
March 28, 2013 | 2004 | 2,911,724 | 58,234 | 7.25 | % | 7.53 | % | 100 | % | ||||||||||||||
Buffalo Wild Wings Woodridge, IL |
March 28, 2013 | 2005 | 2,911,724 | 58,234 | 7.25 | % | 7.53 | % | 100 | % | ||||||||||||||
Trader Joes Columbia, SC |
March 28, 2013 | 2012 | 6,037,500 | 120,750 | 6.80 | % | 6.80 | % | 100 | % | ||||||||||||||
|
|
|
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$ | 700,599,783 | $ | 14,011,998 | |||||||||||||||||||||
|
|
|
|
(1) | Fees paid to sponsor are payments made to an affiliate of our advisor for acquisition fees in connection with the property acquisition. For more detailed information on fees paid to our advisor or its affiliates, see the section captioned Management Compensation beginning on page 79 of the prospectus. |
111
(2) | Initial yield is calculated as the current annualized rental income, adjusted for any rent concessions or abatements, if any, for the in-place leases at the respective property divided by the property purchase price, exclusive of acquisition costs and acquisition fees paid to our advisor or its affiliates. In general, our properties are subject to long-term triple net or double net leases, and the future costs associated with the double net leases are unpredictable and may reduce the yield. Accordingly, our management believes that effective annualized rental income is a more appropriate figure from which to calculate initial yield than net operating income. |
(3) | Average yield is calculated as the average annual rental income, adjusted for any rent concessions or abatements, for the in-place leases over the non-cancellable lease term at the respective property divided by the property purchase price, exclusive of acquisition costs and acquisition fees paid to our advisor or its affiliates. In general, our properties are subject to long-term triple net or double net leases, and the future costs associated with the double net leases are unpredictable and may reduce the yield. Accordingly our management believes that average annual rental income is a more appropriate figure from which to calculate average yield than net operating income. |
(4) | These properties were acquired by purchasing 100% of the membership interests in AA North Ridgeville and PM Wilkesboro, respectively, from Series C. Series C had acquired these properties for the purpose of holding them temporarily until we were able to raise sufficient proceeds in our public offering to acquire them from Series C at its acquisition cost (including acquisition related expenses). A majority of our board of directors (including a majority of our independent directors) not otherwise interested in the transactions approved the acquisitions as being fair and reasonable to us and determined that the cost to us of each property was equal to the cost of the respective property to Series C (including acquisition related expenses). In addition, the purchase price of each property, exclusive of closing costs, was less than the current appraised value of the respective property as determined by an independent third party appraiser. |
(5) | The Benihana Portfolio consists of four single-tenant commercial properties located in Florida, Illinois, Minnesota and Texas, which were purchased under individual sale-leaseback agreements with Benihana National of Florida Corp., Benihana Lombard Corp., The Samurai, Inc. and Benihana Woodlands Corp., respectively, as tenants. The properties are subject to individual lease agreements with identical terms. |
(6) | The Stripes Portfolio I consists of three single-tenant commercial properties located in Texas, which are subject to individual lease agreements with identical terms. |
(7) | The Stripes Portfolio II consists of three single-tenant commercial properties located in Texas, which are subject to individual lease agreements with identical terms. |
(8) | Subject to ground lease and therefore year built is not applicable. |
(9) | Physical occupancy includes approximately 16,000 rentable square feet leased by Staples the Office Superstore East, Inc. The lease will not commence until August 2013. |
The following tables set forth the principal provisions of the lease term for the major tenants at each of the properties listed above:
Property |
Major Tenants(1) |
Total Square Feet Leased |
% of Total Rentable Square Feet |
Renewal Options(2) |
Effective Annual Base Rent(3) |
Effective Base Rent per Square Foot(3) |
Lease Term(4) | |||||||||||||||||||
Advance Auto Parts |
Advance Stores |
6,000 | 100 | % | 3/5 yr. | $ | 138,845 | $ | 23.14 | 4/13/2012 | | 2/29/2024 | ||||||||||||||
PetSmart Wilkesboro, |
PetSmart Inc. |
12,259 | 100 | % | 4/5 yr. | 214,533 | 17.50 | 4/13/2012 | | 1/31/2017 | ||||||||||||||||
226,791 | 18.50 | 2/1/2017 | | 1/31/2022 | ||||||||||||||||||||||
Nordstrom Rack |
Nordstrom, Inc. |
44,925 | 100 | % | 4/5 yr. | 889,515 | 19.80 | 4/16/2012 | | 10/31/2020 | ||||||||||||||||
Walgreens Blair, NE |
Walgreens Co. |
14,820 | 100 | % | (5) | 280,000 | 18.89 | 4/18/2012 | | 9/30/2033 | ||||||||||||||||
CVS Corpus Christi, |
CVS EGL South. Alameda TX, LP |
11,306 | 100 | % | 5/5 yr. | 229,500 | 20.30 | 4/19/2012 | | 4/30/2037 | ||||||||||||||||
CVS Charleston, SC |
South Carolina CVS Pharmacy, LLC |
10,125 | 100 | % | 5/5 yr. | 144,300 | 14.25 | 4/26/2012 | | 4/30/2037 | ||||||||||||||||
CVS Asheville, NC |
North Carolina CVS Pharmacy, LLC |
10,125 | 100 | % | 5/5 yr. | 159,700 | 15.77 | 4/26/2012 | | 4/30/2037 | ||||||||||||||||
OReilly Auto Parts |
OReilly Automotive Stores, Inc. |
6,365 | 100 | % | 5/5 yr. | 68,064 | 10.69 | 5/8/2012 | | 1/20/2022 | ||||||||||||||||
72,144 | 11.33 | 1/21/2022 | | 1/20/2027 |
112
Property |
Major Tenants(1) |
Total Square Feet Leased |
% of Total Rentable Square Feet |
Renewal Options(2) |
Effective Annual Base Rent(3) |
Effective Base Rent per Square Foot(3) |
Lease Term(4) | |||||||||||||||||||
OReilly Auto Parts |
OReilly Automotive Stores, Inc. |
6,047 | 100 | % | 4/5 yr. | $ | 79,680 | $ | 13.18 | 5/8/2012 | | 9/30/2021 | ||||||||||||||
84,456 | 13.97 | 10/1/2021 | | 9/30/2026 | ||||||||||||||||||||||
89,520 | 14.80 | 10/1/2026 | | 9/30/2031 | ||||||||||||||||||||||
Walgreens Suffolk, VA |
Walgreen, Co. |
14,820 | 100 | % | (5) | 330,000 | 22.27 | 5/14/2012 | | 8/31/2032 | ||||||||||||||||
Walgreens Springfield, IL |
Walgreen, Co. |
14,820 | 100 | % | 10/5 yr. | 350,000 | 23.62 | 5/14/2012 | | 10/31/2032 | ||||||||||||||||
Walgreens Montgomery, AL |
Walgreen, Co. |
14,820 | 100 | % | 10/5 yr. | 300,000 | 20.24 | 5/14/2012 | | 3/31/2032 | ||||||||||||||||
Tractor Supply Cambridge, MN |
Tractor Supply Company |
18,000 | 100 | % | 4/5 yr. | 180,000 | 10.00 | 5/14/2012 | | 3/31/2017 | ||||||||||||||||
198,000 | 11.00 | 4/1/2017 | | 3/31/2022 | ||||||||||||||||||||||
217,800 | 12.10 | 4/1/2022 | | 3/31/2027 | ||||||||||||||||||||||
HEB Center Waxahachie, TX |
HEB Grocery Company, LP |
70,458 | 85 | % | 8/5 yr. | 762,356 | 10.82 | 6/27/2012 | | 6/30/2027 | ||||||||||||||||
CVS Bainbridge, GA |
Georgia CVS Pharmacy, LLC |
10,125 | 100 | % | 5/5 yr. | 185,500 | 18.32 | 6/27/2012 | | 6/30/2037 | ||||||||||||||||
Advance Auto Starkville, MS |
Advance Stores Company, Inc. |
6,129 | 100 | % | 3/5 yr. | 102,182 | 16,67 | 6/29/2012 | | 5/31/2026 | ||||||||||||||||
AutoZone Philipsburg, PA |
AutoZone Northeast, Inc. |
7,380 | 100 | % | 1/5 yr., 1/4 yr. and 6 months |
111,000 | 15.04 | 7/27/2012 | | 7/31/2030 | ||||||||||||||||
Benihana Portfolio Various |
Various |
36,911 | 100 | % | 6/5 yr. | 1,360,857 | (6) | 36.87 | 8/21/2012 | | 8/31/2032 | |||||||||||||||
Wawa Cape May, NJ |
Wawa, Inc. |
5,594 | 100 | % | 6/5 yr. | 515,693 | 92.19 | 8/29/2012 | | 5/31/2026 | ||||||||||||||||
Wawa Galloway, NJ |
Wawa, Inc. |
5,605 | 100 | % | 6/5 yr. | 548,366 | 97.84 | 8/29/2012 | | 5/31/2026 | ||||||||||||||||
Stripes Portfolio I Various |
Stripes LLC |
14,216 | 100 | % | 5/5 yr. | 587,190 | (7) | 41.30 | 8/30/2012 | | 9/27/2027 | |||||||||||||||
Stripes Portfolio II Various |
Town & Country Food Stores, Inc. |
11,433 | 100 | % | 5/5 yr. | 1,208,678 | (7) | 105.72 | 8/30/2012 | | 11/12/2027 | |||||||||||||||
Pickn Save Sheboygan, WI |
Roundys Supermarkets, Inc |
70,072 | 100 | % | 4/5 yr. | 1,082,900 | (8) | 15.45 | 9/6/2012 | | 12/31/2031 | |||||||||||||||
The Marquis Williamsburg, VA |
Kohls Department Stores, Inc. |
89,911 | 67 | % | 6/5 yr. | 731,500 | 8.14 | 9/21/2012 | | 1/31/2028 | ||||||||||||||||
Dicks Sporting Goods, Inc. |
45,000 | 33 | % | 4/5 yr. | 270,000 | 6.00 | 9/21/2012 | | 1/31/2017 | |||||||||||||||||
292,500 | 6.50 | 2/1/2017 | | 1/31/2022 | ||||||||||||||||||||||
Golden Corral Garland, |
Golden Corral Corporation |
12,763 | 100 | % | 4/5 yr. | 312,240 | 24.46 | 9/21/2012 | | 9/30/2017 | ||||||||||||||||
327,852 | 25.69 | 10/21/2017 | | 9/30/2022 | ||||||||||||||||||||||
344,245 | 26.97 | 10/1/2022 | | 9/30/2027 | ||||||||||||||||||||||
Ross Ft. Worth, TX |
Ross Dress for Less, Inc. |
32,400 | 100 | % | 3/5 yr. | 356,400 | 11.00 | 10/5/2012 | | 1/31/2023 | ||||||||||||||||
CVS Irving, TX |
CVS Pharmacy, Inc. |
10,908 | 100 | % | 5/5 yr. | 256,600 | 23.52 | 10/5/2012 | | 10/31/2037 | ||||||||||||||||
Mattress Firm Jonesboro, AR |
Mattress Firm, Inc. |
6,000 | 100 | % | 3/5 yr. | 179,500 | (9) | 29.92 | 10/5/2012 | | 5/31/2024 | |||||||||||||||
Petsmart Baton Rouge, LA |
Petsmart, Inc. |
25,265 | 100 | % | 5/5 yr. | 336,518 | 13.32 | 10/11/2012 | | 4/30/2024 | ||||||||||||||||
Walgreens Lubbock (82nd), TX |
Walgreens Co. | 15,120 | 100 | % | 8/5 yr. | 301,500 | 19.94 | 10/11/2012 | | 10/31/2032 | ||||||||||||||||
Walgreens Lubbock (Indiana), TX |
Walgreens Co. | 13,905 | 100 | % | 7/5 yr. | 265,307 | 19.08 | 10/11/2012 | | 10/31/2032 | ||||||||||||||||
Kohls Hutchinson, KS |
Kohls Illinois, Inc. | 55,000 | 100 | % | 8/5 yr. | 220,000 | 4.00 | 10/19/2012 | | 1/31/2033 | ||||||||||||||||
CVS Cartersville, GA |
Georgia CVS Pharmacy, LLC |
| (10) | 100 | % | 3/5 yr. | 163,500 | 3.11 | 10/22/2012 | | 1/31/2035 | |||||||||||||||
Logans Roadhouse Lancaster, TX |
Logans Roadhouse, Inc. |
6,555 | 100 | % | 3/5 yr. | 243,560 | (11) | 37.16 | 10/23/2012 | | 1/31/2032 | |||||||||||||||
Logans Roadhouse Opelika, AL |
Logans Roadhouse, Inc. |
8,140 | 100 | % | 5/5 yr. | 232,618 | (12) | 28.58 | 10/23/2012 | | 11/29/2026 | |||||||||||||||
Logans Roadhouse Sanford, FL |
Logans Roadhouse, Inc. |
8,670 | 100 | % | 5/5 yr. | 285,030 | (12) | 32.88 | 10/23/2012 | | 11/29/2026 | |||||||||||||||
Logans Roadhouse Troy, OH |
Logans Roadhouse, Inc. |
6,533 | 100 | % | 3/5 yr. | 239,040 | (11) | 36.59 | 10/23/2012 | | 1/31/2032 | |||||||||||||||
Advance Auto Corydon, IN |
Advance Stores Company, Incorporated |
6,895 | 100 | % | 3/5 yr. | 117,258 | 17.01 | 10/26/2012 | | 7/31/2027 | ||||||||||||||||
Mattress Firm Pineville, NC |
Mattress Firm, Inc. | 10,837 | 100 | % | 2/5 yr. | 279,595 | (9) | 25.80 | 10/29/2012 | | 10/31/2023 | |||||||||||||||
Tractor Supply Newnan, GA |
Tractor Supply Company |
19,097 | 100 | % | 4/5 yr. | 279,996 | (9) | 14.66 | 11/6/2012 | | 7/31/2024 | |||||||||||||||
Cost Plus Shopping Center Kansas City, MO |
Cost Plus, Inc. |
24,989 | 93 | % | 1/5 yr. | 295,870 | 11.88 | 11/13/2012 | | 1/31/2018 | ||||||||||||||||
309,365 | 12.43 | 2/1/2018 | | 1/31/2023 |
113
Property |
Major Tenants(1) |
Total Square Feet Leased |
% of Total Rentable Square Feet |
Renewal Options(2) |
Effective Annual Base Rent(3) |
Effective Base Rent per Square Foot(3) |
Lease Term(4) | |||||||||||||||||||
Michaels Bowling Green, |
Michaels Stores, Inc. |
18,391 | 100 | % | 4/5 yr. | $ | 239,450 | $ | 13.02 | 11/20/2012 | | 9/30/2017 | ||||||||||||||
257,474 | 14.00 | 10/1/2017 | | 2/28/2023 | ||||||||||||||||||||||
Tractor Supply Spencer, WV |
Tractor Supply Company |
19,127 | 100 | % | 4/5 yr. | 210,000 | 10.98 | 11/20/2012 | | 8/31/2017 | ||||||||||||||||
231,000 | 12.08 | 9/1/2017 | | 8/31/2022 | ||||||||||||||||||||||
254,100 | 13.28 | 9/1/2022 | | 8/31/2027 | ||||||||||||||||||||||
Dollar General Hanceville, |
Dolgencorp, LLC | 20,707 | 100 | % | 5/5 yr. | 244,963 | 11.83 | 11/21/2012 | | 8/31/2022 | ||||||||||||||||
252,312 | 12.18 | 9/1/2022 | | 8/31/2027 | ||||||||||||||||||||||
Dollar General Piedmont, AL |
Dolgencorp, LLC | 20,707 | 100 | % | 5/5 yr. | 239,367 | 11.56 | 11/21/2012 | | 5/31/2022 | ||||||||||||||||
246,548 | 11.91 | 6/1/2022 | | 5/31/2027 | ||||||||||||||||||||||
Kirklands Jonesboro, AR |
Kirklands Stores, Inc. |
9,000 | 100 | % | 2/5 yr. | 225,000 | 25.00 | 11/27/2012 | | 1/31/2018 | ||||||||||||||||
247,500 | 27.50 | 2/1/2018 | | 1/31/2023 | ||||||||||||||||||||||
Dollar General Maynardville, TN |
Dolgencorp, LLC |
9,026 | 100 | % | 5/5 yr. | 93,901 | 10.40 | 11/30/2012 | | 10/31/2022 | ||||||||||||||||
96,718 | 10.72 | 11/1/2022 | | 10/31/2027 | ||||||||||||||||||||||
Dollar General Lima, OH |
Dolgen Midwest, LLC |
9,002 | 100 | % | 4/5 yr. | 97,950 | 10.88 | 11/30/2012 | | 7/31/2022 | ||||||||||||||||
100,889 | 11.21 | 8/1/2022 | | 7/31/2027 | ||||||||||||||||||||||
Dollar General Whitwell, TN |
Dolgencorp, LLC | 12,406 | 100 | % | 5/5 yr. | 105,216 | 8.48 | 11/30/2012 | | 4/30/2022 | ||||||||||||||||
108,373 | 8.74 | 5/1/2022 | | 4/30/2027 | ||||||||||||||||||||||
Dollar General Cleveland, TX |
Dolgencorp of Texas, Inc. |
9,026 | 100 | % | 4/5 yr. | 82,548 | 9.15 | 11/30/2012 | | 8/31/2022 | ||||||||||||||||
85,032 | 9.42 | 9/1/2022 | | 8/31/2027 | ||||||||||||||||||||||
Dollar General Brownsville, TX |
Dolgencorp of Texas, Inc. |
9,026 | 100 | % | 4/5 yr. | 99,245 | 11.00 | 11/30/2012 | | 8/31/2022 | ||||||||||||||||
102,222 | 11.33 | 9/1/2022 | | 8/31/2027 | ||||||||||||||||||||||
Dollar General Greenwell Springs, LA |
Dolgencorp, LLC | 9,026 | 100 | % | 4/5 yr. | 104,916 | 11.62 | 11/30/2012 | | 9/30/2022 | ||||||||||||||||
108,060 | 11.97 | 10/1/2022 | | 9/30/2027 | ||||||||||||||||||||||
Dollar General Breaux Bridge, LA |
Dolgencorp, LLC | 9,100 | 100 | % | 4/5 yr. | 101,172 | 11.12 | 11/30/2012 | | 10/31/2022 | ||||||||||||||||
104,208 | 11.45 | 11/1/2022 | | 10/31/2027 | ||||||||||||||||||||||
Tire Kingdom Tarpon Springs, FL |
Tire Kingdom, Inc. | 6,100 | 100 | % | 2/5 yr. | 153,480 | (13) | 25.16 | 11/30/2012 | | 4/30/2023 | |||||||||||||||
Tractor Supply Canon City, CO |
Tractor Supply Company |
21,924 | 100 | % | 4/5 yr. | 269,496 | 12.29 | 11/30/2012 | | 11/30/2017 | ||||||||||||||||
289,716 | 13.21 | 12/1/2017 | | 11/30/2022 | ||||||||||||||||||||||
311,442 | 14.21 | 12/1/2022 | | 11/30/2027 | ||||||||||||||||||||||
Hobby Lobby Mooresville, |
Hobby Lobby Stores, Inc. |
55,000 | 100 | % | 3/5 yr. | 412,500 | 7.50 | 11/30/2012 | | 10/31/2017 | ||||||||||||||||
440,000 | 8.00 | 11/1/2017 | | 10/31/2022 | ||||||||||||||||||||||
467,500 | 8.50 | 11/1/2022 | | 10/31/2027 | ||||||||||||||||||||||
Canarsie Plaza Brooklyn, NY |
BJs Wholesale |
172,770 | 63 | % | 2/10 yr. |
5,100,000 | 29.52 | 12/5/2012 | | 11/30/2015 | ||||||||||||||||
Club, Inc. |
& 1/5 yr. | 5,508,000 | 31.88 | 12/1/2015 | | 11/30/2020 | ||||||||||||||||||||
5,948,640 | 34.43 | 12/1/2020 | | 11/30/2025 | ||||||||||||||||||||||
6,543,504 | 37.87 | 12/1/2025 | | 11/30/2030 | ||||||||||||||||||||||
The City of New York |
33,048 | 12 | % | 2/5 yr. | 991,440 | 30.00 | 12/5/2012 | | 1/25/2016 | |||||||||||||||||
1,090,584 | 33.00 | 1/26/2016 | | 1/25/2021 | ||||||||||||||||||||||
1,199,642 | 36.30 | 1/26/2021 | | 1/25/2026 | ||||||||||||||||||||||
1,319,607 | 39.93 | 1/26/2026 | | 1/25/2031 | ||||||||||||||||||||||
Kohls Cedar Falls, IA |
Kohls Department Stores, Inc. |
86,584 | 100 | % | 5/5 yr. | 587,040 | 6.78 | 12/7/2012 | | 1/31/2022 | ||||||||||||||||
Big Lots Waco, TX |
PNS Stores, Inc. | 28,526 | 100 | % | 2/5 yr. | 199,682 | (14) | 7.00 | 12/10/2012 | | 1/31/2017 | |||||||||||||||
219,650 | 7.70 | 2/1/2017 | | 1/31/2022 | ||||||||||||||||||||||
Costco Tallahassee, FL |
Costco Wholesale Corporation |
| (10) | 100 | % | 5/5 yr. | 602,000 | 1.11 | 12/11/2012 | | 4/30/2033 | |||||||||||||||
Wal-Mart Tallahassee, FL |
Wal-Mart Stores East, LP |
| (10) | 100 | % | 16/5 yr. | 954,000 | 1.16 | 12/11/2012 | | 9/6/2027 | |||||||||||||||
Golden Corral Houston, TX |
Golden Corral |
14,284 | 100 | % | 4/5 yr. | 315,520 | 22.09 | 12/12/2012 | | 12/31/2017 | ||||||||||||||||
Corporation |
331,296 | 23.19 | 1/1/2018 | | 12/31/2022 | |||||||||||||||||||||
347,861 | 24.35 | 1/1/2023 | | 12/31/2027 | ||||||||||||||||||||||
Old Navy & PetSmart Reynoldsburg, OH |
Old Navy, LLC | 15,112 | 52 | % | 3/5 yr. | 219,124 | 14.50 | 12/14/2012 | | 10/31/2017 | ||||||||||||||||
230,458 | 15.25 | 11/1/2017 | | 10/31/2022 | ||||||||||||||||||||||
PetSmart, Inc. | 13,858 | 48 | % | 5/5 yr. | 232,814 | 16.80 | 12/14/2012 | | 9/30/2017 | |||||||||||||||||
246,672 | 17.80 | 10/1/2017 | | 9/30/2022 | ||||||||||||||||||||||
National Tire & Battery Cedar Hill, TX |
NTW, Incorporated |
6,912 | 100 | % | 3/5 yr. | 179,755 | (15) | 26.01 | 12/18/2012 | | 9/30/2031 |
114
Property |
Major Tenants(1) |
Total Square Feet Leased |
% of Total Rentable Square Feet |
Renewal Options(2) |
Effective Annual Base Rent(3) |
Effective Base Rent per Square Foot(3) |
Lease Term(4) | |||||||||||||||||||||
Hickory Flat Commons |
The Kroger Co. | 78,846 | 69 | % | 6/5 yr. | $ | 644,701 | $ | 8.18 | 12/18/2012 | | 11/30/2028 | ||||||||||||||||
Dollar General |
Dolgencorp, LLC | 9,100 | 100 | % | 4/5 yr. | 99,875 | 10.98 | 12/18/2012 | | 9/30/2022 | ||||||||||||||||||
102,871 | 11.30 | 10/1/2022 | | 9/30/2027 | ||||||||||||||||||||||||
Dollar General Rayne, LA |
Dolgencorp, LLC | 9,026 | 100 | % | 4/5 yr. | 84,504 | 9.36 | 12/18/2012 | | 10/31/2022 | ||||||||||||||||||
87,036 | 9.64 | 11/1/2022 | | 10/31/2027 | ||||||||||||||||||||||||
Dollar General Conroe, TX |
Dolgencorp of |
9,026 | 100 | % | 4/5 yr. | 91,248 | 10.11 | 12/18/2012 | | 9/30/2022 | ||||||||||||||||||
Texas, Inc. |
93,984 | 10.41 | 10/1/2022 | | 9/30/2027 | |||||||||||||||||||||||
Dollar General Houston, TX |
Dolgencorp of |
9,026 | 100 | % | 4/5 yr. | 116,856 | 12.95 | 12/18/2012 | | 10/31/2022 | ||||||||||||||||||
Texas, Inc. |
120,360 | 13.33 | 11/1/2022 | | 10/31/2027 | |||||||||||||||||||||||
Dollar General Lubbock, TX |
Dolgencorp of |
9,026 | 100 | % | 4/5 yr. | 89,780 | 9.95 | 12/18/2012 | | 10/31/2022 | ||||||||||||||||||
Texas, Inc. |
92,473 | 10.25 | 11/1/2022 | | 10/31/2027 | |||||||||||||||||||||||
Big Lots San Angelo, TX |
PNS Stores, Inc. | 35,584 | 100 | % | 4/5 yr. | 249,088 | 7.00 | 12/19/2012 | | 1/31/2018 | ||||||||||||||||||
273,997 | 7.70 | 2/1/2018 | | 1/31/2023 | ||||||||||||||||||||||||
Home Depot North Canton, OH |
Home Depot U.S.A, |
111,803 | 100 | % | 4/5 yr. | 955,942 | 8.55 | 12/20/2012 | | 12/31/2019 | ||||||||||||||||||
Inc. |
1,027,638 | 9.19 | 1/1/2020 | | 12/31/2027 | |||||||||||||||||||||||
Walgreens Danville, VA |
Walgreen Co. | 14,820 | 100 | % | 10/5 yr. | 377,000 | 25.44 | 12/21/2012 | | 10/31/2037 | ||||||||||||||||||
Dollar General Ashville, AL |
Dolgencorp, LLC. | 9,026 | 100 | % | 5/5 yr. | 83,083 | 9.20 | 12/21/2012 | | 12/31/2027 | ||||||||||||||||||
Dollar General Geneva, AL |
Dolgencorp, LLC. | 9,026 | 100 | % | 5/5 yr. | 92,454 | 10.24 | 12/21/2012 | | 12/31/2022 | ||||||||||||||||||
95,227 | 10.55 | 1/1/2023 | | 12/31/2027 | ||||||||||||||||||||||||
Dollar General Harvest, AL |
Dolgencorp, LLC | 9,002 | 100 | % | 5/5 yr. | 85,180 | 9.46 | 12/21/2012 | | 12/31/2022 | ||||||||||||||||||
87,735 | 9.75 | 1/1/2023 | | 12/31/2027 | ||||||||||||||||||||||||
Dollar General Huntsville, AL |
Dolgencorp, LLC | 9,026 | 100 | % | 5/5 yr. | 92,789 | 10.28 | 12/21/2012 | | 12/31/2027 | ||||||||||||||||||
Dollar General Kinston, AL |
Dolgencorp, LLC | 9,026 | 100 | % | 5/5 yr. | 80,009 | 8.86 | 12/21/2012 | | 12/31/2022 | ||||||||||||||||||
82,410 | 9.13 | 1/1/2023 | | 12/31/2027 | ||||||||||||||||||||||||
Fairview Village Cary, NC |
Food Lion, LLC | | (5) | 75 | % | 6/5 yr. | 460,216 | 12.11 | 12/21/2012 | | 12/8/2034 | |||||||||||||||||
Dicks Oklahoma City (3rd Street), OK |
Dicks Sporting Goods, Inc. |
50,018 | 100 | % | 4/5 yr. | 637,730 | 12.75 | 12/21/2012 | | 1/31/2023 | ||||||||||||||||||
Wallace Commons Salisbury, NC |
Kohls Department Stores, Inc. |
68,639 | 77 | % | 8/5 yr. | 497,632 | 7.25 | 12/31/2012 | | 1/31/2029 | ||||||||||||||||||
Dicks Oklahoma City, OK |
Dicks Sporting |
60,500 | 100 | % | 4/5 yr. | 877,250 | 14.50 | 12/31/2012 | | 1/31/2018 | ||||||||||||||||||
Goods, Inc. |
907,500 | 15.00 | 2/1/2018 | | 1/31/2023 | |||||||||||||||||||||||
Dollar General Park Hill, OK |
Dolgencorp, LLC | 9,026 | 100 | % | 3/5 yr. | 80,393 | 8.91 | 1/4/2013 | | 10/31/2022 | ||||||||||||||||||
82,804 | 9.17 | 11/1/2022 | | 10/31/2027 | ||||||||||||||||||||||||
Dollar General Pueblo, CO |
DG Retail, LLC | 9,026 | 100 | % | 3/5 yr. | 94,372 | 10.46 | 1/4/2013 | | 10/31/2022 | ||||||||||||||||||
97,204 | 10.77 | 11/1/2022 | | 10/31/2027 | ||||||||||||||||||||||||
National Tire & Battery Montgomery, IL |
NTW LLC | 7,964 | 100 | % | 3/5 yr. | 239,473 | 30.07 | 1/15/2013 | | 12/31/2023 | ||||||||||||||||||
268,210 | (16) | 33.68 | 1/1/2024 | | 12/31/2032 | |||||||||||||||||||||||
PetSmart Edmond, OK |
PetSmart, Inc. | 26,040 | 100 | % | 5/5 yr. | 344,249 | 13.22 | 1/23/2013 | | 1/31/2024 | ||||||||||||||||||
Spinx Simpsonville, SC |
The Spinx Company, Inc. |
5,404 | 100 | % | 6/5 yr. | 170,000 | (17) | 31.46 | 1/24/2013 | | 1/24/2033 | |||||||||||||||||
Logans Roadhouse Bristol, VA |
Logans Roadhouse, Inc. |
7,936 | 100 | % | 5/5 yr. | 338,019 | (18) | 42.59 | 1/29/2013 | | 11/30/2026 | |||||||||||||||||
Dollar Tree/Petco Humble, TX |
Dollar Tree Stores, Inc. |
9,800 | 100 | % | 2/5 yr. | 117,600 | 12.00 | 1/31/2013 | | 1/31/2022 | ||||||||||||||||||
Petco Southwest, Inc. |
12,585 | 100 | % | 4/5 yr. | 201,360 | 16.00 | 2/11/2013 | | 1/31/2022 | |||||||||||||||||||
Advance Auto Lake Geneva, WI |
Advance Stores |
6,895 | 100 | % | 3/5 yr. | 122,142 | 17.71 | 2/6/2013 | | 10/31/2027 | ||||||||||||||||||
Dollar General Clay, AL |
Dolgencorp, LLC | 9,026 | 100 | % | 4/5 yr. | 95,650 | 10.60 | 2/8/2013 | | 10/31/2022 | ||||||||||||||||||
98,520 | 10.92 | 11/1/2022 | | 10/31/2027 | ||||||||||||||||||||||||
Dollar General Woodville, OH |
Dolgen Midwest, | 9,026 | 100 | % | 4/5 yr. | 94,800 | 10.50 | 2/8/2013 | | 12/31/2022 | ||||||||||||||||||
LLC |
97,644 | 10.82 | 1/1/2023 | | 12/31/2027 | |||||||||||||||||||||||
Walgreens Cullman, AL |
Walgreen Co. | 14,550 | 100 | % | (5 | ) | 400,000 | 27.49 | 2/22/2013 | | 9/30/2037 |
115
Property |
Major Tenants(1) |
Total Square Feet Leased |
% of Total Rentable Square Feet |
Renewal Options(2) |
Effective Annual Base Rent(3) |
Effective Base Rent per Square Foot(3) |
Lease Term(4) | |||||||||||||||||||||
Dollar General Bokchito, OK |
Dolgencorp, LLC |
9,026 | 100 | % | 3/5 yr. | $ | 75,891 | $ | 8.41 | 2/27/2013 | | 2/29/2028 | ||||||||||||||||
Walgreens Hickory, NC |
Walgreen Co. | 14,820 | 100 | % | (5 | ) | 435,000 | 29.35 | 2/28/2013 | | 4/30/2033 | |||||||||||||||||
Earth Fare Huntersville, NC |
Earth Fare, Inc. | 24,989 | 100 | % | 2/5 yr. | 393,577 | 15.75 | 2/28/2013 | | 12/31/2015 | ||||||||||||||||||
406,071 | 16.25 | 1/1/2016 | | 12/31/2020 | ||||||||||||||||||||||||
418,566 | 16.75 | 1/1/2021 | | 12/31/2025 | ||||||||||||||||||||||||
431,060 | 17.25 | 1/1/2026 | | 8/31/2031 | ||||||||||||||||||||||||
Dollar General Nashville, GA |
Dolgencorp, LLC |
20,707 | 100 | % | 5/5 yr. | 252,661 | (19) | 12.20 | 3/1/2013 | | 2/29/2028 | |||||||||||||||||
Golds Gym Corpus Christi, TX |
Golds Texas Holding, LP |
47,395 | 100 | % | 2/5 yr. | 756,989 | (20) | 15.97 | 3/6/2013 | | 10/31/2022 | |||||||||||||||||
Bed Bath & Beyond/Golfsmith Schaumburg, IL |
Bed Bath & |
70,737 | 70 | % | 4/5 yr. | 548,212 | (21) | 7.75 | 3/8/2013 | | 1/31/2023 | |||||||||||||||||
Golfsmith USA, LLC |
30,036 | 30 | % | 2/5 yr. | 390,468 | 13.00 | 3/8/2013 | | 9/30/2018 | |||||||||||||||||||
Walgreens Huntsville, AL |
Walgreen Co. | 15,120 | 100 | % | 8/5 yr. | 403,300 | 26.67 | 3/15/2013 | | 5/31/2021 | ||||||||||||||||||
Dollar General Newark, OH |
Dolgen Midwest, LLC |
9,100 | 100 | % | 4/5 yr. | 95,844 | 10.53 | 3/15/2013 | | 1/31/2023 | ||||||||||||||||||
98,712 | 10.85 | 2/1/2023 | | 1/31/2028 | ||||||||||||||||||||||||
Dollar General Groveport, OH |
Dolgen Midwest, LLC |
9,026 | 100 | % | 5/5 yr. | 97,500 | 10.80 | 3/15/2013 | | 1/31/2023 | ||||||||||||||||||
100,425 | 11.13 | 2/1/2023 | | 1/31/2028 | ||||||||||||||||||||||||
CVS Chicago (Central Ave), IL |
Highland Park CVS, LLC |
12,066 | 100 | % | 8/5 yr. | 439,975 | 36.46 | 3/20/2013 | | 1/31/2035 | ||||||||||||||||||
Dollar General Toney, AL |
Dolgencorp, LLC | 9,100 | 100 | % | 5/5 yr. | 79,922 | (19) | 8.78 | 3/21/2013 | | 1/31/2028 | |||||||||||||||||
Walgreens Phoenix, AZ |
Walgreen Arizona Drug Co. |
15,120 | 100 | % | 8/5 yr. | 286,206 | 18.93 | 3/22/2013 | | 6/30/2021 | ||||||||||||||||||
University Marketplace Marion, IN |
Hobby Lobby Stores, Inc. |
50,000 | 58 | % | 3/5 yr. | 275,000 | 5.50 | 3/22/2013 | | 9/30/2017 | ||||||||||||||||||
287,500 | 5.75 | 10/1/2017 | | 9/30/2022 | ||||||||||||||||||||||||
312,500 | 6.25 | 10/1/2022 | | 9/30/2027 | ||||||||||||||||||||||||
The TJX Companies, Inc. |
24,000 | 28 | % | 4/5 yr. | 192,000 | 8.00 | 3/22/2013 | | 3/31/2023 | |||||||||||||||||||
PetSmart, Inc. | 12,224 | 14 | % | 5/5 yr. | 152,800 | 12.50 | 3/22/2013 | | 1/31/2018 | |||||||||||||||||||
165,024 | 13.50 | 2/1/2018 | | 1/31/2023 | ||||||||||||||||||||||||
Dollar General Yatesville, GA |
Dolgencorp, LLC | 9,026 | 100 | % | 5/5 yr. | 83,543 | 9.26 | 3/25/2013 | | 2/29/2028 | ||||||||||||||||||
Fourth Creek Landing Statesville, NC |
The TJX Companies, Inc. |
23,600 | 35 | % | 4/5 yr. | 200,600 | 8.50 | 3/26/2013 | | 9/30/2022 | ||||||||||||||||||
Staples the Office Superstore East, Inc. |
15,764 | 23 | % | 4/5 yr. | 202,567 | (22) | 12.85 | 8/1/2013 | | 7/31/2023 | ||||||||||||||||||
Michaels Stores, Inc. |
14,293 | 21 | % | 4/5 yr. | 152,935 | 10.70 | 3/26/2013 | | 2/28/2023 | |||||||||||||||||||
PetSmart, Inc. | 13,890 | 21 | % | 5/5 yr. | 215,295 | (22) | 15.50 | 3/26/2013 | | 7/31/2022 | ||||||||||||||||||
CVS Florence, AL |
Alabama CVS Pharmacy, LLC |
10,125 | 100 | % | 5/5 yr. | 196,250 | 19.38 | 3/27/2013 | | 1/31/2038 | ||||||||||||||||||
Canton Marketplace Canton, GA |
Dicks Sporting |
50,750 | 14 | % | 4/5 yr. | 583,625 | (23) | 11.50 | 3/28/2013 | | 1/31/2020 | |||||||||||||||||
PetSmart Commerce, MI |
PetSmart, Inc. | 26,034 | 100 | % | 4/5 yr. | 221,775 | 8.52 | 3/28/2013 | | 3/31/2018 | ||||||||||||||||||
243,953 | 9.37 | 4/1/2018 | | 3/31/2023 | ||||||||||||||||||||||||
Buffalo Wild Wings Warrenville, IL |
Blazin Wings, Inc. | 6,400 | 100 | % | 3/5 yr. | 211,200 | 33.00 | 3/28/2013 | | 11/30/2017 | ||||||||||||||||||
227,072 | 35.48 | 12/1/2017 | | 11/30/2022 | ||||||||||||||||||||||||
Buffalo Wild Wings Woodridge, IL |
Blazin Wings, Inc. | 6,400 | 100 | % | 3/5 yr. | 211,200 | 33.00 | 3/28/2013 | | 11/30/2017 | ||||||||||||||||||
227,072 | 35.48 | 12/1/2017 | | 11/30/2022 | ||||||||||||||||||||||||
Trader Joes Columbia, SC |
Trader Joes East, Inc. |
13,800 | 100 | % | 4/5 yr. | 410,550 | (7) | 29.75 | 3/28/2013 | | 3/31/2023 |
(1) | Major tenants include those tenants that occupy greater than 10% of the rentable square feet of the respective property. |
(2) | Represents number of renewal options and the term of each option. |
(3) | Effective annual base rent and effective base rent per square foot includes adjustments for rent concessions or abatements, if any. |
116
(4) | Represents lease term beginning with the later of the purchase date or the rent commencement date through the end of the non-cancellable lease term, assuming no renewals are exercised. In general, these properties are subject to long-term triple or double net leases that require the tenants to pay substantially all operating expenses in addition to base rent. |
(5) | Lease continues for 50 years following the end of the non-cancellable portion of the lease term, provided that the tenant has the right to terminate the lease as of the last day of any month during such 50-year period upon 12 months prior notice. |
(6) | The annual base rent under the leases increases every two years by the lesser of the cumulative percentage increase in the Consumer Price Index over the preceding two-year period or 4% of the then-current annual base rent. |
(7) | The annual base rent under the leases increases every five years by the lesser of the cumulative percentage increase in the Consumer Price Index over the preceding five-year period or 10% of the then-current annual base rent. |
(8) | The annual base rent under the lease increases every five years by $35,000. |
(9) | The annual base rent under the lease increases every five years by approximately 10% of the then-current annual base rent. |
(10) | Subject to a ground lease. |
(11) | The annual base rent under the lease increases every five years by the lesser of one and a half times the cumulative percentage increase in the Consumer Price Index over the preceding five-year period or 10% of the then-current annual base rent. |
(12) | The annual base rent under the lease increases every year by the lesser of one and a quarter times the cumulative percentage increase in the Consumer Price Index over the preceding annual period or 1.75% of the then-current annual base rent. |
(13) | The annual base rent under the lease increases every year by 2% of the then-current annual base rent. |
(14) | Lease term beginning December 10, 2012 through April 18, 2013 includes an adjustment for a rent incentive received on the purchase date. |
(15) | The annual base rent under the lease increases every five years by the lesser of the cumulative percentage increase in the Consumer Price Index over the preceding five-year period or 11% of the then-current annual base rent. |
(16) | The annual base rent under the lease increases every five years by the lesser of the cumulative percentage increase in the Consumer Price Index over the preceding five-year period or 12% of the then-current annual base rent. |
(17) | The annual base rent under the lease increases every year by 1.75% of the then-current annual base rent. |
(18) | The annual base rent under the lease increases every year by the lesser of the cumulative percentage increase in the Consumer Price Index over the preceding year or 1.75% of the then-current annual base rent. |
(19) | The annual base rent under the lease increases every ten years by 3% of the then-current annual base rent. |
(20) | The annual base rent under the lease increases every five years by 10% of the then-current annual base rent. |
(21) | The annual base rent under the lease increases every five years by 3.2% of the then-current annual base rent. |
(22) | The annual base rent under the lease increases every five years by $1.00 per square foot. |
(23) | The annual base rent under the lease increases every five years by $0.50 per square foot. |
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Tenant Lease Expirations
The following table sets forth the lease expirations for each of our properties acquired as of April 4, 2013 for each of the next ten years and thereafter assuming no renewal options are exercised. For purposes of the table, the Total Annual Base Rent Expiring column represents annualized rental revenue, on a straight-line basis, for each lease that expires during the respective year.
Year Ending December 31, |
Number of Leases Expiring |
Square Feet Expiring |
Total Annual Base Rent Expiring |
% of Total Annual Base Rent |
||||||||||||
2013 |
1 | 1,200 | $ | 36,840 | * | |||||||||||
2014 |
12 | 33,713 | 833,099 | 2 | % | |||||||||||
2015 |
11 | 23,861 | 484,627 | 1 | % | |||||||||||
2016 |
9 | 19,622 | 382,586 | 1 | % | |||||||||||
2017 |
11 | 26,721 | 518,457 | 1 | % | |||||||||||
2018 |
4 | 45,561 | 574,607 | 1 | % | |||||||||||
2019 |
12 | 103,267 | 2,106,701 | 4 | % | |||||||||||
2020 |
8 | 214,200 | 3,172,443 | 6 | % | |||||||||||
2021 |
10 | 43,399 | 1,297,134 | 2 | % | |||||||||||
2022 |
16 | 340,525 | 4,428,272 | 8 | % | |||||||||||
2023 |
18 | 430,143 | 5,434,995 | 10 | % | |||||||||||
Thereafter |
101 | 2,153,135 | 33,750,245 | 64 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
213 | 3,435,347 | $ | 53,020,006 | 100 | % | |||||||||||
|
|
|
|
|
|
|
|
* | Represents less than 1% of the total annual base rent. |
Depreciable Tax Basis
For federal income tax purposes, the aggregate depreciable basis in the properties described in this prospectus is approximately $535.9 million. When we calculate depreciation expense for federal income tax purposes, we depreciate buildings and improvements over a 40-year recovery period, land improvements over a 20-year recovery period and furnishings and equipment over a 12-year recovery period using a straight-line method and a mid-month convention. The preliminary depreciable basis in these properties is estimated, as of April 4, 2013, as follows:
Wholly-owned Property |
Depreciable Tax Basis |
|||
Advance Auto Parts North Ridgeville, OH |
$ | 1,454,746 | ||
PetSmart Wilkesboro, NC |
2,202,687 | |||
Nordstrom Rack Tampa, FL |
8,626,924 | |||
Walgreens Blair, NE |
3,906,948 | |||
CVS Corpus Christi, TX |
2,752,223 | |||
CVS Charleston, SC |
1,268,905 | |||
CVS Asheville, NC |
1,257,283 | |||
OReilly Auto Parts Brownfield, TX |
943,673 | |||
OReilly Auto Parts Columbus, TX |
870,191 | |||
Walgreens Suffolk, VA |
3,664,037 | |||
Walgreens Springfield, IL |
4,393,205 | |||
Walgreens Montgomery, AL |
3,366,967 | |||
Tractor Supply Cambridge, MN |
1,437,724 | |||
HEB Center Waxahachie, TX |
9,434,791 | |||
CVS Bainbridge, GA |
2,160,621 | |||
Advance Auto Starkville, MS |
897,523 | |||
AutoZone Philipsburg, PA |
1,328,400 |
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Wholly-owned Property |
Depreciable Tax Basis |
|||
Benihana Portfolio Various |
$ | 14,215,321 | ||
Wawa Cape May, NJ |
6,264,715 | |||
Wawa Galloway, NJ |
6,661,619 | |||
Stripes Portfolio I Various |
6,747,067 | |||
Stripes Portfolio II Various |
13,888,247 | |||
Pickn Save Sheboygan, WI |
11,580,040 | |||
The Marquis Williamsburg, VA |
11,693,200 | |||
Golden Corral Garland, TX |
3,200,460 | |||
Ross Ft. Worth, TX |
4,018,000 | |||
CVS Irving, TX |
3,212,397 | |||
Mattress Firm Jonesboro, AR |
1,794,980 | |||
Petsmart Baton Rouge, LA |
3,362,000 | |||
Walgreens Lubbock (82nd), TX |
3,477,210 | |||
Walgreens Lubbock (Indiana), TX |
3,032,770 | |||
Kohls Hutchinson, KS |
2,775,700 | |||
CVS Cartersville, GA |
| (1) | ||
Logans Roadhouse Lancaster, TX |
2,595,300 | |||
Logans Roadhouse Opelika, AL |
2,427,047 | |||
Logans Roadhouse Sanford, FL |
2,973,110 | |||
Logans Roadhouse Troy, OH |
2,546,100 | |||
Advance Auto Corydon, IN |
1,240,982 | |||
Mattress Firm Pineville, NC |
2,778,980 | |||
Tractor Supply Newnan, GA |
3,233,260 | |||
Cost Plus Shopping Center Kansas City, MO |
3,169,300 | |||
Michaels Bowling Green, KY |
2,550,200 | |||
Tractor Supply Spencer, WV |
2,414,900 | |||
Dollar General Peidmont, AL |
2,714,456 | |||
Dollar General Hanceville, AL |
2,652,444 | |||
Kirklands Jonesboro, AR |
2,380,645 | |||
Dollar General Maynardville, TN |
1,006,520 | |||
Dollar General Lima, OH |
1,100,260 | |||
Dollar General Whitwell, TN |
1,181,878 | |||
Dollar General Cleveland, TX |
927,252 | |||
Dollar General Brownsville, TX |
1,114,807 | |||
Dollar General Greenwell Springs, LA |
1,178,508 | |||
Dollar General Breaux Bridge, LA |
1,136,453 | |||
Tire Kingdom Tarpon Springs, FL |
1,711,607 | |||
Tractor Supply Canon City, CO |
3,048,093 | |||
Hobby Lobby Mooresville, NC |
4,510,000 | |||
Canarsie Plaza Brooklyn, NY |
101,680,000 | |||
Kohls Cedar Falls, IA |
6,601,000 | |||
Big Lots Waco, TX |
2,132,000 | |||
Costco Tallahassee, FL |
| (1) | ||
Wal-Mart Tallahassee, FL |
| (1) | ||
Golden Corral Houston, TX |
3,234,080 | |||
Old Navy & PetSmart Reynoldsburg, OH |
4,961,235 | |||
National Tire & Battery Cedar Hill, TX |
2,151,680 | |||
Hickory Flat Commons Canton, GA |
15,580,000 | |||
Dollar General Independence, MO |
1,121,884 | |||
Dollar General Rayne, LA |
949,223 | |||
Dollar General Conroe, TX |
1,024,978 | |||
Dollar General Houston, TX |
1,312,629 | |||
Dollar General Lubbock, TX |
1,008,488 |
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Wholly-owned Property |
Depreciable Tax Basis |
|||
Big Lots San Angelo, TX |
2,665,000 | |||
Home Depot North Canton, OH |
11,849,000 | |||
Walgreens Danville, VA |
4,830,313 | |||
Dollar General Ashville, AL |
920,648 | |||
Dollar General Geneva, AL |
1,024,490 | |||
Dollar General Harvest, AL |
943,886 | |||
Dollar General Huntsville, AL |
1,028,203 | |||
Dollar General Kinston, AL |
886,589 | |||
Fairview Village Cary, NC |
1,354,611 | (1) | ||
Dicks Oklahoma City (3rd Street), OK |
7,357,291 | |||
Wallace Commons Salisbury, NC |
2,427,311 | (1) | ||
Dicks Oklahoma City, OK |
9,922,000 | |||
Dollar General Park Hill, OK |
891,340 | |||
Dollar General Pueblo, CO |
1,044,680 | |||
National Tire & Battery Montgomery, IL |
2,805,220 | |||
PetSmart Edmond, OK |
3,362,000 | |||
Spinx Simpsonville, SC |
1,640,000 | |||
Logans Roadhouse Bristol, VA |
3,229,980 | |||
Dollar Tree/Petco Humble, TX |
3,099,600 | |||
Advance Auto Lake Geneva, WI |
1,410,646 | |||
Dollar General Clay, AL |
1,074,425 | |||
Dollar General Woodville, OH |
1,064,877 | |||
Walgreens Cullman, AL |
5,248,000 | |||
Dollar General Bokchito, OK |
841,320 | |||
Walgreens Hickory, NC |
5,573,438 | |||
Earth Fare Huntersville, NC |
4,303,108 | |||
Dollar General Nashville, GA |
2,799,159 | |||
Golds Gym Corpus Christi, TX |
7,175,000 | |||
Bed Bath & Beyond/Golfsmith Schaumburg, IL |
10,168,000 | |||
Walgreens Huntsville, AL |
4,428,000 | |||
Dollar General Newark, OH |
1,076,604 | |||
Dollar General Groveport, OH |
1,095,205 | |||
CVS Chicago (Central Ave), IL |
5,707,348 | |||
Dollar General Toney, AL |
885,623 | |||
Walgreens Phoenix, AZ |
3,198,000 | |||
University Marketplace Marion, IN |
6,617,775 | |||
Dollar General Yatesville, GA |
925,746 | |||
Fourth Creek Landing Statesville, NC |
8,433,946 | |||
CVS Florence, AL |
2,238,885 | |||
Canton Marketplace Canton, GA |
50,081,500 | (1) | ||
PetSmart Commerce, MI |
2,287,494 | |||
Buffalo Wild Wings Warrenville, IL |
2,387,614 | |||
Buffalo Wild Wings Woodridge, IL |
2,387,614 | |||
Trader Joes Columbia, SC |
4,950,750 | |||
|
|
|||
$ | 535,882,112 | |||
|
|
(1) | Depreciable basis excludes any ground leases. |
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We currently have no plan for any renovations, improvements or development of the properties listed above, and we believe all of our properties are adequately insured. We intend to obtain adequate insurance coverage for all future properties that we acquire.
Placement of Debt on Certain Real Property Investments
Revolving Credit Facility
On April 13, 2012, our operating partnership entered into a secured revolving credit facility providing for up to $50.0 million of borrowings pursuant to a credit agreement (the Credit Agreement) with J.P. Morgan Securities, LLC, as sole lead arranger and sole bookrunner, JPMorgan Chase Bank, N.A. (JPMorgan Chase) as administrative agent, and other lending institutions that may become parties to the Credit Agreement (collectively, with JPMorgan Chase, the Lenders). Subject to meeting certain conditions described in the Credit Agreement and the payment of certain fees, the amount of the Credit Facility could be increased up to a maximum of $250.0 million (the Accordion Feature). Pursuant to the Credit Agreement, our operating partnership exercised the Accordion Feature and, on July 13, 2012, entered into an amended and restated secured revolving credit agreement (the Amended Credit Agreement), which amended and restated the Credit Agreement in its entirety (the Credit Facility).
The Credit Facility allows our operating partnership to borrow up to $250.0 million in revolving loans (the Revolving Loans), with the maximum amount outstanding not to exceed the lesser of (i) 65% of the appraised value of qualified properties as determined by the administrative agent or (ii) 65% of the acquisition costs of qualified properties as reasonably determined by the administrative agent (the Borrowing Base). The Revolving Loans will bear interest at rates depending upon the type of loan specified by our operating partnership. For a Eurodollar rate loan, as defined in the Amended Credit Agreement, the interest rate will be equal to the LIBOR for the interest period, plus 2.35%. For floating rate loans, the interest rate will be a per annum amount equal to 1.35% plus the greatest of (a) the Federal Funds Rate plus 0.5%; (b) JPMorgan Chases Prime Rate; or (c) the one-month LIBOR plus 1.0%. The Credit Facility matures on July 13, 2015 and may be prepaid in whole or in part without any premium or penalty upon satisfying the notification requirements to the Lenders. In addition, the Amended Credit Agreement modified the terms of the Accordion Feature, allowing the amount of the Credit Facility to be increased up to a maximum of $400.0 million, subject to meeting certain conditions described in the Amended Credit Agreement and the payment of certain fees.
As of April 4, 2013, the Borrowing Base under the Credit Facility was approximately $176.9 million based on the underlying collateral pool for qualified properties. As of April 4, 2013, we had $60.4 million outstanding under the Credit Facility.
Bridge Facility
On December 14, 2012, our operating partnership, CCPT IV OP, entered into an unsecured bridge facility (the Bridge Facility) providing for up to $75.0 million of borrowings pursuant to a credit agreement (the Bridge Credit Agreement) with J.P. Morgan Securities LLC, as lead arranger and sole book manager, JPMorgan Chase as administrative agent and syndication agent, and other lending institutions that may become parties to the Bridge Credit Agreement.
On March 8, 2013, CCPT IV OP entered into a first modification and lender joinder agreement (the Modified Bridge Credit Agreement) with JP Morgan Chase and Bank of America, N.A., which modified the Bridge Credit Agreement and added Bank of America, N.A. as a party to the Bridge Credit Agreement. The Modified Bridge Credit Agreement allows CCPT IV OP to borrow up to $150.0 million in revolving loans (the Bridge Revolving Loans), with the maximum amount outstanding not to exceed the lesser of (a) 50% of the aggregate value allocated to each qualified unencumbered property comprising the borrowing base and (b) the aggregate mortgageability of each qualified unencumbered property, as defined in the Bridge Credit Agreement,
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comprising the borrowing base (the Bridge Borrowing Base). Up to 15% of the total amount available may be used for issuing letters of credit and up to $15.0 million may be used for issuing swing line loans (the Swing Line Loans). The Bridge Facility matures on June 14, 2013.
The Bridge Revolving Loans will bear interest at rates depending upon the type of loan specified by CCPT IV OP. For a Eurodollar rate loan, as defined in the Bridge Credit Agreement, the interest rate will be equal to the one-month LIBOR for the interest period multiplied by the statutory reserve rate, as defined in the Bridge Credit Agreement (the Adjusted LIBO Rate), plus 2.75%. For base rate committed loans, the interest rate will be a per annum amount equal to the greater of (a) JPMorgan Chases Prime Rate (b) the Federal Funds Effective Rate plus 0.50%; or (c) the Adjusted LIBO Rate plus 1.0% (the Base Rate) plus 1.75%. The Swing Line Loans will bear interest at a rate equal to the Base Rate plus 2.75%.
CCPT IV OP has the right to prepay the Eurodollar rate loans and base rate committed loans, in whole or in part, without premium or penalty provided that (i) prior written notice is received by the administrative agent; (ii) any prepayment of Eurodollar Rate loans must be in a principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess thereof; and (iii) any prepayment of Base Rate committed loans must be in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof, or in each case, if less, the entire principal amount then outstanding. CCPT IV OP also has the right to prepay the Swing Line Loans, in whole or part, without premium or penalty provided that (i) prior written notice is received by the lender and administrative agent and (ii) any such prepayment shall be in a minimum principal amount of $100,000.
The Bridge Credit Agreement and Modified Bridge Credit Agreement contain customary representations, warranties, borrowing conditions and affirmative, negative and financial covenants, including minimum net worth, debt service coverage and leverage ratio requirements and dividend payout requirements. The Bridge Credit Agreement also includes usual and customary events of default and remedies for facilities of this nature. Upon the occurrence of any event of default, the base rate committed loans and Swing Line Loans will bear interest payable at an interest rate equal to the Base Rate plus 3.75% per annum and the Eurodollar rate loans will bear interest payable at an interest rate equal to 2.0% per annum above the interest rate that would otherwise be applicable at the time, until such default is cured. Similarly, the letter of credit fees described above will be increased to a rate of 4.75% above the letter of credit fee that would otherwise be applicable at that time. Under the Modified Bridge Credit Agreement, CCPT IV paid certain fees, including an up-front fee.
As of April 4, 2013, CCPT IV OP had approximately $86.6 million outstanding under the Bridge Facility and, based on the underlying collateral pool for qualified unencumbered properties, approximately $17.4 million available for borrowing.
Mortgage Loan
CCPT IV OP, through one of its wholly-owned subsidiaries, entered into a mortgage loan agreement on December 5, 2012 with PNC Bank, National Association (PNC Bank), as lender, in the principal amount of $75.0 million (the PNC Loan) which matures on January 1, 2023 (the Maturity Date). The PNC Loan is secured by the Canarsie Plaza property. CCPT IV OP will make interest payments to PNC Bank based on a fixed rate of 3.69% per annum, with interest only payments due monthly through the Maturity Date.
The PNC Loan may not be prepaid in whole or in part prior to December 31, 2014. Subsequent to December 31, 2014, but prior to June 30, 2022, it may be prepaid in whole but not in part, upon payment of applicable prepayment consideration. There is no prepayment consideration due if the Company prepays the PNC Loan subsequent to June 30, 2022. The PNC Loan is non-recourse to us, but we are liable for customary non-recourse carve-outs.
Upon the occurrence of an event of default, interest on the PNC Loan would accrue at an annual default interest rate equal to the lesser of the then-current interest rate plus 5.00%, or the maximum rate permitted by the state law governing the PNC Loan and any outstanding principal and interest would be payable on demand.
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Dilution of the Net Tangible Book Value of Our Shares
Our net tangible book value per share is calculated as total book value of assets minus total book value of liabilities, divided by the total number of shares of common stock outstanding. Net tangible book value assumes that the value of real estate assets diminishes predictably over time, as shown through the depreciation and amortization of real estate investments, while historically real estate values have risen or fallen with market conditions. Net tangible book value is used generally as a conservative measure of net worth that we do not believe will reflect the estimated value of our assets upon the sale of our company, an orderly liquidation of the real estate portfolio we intend to acquire or the listing of our shares of common stock for trading on a national securities exchange consistent with our potential exit strategies. However, after we begin acquiring real estate assets, net tangible book value will reflect certain dilution in value of our common stock from the issue price as a result of (i) accumulated depreciation and amortization of real estate investments, (ii) fees and expenses paid in connection with our public offering, including selling commissions and dealer manager fees, (iii) the fees and expenses paid to our advisor and third parties in connection with the acquisition of our assets and related financing, and (iv) the funding of distributions from sources other than cash flow from operations, if any. Accordingly, investors in this offering will experience immediate dilution of the net tangible book value per share of our common stock from the per share offering price. As of December 31, 2012, our net tangible book value per share was $8.26. The offering price for our common stock was $10.00 per share in our primary offering as of December 31, 2012 (ignoring purchase price discounts for certain categories of purchasers). Accordingly, investors in this offering will experience immediate dilution of the net tangible book value per share of our common stock from the per share offering price.
Our offering price was not established on an independent basis and bears no relationship to the net value of our assets. Further, even without depreciation in the value of our assets, the other factors described above with respect to the dilution in the value of our common stock are likely to cause our offering price to be higher than the amount you would receive per share if we were to liquidate after we break escrow, but before the end of the offering period.
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The following data should be read in conjunction with our consolidated financial statements and notes thereto and Managements Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2012, incorporated by reference into this prospectus.
The selected financial data presented below has been derived from our audited consolidated financial statements as of and for the year ended December 31, 2012 and the period ended December 31, 2011, respectively.
December 31, 2012 | December 31, 2011 | |||||||
Balance Sheet Data: |
||||||||
Total investment in real estate assets, net |
$ | 520,083,451 | $ | | ||||
Cash and cash equivalents |
$ | 13,895,153 | $ | 200,000 | ||||
Total assets |
$ | 542,200,907 | $ | | ||||
Borrowing facilities and note payable |
$ | 274,593,794 | $ | | ||||
Acquired below market lease intangibles, net |
$ | 7,809,544 | $ | | ||||
Total liabilities |
$ | 294,721,269 | $ | | ||||
Stockholders equity |
$ | 245,515,786 | $ | 200,000 | ||||
Operating Data: |
||||||||
Total revenue |
$ | 7,836,972 | $ | | ||||
General and administrative expenses |
$ | 1,502,460 | $ | | ||||
Property operating expenses |
$ | 552,995 | $ | | ||||
Advisory fees and expenses |
$ | 812,322 | $ | | ||||
Acquisition related expenses |
$ | 14,370,555 | $ | | ||||
Depreciation and amortization |
$ | 2,614,371 | $ | | ||||
Operating loss |
$ | (12,015,731 | ) | $ | | |||
Interest expense |
$ | (1,728,951 | ) | $ | | |||
Net loss |
$ | (13,743,823 | ) | $ | | |||
Cash Flow Data: |
||||||||
Net cash used in operating activities |
$ | (8,716,176) | $ | | ||||
Net cash used in investing activities |
$ | (511,223,309 | ) | $ | | |||
Net cash provided by financing activities |
$ | 533,634,638 | $ | | ||||
Per Share Data: |
||||||||
Net loss basic and diluted |
$ | (1.60 | ) | $ | | |||
Distributions declared per common share |
$ | 0.63 | $ | | ||||
Weighted average shares outstanding basic and diluted |
8,578,494 | 20,000 |
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Prior Investment Programs
The information presented in this section and in the Prior Performance Tables attached to this prospectus provides relevant summary information on the historical experience of the real estate programs managed over the last ten years by our sponsor, Cole Real Estate Investments, including certain officers and directors of our advisor. The prior performance of the programs previously sponsored by Cole Real Estate Investments is not necessarily indicative of the results that we will achieve. For example, many of the prior programs were privately offered and did not bear a fee structure similar to ours, or the additional costs associated with being a publicly held entity. Therefore, you should not assume that you will experience returns comparable to those experienced by investors in prior real estate programs sponsored by Cole Real Estate Investments.
We intend to conduct this offering in conjunction with future offerings by one or more public and private real estate entities sponsored by Cole Real Estate Investments. To the extent that such entities have the same or similar objectives as ours or involve similar or nearby properties, such entities may be in competition with the properties acquired by us. See the Conflicts of Interest section of this prospectus for additional information.
The Prior Performance Tables set forth information as of the dates indicated regarding the prior programs subject to public reporting requirements, including (1) experience in raising and investing funds (Table I); (2) compensation to the sponsor and its affiliates (Table II); (3) annual operating results of prior real estate programs (Table III); and (4) results of sales or disposals of properties (Table V). The Company has not included the results of completed programs (Table IV) since none of the prior public real estate programs sponsored by Cole Real Estate Investments have completed their operations during the five years ended December 31, 2012. Additionally, Table VI, which is contained in Part II of the registration statement for this offering and which is not part of this prospectus, contains certain additional information relating to properties acquired by these prior real estate programs. We will furnish copies of such tables to any prospective investor upon request and without charge. The purpose of this prior performance information is to enable you to evaluate accurately the experience of our advisor and its affiliates in sponsoring like programs. The following discussion is intended to summarize briefly the objectives and performance of the prior real estate programs and to disclose any material adverse business developments sustained by them. As of December 31, 2012, approximately 98% of the prior real estate programs had investment objectives similar to those of this program, based on number of programs.
Summary Information
Prior Private Programs
During the period from January 1, 2003 to December 31, 2012, Cole Real Estate Investments sponsored 61 privately offered programs, including two limited partnerships, four debt offerings, 27 Delaware Statutory Trusts, 26 tenant-in-common programs and CCPT, a privately offered REIT, each with similar investment objectives to those of this program, and one limited partnership that did not have similar investment objectives to this program. As of December 31, 2012, such privately offered prior programs have raised approximately $637.8 million from approximately 5,500 investors.
With respect to the two privately offered limited partnerships, CCPF and CCPF II, sponsored by Cole Real Estate Investments during the period from January 1, 2003 to December 31, 2012, which had similar investment objectives to this program, affiliates of our advisor have been general partners in each limited partnership. In total, limited partnership interests were sold to approximately 1,000 investors, raising approximately $49.5 million of capital. The foregoing partnerships have purchased 23 single-tenant retail and commercial properties for an approximate acquisition cost of $117.0 million. The properties were located in the following states: three in Tennessee; three in Oklahoma; two in California; two in Ohio; and one each in Alabama, Florida, Indiana, Iowa, Kentucky, Michigan, Missouri, New Mexico, New York, South Carolina, Texas, Virginia and Washington. The properties have been purchased on terms varying from all cash to market rate financing. As of
125
December 31, 2012, each of the limited partnerships has completed operations and all of the 23 properties have been sold, 22 of which were sold to CCPT II for $121.2 million. In accordance with CCPT IIs charter, CCPT IIs board of directors, including all of its independent directors, not otherwise interested in the transactions, approved these purchases as being fair and reasonable to CCPT II at a price in excess of the cost paid by the affiliated seller, and determined that there was substantial justification for the excess cost. In addition, the limited partners of the two privately offered limited partnerships approved the sales. CCPF and CCPF II achieved average annual returns of approximately 8.07% and 9.36%, respectively, during the life of the respective partnership through the date of liquidation.
With respect to the one privately offered limited partnership sponsored by Cole Real Estate Investments during the period from January 1, 2003 to December 31, 2012, CGOF, which did not have similar investment objectives to this program, an affiliate of our advisor serves as the general partner. Unlike the investment approach of our sponsors other programs, which were designed to provide current income through the payment of cash distributions, CGOF is designed to invest in properties located in high growth markets in the early stages of development, where value added investment strategies could be implemented with the objective of realizing appreciation through the sale or other form of disposition of properties. As of December 31, 2012, CGOF had raised approximately $26.3 million from approximately 400 investors and owned directly, or indirectly through investments in joint ventures, a total of four properties including three properties in Arizona and one property in Nevada for an aggregate cost of approximately $27.3 million, including development related costs. As of December 31, 2012, none of these properties had been sold.
In addition to the partnerships described above, as of December 31, 2012, affiliates of our advisor had issued an aggregate of approximately $114.2 million in collateralized senior notes through four privately offered debt programs and had acquired 123 single-tenant retail properties, 40 single-tenant commercial properties, three multi-tenant retail properties and one land parcel in 38 states for an aggregate acquisition cost of approximately $1.0 billion. The debt offerings are considered to be prior programs, as proceeds were primarily used to invest in single-tenant income-producing retail and commercial properties. One of the primary purposes of the note programs was to enable Cole Real Estate Investments to acquire assets that might be suitable for its tenant-in-common program and Delaware Statutory Trust program and for acquisition by one of its equity programs pending such time as the respective program had sufficient capital and/or corporate approval to acquire the asset. As of December 31, 2012, all of the properties had been sold, of which eight were sold to CCPT, one land parcel was sold to CGOF, 17 were sold to CCPT II, six were sold to CCPT III, one was sold to CCIT, 26 were sold to participants in Cole Real Estate Investments tenant-in-common program, 52 were sold to participants in Cole Real Estate Investments Delaware Statutory Trust program and the remaining 52 properties were sold to unrelated third parties. As of December 31, 2012, an affiliate of our advisor had redeemed at par all $114.2 million in collateralized senior notes.
In addition, Cole Real Estate Investments offered properties to Section 1031 exchange investors through the sale of tenant-in-common ownership interests in such properties. As of December 31, 2012, aggregate ownership interests in 26 properties of approximately $171.4 million had been sold in 26 private offerings of properties located in 15 states. The value of such tenant-in-common ownership interests was determined by the aggregate purchase price, including acquisition costs, of the properties. In addition, Cole Real Estate Investments offered properties through a Delaware statutory trust program whereby beneficial interests were offered in trusts that acquired real property. As of December 31, 2012, aggregate ownership interests in 52 properties of approximately $176.1 million had been sold in 27 private offerings of properties located in 21 states. The value of such beneficial interests was determined by the aggregate purchase price, including acquisition costs, of the real property acquired. As of December 31, 2012, one of the properties offered through a tenant-in-common ownership program had been sold; however, each of the remaining programs described in this paragraph were still in operation and have similar investment objectives to this program.
On April 6, 2004, CCPT commenced a private placement of shares of its common stock for $10.00 per share, subject to certain volume and other discounts. CCPT completed the private placement on September 16, 2005, after having raised aggregate gross proceeds of approximately $100.3 million. As of December 31, 2012,
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CCPT, which has similar investment objectives to this program, had approximately 1,400 investors, and had acquired 42 single-tenant retail properties located in 19 states for an aggregate acquisition cost of approximately $199.1 million. Additionally, as of December 31, 2012, CCPT had sold six properties for $42.2 million. CCPT disclosed in its private placement memorandum a targeted liquidity event by February 1, 2016. Such targeted date has not yet occurred, and CCPT has not had a liquidity event. See the Prior Performance Tables for additional information regarding this program.
Upon written request, any potential investor may obtain, without charge, the most recent annual report on Form 10-K filed with the Securities and Exchange Commission by CCPT within the last 24 months. For a reasonable fee, CCPT will provide copies of any exhibits to such Form 10-K.
During the period from January 1, 2003 to December 31, 2012, the prior private programs purchased 227 properties located in 40 states. The table below gives information about these properties by region.
Properties Purchased | ||||||||
Location |
Number | % of Total Purchase Price |
||||||
South |
112 | 43.8 | % | |||||
Midwest |
63 | 30.6 | % | |||||
West |
29 | 19.4 | % | |||||
Northeast |
23 | 6.2 | % | |||||
|
|
|
|
|||||
227 | 100.0 | % | ||||||
|
|
|
|
Based on the aggregate purchase price of the 227 properties, approximately 79.2% were single-tenant retail properties, approximately 10.2% were multi-tenant retail properties, 9.8% were single-tenant commercial properties, and approximately 0.8% was land. The following table shows a breakdown of the aggregate amount of the acquisition and development costs of the properties purchased by the prior private real estate programs sponsored by Cole Real Estate Investments as of December 31, 2012:
Type of Property |
New | Used | Construction | |||||||||
Retail/Commercial |
29.1 | % | 69.7 | % | 1.2 | % | ||||||
Land |
| 100 | % | |
As of December 31, 2012, these private programs had sold 188, or 82.8% of the total 227 properties purchased, of which 39 properties were sold to CCPT II, six properties were sold to CCPT III, one property was sold to CCIT and 142 properties were sold to unrelated third parties. Of the 142 properties sold to unrelated third parties, 26 properties were sold to participants in Cole Real Estate Investments tenant-in-common program and 52 properties were sold to participants in Cole Real Estate Investments Delaware Statutory Trust program. The original purchase price of the properties that were sold was approximately $1.2 billion, and the aggregate sales price of such properties was approximately $1.3 billion.
During the three years ended December 31, 2012, the prior private real estate programs purchased one single-tenant commercial property located in San Antonio, Texas for $32.9 million.
Prior Public Programs
Cole Real Estate Investments sponsored five publicly offered REITs, CCPT II, CCPT III, CCIT, Cole Income NAV Strategy and CCPT IV, during the period from January 1, 2003 to December 31, 2012. Each of the publicly offered REITs have similar investment objectives to our program. As of December 31, 2012, CCPT II had raised approximately $2.3 billion from approximately 41,000 investors, CCPT III had raised approximately $4.9 billion from approximately 102,000 investors, CCPT IV had raised approximately $298.4 million from approximately 7,500 investors, CCIT had raised approximately $167.8 million from approximately 5,000
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investors and Cole Income NAV Strategy had raised approximately $13.7 million from approximately 100 investors. For more detailed information about the experience of our sponsor in raising and investing funds and compensation paid to the sponsors of CCPT II, CCPT III, CCPT IV, CCIT and Cole Income NAV Strategy, see Tables I and II of the Prior Performance Tables.
On June 27, 2005, CCPT II commenced an initial public offering of shares of its common stock for $10.00 per share, subject to certain volume and other discounts, in a primary offering, and for $9.50 per share pursuant to a distribution reinvestment plan. CCPT II terminated its initial public offering on May 22, 2007 and commenced a follow-on public offering on May 23, 2007. Pursuant to the follow-on offering, CCPT II offered and sold shares of its common stock for $10.00 per share, subject to certain volume and other discounts, in a primary offering, and for $9.50 per share pursuant to its distribution reinvestment plan. CCPT II terminated its follow-on offering on January 2, 2009, although it continued to offer and sell shares of its common stock to existing CCPT II stockholders pursuant to its distribution reinvestment plan. On December 6, 2012, the CCPT II board of directors voted to suspend the distribution reinvestment plan and the share redemption program. As of December 31, 2012, CCPT II had raised approximately $2.3 billion from approximately 41,000 investors and had acquired 417 single-tenant retail properties, 314 single-tenant commercial properties, and 23 multi-tenant retail properties in 45 states and the U.S. Virgin Islands for an aggregate acquisition cost of approximately $3.3 billion or a total of 754 properties. On January 22, 2013, CCPT II entered into an agreement and plan of merger with Spirit Reality Capital, Inc., a publicly listed REIT. The merger agreement provides for the merger of Spirit with and into CCPT II, with CCPT II continuing as the surviving corporation. The name of the surviving corporation is expected to be Spirit Realty Capital, Inc. The completion of the transactions contemplated by the merger agreement is subject to various conditions, including approval by the holders of a majority of the outstanding shares of CCPT II. The transaction is expected to close during the third quarter of 2013.
On October 1, 2008, CCPT III commenced an initial public offering of shares of its common stock for $10.00 per share, subject to certain volume and other discounts, in a primary offering, and for $9.50 per share pursuant to a distribution reinvestment plan. CCPT III terminated its initial public offering on October 1, 2010 and commenced a follow-on public offering on October 1, 2010. Pursuant to the follow-on offering, CCPT III sold shares of its common stock for $10.00 per share, subject to certain volume and other discounts, in a primary offering, and for $9.50 per share pursuant to its distribution reinvestment plan. CCPT III ceased issuing shares in its follow-on offering on April 27, 2012, although it continues to offer and sell shares pursuant to its distribution reinvestment plan. As of December 31, 2012, CCPT III had raised approximately $4.9 billion from approximately 102,000 investors and had acquired 825 single-tenant retail properties, 137 single-tenant commercial properties, 72 multi-tenant retail properties, seven office/industrial properties and two land parcels under construction in 47 states for an aggregate acquisition cost of approximately $7.2 billion, or a total of 1,043 properties, which includes three consolidated joint ventures. In addition, through seven unconsolidated joint venture arrangements as of December 31, 2012, CCPT III had interests in 12 properties comprising 2.3 million gross rentable square feet of commercial space. On April 5, 2013, CCPT III completed a transaction whereby Cole Holdings Corporation merged with and into CREInvestments, LLC (CREI), a wholly-owned subsidiary of CCPT III. Prior to the merger, Cole Holdings was wholly owned by Mr. Christopher H. Cole. CCPT III intends to list its shares of common stock on the New York Stock Exchange following its 2013 annual meeting of stockholders.
On January 26, 2012, CCPT IV commenced an initial public offering of shares of its common stock for $10.00 per share, subject to certain volume and other discounts, in a primary offering, and for $9.50 per share pursuant to a distribution reinvestment plan. On April 13, 2012, the conditions of the escrow agreement were satisfied, and thereafter CCPT IV commenced principal operations. As of December 31, 2012, CCPT IV had raised approximately $298.4 million from approximately 7,500 investors and had acquired 81 single-tenant retail properties and eight multi-tenant properties in 27 states for an aggregate acquisition cost of approximately $513.6 million.
On February 10, 2011, CCIT commenced an initial public offering of shares of its common stock for $10.00 per share, subject to certain volume and other discounts, in a primary offering, and for $9.50 per share pursuant
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to a distribution reinvestment plan. The board of directors of CCIT approved closing the primary offering in the third quarter of 2013 and intends to continue to sells shares of their common stock pursuant to CCITs distribution reinvestment plan. As of December 31, 2012, CCIT had raised approximately $167.8 million from approximately 5,000 investors and had acquired 12 single-tenant commercial properties and one office property in nine states for an aggregate acquisition cost of approximately $294.9 million.
On December 6, 2011, Cole Income NAV Strategy commenced an initial public offering of up to $4.0 billion in shares of its common stock at an initial offering price of $15.00 per share. The conditions of the escrow agreement were satisfied on December 7, 2011, and thereafter, the per share purchase price of Cole Income NAV Strategys common stock varies from day-to-day and, on any given business day, is equal to its net asset value (NAV) divided by the number of shares of its common stock outstanding as of the end of business on such day. The purchase price for shares under the distribution reinvestment program is equal to the NAV per share on the date that the distribution is payable, after giving effect to the distribution. As of December 31, 2012, Cole Income NAV Strategy had raised approximately $13.7 million from approximately 100 investors and had acquired nine single-tenant commercial properties and one multi-tenant retail property in eight states for an aggregate acquisition cost of approximately $32.7 million.
During the period from January 1, 2003 to December 31, 2012, the prior public real estate programs purchased 1,909 properties located in 47 states and the U.S. Virgin Islands as of December 31, 2012. The table below gives information about these properties by region.
Properties Purchased | ||||||||
Location |
Number | % of Total Purchase Price |
||||||
South |
1,087 | 48.1 | % | |||||
Midwest |
495 | 21.3 | % | |||||
West |
196 | 19.9 | % | |||||
Northeast |
130 | 10.6 | % | |||||
U.S. Virgin Islands |
1 | 0.1 | % | |||||
|
|
|
|
|||||
1,909 | 100.0 | % | ||||||
|
|
|
|
Based on the aggregate purchase price of the 1,909 properties, approximately 48.5% were single-tenant retail properties, approximately 25.1% were multi-tenant retail properties, approximately 21.4% were single-tenant commercial properties, 4.9% were office/industrial properties and approximately 0.1% was land.
The following table shows a breakdown of the aggregate amount of the acquisition and development costs of the properties purchased by the prior public real estate programs sponsored by Cole Real Estate Investments as of December 31, 2012:
Type of Property |
New | Used | Construction | |||||||||
Retail/Commercial |
10.9 | % | 89.0 | % | 0.1 | % | ||||||
Land |
| 99.6 | % | 0.4 | % |
As of December 31, 2012, two of the prior public programs had sold 30 properties for $581.3 million.
During the three years ended December 31, 2012, the prior public real estate programs had purchased 1,082 properties located in 47 states. The table below gives information about these properties by region.
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Properties Purchased | ||||||||
Location |
Number | % of Total Purchase Price |
||||||
South |
574 | 45.9 | % | |||||
Midwest |
301 | 18.6 | % | |||||
West |
121 | 22.6 | % | |||||
Northeast |
86 | 12.9 | % | |||||
|
|
|
|
|||||
1,082 | 100.0 | % | ||||||
|
|
|
|
Based on the aggregate purchase price of the 1,082 properties, approximately 42.6% were single-tenant retail properties, approximately 28.7% were multi-tenant retail properties, approximately 21.2% were single-tenant commercial properties, 7.4% were office/industrial properties, and approximately 0.1% was land. Each of the prior public programs used a combination of proceeds from the offering of common stock and debt financing, including mortgage notes payable, revolving lines of credit and mezzanine financing to acquire these properties.
Upon written request, any potential investor may obtain, without charge, the most recent annual report on Form 10-K filed with the Securities and Exchange Commission by CCPT II, CCPT III, CCPT IV, CCIT and Cole Income NAV Strategy within the last 24 months. For a reasonable fee, CCPT II, CCPT III, CCPT IV, CCIT and Cole Income NAV Strategy will provide copies of any exhibits to such Form 10-K.
Liquidity Track Record
Prior Private Programs
Of the 61 prior private programs sponsored by Cole Real Estate Investments discussed above, 35 programs disclosed a targeted date or time frame for liquidation in their private placement memorandum. Of the 35 programs that made such disclosure, six programs liquidated by the date or within the time frame set forth in their private placement memorandum. With respect to the remaining 29 programs, the targeted date or time frame for liquidation has not yet occurred, and those programs were still in operation as of December 31, 2012.
Prior Public Programs
Of the five prior public programs sponsored by Cole Real Estate Investments discussed above, two programs, CCPT II and CCPT III, disclosed in their prospectus a targeted date or time frame for listing their shares on a national securities exchange or seeking stockholder approval of either (1) an extension or elimination of the listing deadline, or (2) a liquidation. With respect to each of the programs, the targeted date or time frame for listing or seeking such stockholder approval has not yet occurred, and the programs are still in operation as of December 31, 2012; however, CCPT II and CCPT III both announced plans for liquidity events subsequent to December 31, 2012, as discussed above. CCIT disclosed in its prospectus that it expects to engage in a strategy to provide its investors with liquidity at a time and in a method recommended by its advisor and determined by its independent directors to be in the best interests of its stockholders. CCITs board of directors approved closing of CCITs primary offering in the third quarter of 2013; however, the timing and method of any liquidity event for CCIT is undetermined as of December 31, 2012. Cole Income NAV Strategy is structured as a perpetual-life, non-exchange traded REIT, which means that, subject to regulatory approval of registrations for additional future offerings, it will be selling shares of its common stock on a continuous basis and for an indefinite period of time. Finally, CCPT IV has not established a targeted date or time frame for pursuing a liquidity event, although it has disclosed in its prospectus that it expects to engage in a strategy to provide its investors with liquidity at a time and in a method recommended by its advisor and determined by its independent directors to be in the best interests of its stockholders. Accordingly, the timing and method of any liquidity event for CCPT IV is undetermined as of December 31, 2012.
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Adverse Business and Other Developments
Adverse changes in general economic conditions have occasionally affected the performance of the prior programs. The following discussion presents a summary of significant adverse business developments or conditions experienced by Cole Real Estate Investments prior programs over the past ten years that may be material to investors in this offering.
Share Valuation
CCPT stated in its private placement memorandum that after two years from the last offering of its shares of common stock, CCPT would provide an estimated value per share for the principal purpose of assisting fiduciaries of plans subject to the annual reporting requirements of ERISA, and IRA trustees or custodians, which prepare reports relating to an investment in CCPTs shares of common stock. On January 15, 2013, CCPT announced that its board of directors approved an estimated value of CCPTs common stock of $7.75 per share as of December 31, 2012. This is a decrease from the previously reported estimated value of CCPTs common stock of $7.95 per share as of December 31, 2011, announced by CCPT on January 13, 2012, but an increase from the $7.65 per share estimated value as of December 31, 2010 and 2009, announced January 13, 2011 and February 1, 2010, respectively. The shares of CCPTs common stock were originally sold at a gross offering price of $10.00 per share. The principal reason for the decrease in share value beginning with the December 31, 2009 valuation was a decline in real estate values, despite CCPTs properties maintaining a 100% occupancy rate. The decline in values resulted from disruptions in the credit markets and the general economic conditions. In determining an estimated value of CCPTs shares of common stock in January 2012 and January 2013, the board of directors of CCPT relied upon information provided by an independent investment banking firm that specializes in providing real estate financial services and information provided by CCPT Advisors. In determining an estimated value of CCPTs shares of common stock in January 2011 and February 2010, the board of directors of CCPT relied on information provided by an independent consultant that specializes in valuing commercial real estate companies, and information provided by CCPT Advisors. The statement of value was only an estimate and may not reflect the actual value of CCPTs shares of common stock. Accordingly, there can be no assurance that the estimated value per share would be realized by CCPTs stockholders if they were to attempt to sell their shares or upon liquidation.
In February 2009, FINRA informed broker dealers that sell shares of non-exchange traded REITs that broker dealers may not report, in a customer account statement, an estimated value per share that is developed from data more than 18 months old. To assist broker dealers in complying with the FINRA notice, the board of directors of CCPT II established an estimated value of CCPT IIs common stock of $9.35 per share as of July 27, 2011. This was an increase from the previously reported estimated share value of $8.05 per share announced on June 22, 2010. The shares of CCPT IIs common stock were originally sold at a gross offering price of $10.00 per share. The principal reason for the initial decrease in share value was a decline in real estate values resulting from disruptions in the credit markets and the general economic conditions, in addition to a decline in CCPT IIs occupancy rate to 94%. CCPT IIs occupancy rate increased to 96% as of December 31, 2012. In determining an estimated value of CCPT IIs shares of common stock in July 2011, the board of directors of CCPT II relied upon information provided by an independent investment banking firm that specializes in providing real estate financial services and information provided by CCPT II Advisors. In determining an estimated value of CCPT IIs shares of common stock in June 2010, the board of directors of CCPT II relied upon information provided by an independent consultant that specializes in valuing commercial real estate companies and information provided by CCPT II Advisors. On January 23, 2013, CCPT IIs board of directors established an estimated value of CCPT IIs common stock of $9.45 per share as of January 23, 2013. This is an increase from the $9.35 per share and $8.05 per share estimated values announced by the CCPT II board of directors on July 27, 2011 and June 22, 2010, respectively. The statements of value were only an estimate and may not reflect the actual value of CCPT IIs shares of common stock. Accordingly, there can be no assurance that the estimated value per share would be realized by CCPT IIs stockholders if they were to attempt to sell their shares or upon liquidation.
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Distributions and Redemptions
From June 2005 through February 2010, CCPT paid a 7.00% annualized distribution rate based upon a purchase price of $10.00 per share. However, beginning in March 2010, CCPT reduced its annualized distribution rate to 5.00% based on a purchase price of $10.00 per share, or 6.50% based on the most recent estimated value of $7.75 per share. The principal reasons for the lower distribution rate were the approximately $50.0 million of fixed rate debt that was to mature by year-end 2010 and the prevailing credit markets, which dictated higher interest rates upon refinancing and amortization provisions, requiring CCPT to pay down a portion of the principal on a monthly basis over the life of the loan. As of December 31, 2012, CCPT had paid approximately $47.6 million in cumulative distributions since inception. These distributions were fully funded by net cash provided by operating activities.
Pursuant to CCPTs share redemption program, the company may use up to 1% of its annual cash flow, including operating cash flow not intended for distributions, borrowings, and capital transactions such as sales or refinancings, to satisfy redemption requests. Accordingly, CCPTs board of directors must determine at the beginning of each fiscal year the maximum amount of shares that CCPT may redeem during that year. CCPTs board of directors determined that there was an insufficient amount of cash available for redemptions during the five years ended December 31, 2012 and the year ending December 31, 2013. CCPT continues to accept redemption requests which are considered for redemption if and when sufficient cash is available to fund redemptions. Requests relating to approximately 261,000 shares remained unfulfilled as of December 31, 2012.
From October 2005 through February 2006, CCPT II paid a 6.00% annualized distribution rate based upon a purchase price of $10.00 per share; from March 2006 through June 2006, CCPT II paid a 6.25% annualized distribution rate based upon a purchase price of $10.00 per share; from July 2006 through June 2007, CCPT II paid a 6.50% annualized distribution rate based upon a purchase price of $10.00 per share; from July 2007 through June 2009, CCPT II paid a 7.00% annualized distribution rate based upon a purchase price of $10.00 per share; and from July 2009 through the date of this prospectus, CCPT II paid a 6.25% annualized distribution rate based upon a purchase price of $10.00 per share, or a 6.61% annualized distribution rate based on the most recent estimate of the value of $9.45 per share. The principal reason for the reduction of the distribution rate was the drop in the occupancy rate of the CCPT II portfolio from 99% on December 31, 2008, to 95% at September 30, 2009, resulting in lower revenue. CCPT IIs occupancy rate as of December 31, 2012 was 96%.
As of December 31, 2012, CCPT II had paid approximately $667.5 million in cumulative distributions since inception. These distributions were funded by net cash provided by operating activities of approximately $603.0 million, offering proceeds of approximately $9.9 million, net sale proceeds in excess of CCPT IIs investment in marketable securities of approximately $21.5 million, net sale proceeds and return of capital in excess of CCPT IIs investment from CCPT IIs interest in joint ventures of approximately $5.9 million, principal payments from mortgage notes receivable and real estate under direct financing leases of $13.3 million and net borrowings of approximately $13.9 million. As of December 31, 2012, CCPT II had expensed approximately $9.9 million in cumulative real estate acquisition expenses, which reduced operating cash flows. CCPT II treats its real estate acquisition expenses as funded by offering proceeds. Therefore, for consistency, real estate acquisition expenses are treated in the same manner in describing the sources of distributions, to the extent that distributions paid exceed net cash provided by operating activities.
Pursuant to CCPT IIs share redemption program in effect during 2009, redemptions were limited to 3% of the weighted average number of shares outstanding during the prior calendar year, other than for redemptions requested upon the death of a stockholder. During 2009, CCPT II funded redemptions up to this limit. On November 10, 2009, CCPT IIs board of directors voted to temporarily suspend CCPT IIs share redemption program other than for requests made upon the death of a stockholder. The board considered many factors in making this decision, including the expected announcement of an estimated value of CCPT IIs common stock in June 2010 and continued uncertainty in the economic environment and credit markets. On June 22, 2010, CCPT IIs board of directors reinstated the share redemption program, with certain amendments, effective
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August 1, 2010. Under the terms of the revised share redemption program, during any calendar year, CCPT II would redeem shares on a quarterly basis, up to one-fourth of 3% of the weighted average number of shares outstanding during the prior calendar year (including shares requested for redemption upon the death of a stockholder). In addition, funding for redemptions for each quarter would be limited to the net proceeds received from the sale of shares, in the respective quarter, under CCPT IIs distribution reinvestment plan. During the year ended December 31, 2012, CCPT II received valid redemption requests pursuant to the share redemption program, as amended, relating to approximately 19.5 million shares, including those requests unfulfilled and resubmitted from a previous period, and requests relating to approximately 6.1 million shares were redeemed for $56.9 million at an average price of $9.32 per share. The remaining redemption requests relating to approximately 13.4 million shares went unfulfilled, including those requests unfulfilled and resubmitted from a previous period. Requests for redemption that are not fulfilled in a period may be resubmitted by stockholders in a subsequent period. Unfulfilled requests for redemption are not carried over automatically to subsequent redemption periods. A valid redemption request is one that complies with the applicable requirements and guidelines of the share redemption program, as amended. On December 6, 2012, CCPT II suspended its share redemption program in anticipation of a potential liquidity event. As a result of the suspension of the share redemption program, all redemption requests received from stockholders during the fourth quarter of 2012 on or before December 6, 2012 and that were determined to be in good order on or before December 12, 2012 were honored in accordance with the terms, conditions and limitation of the share redemption program. CCPT II did not process or accept any requests for redemption received after December 6, 2012 and will not process or accept any future requests until such time as the CCPT II board of directors may approve resumption of the share redemption program.
CCPT IIIs board of directors began declaring distributions in January 2009, after the company commenced business operations. CCPT III paid a 6.50% annualized distribution rate based upon a $10.00 per share purchase price for the period commencing on January 6, 2009 through March 31, 2009. During the period commencing on April 1, 2009 and ending on March 31, 2010, CCPT III paid a 6.75% annualized distribution rate based upon a $10.00 per share purchase price. CCPT III paid a 7.00% annualized distribution rate based upon a $10.00 per share purchase price for the period commencing on April 1, 2010 and ending on December 31, 2010. CCPT III paid a 6.50% annualized distribution rate to stockholders of record during the period commencing January 1, 2011 through the date of this prospectus. The principal reason for the reduction of the distribution rate was to align more closely the distribution rate with CCPT IIIs present operating income.
As of December 31, 2012, CCPT III had paid approximately $624.9 million in cumulative distributions since inception. These distributions were funded by net cash provided by operating activities of approximately $424.0 million, offering proceeds of approximately $200.6 million and distributions received in excess of income from unconsolidated joint ventures of approximately $0.4 million. As of December 31, 2012, CCPT III had expensed approximately $200.6 million in cumulative real estate acquisition expenses which reduced operating cash flows. CCPT III treats its real estate acquisition expenses as funded by offering proceeds. Therefore, for consistency, real estate acquisition expenses are treated in the same manner in describing the sources of distributions, to the extent that distributions paid exceed net cash provided by operating activities.
CCPT IVs board of directors began declaring distributions in April 2012, after the company commenced business operations. CCPT IV paid a 6.25% annualized distribution rate based upon a $10.00 per share purchase price for the period commencing on April 14, 2012, through the date of this prospectus. As of December 31, 2012, CCPT IV had paid approximately $3.9 million in cumulative distributions since inception. These distributions were fully funded proceeds from the offering. As of December 31, 2012, CCPT IV had expensed approximately $14.4 million in cumulative real estate acquisition expenses which reduced operating cash flows. CCPT IV treats its real estate acquisition expenses as funded by offering proceeds. Therefore, for consistency, real estate acquisition costs are treated in the same manner in describing the sources of distributions, to the extent that distributions paid exceed net cash provided by operating activities.
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From October 2011 through the date of this prospectus, CCIT paid a 6.50% annualized distribution rate based on a purchase price of $10.00 per share. As of December 31, 2012, CCIT has paid approximately $4.1 million in cumulative distributions since inception. The distributions were funded by net cash provided by operating activities of approximately $433,000 and offering proceeds of approximately $3.7 million. As of December 31, 2012, CCIT had expensed approximately $6.9 million in cumulative real estate acquisition expenses which reduced operating cash flows. CCIT treats its real estate acquisition expenses as funded by offering proceeds. Therefore, for consistency, real estate acquisition expenses are treated in the same manner in describing the sources of distributions, to the extent that distributions paid exceed net cash provided by operating activities.
The remaining programs sponsored by Cole Real Estate Investments have fulfilled all valid redemption requests and fully funded distributions with operating cash flows.
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We were formed under the laws of the state of Maryland. The rights of our stockholders are governed by Maryland law as well as our charter and bylaws. The following is a summary of the material terms of our common stock as set forth in our charter and bylaws, and is qualified by reference to our charter and bylaws. Our charter and bylaws are on file with the Securities and Exchange Commission as Exhibit 3.4 and 3.5, respectively, to our registration statement on Form S-11 and can be accessed over the Internet at the Securities and Exchange Commissions website at http://www.sec.gov. In addition, copies of our charter and bylaws are available at no cost upon request. See the Where You Can Find More Information section of this prospectus.
Our charter authorizes us to issue up to 500,000,000 shares of stock, of which 490,000,000 shares are designated as common stock at $0.01 par value per share and 10,000,000 shares are designated as preferred stock at $0.01 par value per share. As of April 4, 2013, approximately 46.0 million shares of our common stock were issued and outstanding, and no shares of preferred stock were issued and outstanding. Our board of directors may amend our charter to increase or decrease the aggregate number of our authorized shares or the number of shares of any class or series that we have authority to issue without any action by our stockholders.
Our charter also contains a provision permitting our board of directors, without any action by our stockholders, to classify or reclassify any unissued shares of common stock or preferred stock into one or more classes or series and establish the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications, and terms and conditions of redemption of any new class or series of stock, subject to certain restrictions, including the express terms of any class or series of stock outstanding at the time. We believe that the power to classify or reclassify unissued shares of stock and thereafter issue the classified or reclassified shares provides us with increased flexibility in structuring possible future financings and acquisitions and in meeting other needs that might arise.
Our charter and bylaws contain certain provisions that could make it more difficult to acquire control of our company by means of a tender offer, a proxy contest or otherwise. These provisions are expected to discourage certain types of coercive takeover practices and inadequate takeover bids and to encourage persons seeking to acquire control of our company to negotiate first with our board of directors. We believe that these provisions increase the likelihood that proposals initially will be on more attractive terms than would be the case in their absence and facilitate negotiations that may result in improvement of the terms of an initial offer that might involve a premium price for our common stock or otherwise be in the best interests of our stockholders. See the Risk Factors Risks Related to an Investment in Cole Credit Property Trust IV, Inc. section of this prospectus.
To the extent that our board of directors determines that the Maryland General Corporation Law conflicts with the provisions set forth in the NASAA REIT Guidelines, the NASAA REIT Guidelines will control, unless the provisions of the Maryland General Corporation Law are mandatory under Maryland law.
Common Stock
Subject to any preferential rights of any other class or series of stock and to the provisions of our charter regarding the restriction on the transfer of common stock, the holders of common stock are entitled to such distributions as may be authorized from time to time by our board of directors out of legally available funds and declared by us and, upon any liquidity event, would be entitled to receive all assets available for distribution to our stockholders. Upon issuance for full payment in accordance with the terms of this offering, all common stock issued in the offering will be fully paid and non-assessable. Holders of common stock will not have preemptive rights, which means that they will not have an automatic option to purchase any new shares that we issue, or preference, conversion, exchange, sinking fund, redemption or appraisal rights. Shares of our common stock have equal distribution, liquidation and other rights.
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Preferred Stock
Our charter authorizes our board of directors to issue one or more classes or series of preferred stock without stockholder approval (provided that the issuance of preferred stock must also be approved by a majority of independent directors not otherwise interested in the transaction) and to fix the voting rights, liquidation preferences, distribution rates, conversion rights, redemption rights and terms, including sinking fund provisions, and certain other rights and preferences with respect to such preferred stock; provided, however, that the voting rights of any such preferred stock offered and sold in a private offering shall not exceed voting rights which bear the same relationship to the voting rights of our common stock as the consideration paid to us per share in such private offering bears to the book value of each outstanding share of our common stock. Because our board of directors has the power to establish the preferences and rights of each class or series of preferred stock, it may afford the holders of any series or class of preferred stock preferences, powers, and rights senior to the rights of holders of common stock; subject to the limitation on voting rights noted in the preceding sentence. If we were to create and issue preferred stock with a distribution preference over common stock, payment of any distribution preferences of outstanding preferred stock would reduce the amount of funds available for the payment of distributions on the common stock. Further, holders of preferred stock are normally entitled to receive a preference payment in the event we liquidate, dissolve, or wind up before any payment is made to the common stockholders, likely reducing the amount common stockholders would otherwise receive upon such an occurrence. In addition, under certain circumstances, the issuance of preferred stock may delay, prevent, render more difficult or tend to discourage the following:
| a merger, offer, or proxy contest; |
| the assumption of control by a holder of a large block of our securities; or |
| the removal of incumbent management. |
Also, our board of directors, without stockholder approval, may issue preferred stock with voting and conversion rights that could adversely affect the holders of shares of our common stock.
We currently have no preferred stock issued or outstanding. Our board of directors has no present plans to issue shares of preferred stock, but it may do so at any time in the future without stockholder approval.
Meetings and Special Voting Requirements
Subject to our charter restrictions on transfer of our stock and except as may otherwise be specified in the terms of any class or series of common stock, each holder of common stock is entitled at each meeting of stockholders to one vote per share owned by such stockholder on all matters submitted to a vote of stockholders, including the election of directors. There is no cumulative voting in the election of our board of directors, which means that the holders of a majority of shares of our outstanding common stock can elect all of the directors then standing for election and the holders of the remaining shares of common stock will not be able to elect any directors.
Under Maryland law, a Maryland corporation generally cannot dissolve, amend its charter, merge, sell all or substantially all of its assets, engage in a share exchange or engage in similar transactions outside the ordinary course of business, unless approved by the affirmative vote of stockholders holding at least two-thirds of the shares entitled to vote on the matter. However, a Maryland corporation may provide in its charter for approval of these matters by a lesser percentage, but not less than a majority of all of the votes entitled to be cast on the matter. Our charter provides for approval of these matters by the affirmative vote of a majority of the votes entitled to be cast.
However, under the Maryland General Corporation Law and our charter, the following events do not require stockholder approval:
| stock exchanges in which we are the successor; and |
| transfers of less than substantially all of our assets. |
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Also, because our operating assets are held by our subsidiaries, these subsidiaries may be able to merge or sell all or substantially all of their assets without the approval of our stockholders.
An annual meeting of our stockholders will be held each year, at least 30 days after delivery of our annual report to our stockholders. Our directors, including our independent directors, are required to take reasonable steps to ensure this requirement is met. Special meetings of stockholders may be called only upon the request of a majority of our directors, a majority of our independent directors, our president, our chief executive officer or by an officer upon the written request of stockholders holding at least 10% of our outstanding shares. Within ten days of receiving a written request of stockholders entitled to cast at least 10% of all the votes entitled to be cast requesting a special meeting and stating the purpose of such special meeting, our sponsor will provide all of our stockholders written notice of the meeting and the purpose of such meeting. The meeting must be held not less than 15 nor more than 60 days after the distribution of the notice of meeting at the time and place specified in the request, or, if a time and place are not specified in the request, at a time and place convenient to our stockholders. The presence, either in person or by proxy, of stockholders entitled to cast at least 50% of all the votes entitled to be cast at a meeting on any matter will constitute a quorum.
Our stockholders are entitled to receive a copy of our stockholder list upon request. The list provided by us will include each stockholders name, address and telephone number, and the number of shares owned by each stockholder, and will be sent within ten days of the receipt by us of the request. A stockholder requesting a list will be required to pay reasonable costs of postage and duplication. Stockholders and their representatives will also be given access to our corporate records at reasonable times. We have the right to request that a requesting stockholder represent to us in writing that the list and records will not be used to pursue commercial interests before we become obligated to provide a copy of our stockholder list.
The corporation will continue perpetually unless dissolved pursuant to any applicable provision of the Maryland General Corporation Law.
Formation Transaction
In connection with our formation, a predecessor of CREInvestments invested $200,000 in exchange for 20,000 shares of our common stock. Pursuant to our charter, CREInvestments may not sell this investment in us while Cole Real Estate Investments remains our sponsor, but it may transfer this investment to its affiliates.
Restrictions on Ownership and Transfer
In order for us to qualify as a REIT under the Internal Revenue Code, we must meet the following criteria regarding our stockholders ownership of our shares:
| five or fewer individuals (as defined in the Internal Revenue Code to include certain tax exempt organizations and trusts) may not own, directly or indirectly, more than 50% in value of our outstanding shares during the last half of a taxable year; and |
| 100 or more persons must beneficially own our shares during at least 335 days of a taxable year of 12 months or during a proportionate part of a shorter taxable year. |
See the Federal Income Tax Considerations section of this prospectus for further discussion of this topic. We may prohibit certain acquisitions and transfers of shares so as to ensure our initial and continued qualification as a REIT under the Internal Revenue Code. However, there can be no assurance that this prohibition will be effective. Because we believe it is essential for us to qualify as a REIT, and, once qualified, to continue to qualify, among other reasons, our charter provides (subject to certain exceptions) that no stockholder may own, or be deemed to own by virtue of the attribution provisions of the Internal Revenue Code, more than 9.8% in value of the aggregate of our outstanding shares or more than 9.8% (in value or number of shares, whichever is
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more restrictive) of the aggregate of our outstanding shares of common stock. Our board of directors, in its sole discretion, may waive this ownership limit if evidence satisfactory to our directors is presented that such ownership will not then or in the future jeopardize our status as a REIT. Also, these restrictions on transferability and ownership will not apply if our directors determine that it is no longer in our best interests to continue to qualify as a REIT.
Additionally, our charter further prohibits the transfer or issuance of our stock if such transfer or issuance:
| with respect to transfers only, results in our common stock being owned by fewer than 100 persons; |
| results in our being closely held within the meaning of Section 856(h) of the Internal Revenue Code; |
| results in our owning, directly or indirectly, more than 9.8% of the ownership interests in any tenant or subtenant; or |
| otherwise results in our disqualification as a REIT. |
Any attempted transfer of our stock which, if effective, would result in our stock being owned by fewer than 100 persons will be null and void. In the event of any attempted transfer of our stock which, if effective, would result in (i) violation of the ownership limit discussed above, (ii) our being closely held under Section 856(h) of the Internal Revenue Code, (iii) our owning (directly or indirectly) more than 9.8% of the ownership interests in any tenant or subtenant or (iv) our otherwise failing to qualify as a REIT, then the number of shares causing the violation (rounded to the nearest whole share) will be automatically transferred to a trust for the exclusive benefit of one or more charitable beneficiaries, and the proposed transferee will not acquire any rights in the shares. To avoid confusion, these shares so transferred to a beneficial trust are referred to in this prospectus as Excess Securities. Excess Securities will remain issued and outstanding shares and will be entitled to the same rights and privileges as all other shares of the same class or series. The trustee of the beneficial trust, as holder of the Excess Securities, will be entitled to receive all distributions authorized by our board of directors on such securities for the benefit of the charitable beneficiary. Our charter further entitles the trustee of the beneficial trust to vote all Excess Securities.
Within 20 days of receiving notice from us that the Excess Securities have been transferred to the beneficial trust, the trustee of the beneficial trust shall sell the Excess Securities. The trustee of the beneficial trust may select a transferee to whom the Excess Securities may be sold as long as such sale does not violate the 9.8% ownership limit or the other restrictions on transfer. Upon sale of the Excess Securities, the intended transferee (the transferee of the Excess Securities whose ownership would violate the 9.8% ownership limit or the other restrictions on transfer) will receive from the trustee of the beneficial trust the lesser of such sale proceeds (net of any commissions and other expenses of sale), or the price per share the intended transferee paid for the Excess Securities (or, in the case of a gift or devise to the intended transferee, the price per share equal to the market value per share on the date of the transfer to the intended transferee). The trustee of the beneficial trust will distribute to the charitable beneficiary any amount the trustee receives in excess of the amount to be paid to the intended transferee.
In addition, we have the right to purchase any Excess Securities at the lesser of (i) the price per share paid in the transfer that created the Excess Securities, or (ii) the current market price, until the Excess Securities are sold by the trustee of the beneficial trust. We may reduce the amount payable to the intended transferee upon such sale by the amount of any distribution we pay to an intended transferee on Excess Securities prior to our discovery that such Excess Securities have been transferred in violation of the provisions of the charter. If any legal decision, statute, rule, or regulation deems or declares the transfer restrictions included in our charter to be void or invalid, then we may, at our option, deem the intended transferee of any Excess Securities to have acted as an agent on our behalf in acquiring such Excess Securities and to hold such Excess Securities on our behalf.
Any person who (i) acquires or attempts to acquire shares in violation of the foregoing ownership restriction, transfers or receives shares subject to such limitations, or would have owned shares that resulted in a transfer to a charitable trust, or (ii) proposes or attempts any of the transactions in clause (i), is required to give us
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15 days written notice prior to such transaction. In both cases, such persons must provide to us such other information as we may request in order to determine the effect, if any, of such transfer on our status as a REIT. The foregoing restrictions will continue to apply until our board of directors determines it is no longer in our best interests to continue to qualify as a REIT.
The ownership restriction does not apply to the underwriter in a public offering of shares or to a person or persons so exempted from the ownership limit by our board of directors based upon appropriate assurances that our qualification as a REIT is not jeopardized. Any person who owns 5% or more of the outstanding shares during any taxable year will be asked to deliver a statement or affidavit setting forth the number of shares beneficially owned, directly or indirectly.
Stockholders wishing to transfer shares of our stock may request an application for transfer by contacting us. See the section of this prospectus captioned Where You Can Find More Information. With respect to transfers of uncertificated stock, we will continue to treat the stockholder registered on our stock ledger as the owner of the shares until the record owner and the new owner deliver a properly executed application for transfer to our transfer agent at the address set forth in the application for transfer. Any questions regarding the transferability of shares should be directed to our transfer agent, whose contact information is set forth on page 6 of this prospectus and in the application for transfer.
Distribution Policy and Distributions
We currently pay regular monthly distributions to our stockholders and we intend to continue to pay monthly distributions to our stockholders. We anticipate that our board of directors will declare distributions to stockholders as of daily record dates with distributions aggregated and paid monthly in arrears. Therefore, new investors will be entitled to distributions immediately upon the purchase of their shares. Because substantially all of our operations will be performed indirectly through CCPT IV OP, our operating partnership, our ability to pay distributions depends in large part on CCPT IV OPs ability to pay distributions to us. In the event we do not have enough cash flow from operations to fund distributions, we have paid, and may continue to pay, distributions from sources other than cash flow from operations, including borrowings and proceeds from the sale of our securities or asset sales, and we have no limits on the amounts we may pay from such other sources. We expect that, from time to time, we will pay distributions in excess of our cash flows from operations as defined by GAAP. As a result, the amount of distributions paid at any time may not be an indicator of the current performance of our properties or current operating cash flows. If you are a Maryland investor, you will receive from us on a quarterly basis a notice that discloses the sources of our distribution payments in both dollar and percentage amounts, consistent with similar disclosure that will be included in the prospectus and updated quarterly.
Distributions to stockholders are characterized for federal income tax purposes as ordinary income, capital gains, non-taxable return of capital or a combination of the three. Distributions that exceed our current or accumulated earnings and profits typically constitute a return of capital for tax purposes and reduce the stockholders basis in our common shares. We will annually notify stockholders of the taxability of distributions paid during the preceding year.
Our board of directors authorized a daily distribution, based on 365 days in the calendar year, of $0.001712523 per share (which equates to 6.25% on an annualized basis calculated at the current rate, assuming a $10.00 per share purchase price) for stockholders of record as of the close of business on each day of the period commencing on January 1, 2013 and ending on June 30, 2013.
As of December 31, 2012, cumulative since inception, we have declared approximately $5.4 million of distributions and we have paid approximately $3.9 million, of which approximately $1.9 million was paid in cash and approximately $2.0 million was reinvested in shares of our common stock pursuant to the distribution reinvestment plan. Our net loss was $13.7 million as of December 31, 2012, cumulative since inception.
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The following table presents distributions and source of distributions for the periods indicated below:
Cumulative Paid Since Inception |
Year Ended December 31, 2012 |
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Amount | Percent | Amount | Percent | |||||||||||||
Distributions paid in cash |
$ | 1,960,675 | 50 | % | $ | 1,960,675 | 50 | % | ||||||||
Distributions reinvested |
1,963,852 | 50 | % | 1,963,852 | 50 | % | ||||||||||
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|
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Total distributions |
$ | 3,924,527 | 100 | % | $ | 3,924,527 | 100 | % | ||||||||
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Source of distributions: |
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Proceeds from issuance of common stock |
$ | 3,924,527 | 100 | % | $ | 3,924,527 | 100 | % | ||||||||
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|
|
|
|
|
|
Net cash used in operating activities for the year ended December 31, 2012 was $8.7 million and reflects a reduction for real estate acquisition fees and related costs incurred and expensed of $14.4 million, in accordance with GAAP. As set forth in the Estimated Use of Proceeds section of the prospectus, we treat our real estate acquisition related expenses as funded by proceeds from our offering. Therefore, for consistency, proceeds from the issuance of common stock for the year ended December 31, 2012 are considered a source of our distributions to the extent that acquisition expenses have reduced net cash flows from operating activities. As such, all of our 2012 distributions were funded from proceeds from our offering. For the year ended December 31, 2011, no distributions were paid as we had not commenced principal operations.
Although we intend to continue to pay regular monthly distributions, our results of operations, our general financial condition, general economic conditions, or other factors may inhibit us from doing so. Distributions are authorized at the discretion of our board of directors, and are based on many factors, including current and expected cash flow from operations, as well as the obligation that we comply with the REIT requirements of the Internal Revenue Code. The funds we receive from operations that are available for distribution may be affected by a number of factors, including the following:
| the amount of time required for us to invest the funds received in the offering; |
| our operating and interest expenses, including fees and expenses paid to our advisor; |
| the ability of tenants to meet their obligations under the leases associated with our properties; |
| the amount of distributions or dividends received by us from our indirect real estate investments; |
| our ability to keep our properties occupied; |
| our ability to maintain or increase rental rates when renewing or replacing current leases; |
| capital expenditures and reserves for such expenditures; |
| the issuance of additional shares; |
| the amount of cash used to repurchase shares under our share redemption program; and |
| financings and refinancings. |
We must distribute to our stockholders at least 90% of our taxable income each year in order to meet the requirements for being treated as a REIT under the Internal Revenue Code. This requirement is described in greater detail in the Federal Income Tax Considerations Requirements for Qualification as a REIT Operational Requirements Annual Distribution Requirement section of this prospectus. Our directors may authorize distributions in excess of this percentage as they deem appropriate. Because we may receive income from interest or rents at various times during our fiscal year, distributions may not reflect our income earned in that particular distribution period, but may be made in anticipation of operating cash flows that we expect to receive during a later period and may be made in advance of actual receipt of funds in an attempt to make
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distributions relatively uniform. To allow for such differences in timing between the receipt of income and the payment of expenses, and the effect of required debt payments, among other things, could require us to borrow funds from third parties on a short-term basis, issue new securities, including through this offering, or sell assets to meet the distribution requirements that are necessary to achieve the tax benefits associated with qualifying as a REIT. These methods of obtaining funding could affect future distributions by increasing operating costs and decreasing available cash. In addition, such distributions may constitute a return of capital. See the Federal Income Tax Considerations Requirements for Qualification as a REIT section of this prospectus.
Distributions in Kind
Distributions in kind shall not be permitted, except for distributions of readily marketable securities or our securities, distributions of beneficial interests in a liquidating trust established for our dissolution and the liquidation of our assets in accordance with the terms of our charter or distributions in which (a) our board of directors advises each stockholder of the risks associated with direct ownership of the property, (b) our board of directors offers each stockholder the election of receiving such in-kind distributions, and (c) in-kind distributions are made only to those stockholders that accept such offer.
Stockholder Liability
The Maryland General Corporation Law provides that our stockholders:
| are not liable personally or individually in any manner whatsoever for any debt, act, omission or obligation incurred by us or our board of directors; and |
| are under no obligation to us or our creditors with respect to their shares other than the obligation to pay to us the full amount of the consideration for which their shares were issued. |
Business Combinations
Under Maryland law, business combinations between a Maryland corporation and an interested stockholder or an affiliate of an interested stockholder are prohibited for five years after the most recent date on which the interested stockholder becomes an interested stockholder. These business combinations include a merger, consolidation, share exchange, or, in circumstances specified in the statute, an asset transfer or issuance or reclassification of equity securities. An interested stockholder is defined as:
| any person who beneficially owns 10% or more of the voting power of the corporations shares; or |
| an affiliate or associate of the corporation who, at any time within the two-year period prior to the date in question, was the beneficial owner of 10% or more of the voting power of the then outstanding voting stock of the corporation. |
A person is not an interested stockholder under the statute if the board of directors approved in advance the transaction by which he otherwise would have become an interested stockholder. However, in approving a transaction, the board of directors may provide that its approval is subject to compliance, at or after the time of approval, with any terms and conditions determined by the board of directors.
After the five-year prohibition, any business combination between the Maryland corporation and an interested stockholder generally must be recommended by the board of directors of the corporation and approved by the affirmative vote of at least:
| 80% of the votes entitled to be cast by holders of outstanding shares of voting stock of the corporation; and |
| two-thirds of the votes entitled to be cast by holders of voting stock of the corporation other than shares held by the interested stockholder with whom or with whose affiliate the business combination is to be effected or held by an affiliate or associate of the interested stockholder. |
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These super-majority vote requirements do not apply if the corporations stockholders receive a minimum price, as defined under Maryland law, for their shares in the form of cash or other consideration in the same form as previously paid by the interested stockholder for its shares.
The statute permits various exemptions from its provisions, including business combinations that are exempted by the board of directors before the time that the interested stockholder becomes an interested stockholder. Pursuant to the statute, our board of directors has exempted any business combination with our advisor or any of its affiliates. Consequently, the five-year prohibition and the super-majority vote requirements will not apply to business combinations between us and our advisor or any of its affiliates. As a result, our advisor or any of its affiliates may be able to enter into business combinations with us that may not be in the best interests of our stockholders, without compliance with the super-majority vote requirements and the other provisions of the statute.
The business combination statute may discourage others from trying to acquire control of us and increase the difficulty of consummating any offer.
Control Share Acquisitions
With some exceptions, Maryland law provides that control shares of a Maryland corporation acquired in a control share acquisition have no voting rights except to the extent approved by a vote of stockholders holding two-thirds of the votes entitled to be cast on the matter, excluding control shares:
| owned by the acquiring person; |
| owned by our officers; and |
| owned by our employees who are also directors. |
Control shares mean voting shares which, if aggregated with all other voting shares owned by an acquiring person or shares for which the acquiring person can exercise or direct the exercise of voting power, would entitle the acquiring person to exercise voting power in electing directors within one of the following ranges of voting power:
| one-tenth or more but less than one-third; |
| one-third or more but less than a majority; or |
| a majority or more of all voting power. |
Control shares do not include shares the acquiring person is then entitled to vote as a result of having previously obtained stockholder approval. A control share acquisition occurs when, subject to some exceptions, a person directly or indirectly acquires ownership or the power to direct the exercise of voting power (except solely by virtue of a revocable proxy) of issued and outstanding control shares. A person who has made or proposes to make a control share acquisition, upon satisfaction of some specific conditions, including an undertaking to pay expenses, may compel our board of directors to call a special meeting of our stockholders to be held within 50 days of a demand to consider the voting rights of the control shares. If no request for a meeting is made, we may present the question at any stockholders meeting.
If voting rights are not approved at the meeting or if the acquiring person does not deliver an acquiring person statement as required by the statute, then, subject to some conditions and limitations, we may redeem any or all of the control shares (except those for which voting rights have been previously approved) for fair value determined, without regard to the absence of voting rights for the control shares, as of the date of the last control share acquisition by the acquiror or of any meeting of stockholders at which the voting rights of such shares are considered and not approved. If voting rights for control shares are approved at a stockholders meeting and the
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acquiror becomes entitled to vote a majority of the shares entitled to vote, all other stockholders may exercise appraisal rights. The fair value of the shares as determined for purposes of such appraisal rights may not be less than the highest price per share paid by the acquiror in the control share acquisition. The control share acquisition statute does not apply to shares acquired in a merger, consolidation, or share exchange if we are a party to the transaction or to acquisitions approved or exempted by our charter or bylaws.
As permitted by Maryland General Corporation Law, our bylaws contain a provision exempting from the control share acquisition statute any and all acquisitions of our stock by Cole Capital Advisors or any affiliate of Cole Capital Advisors.
Subtitle 8
Subtitle 8 of Title 3 of the Maryland General Corporation Law permits a Maryland corporation with a class of equity securities registered under the Exchange Act and at least three independent directors to elect to be subject, by provision in its charter or bylaws or a resolution of its board of directors and notwithstanding any contrary provision in the charter or bylaws, to any or all of five provisions:
| a classified board of directors; |
| a two-thirds vote requirement for removing a director; |
| a requirement that the number of directors be fixed only by vote of the directors; |
| a requirement that a vacancy on the board of directors be filled only by the remaining directors and for the remainder of the full term of the class of directors in which the vacancy occurred; and |
| a majority requirement for the calling of a special meeting of stockholders. |
Pursuant to Subtitle 8, except as may be provided by our board of directors in setting the terms of any class or series of our preferred stock, we have elected to provide that vacancies on our board of directors be filled only by the remaining directors and for the remainder of the full term of the directorship in which the vacancy occurred. Through provisions in our charter and bylaws unrelated to Subtitle 8, we already vest in the board of directors the exclusive power to fix the number of directorships. We have not elected to be subject to any of the other provisions of Subtitle 8.
Tender Offers by Stockholders
Our charter provides that any tender offer, including any mini-tender offer, must comply with Regulation 14D of the Exchange Act, including the notice and disclosure requirements. The offering person must provide our company notice of such tender offer at least ten business days before initiating the tender offer. If the offering person does not comply with the provisions set forth above, our company will have the right to redeem that persons shares and any shares acquired in such tender offer. In addition, the non-complying person will be responsible for all of our companys expenses in connection with that persons noncompliance.
Advance Notice of Director Nominations and New Business
Our bylaws provide that with respect to an annual meeting of stockholders, nominations of individuals for election to the board of directors and the proposal of business to be considered by stockholders may be made only (1) pursuant to our notice of the meeting, (2) by or at the direction of our board of directors or (3) by a stockholder who is a stockholder of record both at the time of giving advance notice of such nominations or proposals of business and at the time of such annual meeting, who is entitled to vote at the meeting and who has complied with the advance notice procedures of the bylaws. With respect to special meetings of stockholders, only the business specified in our notice of the meeting may be brought before the meeting. Nominations of individuals for election to our board of directors at a special meeting may be made only (1) pursuant to our notice
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of the meeting, (2) by or at the direction of our board of directors, or (3) provided that our board of directors has determined that directors will be elected at the meeting, by a stockholder who is a stockholder of record both at the time of giving advance notice of such nominations and at the time of such special meeting, who is entitled to vote at the meeting and who has complied with the advance notice provisions of the bylaws.
Share Redemption Program
Our board of directors has adopted a share redemption program that enables you to sell your shares to us in limited circumstances. Our share redemption program permits you to sell your shares back to us after you have held them for at least one year, subject to the significant conditions and limitations described below.
Our common stock currently is not listed on a national securities exchange and we will not seek to list our stock unless and until such time as our independent directors believe that the listing of our stock would be in the best interests of our stockholders. In order to provide stockholders with the benefit of interim liquidity, stockholders who have held their shares for at least one year may present all, or a portion consisting of at least the lesser of (1) 25% of the holders shares; or (2) a number of shares with an aggregate redemption price of $2,500, in accordance with the procedures outlined below. At that time, we may, subject to the conditions and limitations described below, redeem the shares presented for redemption for cash to the extent that we have sufficient funds available to us to fund such redemption. We will not pay to our sponsor, board of directors, advisor or its affiliates any fees to complete any transactions under our share redemption program.
During the term of this offering, and until such time as our board of directors determines a reasonable estimate of the value of our shares, the redemption price per share (other than for shares purchased pursuant to our distribution reinvestment plan) will depend on the price you paid for your shares and the length of time you have held such shares as follows: after one year from the purchase date, 95% of the amount you paid for each share; after two years from the purchase date, 97.5% of the amount you paid for each share; and after three years from the purchase date, 100% of the amount you paid for each share. During this time period, the redemption price for shares purchased pursuant to our distribution reinvestment plan will be the amount you paid for such shares. (In each case, the redemption price will be adjusted for any stock dividends, combinations, splits, recapitalizations and the like with respect to our common stock). Accordingly, the redemption price will reflect a stockholders reduced purchase price if such stockholder received discounted or waived selling commissions and/or a waived dealer manager fee. At any time we are engaged in an offering of shares, the per share price for shares purchased under our redemption program will always be equal to or lower than the applicable per share offering price.
After such time as our board of directors has determined a reasonable estimated value of our shares, the per share redemption price (other than for shares purchased pursuant to our distribution reinvestment plan) will depend on the length of time you have held such shares as follows: after one year from the purchase date, 95% of the Estimated Share Value (defined below); after two years from the purchase date, 97.5% of the Estimated Share Value; and after three years from the purchase date, 100% of the Estimated Share Value. During this time period, the redemption price for shares purchased pursuant to our distribution reinvestment plan will be 100% of the Estimated Share Value. (In each case, the redemption price will be adjusted for any stock dividends, combinations, splits, recapitalizations and the like with respect to our common stock). For purposes of establishing the redemption price per share, Estimated Share Value shall mean the most recently disclosed reasonable estimated value of our shares of common stock as determined by our board of directors, including a majority of our independent directors.
In determining the redemption price, we consider shares to have been redeemed from a stockholders account on a first in, first out basis. Our board of directors will announce any redemption price adjustment and the time period of its effectiveness as a part of its regular communications with our stockholders. If we have sold property and have made one or more special distributions to our stockholders of all or a portion of the net
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proceeds from such sales subsequent to the establishment of the Estimated Share Value, the per share redemption price will be reduced by the net sale proceeds per share distributed to investors prior to the redemption date. Our board of directors will, in its sole discretion, determine which distributions, if any, constitute a special distribution. While our board of directors does not have specific criteria for determining a special distribution, we expect that a special distribution will only occur upon the sale of a property and the subsequent distribution of the net sale proceeds. In no event will the Estimated Share Value established for purposes of our share redemption program exceed the then-current estimated share value established for purposes of our distribution reinvestment plan.
Upon receipt of a request for redemption, we may conduct a Uniform Commercial Code search to ensure that no liens are held against the shares. We will not redeem any shares subject to a lien. Any costs in conducting the Uniform Commercial Code search will be borne by us.
We may waive the one-year holding period requirement upon request due to a stockholders death or bankruptcy or other exigent circumstances as determined by our advisor. In the event of the death of a stockholder, we must receive notice from the stockholders estate within 270 days after the stockholders death. In addition, in the event that you redeem all of your shares, any shares that you purchased pursuant to our distribution reinvestment plan will be excluded from the one-year holding requirement. Also, for purposes of the one-year-holding period, limited partners of our operating partnership who exchanged their limited partnership units for shares of our common stock will be deemed to have owned their shares as of the date the operating partnership units were issued. Shares redeemed in connection with a stockholders death, during the term of this offering and until such time as our board of directors determines a reasonable estimated value of our shares, will be redeemed at a purchase price equal to 100% of the amount actually paid for the shares. Shares redeemed in connection with a stockholders death, after such time as our board of directors has determined a reasonable estimated value of our shares, will be redeemed at a purchase price per share equal to 100% of the Estimated Share Value. Shares redeemed in connection with a stockholders bankruptcy or other exigent circumstance within one year from the purchase date will be redeemed at a price per share equal to the price per share we would pay had the stockholder held the shares for one year from the purchase date.
In the event that you request a redemption of all of your shares, and you are participating in our distribution reinvestment plan, you will be deemed to have notified us, at the time you submit your redemption request, that you are terminating your participation in our distribution reinvestment plan, and have elected to receive future distributions in cash. This election will continue in effect even if less than all of your shares are redeemed unless you notify us that you wish to resume your participation in our distribution reinvestment plan.
We will limit the number of shares redeemed pursuant to our share redemption program as follows: (1) we will not redeem in excess of 5% of the weighted average number of shares outstanding during the trailing 12 months prior to the end of the fiscal quarter for which the redemptions are being paid; and (2) funding for the redemption of shares will be limited to the net proceeds we receive from the sale of shares under our distribution reinvestment plan. In an effort to accommodate redemption requests throughout the calendar year, we intend to limit quarterly redemptions to approximately one-fourth of 5% (1.25%) of the weighted average number of shares outstanding during the trailing 12-month period ending on the last day of the fiscal quarter, and funding for redemptions for each quarter generally will be limited to the net proceeds we receive from the sale of shares in the respective quarter under our distribution reinvestment plan; however, our management may waive these quarterly limitations in its sole discretion, subject to the 5% cap on the number of shares we may redeem during the respective trailing 12 month period. Any of the foregoing limits might prevent us from accommodating all redemption requests made in any quarter, in which case quarterly redemptions will be made pro rata, except as described below. Our management also reserves the right, in its sole discretion at any time, and from time to time, to reject any request for redemption for any reason.
We will redeem our shares no later than the end of the month following the end of each fiscal quarter. Requests for redemption must be received on or prior to the end of the fiscal quarter in order for us to repurchase the shares in the month following the end of that fiscal quarter. You may withdraw your request to have your
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shares redeemed, but all such requests generally must be submitted prior to the last business day of the applicable fiscal quarter. Any redemption capacity that is not used as a result of the withdrawal or rejection of redemption requests may be used to satisfy the redemption requests of other stockholders received for that fiscal quarter, and such redemption payments may be made at a later time than when that quarters redemption payments are made.
We will determine whether we have sufficient funds and/or shares available as soon as practicable after the end of each fiscal quarter, but in any event prior to the applicable payment date. If we cannot purchase all shares presented for redemption in any fiscal quarter, based upon insufficient cash available and/or the limit on the number of shares we may redeem during any quarter or year, we will give priority to the redemption of deceased stockholders shares. (While deceased stockholders shares will be included in calculating the maximum number of shares that may be redeemed in any annual or quarterly period, they will not be subject to the annual or quarterly percentage caps; therefore, if the volume of requests to redeem deceased stockholders shares in a particular quarter were large enough to cause the annual or quarterly percentage caps to be exceeded, even if no other redemption requests were processed, the redemptions of deceased stockholders shares would be completed in full, assuming sufficient proceeds from the sale of shares under our distribution reinvestment plan were available. If sufficient proceeds from the sale of shares under our distribution reinvestment plan were not available to pay all such redemptions in full, the requests to redeem deceased stockholders shares would be honored on a pro rata basis.) We next will give priority to requests for full redemption of accounts with a balance of 250 shares or less at the time we receive the request, in order to reduce the expense of maintaining small accounts. Thereafter, we will honor the remaining redemption requests on a pro rata basis. Following such quarterly redemption period, if you would like to resubmit the unsatisfied portion of the prior request for redemption, you must submit a new request for redemption of such shares prior to the last day of the new quarter. Unfulfilled requests for redemption will not be carried over automatically to subsequent redemption periods.
Our board of directors may choose to amend, suspend or terminate our share redemption program at any time upon 30 days notice. Additionally, we will be required to discontinue sales of shares under the distribution reinvestment plan on the earlier of January 26, 2014, which is two years from the effective date of this offering, unless the distribution reinvestment plan offering is extended, or the date we sell all of the shares registered for sale under the distribution reinvestment plan, unless we file a new registration statement with the Securities and Exchange Commission and applicable states. Because the redemption of shares will be funded with the net proceeds we receive from the sale of shares under the distribution reinvestment plan, the discontinuance or termination of the distribution reinvestment plan will adversely affect our ability to redeem shares under the share redemption program. We will notify our stockholders of such developments (i) in our next annual or quarterly report or (ii) by means of a separate mailing to you, accompanied by disclosure in a current or periodic report under the Exchange Act. During this offering, we would also include this information in a prospectus supplement or post-effective amendment to the registration statement, as then required under federal securities laws.
Our share redemption program is only intended to provide limited liquidity to our stockholders until a liquidity event occurs, which may include the sale of our company, the sale of all or substantially all of our assets, a merger or similar transaction, an alternative strategy that will result in a significant increase in opportunities for stockholders to redeem their shares or the listing of the shares of common stock for trading on a national securities exchange. The share redemption program will be terminated if the shares become listed on a national securities exchange. We cannot guarantee that a liquidity event will occur.
The shares we redeem under our share redemption program will be cancelled and will return to the status of authorized but unissued shares. We do not intend to resell such shares to the public unless they are first registered with the Securities and Exchange Commission under the Securities Act and under appropriate state securities laws or otherwise sold in compliance with such laws.
We will disclose, when available and applicable, the number of shares of common stock that we redeemed during the prior year ended, the aggregate redemption price for those shares, whether any redemption requests
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went unfulfilled and the source of the cash used to fund the redemptions. During the year ended December 31, 2012, we received a valid redemption request upon the death of a stockholder for approximately 10,000 shares, which we redeemed in full for approximately $100,000 ($10.00 per share).
Restrictions on Roll-up Transactions
A Roll-up Transaction is a transaction involving the acquisition, merger, conversion or consolidation, directly or indirectly, of us and the issuance of securities of an entity (Roll-up Entity) that is created or would survive after the successful completion of a Roll-up Transaction. This term does not include:
| a transaction involving securities of a corporation that have been listed on a national securities exchange for at least 12 months; or |
| a transaction involving our conversion to trust or association form if, as a consequence of the transaction, there will be no significant adverse change in stockholder voting rights, the term of our existence, compensation to our advisor or our investment objectives. |
In connection with any Roll-up Transaction involving the issuance of securities of a Roll-up Entity, an appraisal of all of our assets will be obtained from a competent independent appraiser. Our assets will be appraised on a consistent basis, and the appraisal will be based on the evaluation of all relevant information and will indicate the value of the assets as of a date immediately prior to the announcement of the proposed Roll-up Transaction. The appraisal will assume an orderly liquidation of assets over a 12-month period. The terms of the engagement of the independent appraiser will clearly state that the engagement is for the benefit of us and our stockholders. A summary of the appraisal, indicating all material assumptions underlying the appraisal, will be included in a report to our stockholders in connection with any proposed Roll-up Transaction. If the appraisal is to be included in a prospectus used to offer the securities of a Roll-up Entity, the appraisal will be filed with the Securities and Exchange Commission and the states as an exhibit to the registration statement for that offering. Accordingly, we would be subject to liability for violation of Section 11 of the Securities Act and comparable provisions under state laws for any material misrepresentations or material omissions in any such filed appraisal.
In connection with a proposed Roll-up Transaction, the sponsor of the Roll-up Transaction must offer to stockholders who vote no on the proposal the choice of:
(1) accepting the securities of the Roll-up Entity offered in the proposed Roll-up Transaction; or
(2) one of the following:
(a) remaining as holders of our common stock and preserving their interests therein on the same terms and conditions as existed previously, or
(b) receiving cash in an amount equal to the stockholders pro rata share of the appraised value of our net assets.
We are prohibited from participating in any Roll-up Transaction:
| that includes provisions that would materially impede or frustrate the accumulation of shares by any purchaser of the securities of the Roll-up Entity, except to the minimum extent necessary to preserve the tax status of the Roll-up Entity, or which would limit the ability of an investor to exercise the voting rights of its securities of the Roll-up Entity on the basis of the number of shares held by that investor; |
| that results in our stockholders having an adverse change in their voting rights; |
| in which our investors rights to access records of the Roll-up Entity will be less than those provided in the section of this prospectus entitled Meetings and Special Voting Requirements above; or |
| in which any of the costs of the Roll-up Transaction would be borne by us if the Roll-up Transaction is rejected by the stockholders. |
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Valuation Policy
The offering price for our shares is not based on the expected book value or expected net asset value of our proposed investments, or our expected operating cash flows. Although our board of directors may do so at any time in its discretion, we do not expect that our board of directors will undertake a process for estimating the per share value of our common stock during the period of this offering or for the 18-month period following the termination of this offering. Furthermore, if we engage in a follow-on offering, we do not expect that our board of directors will undertake a process for estimating the per share value of our common stock during the period of the follow-on offering or for the 18-month period following the termination of such follow-on offering. However, during such periods, solely to assist fiduciaries of certain tax-exempt plans subject to annual reporting requirements of ERISA who identify themselves to us and who request per share value information, we intend to use the most recent gross per share offering price of our shares of common stock as the per share value (unless we have made a special distribution to stockholders of net sales proceeds from the sale of one or more properties during such periods, in which case we will use the most recent gross offering price less the per share amount of the special distribution).
Estimates based solely on the most recent offering price of our shares will be subject to numerous limitations. For example, such estimates will not take into account:
| individual or aggregate values of our assets; |
| real estate market fluctuations affecting our assets generally; |
| adverse or beneficial developments with respect to one or more assets in our portfolio; |
| our costs of the offering; or |
| our costs of acquiring assets. |
No later than 18 months after the last sale in an offering as set forth above, we will disclose an estimated per share value that is not based solely on the offering price of our shares. This estimate will be determined by our board of directors, or a committee thereof, which in either case will include a majority of our independent directors, after consultation with our advisor, CR IV Advisors, or if we are no longer advised by CR IV Advisors, any successor advisor or our officers and employees, subject to the restrictions and limitations set forth in this valuation policy. We intend to publish our board of directors estimate of the reasonable value of our shares within 18 months after an offering, at a time to be determined by our board of directors.
Our board of directors or a committee thereof will have the discretion to choose a methodology or combination of methodologies as it deems reasonable under then current circumstances for estimating the per share value of our common stock. The estimated value will not necessary be equivalent to our net asset value, and is not intended to be related to any values at which individual assets may be carried on financial statements under applicable accounting standards. The methodologies for determining the estimated values under the valuation policy may take into account numerous factors including, without limitation, the following:
| net amounts that might be realized in a sale of our assets in an orderly liquidation; |
| net amounts that might be realized in a bulk portfolio sale of our assets; |
| separate valuations of our assets (including any impairments); |
| our going concern value; |
| private real estate market conditions; |
| public real estate market conditions; |
| our business plan and characteristics and factors specific to our portfolio or securities; |
| the prices at which our securities were sold in other offerings, such as a distribution reinvestment plan offering; |
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| the prices paid for our securities in other transactions, including secondary market trades; and |
| the relative prices paid for comparable companies listed on a national securities exchange. |
Our board of directors may rely on an independent third-party valuation expert to assist in estimating the value of our assets or our shares of common stock. However, with respect to asset valuations, our board of directors will not be required to obtain asset-by-asset appraisals prepared by certified independent appraisers, nor must any appraisals conform to formats or standards promulgated by any such trade organization. We will disclose the effective date of the estimated valuation and a summary of the methodology by which the estimated value was developed. We do not intend to release individual property value estimates or any of the data supporting the estimated per share value.
After first publishing our board of directors estimate of the per share value of our common stock, our board of directors will repeat the process of estimating the per value of our common stock periodically thereafter. However, our board of directors may suspend the publication of such estimates during any follow-on offering of our common stock and for a period of 18 months thereafter.
The reasonable estimate of the value of our shares will be subject to numerous limitations. Such valuations will be estimates only and may be based upon a number of estimates, assumptions, judgments and opinions that may not be, or may later prove not to be, accurate or complete, which could make the estimated valuations incorrect. As a result, with respect to any estimate of the value of our common stock made pursuant to our valuation policy, there can be no assurance that:
| the estimated value per share would actually be realized by our stockholders upon liquidation, bulk portfolio sales of our assets, sale of our company or listing of the common stock on an exchange; |
| any stockholder would be able to realize estimated share values in any attempt to sell shares; |
| the estimated value per share would be related to any individual or aggregated value estimates or appraisals of our assets; or |
| the estimated value, or method used to estimate value, would be found by any regulatory authority to comply with the ERISA, FINRA or other regulatory requirements. |
This valuation policy may be amended by our board of directors at any time and, although the policy will express the intent of our board of directors at the time of its adoption, there is no limitation on the ability of our board of directors to cause us to vary from this policy to the extent it deems appropriate, with or without an express amendment of the policy.
Reports We Provide to our Stockholders
Our charter requires that we prepare an annual report and deliver it to our common stockholders within 120 days after the end of each fiscal year. Our directors are required to take reasonable steps to ensure that the annual report complies with our charter provisions. Among the matters that must be included in the annual report or included in a proxy statement delivered with the annual report are:
| financial statements prepared in accordance with GAAP that are audited and reported on by independent certified public accountants; |
| the ratio of the costs of raising capital during the year to the capital raised; |
| the aggregate amount of advisory fees and the aggregate amount of other fees paid to our advisor and any affiliates of our advisor by us or third parties doing business with us during the year; |
| our total operating expenses for the year stated as a percentage of our average invested assets and as a percentage of our net income; |
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| a report from our independent directors that our policies are in the best interests of our stockholders and the basis for such determination; and |
| a separately stated, full disclosure of all material terms, factors and circumstances surrounding any and all transactions involving us and our advisor, a director or any affiliate thereof during the year, which disclosure has been examined and commented upon in the report by our independent directors with regard to the fairness of such transactions. |
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SUMMARY OF DISTRIBUTION REINVESTMENT PLAN
We have adopted a distribution reinvestment plan. The distribution reinvestment plan allows you to have distributions otherwise payable to you in cash reinvested in additional shares of our common stock. We are offering 50,000,000 shares for sale pursuant to our distribution reinvestment plan at an initial price of $9.50 per share. Such price may only be available until the termination of our primary offering, which is anticipated to be on or before January 26, 2014, although our board of directors may extend the primary offering an additional year. Our board of directors has the discretion to extend the offering period for the shares offered under our distribution reinvestment plan up to the sixth anniversary of the termination of the primary offering. We may reallocate the shares of common stock being offered in this prospectus between the primary offering and the distribution reinvestment plan. The following is a summary of our distribution reinvestment plan. See Appendix H to this prospectus for the full text of the plan.
Pursuant to the distribution reinvestment plan, we generally intend to offer shares for sale at a price of $9.50 per share during the initial public offering of our shares and until such time as our board of directors determines a reasonable estimate of the value of our shares. Thereafter, the purchase price per share under our distribution reinvestment plan will be the most recently disclosed per share value as determined in accordance with the valuation policy. If, at any time prior to the time distributions are reinvested, we have distributed net sale proceeds from the sale of one or more of our assets, or otherwise have paid a special distribution to stockholders, the offering price for shares offered under our distribution reinvestment plan will be adjusted to take into account such special distributions.
Notwithstanding the foregoing, our board of directors may establish a different price for shares sold pursuant to the plan, provided that if the new price so determined varies more than 5% from the pricing that would have resulted from the formula above, we will deliver a notice (which may be given by letter, delivered by electronic means or given by including such information in a Current Report on Form 8-K or in our annual or quarterly reports, all publicly filed with the Securities and Exchange Commission) regarding the new price to each plan participant at least 30 days prior to the effective date of the new price. For more information about our valuation policy, see Description of Shares Valuation Policy.
Participants in our distribution reinvestment plan who purchased shares of our common stock in the primary offering at a discounted purchase price (due to volume or other applicable discounts) may pay more for the shares they acquire pursuant to the distribution reinvestment plan than their original purchase price.
Investment of Distributions
Our distribution reinvestment plan allows our stockholders, and, subject to certain conditions set forth in the plan, any stockholder or partner of any other publicly offered limited partnership, REIT or other Cole-sponsored real estate program, to elect to purchase shares of our common stock with our distributions or distributions from such other programs. We have the discretion to extend the offering period for the shares being offered pursuant to this prospectus under our distribution reinvestment plan beyond the termination of this offering until we have sold all of the shares allocated to the plan through the reinvestment of distributions. We may also offer shares pursuant to a new registration statement.
No dealer manager fees or sales commissions will be paid with respect to shares purchased pursuant to the distribution reinvestment plan; therefore, we will retain all of the proceeds from the reinvestment of distributions. Accordingly, substantially all the economic benefits resulting from distribution reinvestment purchases by stockholders from the elimination of the dealer manager fee and selling commissions will inure to the benefit of the participant. However, purchasers of shares of our common stock who receive volume or other discounts in the primary offering who elect to participate in the distribution reinvestment plan may pay more for the shares they acquire pursuant to the distribution reinvestment plan than their original purchase price.
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Pursuant to the terms of our distribution reinvestment plan, the reinvestment agent, which currently is us, will act on behalf of participants to reinvest the cash distributions they receive from us. Stockholders participating in the distribution reinvestment plan may purchase fractional shares. If sufficient shares are not available for issuance under our distribution reinvestment plan, the reinvestment agent will remit excess cash distributions to the participants. Participants purchasing shares pursuant to our distribution reinvestment plan will have the same rights as stockholders with respect to shares purchased under the plan and will be treated in the same manner as if such shares were issued pursuant to our offering.
After the termination of the offering of our shares registered for sale pursuant to the distribution reinvestment plan under this prospectus and any subsequent offering, we may determine to allow participants to reinvest cash distributions from us in shares issued by another Cole-sponsored program only if all of the following conditions are satisfied:
| prior to the time of such reinvestment, the participant has received the final prospectus and any supplements thereto offering interests in the subsequent Cole-sponsored program and such prospectus allows investments pursuant to a distribution reinvestment plan; |
| a registration statement covering the interests in the subsequent Cole-sponsored program has been declared effective under the Securities Act; |
| the offer and sale of such interests are qualified for sale under applicable state securities laws; |
| the participant executes the subscription agreement included with the prospectus for the subsequent Cole-sponsored program; and |
| the participant qualifies under applicable investor suitability standards as contained in the prospectus for the subsequent Cole-sponsored program. |
Stockholders who invest in subsequent Cole-sponsored programs pursuant to our distribution reinvestment plan will become investors in such subsequent Cole-sponsored program and, as such, will receive the same reports as other investors in the subsequent Cole-sponsored program. No dealer manager fees or sales commissions will be paid with respect to shares purchased in any subsequent Cole-sponsored programs pursuant to our distribution reinvestment plan.
Election to Participate or Terminate Participation
A stockholder may participate in our distribution reinvestment plan by making a written election to participate on his or her subscription agreement at the time he or she subscribes for shares. Any stockholder who has not previously elected to participate in the distribution reinvestment plan may so elect at any time by delivering to the reinvestment agent a completed enrollment form or other written authorization required by the reinvestment agent. Participation in our distribution reinvestment plan will commence with the next distribution payable after receipt of the participants notice, provided it is received on or prior to the last day of the distribution period to which such distribution relates.
Some brokers may determine not to offer their clients the opportunity to participate in our distribution reinvestment plan. Any prospective investor who wishes to participate in our distribution reinvestment plan should consult with his or her broker as to the brokers position regarding participation in the distribution reinvestment plan.
We reserve the right to prohibit qualified retirement plans from participating in our distribution reinvestment plan if such participation would cause our underlying assets to constitute plan assets of qualified retirement plans. See the Investment by Tax-Exempt Entities and ERISA Considerations section of this prospectus.
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Subscribers should note that affirmative action in the form of written notice to the reinvestment agent must be taken to withdraw from participation in our distribution reinvestment plan. A withdrawal from participation in our distribution reinvestment plan will be effective with respect to distributions for a quarterly, monthly or other distribution period, as applicable, only if written notice of termination is received on or prior to the last day of the distribution period to which it relates. In addition, a transfer of shares prior to the date our shares are listed for trading on a national securities exchange, which we have no intent to do at this time and which may never occur, will terminate participation in the distribution reinvestment plan with respect to such transferred shares as of the first day of the distribution period in which the transfer is effective, unless the transferee demonstrates to the reinvestment agent that the transferee meets the requirements for participation in the plan and affirmatively elects to participate in the plan by providing to the reinvestment agent an executed enrollment form or other written authorization required by the reinvestment agent. Furthermore, in the event that a participant requests a redemption of all of the participants shares, the participant will be deemed to have given written notice to the reinvestment agent, at the time the redemption request is submitted, that the participant is terminating his or her participation in the distribution reinvestment plan, and is electing to receive all future distributions in cash. This election will continue in effect even if less than all of the participants shares are redeemed unless the participant notifies the reinvestment agent that he or she elects to resume participation in the plan.
Offers and sales of shares pursuant to the distribution reinvestment plan must be registered in every state in which such offers and sales are made, or otherwise exempt from such registration requirements. Generally, such registrations are for a period of one year. Thus, we may have to stop selling shares pursuant to the distribution reinvestment plan in any states in which our registration is not renewed or extended.
Reports to Participants
Within 90 days after the end of each calendar year, the reinvestment agent will mail to each participant a statement of account describing, as to such participant, the distributions received, the number of shares purchased, the purchase price for such shares, the total shares purchased on behalf of the participant during the prior year pursuant to our distribution reinvestment plan and the information regarding the participants participation in the plan.
Excluded Distributions
Our board of directors may designate that certain cash or other distributions attributable to net sales proceeds will be excluded from distributions that may be reinvested in shares under our distribution reinvestment plan. Accordingly, in the event that proceeds attributable to the sale of an asset are distributed to stockholders as an excluded distribution, such amounts may not be reinvested in our shares pursuant to our distribution reinvestment plan. The determination of whether all or part of a distribution will be deemed to be an excluded distribution is separate and unrelated to our requirement to distribute 90% of our taxable REIT income. In its initial determination of whether to make a distribution and the amount of the distribution, our board of directors will consider, among other factors, our cash position and our distribution requirements as a REIT. Once our board of directors determines to make the distribution, it will then consider whether all or part of the distribution will be deemed to be an excluded distribution. In most instances, we expect that our board of directors would not deem any of the distribution to be an excluded distribution. In that event, the amount distributed to participants in our distribution reinvestment plan will be reinvested in additional shares of our common stock. If all or a portion of the distribution is deemed to be an excluded distribution, the distribution will be made to all stockholders; however, the excluded portion will not be reinvested. We currently do not have any planned excluded distributions, which will only be made, if at all, in addition to, not in lieu of, regular distributions.
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Federal Income Tax Considerations
Taxable participants will incur tax liability for income allocated to them even though they have elected not to receive their distributions in cash but rather to have their distributions reinvested under our distribution reinvestment plan. In addition, to the extent you purchase shares through our distribution reinvestment plan at a discount to their fair market value, you may be treated for tax purposes as receiving an additional distribution equal to the amount of the discount. At least until our offering stage is complete, we expect that (i) we will sell shares under the distribution reinvestment plan at $9.50 per share, and (ii) no secondary trading market for our shares will develop. In the event that the fair market value of one share is greater than $9.50 at the time of the reinvestment, participants in our distribution reinvestment plan may be treated as having received a distribution in excess of the $9.50 reinvested by them under our distribution reinvestment plan. You may be taxed on the amount of such distribution as a dividend to the extent such distribution is from current or accumulated earnings and profits, unless we have designated all or a portion of the dividend as a capital gains dividend.
Amendment, Suspension and Termination
We reserve the right to amend our distribution reinvestment plan, subject to certain limitations, upon ten days prior written notice. The reinvestment agent also reserves the right to suspend or terminate a participants individual participation in the plan, and we reserve the right to suspend or terminate our distribution reinvestment plan itself in our sole discretion at any time, by sending ten days prior written notice of suspension or termination to the individual participant or, upon termination of the plan, to all participants.
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OUR OPERATING PARTNERSHIP AGREEMENT
General
CCPT IV OP, our operating partnership, was formed in July 2010 to acquire, own and operate properties on our behalf. All of the limited partnership interests are owned by us or one of our wholly-owned subsidiaries. CCPT IV OP is structured to be an UPREIT if and when all or a portion of its limited partnership interests are held by persons other than us or any subsidiary we establish that is disregarded for tax purposes. A property owner may contribute property to an UPREIT in exchange for limited partnership units on a tax-free basis. This enables us to acquire real property from owners who desire to defer taxable gain that would otherwise be recognized by such owners upon the disposition of their property. This structure may also be attractive for property owners that desire to diversify their investments and gain benefits afforded to owners of stock in a REIT. In addition, CCPT IV OP is structured to ultimately make distributions with respect to limited partnership units that will be equivalent to the distributions made to holders of our common stock. A limited partner in CCPT IV OP may later exchange his or her limited partnership units in CCPT IV OP for shares of our common stock in a taxable transaction. For purposes of satisfying the asset and income tests for qualification as a REIT for tax purposes, the REITs proportionate share of the assets and income of an UPREIT, such as CCPT IV OP, will be deemed to be assets and income of the REIT. We control, and intend to continue to control, our operating partnership and intend to operate it consistently with the requirements for our qualification as a REIT whether our operating partnership is a disregarded entity or a partnership for federal income tax purposes.
The partnership agreement for CCPT IV OP contains provisions that would allow, under certain circumstances, other entities, including other Cole-sponsored programs, to merge into or cause the exchange or conversion of their interest in that entity for interests of CCPT IV OP. In the event of such a merger, exchange or conversion, CCPT IV OP would issue additional limited partnership interests, which would be entitled to the same exchange rights as other limited partnership interests of CCPT IV OP. As a result, any such merger, exchange or conversion ultimately could result in the issuance of a substantial number of shares of our common stock, thereby diluting the percentage ownership interest of other stockholders.
We will hold substantially all of our assets through CCPT IV OP. We are the sole general partner of CCPT IV OP, and own, directly or indirectly, 100% of the partnership interest in CCPT IV OP. As the sole general partner of CCPT IV OP, we have the exclusive power to manage and conduct the business of CCPT IV OP. We will present our financial statements on a consolidated basis to include CCPT IV OP.
The following is a summary of certain provisions of the partnership agreement of CCPT IV OP. This summary is not complete and is qualified by the specific language in the partnership agreement. For more detail, you should refer to the partnership agreement, itself, which we have filed with the Securities and Exchange Commission as an exhibit to the registration statement of which this prospectus is a part.
Capital Contributions
As we accept subscriptions for shares, we will transfer the net proceeds of the offering to CCPT IV OP as a capital contribution. However, we will be deemed to have made capital contributions in the amount of the gross offering proceeds received from investors. CCPT IV OP will be deemed to have simultaneously paid the selling commissions and other costs associated with the offering. If CCPT IV OP requires additional funds at any time in excess of capital contributions made by our advisor and us (which are minimal in amount), or from borrowings, we may borrow funds from a financial institution or other lender and lend such funds to CCPT IV OP on the same terms and conditions as are applicable to our borrowing of such funds. In addition, we are authorized to cause CCPT IV OP to issue partnership interests for less than fair market value if we conclude in good faith that such issuance is in the best interests of CCPT IV OP and us.
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Operations
The partnership agreement requires that CCPT IV OP be operated in a manner that will enable us to (1) satisfy the requirements for being classified as a REIT for tax purposes, (2) avoid any federal income or excise tax liability, and (3) ensure that CCPT IV OP will not be classified as a publicly traded partnership for purposes of Section 7704 of the Internal Revenue Code, which classification could result in CCPT IV OP being taxed as a corporation, rather than as a partnership. See the Risk Factors Federal Income Tax Risks and the Federal Income Tax Considerations Tax Aspects of Our Operating Partnership Classification as a Partnership sections of this prospectus.
The partnership agreement provides that CCPT IV OP will distribute cash flow from operations as follows:
| first, to us until we have received aggregate distributions with respect to the current fiscal year equal to the minimum amount necessary for us to distribute to our stockholders to enable us to maintain our status as a REIT under the Internal Revenue Code and to avoid any federal income or excise tax liability with respect to such fiscal year; |
| next, to the limited partners until our limited partners have received aggregate distributions equal to the amount that would have been distributed to them with respect to all prior fiscal years had all CCPT IV OP income for all such prior fiscal years been allocated to us, each limited partner held a number of our common shares equal to the number of CCPT IV OP units that it holds and the REIT had distributed all such amounts to our stockholders (including the limited partners); |
| next, after the establishment of reasonable cash reserves for our expenses and obligations of CCPT IV OP, to us and to the limited partners until each partner has received aggregate distributions with respect to the current fiscal year and all fiscal years had all CCPT IV OP income for the current fiscal year and all such prior fiscal years been allocated to us, our income with respect to the current fiscal year and each such prior fiscal year equaled the minimum amount necessary to maintain our status as a REIT under the Internal Revenue Code, each limited partner held a number of common shares equal to the number of CCPT IV OP units that we hold and we had distributed all such amounts to our stockholders (including the limited partners); and |
| finally, to us and the limited partners in accordance with the partners percentage interests in CCPT IV OP. |
Similarly, the partnership agreement of CCPT IV OP provides that taxable income is allocated to the limited partners of CCPT IV OP in accordance with their relative percentage interests such that a holder of one unit of limited partnership interest in CCPT IV OP will be allocated taxable income for each taxable year in an amount equal to the amount of taxable income to be recognized by a holder of one of our shares, subject to compliance with the provisions of Sections 704(b) and 704(c) of the Internal Revenue Code and corresponding Treasury Regulations. Losses, if any, generally will be allocated among the partners in accordance with their respective percentage interests in CCPT IV OP.
Upon the liquidation of CCPT IV OP, after payment of debts and obligations, any remaining assets of CCPT IV OP will be distributed to partners with positive capital accounts in accordance with their respective positive capital account balances. If we were to have a negative balance in our capital account following a liquidation, we would be obligated to contribute cash to CCPT IV OP equal to such negative balance for distribution to other partners, if any, having positive balances in such capital accounts.
In addition to the administrative and operating costs and expenses incurred by CCPT IV OP in acquiring and operating real properties, CCPT IV OP will pay or reimburse us for all of our administrative costs and expenses. Such expenses will include the following, among others:
| all expenses relating to the formation and continuity of our existence; |
| all expenses relating to the public offering and registration of securities by us; |
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| all expenses associated with the preparation and filing of any periodic reports by us under federal, state or local laws or regulations; |
| all expenses associated with compliance by us with applicable laws, rules and regulations; |
| all costs and expenses relating to any issuance or redemption of partnership interests or shares of our common stock; and |
| all of our other operating or administrative costs incurred in the ordinary course of our business on behalf of CCPT IV OP. |
All claims between the partners of CCPT IV OP arising out of the partnership agreement are subject to binding arbitration.
Exchange Rights
The limited partners of CCPT IV OP, including our advisor, have the right to cause their limited partnership units to be redeemed by CCPT IV OP for cash or purchased by us for cash or shares of our common stock, as elected by us. In either event, the cash amount to be paid will be equal to the cash value of the number of our shares that would be issuable if the limited partnership units were exchanged for our shares on a one-for-one basis. If we elect to purchase the limited partnership units with our shares, we will pay one share of our common stock for each limited partnership unit purchased. These exchange rights may not be exercised, however, if and to the extent that the delivery of shares upon exercise would (1) result in any person owning shares in excess of our ownership limits, (2) result in shares being owned by fewer than 100 persons, (3) cause us to be closely held within the meaning of Section 856(h) of the Internal Revenue Code, (4) cause us to own 10% or more of the ownership interests in a tenant within the meaning of Section 856(d)(2)(B) of the Internal Revenue Code, or (5) cause the acquisition of shares by a redeemed limited partner to be integrated with any other distribution of our shares for purposes of complying with the Securities Act.
Subject to the foregoing, limited partners of CCPT IV OP may exercise their exchange rights at any time after one year following the date of issuance of their limited partnership units. However, a limited partner may not deliver more than two exchange notices each calendar year and may not exercise an exchange right for less than 1,000 limited partnership units, unless such limited partner holds less than 1,000 units, in which case he must exercise his exchange right for all of his units. We do not expect to issue any of the shares of common stock offered hereby to limited partners of CCPT IV OP in exchange for their limited partnership units. Rather, in the event a limited partner of CCPT IV OP exercises its exchange rights and we elect to purchase the limited partnership units with shares of our common stock, we expect to issue unregistered shares of common stock, or subsequently registered shares of common stock, in connection with such transaction.
Amendments to the Partnership Agreement
Our consent, as the general partner of CCPT IV OP, is required for any amendment to the partnership agreement. We, as the general partner of CCPT IV OP, and without the consent of any limited partner, may amend the partnership agreement in any manner, provided, however, that the consent of limited partners holding more than 50% of the interests of the limited partners is required for the following:
| any amendment affecting the conversion factor or the exchange right in a manner adverse to the limited partners; |
| any amendment that would adversely affect the rights of the limited partners to receive the distributions payable to them pursuant to the partnership agreement (other than the issuance of additional limited partnership interests); |
| any amendment that would alter the allocations of CCPT IV OPs profit and loss to the limited partners (other than the issuance of additional limited partnership interests); |
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| any amendment that would impose on the limited partners any obligation to make additional capital contributions to CCPT IV OP; and |
| any amendment pursuant to a plan of merger, plan of exchange or plan of conversion, subject to certain exceptions as set forth in the partnership agreement. |
Termination of the Partnership
CCPT IV OP will have perpetual duration, unless it is dissolved earlier upon the first to occur of the following:
| we declare for bankruptcy or dissolve, are removed or withdraw from the partnership, provided, however, that the remaining partners may decide to continue the business; |
| ninety days after the sale or other disposition of all or substantially all of the assets of the partnership; |
| the exchange of all limited partnership units (other than any units held by us or our affiliates); and |
| we elect, as the general partner, to dissolve the partnership. |
Transferability of Interests
We may not (1) voluntarily withdraw as the general partner of CCPT IV OP, (2) engage in any merger, consolidation or other business combination or sale of all or substantially all of our assets (other than in connection with a change in our state of incorporation or organizational form), or (3) transfer our general partnership interest in CCPT IV OP (except to a wholly-owned subsidiary), unless the transaction in which such withdrawal, business combination or transfer occurs results in the limited partners receiving or having the right to receive an amount of cash, securities or other property equal in value to the amount they would have received if they had exercised their exchange rights immediately prior to such transaction or unless, in the case of a merger or other business combination, the successor entity contributes substantially all of its assets to CCPT IV OP in return for an interest in CCPT IV OP and agrees to assume all obligations of the general partner of CCPT IV OP. We may also enter into a business combination or transfer our general partnership interest upon the receipt of the consent of a majority-in-interest of the limited partners of CCPT IV OP, other than our advisor and other affiliates of Christopher H. Cole. With certain exceptions, a limited partner may not transfer its interests in CCPT IV OP, in whole or in part, without our written consent as general partner.
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FEDERAL INCOME TAX CONSIDERATIONS
General
The following is a summary of material federal income tax considerations associated with an investment in shares of our common stock. This summary does not address all possible tax considerations that may be material to an investor and does not constitute tax advice. Moreover, this summary does not deal with all tax aspects that might be relevant to you, as a prospective stockholder, in light of your personal circumstances, nor does it deal with particular types of stockholders that are subject to special treatment under the Internal Revenue Code, such as insurance companies, tax-exempt organizations or financial institutions or broker-dealers.
The Internal Revenue Code provisions governing the federal income tax treatment of REITs are highly technical and complex, and this summary is qualified in its entirety by the express language of applicable Internal Revenue Code provisions, treasury regulations promulgated thereunder (Treasury Regulations) and administrative and judicial interpretations thereof.
We urge you, as a prospective investor, to consult your own tax advisor regarding the specific tax consequences to you of a purchase of shares, ownership and sale of the shares and of our election to be taxed as a REIT. These consequences include the federal, state, local, foreign and other tax consequences of such purchase, ownership, sale and election.
Opinion of Counsel
Morris, Manning & Martin, LLP acts as our counsel, has reviewed this summary and is of the opinion that it fairly summarizes the federal income tax considerations addressed that are material to our stockholders. It is also the opinion of our counsel that we will qualify to be taxed as a REIT under the Internal Revenue Code for our taxable year ended December 31, 2012 provided that we operate in accordance with various assumptions and the factual representations we made to counsel concerning our business, assets and operations. We emphasize that all opinions issued by Morris, Manning & Martin, LLP are based on various assumptions and are conditioned upon the assumptions and representations we will make concerning certain factual matters related to our business and properties. Moreover, our qualification for taxation as a REIT depends on our ability to meet the various qualification tests imposed under the Internal Revenue Code discussed below, the results of which will not be reviewed by Morris, Manning & Martin, LLP. Accordingly, the actual results of our operations for any one taxable year may not satisfy these requirements. See the Risk Factors Federal Income Tax Risks section of this prospectus.
The statements made in this section and in the opinion of Morris, Manning & Martin, LLP are based upon existing law and Treasury Regulations, as currently applicable, currently published administrative positions of the Internal Revenue Service and judicial decisions, all of which are subject to change, either prospectively or retroactively. We cannot assure you that any changes will not modify the conclusions expressed in counsels opinion. Moreover, an opinion of counsel is not binding on the Internal Revenue Service, and we cannot assure you that the Internal Revenue Service will not successfully challenge our status as a REIT.
Taxation of the Company
We plan to make an election to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code, effective for our taxable year ended December 31, 2012. In the opinion of Morris, Manning & Martin, LLP, commencing with such taxable year, we will be organized and will operate in such manner to qualify for taxation as a REIT under the Internal Revenue Code. However, no assurance can be given that we will operate in a manner so as to remain qualified as a REIT. Pursuant to our charter, our board of directors has the authority to make any tax elections on our behalf that, in its sole judgment, are in our best interests. This authority includes the ability to elect not to qualify as a REIT for federal income tax purposes or, after qualifying as a REIT, to revoke or otherwise terminate our status as a REIT. Our board of directors has the authority under our charter to
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make these elections without the necessity of obtaining the approval of our stockholders. In addition, our board of directors has the authority to waive any restrictions and limitations contained in our charter that are intended to preserve our status as a REIT during any period in which our board of directors has determined not to pursue or preserve our status as a REIT.
Although REITs continue to receive substantially better tax treatment than entities taxed as corporations, it is possible that future legislation would cause a REIT to be a less advantageous tax status for companies that invest in real estate, and it could become more advantageous for such companies to elect to be taxed for federal income tax purposes as a corporation. As a result, our charter provides our board of directors with the ability, under certain circumstances, to elect not to qualify us as a REIT or, after we have qualified as a REIT, to revoke or otherwise terminate our REIT election and cause us to be taxed as a corporation, without the vote of our stockholders. Our board of directors has fiduciary duties to us and to our investors and would only cause such changes in our tax treatment if it determines in good faith that such changes are in the best interests of our stockholders.
If we qualify for taxation as a REIT, we generally will not be subject to federal corporate income taxes on that portion of our ordinary income or capital gain that we distribute currently to our stockholders, because the REIT provisions of the Internal Revenue Code generally allow a REIT to deduct distributions paid to its stockholders. This substantially eliminates the federal double taxation on earnings (taxation at both the corporate level and stockholder level) that usually results from an investment in a corporation.
Even if we qualify for taxation as a REIT, we are subject to federal income taxation as follows:
| we will be taxed at regular corporate rates on our undistributed REIT taxable income, including undistributed net capital gains; |
| under some circumstances, we will be subject to alternative minimum tax; |
| if we have net income from the sale or other disposition of foreclosure property (described below) that is held primarily for sale to customers in the ordinary course of business or other non-qualifying income from foreclosure property, we will be subject to tax at the highest corporate rate on that income; |
| if we have net income from prohibited transactions (described below), our income from such prohibited transaction will be subject to a 100% tax; |
| if we fail to satisfy either of the 75% or 95% gross income tests (discussed below) but have nonetheless maintained our qualification as a REIT because applicable conditions have been met, we will be subject to a 100% tax on an amount equal to the greater of the amount by which we fail the 75% or 95% test multiplied by a fraction calculated to reflect our profitability; |
| if we fail to satisfy the asset tests (discussed below) and continue to qualify as a REIT because we meet other requirements, we will have to pay a tax equal to the greater of $50,000 or the highest corporate income tax rate multiplied by the net income generated by the non-qualifying assets during the time we failed to satisfy the asset tests; |
| if we fail to satisfy REIT requirements other than the gross income and asset tests, we can continue to qualify as a REIT if our failure was due to reasonable cause and not willful neglect, but we must pay $50,000 for each failure; |
| if we fail to distribute during each year at least the sum of (i) 85% of our REIT ordinary income for the year, (ii) 95% of our REIT capital gain net income for such year and (iii) any undistributed taxable income from prior periods, we will be subject to a 4% excise tax on the excess of the required distribution over the amounts actually distributed; and |
| if we acquire any asset from a C corporation (i.e., a corporation generally subject to corporate-level tax) in a carryover-basis transaction and we subsequently recognize gain on the disposition of the asset during |
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the ten-year period beginning on the date on which we acquired the asset, then a portion of the gains may be subject to tax at the highest regular corporate rate, pursuant to guidelines issued by the Internal Revenue Service (this is known as the Built-In-Gains-Tax). |
Foreclosure property is real property and any personal property incident to such real property (1) that is acquired by a REIT as the result of the REIT having bid in the property at foreclosure, or having otherwise acquired ownership or possession of the property by agreement or process of law, after there was a default (or default was imminent) on a lease of the property or on a mortgage loan held by the REIT and secured by the property, (2) the related loan or lease of which was acquired by the REIT at a time when default was not imminent or anticipated and (3) for which such REIT makes a proper election to treat the property as foreclosure property. A prohibited transaction is generally a sale or other disposition of property (other than foreclosure property) that is held primarily for sale to customers in the ordinary course of a REITs trade or business, a determination that depends on the particular facts and circumstances surrounding each property.
Requirements for Qualification as a REIT
In order for us to qualify as a REIT, we must meet, and we must continue to meet, the requirements discussed below relating to our organization, sources of income, nature of assets, distributions of income to our stockholders and recordkeeping.
Organizational Requirements
In order to qualify for taxation as a REIT under the Internal Revenue Code, we must:
| be a domestic corporation; |
| elect to be taxed as a REIT and satisfy relevant filing and other administrative requirements; |
| be managed by one or more trustees or directors; |
| have transferable shares; |
| not be a financial institution or an insurance company; |
| use a calendar year for federal income tax purposes; |
| have at least 100 stockholders for at least 335 days of each taxable year of 12 months; and |
| not be closely held. |
As a Maryland corporation, we satisfy the first requirement, and we intend to file an election to be taxed as a REIT when we file our tax return with the Internal Revenue Service for the taxable year ending December 31, 2012. In addition, we are managed by a board of directors, we have transferable shares and we will not operate as a financial institution or insurance company. We utilize the calendar year for federal income tax purposes.
We would be treated as closely held only if five or fewer individuals or certain tax-exempt entities own, directly or indirectly, more than 50% (by value) of our shares at any time during the last half of our taxable year. For purposes of the closely held test, the Internal Revenue Code generally permits a look-through for pension funds and certain other tax-exempt entities to the beneficiaries of the entity to determine if the REIT is closely held. However, these requirements do not apply until after the first taxable year for which an election is made to be taxed as a REIT. We anticipate issuing sufficient shares with sufficient diversity of ownership pursuant to this offering to allow us to satisfy these requirements in the taxable year ending December 31, 2012. In addition, our charter provides for restrictions regarding transfer of shares that are intended to assist us in continuing to satisfy these share ownership requirements. Such transfer restrictions are described in the Description of Shares Restrictions on Ownership and Transfer section of this prospectus.
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These provisions permit us to refuse to recognize certain transfers of shares that would tend to violate these REIT provisions. We can offer no assurance that our refusal to recognize a transfer will be effective. However, based on the foregoing, for the year ending December 31, 2012, we expect to satisfy the organizational requirements, including the share ownership requirements, required for qualifying as a REIT under the Internal Revenue Code.
Notwithstanding compliance with the share ownership requirements outlined above, tax-exempt stockholders may be required to treat all or a portion of their distributions from us as UBTI if tax-exempt stockholders, in the aggregate, exceed certain ownership thresholds set forth in the Internal Revenue Code. See Treatment of Tax-Exempt Stockholders below.
Ownership of Interests in Partnerships and Qualified REIT Subsidiaries
In the case of a REIT that is a partner in a partnership, Treasury Regulations provide that the REIT is deemed to own its proportionate share, based on its interest in partnership capital, of the assets of the partnership and is deemed to have earned its allocable share of partnership income. Also, if a REIT owns a qualified REIT subsidiary, which is defined as a corporation wholly-owned by a REIT that does not elect to be taxed as a taxable REIT subsidiary (TRS) under the Internal Revenue Code, the REIT will be deemed to own all of the subsidiarys assets and liabilities and it will be deemed to be entitled to treat the income of that subsidiary as its own. In addition, the character of the assets and gross income of the partnership or qualified REIT subsidiary shall retain the same character in the hands of the REIT for purposes of satisfying the gross income tests and asset tests set forth in the Internal Revenue Code. Our operating partnership is currently a disregarded entity and will remain so unless and until it issues limited partnership interests to a person other than us or any subsidiary we establish that is disregarded for tax purposes.
Operational Requirements Gross Income Tests
If we qualify for taxation as a REIT, to maintain our qualification as a REIT, we must, on an annual basis, satisfy the following gross income requirements:
| At least 75% of our gross income, excluding gross income from prohibited transactions, for each taxable year must be derived directly or indirectly from investments relating to real property or mortgages on real property. Gross income includes rents from real property and, in some circumstances, interest, but excludes gross income from dispositions of property held primarily for sale to customers in the ordinary course of a trade or business. Such dispositions are referred to as prohibited transactions. This is known as the 75% Income Test. |
| At least 95% of our gross income, excluding gross income from prohibited transactions, for each taxable year must be derived from the real property investments described above and from distributions, interest and gains from the sale or disposition of stock or securities or from any combination of the foregoing. This is known as the 95% Income Test. |
The rents we receive, or that we are deemed to receive, qualify as rents from real property for purposes of satisfying the gross income requirements for a REIT only if the following conditions are met:
| the amount of rent received from a tenant generally must not be based in whole or in part on the income or profits of any person; however, an amount received or accrued generally will not be excluded from the term rents from real property solely by reason of being based on a fixed percentage or percentages of gross receipts or sales; |
| rents received from a tenant will not qualify as rents from real property if an owner of 10% or more of the REIT directly or constructively owns 10% or more of the tenant or a subtenant of the tenant (in which case only rent attributable to the subtenant is disqualified); |
| if rent attributable to personal property leased in connection with a lease of real property is greater than 15% of the total rent received under the lease, then the portion of rent attributable to the personal property will not qualify as rents from real property; and |
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| the REIT must not operate or manage the property or furnish or render services to tenants, other than through an independent contractor who is adequately compensated and from whom the REIT does not derive any income. However, a REIT may provide services with respect to its properties, and the income derived therefrom will qualify as rents from real property if the services are usually or customarily rendered in connection with the rental of space only and are not otherwise considered rendered to the occupant. Even if the services with respect to a property are impermissible tenant services, the income derived therefrom will qualify as rents from real property if such income does not exceed 1% of all amounts received or accrued with respect to that property. Additionally, a REIT may, under certain circumstances, furnish or render services to tenants that are not usually or customarily rendered through a TRS. Subject to certain exceptions, a TRS is any corporation, other than a REIT, in which we directly or indirectly own stock and with respect to which a joint election has been made by us and the corporation to treat the corporation as a TRS of ours. It also includes any corporation, other than a REIT or a qualified REIT subsidiary, in which a TRS of ours owns, directly or indirectly, more than 35% of the voting power or value. |
We will be paid interest on the mortgage loans that we make or acquire. All interest qualifies under the 95% Income Test. If a mortgage loan is secured exclusively by real property, all of such interest will also qualify for the 75% Income Test. If both real property and other property secure the mortgage loan, then all of the interest on such mortgage loan will also qualify for the 75% Income Test if the amount of the loan did not exceed the fair market value of the real property at the time of the loan commitment.
If we acquire ownership of property by reason of the default of a borrower on a loan or possession of property by reason of a tenant default, if the property qualifies and we elect to treat it as foreclosure property, the income from the property will qualify under the 75% Income Test and the 95% Income Test notwithstanding its failure to satisfy these requirements for three years, or if extended for good cause, up to a total of six years. In that event, we must satisfy a number of complex rules, one of which is a requirement that we operate the property through an independent contractor. We will be subject to tax on that portion of our net income from foreclosure property that does not otherwise qualify under the 75% Income Test.
Prior to investing the offering proceeds in properties, we may satisfy the 75% Income Test and the 95% Income Test by investing in liquid assets such as government securities or certificates of deposit, but earnings from those types of assets are qualifying income under the 75% Income Test only for one year from the receipt of proceeds. Accordingly, to the extent that offering proceeds have not been invested in properties prior to the expiration of this one-year period, in order to satisfy the 75% Income Test, we may invest the offering proceeds in less liquid investments such as mortgage-backed securities, maturing mortgage loans purchased from mortgage lenders or shares in other REITs. We expect to receive proceeds from the offering in a series of closings and to trace those proceeds for purposes of determining the one-year period for new capital investments.
Except for amounts received with respect to certain investments of cash reserves, we anticipate that substantially all of our gross income will be derived from sources that will allow us to satisfy the income tests described above; however, we can give no assurance in this regard.
Notwithstanding our failure to satisfy one or both of the 75% Income Test and the 95% Income Test for any taxable year, we may still qualify as a REIT for that year if we are eligible for relief under specific provisions of the Internal Revenue Code. These relief provisions generally will be available if:
| our failure to meet these tests was due to reasonable cause and not due to willful neglect; |
| we attach a schedule of our income sources to our federal income tax return; and |
| any incorrect information on the schedule is not due to fraud with intent to evade tax. |
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It is not possible, however, to state whether, in all circumstances, we would be entitled to the benefit of these relief provisions. For example, if we fail to satisfy the gross income tests because nonqualifying income that we intentionally earn exceeds the limits on this income, the Internal Revenue Service could conclude that our failure to satisfy the tests was not due to reasonable cause. As discussed above in Taxation of the Company, even if these relief provisions apply, a tax would be imposed with respect to the excess net income.
Operational Requirements Asset Tests
At the close of each quarter of our taxable year, we also must satisfy the following three tests relating to the nature and diversification of our assets:
| First, at least 75% of the value of our total assets must be represented by real estate assets, cash, cash items and government securities. The term real estate assets includes real property, mortgages on real property, shares in other qualified REITs and a proportionate share of any real estate assets owned by a partnership in which we are a partner or of any qualified REIT subsidiary of ours. |
| Second, no more than 25% of our total assets may be represented by securities other than those in the 75% asset class. |
| Third, of the investments included in the 25% asset class, except with respect to TRS and assets satisfying the 75% test, the value of any one issuers securities may not exceed 5% of the value of our total assets. Additionally, we may not own more than 10% of any one issuers outstanding securities measured by either voting power or value. |
| Fourth, no more than 25% of the value of our total assets may consist of the securities of one or more TRSs. |
The third asset test must generally be met for any quarter in which we acquire securities, and we have up to six months to dispose of sufficient assets or otherwise to cure a failure to satisfy this asset test, provided the failure is due to the ownership of assets the total value of which does not exceed the lesser of (1) 1% of our assets at the end of the relevant quarter or (2) $10,000,000.
| If we meet the asset tests at the close of any quarter, we will not lose our REIT status for a failure to satisfy the asset tests at the end of a later quarter if such failure occurs solely because of changes in asset values. If our failure to satisfy the asset tests results from an acquisition of securities or other property during a quarter, we can cure the failure by disposing of a sufficient amount of nonqualifying assets within 30 days after the close of that quarter. We will maintain adequate records of the value of our assets to ensure compliance with the asset tests and will take other action within 30 days after the close of any quarter as may be required to cure any noncompliance. |
| For violations of any of the asset tests due to reasonable cause that are larger than $10,000,000, we may avoid disqualification as a REIT after the 30 day cure period by taking certain steps, including the disposition of sufficient assets within the six month period described above to meet the applicable asset test, paying a tax equal to the greater of $50,000 or the highest corporate tax rate multiplied by the net income generated by the non-qualifying assets during the period of time that the assets were held as non-qualifying assets, and filing a schedule with the Internal Revenue Service that describes the non-qualifying assets. |
Operational Requirements Annual Distribution Requirement
In order to be taxed as a REIT, we are required to make distributions, other than capital gain distributions, to our stockholders each year in the amount of at least 90% of our REIT taxable income, which is computed without regard to the distributions paid deduction and our capital gain and subject to certain other potential adjustments.
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While we must generally make distributions in the taxable year to which they relate, we may also pay distributions in the following taxable year if (1) they are declared before we timely file our federal income tax return for the taxable year in question, and (2) they are made on or before the first regular distribution payment date after the declaration.
Even if we satisfy the foregoing distribution requirement and, accordingly, qualify as a REIT for tax purposes, we will still be subject to tax on the excess of our net capital gain and our REIT taxable income, as adjusted, over the amount of distributions made to stockholders.
In addition, we will be subject to a 4% excise tax on the excess of the amount of such required distributions over amounts actually distributed during such year if we fail to distribute during each calendar year at least the sum of:
| 85% of our ordinary income for that year; |
| 95% of our capital gain net income other than the capital gain net income that we elect to retain and pay tax on for that year; and |
| any undistributed taxable income from prior periods. |
We intend to make timely distributions sufficient to satisfy this requirement. It is possible, however, that we may experience timing differences between (1) the actual receipt of cash and payment of deductible expenses, and (2) the recognition of income. It is also possible that we may be allocated a share of net capital gain attributable to the sale of depreciated property that exceeds our allocable share of cash attributable to that sale.
In such circumstances, we may have less cash than is necessary to meet our annual distribution requirement or to avoid income or excise taxation on certain undistributed income. We may find it necessary in such circumstances to arrange for financing or raise funds through the issuance of additional shares in order to meet our distribution requirements, or we may pay taxable stock distributions to meet the distribution requirement.
If we fail to satisfy the distribution requirement for any taxable year by reason of a later adjustment to our taxable income made by the Internal Revenue Service, we may be able to pay deficiency distributions in a later year and include such distributions in our deductions for distributions paid for the earlier year. In such event, we may be able to avoid being taxed on amounts distributed as deficiency distributions, but we would be required in such circumstances to pay interest to the Internal Revenue Service based upon the amount of any deduction taken for deficiency distributions for the earlier year.
We may also elect to retain, rather than distribute, our net long-term capital gains. The effect of such an election would be as follows:
| we would be required to pay the tax on these gains; |
| our stockholders, while required to include their proportionate share of the undistributed long-term capital gains in income, would receive a credit or refund for their share of the tax paid by us; and |
| the basis of a stockholders shares would be increased by the difference between the designated amount included in the stockholders long-term capital gains and the tax deemed paid with respect to such shares. |
In computing our REIT taxable income, we will use the accrual method of accounting and depreciate depreciable property under the alternative depreciation system. We are required to file an annual federal income tax return, which, like other corporate returns, is subject to examination by the Internal Revenue Service.
Because the tax law requires us to make many judgments regarding the proper treatment of a transaction or an item of income or deduction, it is possible that the Internal Revenue Service will challenge positions we take
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in computing our REIT taxable income and our distributions. Issues could arise, for example, with respect to the allocation of the purchase price of properties between depreciable or amortizable assets and non-depreciable or non-amortizable assets such as land and the current deductibility of fees paid to our advisor or its affiliates. If the Internal Revenue Service successfully challenges our characterization of a transaction or determination of our REIT taxable income, we could be found to have failed to satisfy a requirement for qualification as a REIT. If, as a result of a challenge, we are determined to have failed to satisfy the distribution requirements for a taxable year, we would be disqualified as a REIT unless we were permitted to pay a deficiency distribution to our stockholders and pay interest thereon to the Internal Revenue Service, as provided by the Internal Revenue Code. A deficiency distribution cannot be used to satisfy the distribution requirement, however, if the failure to meet the requirement is not due to a later adjustment to our income by the Internal Revenue Service.
Certain taxable stock dividends may satisfy the 90% annual distribution requirement. The Internal Revenue Service has ruled that a distribution of stock by a REIT, whether publicly traded on an established securities market or not, may be treated as a distribution of property that qualifies for the 90% annual distribution requirement. Currently, these rulings require, among other things, that the distribution is declared on or before December 31, 2012, and with respect to a taxable year ending on or before December 31, 2011.
Operational Requirements Recordkeeping
In order to continue to qualify as a REIT, we must maintain records as specified in applicable Treasury Regulations. Further, we must request, on an annual basis, information designed to disclose the ownership of our outstanding shares. We intend to comply with such requirements.
Failure to Qualify as a REIT
If we fail to qualify as a REIT for any reason in a taxable year and applicable relief provisions do not apply, we will be subject to tax, including any applicable alternative minimum tax, on our taxable income at regular corporate rates. We will not be able to deduct distributions paid to our stockholders in any year in which we fail to qualify as a REIT. We also will be disqualified for the four taxable years following the year during which qualification was lost unless we are entitled to relief under specific statutory provisions. See the Risk Factors Federal Income Tax Risks section of this prospectus.
Sale-Leaseback Transactions
Some of our investments may be in the form of sale-leaseback transactions. In most instances, depending on the economic terms of the transaction, we will be treated for federal income tax purposes as either the owner of the property or the holder of a debt secured by the property. We do not expect to request an opinion of counsel concerning the status of any leases of properties as true leases for federal income tax purposes.
The Internal Revenue Service may take the position that a specific sale-leaseback transaction that we treat as a true lease is not a true lease for federal income tax purposes but is, instead, a financing arrangement or loan. We may also structure some sale-leaseback transactions as loans. In this event, for purposes of the asset tests and the 75% Income Test, each such loan likely would be viewed as secured by real property to the extent of the fair market value of the underlying property. We expect that, for this purpose, the fair market value of the underlying property would be determined without taking into account our lease. If a sale-leaseback transaction were so recharacterized, we might fail to satisfy the asset tests or the income tests and, consequently, lose our REIT status effective with the year of recharacterization. Alternatively, the amount of our REIT taxable income could be recalculated, which might also cause us to fail to meet the distribution requirement for a taxable year.
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Taxation of U.S. Stockholders
Definition
In this section, the phrase U.S. stockholder means a holder of shares of our common stock that for federal income tax purposes is:
| a citizen or resident of the United States; |
| a corporation, partnership or other entity created or organized in or under the laws of the United States or of any political subdivision thereof; |
| an estate or trust, the income of which is subject to U.S. federal income taxation regardless of its source; or |
| a trust, if a U.S. court is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust. |
For any taxable year for which we qualify for taxation as a REIT, amounts distributed to U.S. stockholders will be taxed as described below.
Distributions Generally
Distributions to U.S. stockholders, other than capital gain distributions discussed below, will constitute distributions up to the amount of our current or accumulated earnings and profits and will be taxable to the stockholders as ordinary income. Individuals receiving qualified dividends, which are distributions from domestic and certain qualifying foreign subchapter C corporations, may be taxed at lower rates on distributions (at rates applicable to long-term capital gains, currently at a maximum rate of 15%) provided certain holding period requirements are met. Because, however, we will be taxed as a REIT, individuals receiving distributions from us generally will not be eligible for the lower rates on distributions except with respect to the portion of any distribution that (a) represents distributions being passed through to us from a corporation in which we own shares (but only if such distributions would be eligible for the lower rates on distributions if paid by the corporation to its individual stockholders), (b) is equal to our REIT taxable income (taking into account the distributions paid deduction available to us) less any taxes paid by us on these items during our previous taxable year, or (c) is attributable to built-in gains realized and recognized by us from disposition of properties acquired by us in non-recognition transaction, less any taxes paid by us on these items during our previous taxable year. These distributions are not eligible for the distributions received deduction generally available to corporations.
To the extent that we make a distribution in excess of our current or accumulated earnings and profits, the distribution will be treated first as a tax-free return of capital, reducing the tax basis in each U.S. stockholders shares (but not below zero). This, in effect, will defer a portion of your tax until your investment is sold or we are liquidated, at which time you likely will be taxed at capital gains rates. The amount of each distribution in excess of a U.S. stockholders tax basis in its shares will be taxable as gain realized from the sale of its shares. Distributions that we declare in October, November or December of any year payable to a stockholder of record on a specified date in any of these months will be treated as both paid by us and received by the stockholder on December 31 of the year, so long as we actually pay the distribution during January of the following calendar year. U.S. stockholders may not include any of our losses on their own federal income tax returns.
We will be treated as having sufficient earnings and profits to treat as a distribution any distribution by us up to the amount required to be distributed in order to avoid imposition of the 4% excise tax discussed above. Moreover, any deficiency dividend will be treated as an ordinary or capital gain distribution, as the case may be, regardless of our earnings and profits. As a result, stockholders may be required to treat as taxable some distributions that would otherwise result in a tax-free return of capital.
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Capital Gain Distributions
Distributions to U.S. stockholders that we properly designate as capital gain distributions normally will be treated as long-term capital gains, to the extent they do not exceed our actual net capital gain for the taxable year, without regard to the period for which the U.S. stockholder has held his or her shares. A corporate U.S. stockholder, however, may be required to treat up to 20% of some capital gain distributions as ordinary income. See Requirements for Qualification as a REIT Operational Requirements Annual Distribution Requirement above for the treatment by U.S. stockholders of net long-term capital gains that we elect to retain and pay tax on.
Passive Activity Loss and Investment Interest Limitations
Our distributions and any gain realized from a disposition of shares will not be treated as passive activity income, and stockholders may not be able to utilize any of their passive losses to offset this income on their personal tax returns. Our distributions (to the extent they do not constitute a return of capital) will generally be treated as investment income for purposes of the limitations on the deduction of investment interest. Net capital gain from a disposition of shares and capital gain distributions generally will be included in investment income for purposes of the investment interest deduction limitations only if, and to the extent, so elected, in which case any such capital gains will be taxed as ordinary income.
Certain Dispositions of the Shares
In general, any gain or loss realized upon a taxable disposition of shares by a U.S. stockholder who is not a dealer in securities will be treated as long-term capital gain or loss if the shares have been held for more than 12 months and as short-term capital gain or loss if the shares have been held for 12 months or less. If, however, a U.S. stockholder has received any capital gains distributions with respect to his shares, any loss realized upon a taxable disposition of shares held for six months or less, to the extent of the capital gains distributions received with respect to his shares, will be treated as long-term capital loss. Also, the Internal Revenue Service is authorized to issue Treasury Regulations that would subject a portion of the capital gain a U.S. stockholder recognizes from selling shares or from a capital gain distribution to a tax at a 25% rate, to the extent the capital gain is attributable to depreciation previously deducted.
A repurchase by us of shares for cash will be treated as a distribution that is taxable as a dividend to the extent of our current or accumulated earnings and profits at the time of the repurchase under Section 302 of the Internal Revenue Code unless the repurchase:
| results in a complete termination of the stockholders interest in us under Section 302(b)(3) of the Internal Revenue Code; |
| is substantially disproportionate with respect to the stockholder under Section 302(b)(2) of the Internal Revenue Code (i.e., if the percentage of the voting stock of the corporation owned by a stockholder immediately after the repurchase is less than 80% of the percentage of that owned by such stockholder immediately before the repurchase (taking into account Internal Revenue Code Section 318 constructive ownership rules); or |
| is not essentially equivalent to a dividend with respect to the stockholder under Section 302(b)(1) of the Internal Revenue Code (i.e., if it results in a meaningful reduction in the stockholders interest in us). |
If the repurchase is not treated as a dividend, the repurchase of common stock for cash will result in taxable gain or loss equal to the difference between the amount of cash received and the stockholders tax basis in the shares of our common stock repurchased. Such gain or loss would be capital gain or loss if the common stock were held as a capital asset and would be long-term capital gain or loss if the holding period for the shares of our common stock exceeds one year.
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Information Reporting Requirements and Backup Withholding for U.S. Stockholders
Under some circumstances, U.S. stockholders may be subject to backup withholding at a rate of 28% on payments made with respect to, or cash proceeds of a sale or exchange of, our shares. Backup withholding will apply only if the stockholder:
| fails to furnish his or her taxpayer identification number or, for an individual, his or her Social Security Number; |
| furnishes an incorrect tax identification number; |
| is notified by the Internal Revenue Service that he or she has failed to properly report payments of interest and distributions or is otherwise subject to backup withholding; or |
| under some circumstances, fails to certify, under penalties of perjury, that he or she has furnished a correct tax identification number and that (a) he or she has not been notified by the Internal Revenue Service that he or she is subject to backup withholding for failure to report interest and distribution payments or (b) he or she has been notified by the Internal Revenue Service that he or she is no longer subject to backup withholding. |
Backup withholding will not apply with respect to payments made to some stockholders, such as corporations and tax-exempt organizations. Backup withholding is not an additional tax. Rather, the amount of any backup withholding with respect to a payment to a U.S. stockholder will be allowed as a credit against the U.S. stockholders U.S. federal income tax liability and may entitle the U.S. stockholder to a refund, provided that the required information is furnished to the Internal Revenue Service. U.S. stockholders should consult their own tax advisors regarding their qualifications for exemption from backup withholding and the procedure for obtaining an exemption.
Cost Basis Reporting
The Energy Improvement and Extension Act of 2008 (the Act) imposed new customer reporting requirements on certain financial intermediaries (brokers). The Act now requires every broker that is required to file an information return reporting the gross proceeds of a covered security with the Internal Revenue Service to include in the information return the stockholders adjusted basis in the security, and whether any gain or loss with respect to the security is short-term or long-term within the meaning of Internal Revenue Code Sec. 1222. Under IRC Sec. 6045(g)(3), a covered security includes any share of stock in a corporation that was acquired in an account on or after January 1, 2011. We have determined that shares of our common stock that were acquired on or after January 1, 2011, including shares issued pursuant to our distribution reinvestment plan, are covered securities under the Act. Thus, stockholders who redeem, sell or otherwise liquidate shares that were purchased on or after January 1, 2011 will receive an information return reporting the gross proceeds from the sale, the adjusted basis of the shares sold, and whether any gain or loss is short-term or long-term within the meaning of IRC Sec. 1222. We are required to furnish this statement to stockholders by February 15 of the year following the calendar year in which the covered securities were sold. This information also will be reported to the Internal Revenue Service.
When determining the adjusted basis of the shares sold, IRC Sec. 6045(g)(2)(B) requires us to use the first-in first-out method. When using the first-in first-out method, we are required to identify the shares sold in the order that they were acquired. However, as an alternative to the first-in first-out method, the stockholder may notify us of a preferred alternative by means of making an adequate identification of the shares to be liquidated prior to the liquidation event. Please see the section entitled Description of Shares Share Redemption Program for additional information about our share redemption program.
Treatment of Tax-Exempt Stockholders
Tax-exempt entities such as employee pension benefit trusts, individual retirement accounts and charitable remainder trusts generally are exempt from federal income taxation. Such entities are subject to taxation,
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however, on any UBTI. Our payment of distributions to a tax-exempt employee pension benefit trust or other domestic tax-exempt stockholder generally will not constitute UBTI to such stockholder unless such stockholder has borrowed to acquire or carry its shares, or has used the shares of stock in a trade or business.
In the event that we were deemed to be predominately held by qualified employee pension benefit trusts, such trusts would be required to treat a certain percentage of the distributions paid to them as UBTI. We would be deemed to be predominately held by such trusts if either (i) one employee pension benefit trust owns more than 25% in value of our shares, or (ii) any group of employee pension benefit trusts, each owning more than 10% in value of our shares, holds in the aggregate more than 50% in value of our shares. If either of these ownership thresholds were ever exceeded, any qualified employee pension benefit trust holding more than 10% in value of our shares would be subject to tax on that portion of our distributions made to it which is equal to the percentage of our income that would be UBTI if we were a qualified trust, rather than a REIT. We monitor the concentration of ownership of employee pension benefit trusts in our shares, and we do not expect our shares to be deemed to be predominately held by qualified employee pension benefit trusts, as defined in the Internal Revenue Code, to the extent required to trigger the treatment of our income as to such trusts.
For social clubs, voluntary employee benefit associations, supplemental unemployment benefit trusts and qualified group legal services plans exempt from federal income taxation under Sections 501(c)(7), (c)(9), (c)(17) and (c)(20) of the Internal Revenue Code, respectively, income from an investment in our shares will constitute UBTI unless the stockholder in question is able to deduct amounts set aside or placed in reserve for certain purposes so as to offset the UBTI generated. Any such organization that is a prospective stockholder should consult its own tax advisor concerning these set aside and reserve requirements.
Special Tax Considerations for Non-U.S. Stockholders
The rules governing U.S. income taxation of non-resident alien individuals, foreign corporations, foreign partnerships and foreign trusts and estates (non-U.S. stockholders) are complex, and the following discussion is intended only as a summary. Non-U.S. stockholders should consult with their own tax advisors to determine the impact of federal, state and local income tax laws on an investment in our shares, including any reporting requirements.
Income Effectively Connected with a U.S. Trade or Business
In general, non-U.S. stockholders will be subject to regular U.S. federal income taxation with respect to their investment in our shares if the income derived therefrom is effectively connected with the non-U.S. stockholders conduct of a trade or business in the United States. The determination of whether an investment in our shares is effectively connected with another U.S. trade or business will depend entirely on the potential investors business activities within the U.S., and we recommend consultation with a qualified international tax advisor on the issue. A non-U.S. stockholder treated as a corporation for U.S. federal income tax purposes that receives income that is (or is treated as) effectively connected with a U.S. trade or business also may be subject to a branch profits tax under Section 884 of the Internal Revenue Code, which is payable in addition to the regular U.S. federal corporate income tax.
The following discussion will apply to non-U.S. stockholders whose income derived from ownership of our shares is deemed to be not effectively connected with a U.S. trade or business.
Distributions Not Attributable to Gain from the Sale or Exchange of a United States Real Property Interest
A distribution to a non-U.S. stockholder that is not attributable to gain realized by us from the sale or exchange of a United States real property interest within the meaning under FIRPTA, and that we do not designate as a capital gain distribution will be treated as an ordinary income distribution to the extent that it is made out of current or accumulated earnings and profits. Generally, any ordinary income distribution will be subject to a U.S. federal income tax equal to 30% of the gross amount of the distribution unless this tax is
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reduced by the provisions of an applicable tax treaty. Any such distribution in excess of our earnings and profits will be treated first as a return of capital that will reduce each non-U.S. stockholders basis in its shares (but not below zero) and then as gain from the disposition of those shares, the tax treatment of which is described under the rules discussed below with respect to dispositions of shares.
Distributions Attributable to Gain from the Sale or Exchange of a United States Real Property Interest
Distributions to a non-U.S. stockholder that are attributable to gain from the sale or exchange of a United States real property interest will be taxed to a non-U.S. stockholder under Internal Revenue Code provisions enacted by FIRPTA. Under FIRPTA, such distributions are taxed to a non-U.S. stockholder as if the distributions were gains effectively connected with a U.S. trade or business. Accordingly, a non-U.S. stockholder will be taxed at the normal capital gain rates applicable to a U.S. stockholder (subject to any applicable alternative minimum tax and a special alternative minimum tax in the case of non-resident alien individuals). Distributions subject to FIRPTA also may be subject to a 30% branch profits tax when made to a corporate non-U.S. stockholder that is not entitled to a treaty exemption. Capital gain distributions generally will be treated as subject to FIRPTA.
Withholding Obligations With Respect to Distributions to Non-U.S. Stockholders
Although tax treaties may reduce our withholding obligations, based on current law, we will generally be required to withhold from distributions to non-U.S. stockholders, and remit to the Internal Revenue Service:
| 35% of designated capital gain distributions or, if greater, 35% of the amount of any distributions that could be designated as capital gain distributions; and |
| 30% of ordinary income distributions (i.e., distributions paid out of our earnings and profits). |
In addition, if we designate prior distributions as capital gain distributions, subsequent distributions, up to the amount of the prior distributions, will be treated as capital gain distributions for purposes of withholding. A distribution in excess of our earnings and profits will be subject to 30% withholding if at the time of the distribution it cannot be determined whether the distribution will be in an amount in excess of our current or accumulated earnings and profits. If the amount of tax we withhold with respect to a distribution to a non-U.S. stockholder exceeds the stockholders U.S. tax liability with respect to that distribution, the non-U.S. stockholder may file a claim with the Internal Revenue Service for a refund of the excess.
Sale of Our Shares by a Non-U.S. Stockholder
A sale of our shares by a non-U.S. stockholder generally will not be subject to U.S. federal income taxation unless (1) the gain or loss from such sale is effectively connected with the conduct of another U.S. trade or business or (2) our shares constitute a United States real property interest under FIRPTA. With respect to determining whether gain or loss on the sale of our stock is effectively connected with another U.S. trade or business, this determination will depend entirely on each potential non-U.S. investors business activities within the U.S. We recommend consultation with a qualified international tax advisor on this issue. With respect to potential taxation under FIRPTA of the sale of a United States real property interest, in general our shares will not constitute a United States real property interest provided we are a domestically controlled REIT.
A domestically controlled REIT is a REIT that at all times during a specified testing period has less than 50% in value of its shares held directly or indirectly by non-U.S. stockholders. We currently anticipate that we will be a domestically controlled REIT, so gain from the sale of our common stock should not be subject to federal income taxation under FIRPTA. However, we do expect to sell shares of our common stock to non-U.S. stockholders and we cannot assure you that we will continue to be a domestically controlled REIT. If we are not a domestically controlled REIT, it is possible that our common stock would constitute a U.S. real property interest, and as a result, any gain from the sale of our common stock by a non-U.S. stockholder would be subject to federal income tax under FIRPTA.
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If sale of our common stock were subject to taxation under FIRPTA, a non-U.S. stockholder would be subject to the same federal income tax treatment as a U.S. stockholder with respect to the gain recognized (subject to any applicable alternative minimum tax in the case of non-resident alien individuals). In addition, distributions that are subject to tax under FIRPTA also may be subject to a 30% branch profits tax when made to a non-U.S. stockholder treated as a corporation (under U.S. federal income tax principles) that is not otherwise entitled to a treaty exemption. Finally, if we are not a domestically controlled REIT at the time our stock is sold, under FIRPTA the purchaser of our common stock also may be required to withhold 10% of the purchase price and remit this amount to the Internal Revenue Service on behalf of the selling non-U.S. stockholder.
With respect to individual non-U.S. stockholders, even if not subject to FIRPTA, capital gains recognized from the sale of our common stock will be taxable to such non-U.S. stockholder if he or she is a non-resident alien individual who is present in the United States for 183 days or more during the taxable year and some other conditions apply, in which case the non-resident alien individual may be subject to a U.S. federal income tax on his or her U.S. source capital gains.
Information Reporting Requirements and Backup Withholding for Non-U.S. Stockholders
Additional issues may arise for information reporting and backup withholding for non-U.S. stockholders. Non-U.S. stockholders should consult their tax advisors with regard to U.S. information reporting and backup withholding requirements under the Internal Revenue Code.
Statement of Stock Ownership
We are required to demand annual written statements from the record holders of designated percentages of our shares disclosing the actual owners of the shares. Any record stockholder who, upon our request, does not provide us with required information concerning actual ownership of the shares is required to include specified information relating to his or her shares in his or her federal income tax return. We also must maintain, within the Internal Revenue District in which we are required to file, our federal income tax return, permanent records showing the information we have received about the actual ownership of shares and a list of those persons failing or refusing to comply with our demand.
State and Local Taxation
We and any operating subsidiaries that we may form may be subject to state and local tax in states and localities in which they or we do business or own property. The tax treatment of us, CCPT IV OP, any operating subsidiaries we may form and the holders of our shares in local jurisdictions may differ from the federal income tax treatment described above. Prospective stockholders should consult their own tax advisors regarding the effect of state and local tax laws an their investment in our shares.
Tax Aspects of Our Operating Partnership
The following discussion summarizes certain federal income tax considerations applicable to our investment in CCPT IV OP, our operating partnership. The discussion does not cover state or local tax laws or any federal tax laws other than income tax laws.
Classification as a Partnership
We will be entitled to include in our income a distributive share of CCPT IV OPs income and to deduct our distributive share of CCPT IV OPs losses only if CCPT IV OP is classified for federal income tax purposes as a partnership, rather than as an association taxable as a corporation. Under applicable Treasury Regulations known as the Check-the-Box-Regulations, an unincorporated entity with at least two members may elect to be classified either as an association taxable as a corporation or as a partnership. If such an entity fails to make an
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election, it generally will be treated as a partnership for federal income tax purposes. CCPT IV OP intends to be classified as a partnership for federal income tax purposes and will not elect to be treated as an association taxable as a corporation under the Check-the-Box-Regulations.
Even though CCPT IV OP will be treated as a partnership for federal income tax purposes at such time, if any, that it has two or more regarded owners for tax purposes, it may be taxed as a corporation if it is deemed to be a publicly traded partnership (PTP). A PTP is a partnership whose interests are traded on an established securities market or are readily tradable on a secondary market, or the substantial equivalent thereof. However, a PTP will not be treated as a corporation for federal income tax purposes if at least 90% of such partnerships gross income for a taxable year consists of qualifying income under Section 7704(d) of the Internal Revenue Code. Qualifying income generally includes any income that is qualifying income for purposes of the 95% Income Test applicable to REITs (the 90% Passive-Type Income Exception). See Requirements for Qualification as a REIT Operational Requirements Gross Income Tests above.
In addition, limited safe harbors from the definition of a PTP are provided under the applicable PTP Treasury Regulations. Pursuant to one of these (the Private Placement Exclusion), interests in a partnership will not be treated as readily tradable on a secondary market or the substantial equivalent thereof if (i) all interests in the partnership were issued in a transaction (or transactions) that was not required to be registered under the Securities Act, and (ii) the partnership does not have more than 100 partners at any time during the partnerships taxable year. In determining the number of partners in a partnership, a person owning an interest in a flow-through entity, such as a partnership, grantor trust or S corporation, that owns an interest in the partnership is treated as a partner in such partnership only if (a) substantially all of the value of the owners interest in the flow-through is attributable to the flow-through entitys interest, direct or indirect, in the partnership and (b) a principal purpose of the use of the flow-through entity is to permit the partnership to satisfy the 100 partner limitation. CCPT IV OP qualifies for the Private Placement Exclusion. Moreover, even if CCPT IV OP were considered a PTP under the PTP Regulations because it is deemed to have more than 100 partners, we believe CCPT IV OP should not be treated as a corporation because it is eligible for the 90% Passive-Type Income Exception described above.
We have not requested, and do not intend to request, a ruling from the Internal Revenue Service that CCPT IV OP will be classified as a partnership for federal income tax purposes. Morris, Manning & Martin, LLP is of the opinion, however, that based on certain factual assumptions and representations, CCPT IV OP will be treated for federal income tax purposes as a partnership and not as an association taxable as a corporation, or as a PTP. Unlike a tax ruling, however, an opinion of counsel is not binding upon the Internal Revenue Service, and we can offer no assurance that the Internal Revenue Service will not challenge the status of CCPT IV OP as a partnership for federal income tax purposes. If such challenge were sustained by a court, CCPT IV OP would be treated as a corporation for federal income tax purposes, as described below. In addition, the opinion of Morris, Manning & Martin, LLP is based on existing law, which is to a great extent the result of administrative and judicial interpretation. No assurance can be given that administrative or judicial changes would not modify the conclusions expressed in the opinion.
If for any reason CCPT IV OP were taxable as a corporation, rather than a partnership, for federal income tax purposes, we would not be able to qualify as a REIT. See Requirements for Qualification as a REIT Operational Requirements Gross Income Tests and Requirements for Qualification as a REIT Operational Requirements Asset Tests above. In addition, any change in CCPT IV OPs status for tax purposes might be treated as a taxable event, in which case we might incur a tax liability without any related cash distribution. Further, items of income and deduction of CCPT IV OP would not pass through to its partners, and its partners would be treated as stockholders for tax purposes. Consequently, CCPT IV OP would be required to pay income tax at corporate tax rates on its net income, and distributions to its partners would not be deductible in computing CCPT IV OPs taxable income.
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Income Taxation of the Operating Partnership and Its Partners
Partners, Not a Partnership, Subject to Tax
A partnership is not a taxable entity for federal income tax purposes. As a partner in CCPT IV OP, we will be required to take into account our allocable share of CCPT IV OPs income, gains, losses, deductions and credits for any taxable year of CCPT IV OP ending within or with our taxable year, without regard to whether we have received or will receive any distribution from CCPT IV OP.
Partnership Allocations
Although a partnership agreement generally determines the allocation of income and losses among partners, such allocations will be disregarded for tax purposes if they do not comply with the provisions of Section 704(b) of the Internal Revenue Code and the applicable Treasury Regulations. If an allocation is not recognized for federal income tax purposes after the time, if any, at which the operating partnership becomes a partnership for tax purposes, the item subject to the allocation will be reallocated in accordance with the partners interests in the partnership, which will be determined by taking into account all of the facts and circumstances relating to the economic arrangement of the partners with respect to such item. CCPT IV OPs allocations of taxable income and loss are intended to comply with the requirements of Section 704(b) of the Internal Revenue Code and the applicable Treasury Regulations at such time, if any, that the operating partnership becomes a partnership for tax purposes.
Tax Allocations With Respect to Contributed Properties
Pursuant to Section 704(c) of the Internal Revenue Code, income, gain, loss and deductions attributable to appreciated or depreciated property that is contributed to a partnership in exchange for an interest in the partnership must be allocated for federal income tax purposes in a manner such that the contributor is charged with, or benefits from, the unrealized gain or unrealized loss associated with the property at the time of the contribution. The amount of such unrealized gain or unrealized loss is generally equal to the difference between the fair market value of the contributed property at the time of contribution and the adjusted tax basis of such property at the time of contribution. Under applicable Treasury Regulations, partnerships are required to use a reasonable method for allocating items subject to Section 704(c) of the Internal Revenue Code, and several reasonable allocation methods are described therein.
Under the partnership agreement for CCPT IV OP, depreciation or amortization deductions of CCPT IV OP generally will be allocated among the partners in accordance with their respective interests in CCPT IV OP, except to the extent that CCPT IV OP is required under Section 704(c) of the Internal Revenue Code to use a method for allocating depreciation deductions attributable to its properties that results in us receiving a disproportionately large share of such deductions. We may possibly be allocated (1) lower amounts of depreciation deductions for tax purposes with respect to contributed properties than would be allocated to us if each such property were to have a tax basis equal to its fair market value at the time of contribution and/or (2) taxable gain in the event of a sale of such contributed properties in excess of the economic profit allocated to us as a result of such sale. These allocations may cause us to recognize taxable income in excess of cash proceeds received by us, which might adversely affect our ability to comply with the REIT distribution requirements, although we do not anticipate this will occur.
The foregoing principles also will affect the calculation of our earnings and profits for purposes of determining which portion of our distributions is taxable as a distribution. If we acquire properties in exchange for units of CCPT IV OP, the allocations described in this paragraph may result in a higher portion of our distributions being taxed as a distribution than would have occurred had we purchased such properties for cash.
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Basis in Operating Partnership Interest
The adjusted tax basis of our partnership interest in CCPT IV OP generally is equal to (1) the amount of cash and the basis of any other property contributed to CCPT IV OP by us, (2) increased by (a) our allocable share of CCPT IV OPs income and (b) our allocable share of indebtedness of CCPT IV OP, and (3) reduced, but not below zero, by (a) our allocable share of CCPT IV OPs loss and (b) the amount of cash distributed to us, including constructive cash distributions resulting from a reduction in our share of indebtedness of CCPT IV OP.
If the allocation of our distributive share of CCPT IV OPs loss would reduce the adjusted tax basis of our partnership interest in CCPT IV OP below zero, the recognition of such loss will be deferred until such time as the recognition of such loss would not reduce our adjusted tax basis below zero. If a distribution from CCPT IV OP or a reduction in our share of CCPT IV OPs liabilities (which is treated as a constructive distribution for tax purposes) would reduce our adjusted tax basis below zero, any such distribution, including a constructive distribution, would constitute taxable income to us. The gain realized by us upon the receipt of any such distribution or constructive distribution would normally be characterized as capital gain, and if our partnership interest in CCPT IV OP has been held for longer than the required long-term capital gain holding period (currently one year), the distribution would constitute long-term capital gain.
Depreciation Deductions Available to the Operating Partnership
CCPT IV OP will use a portion of contributions made by us from offering proceeds to acquire interests in properties. To the extent that CCPT IV OP acquires properties for cash, CCPT IV OPs initial basis in such properties for federal income tax purposes generally will be equal to the purchase price paid by CCPT IV OP. CCPT IV OP plans to depreciate each such depreciable property for federal income tax purposes under the alternative depreciation system of depreciation. Under this system, CCPT IV OP generally will depreciate such buildings and improvements over a 40-year recovery period using a straight-line method and a mid-month convention and will depreciate furnishings and equipment over a 12-year recovery period.
To the extent that CCPT IV OP acquires properties in exchange for its partnership units, CCPT IV OPs initial basis in each such property for federal income tax purposes should be the same as the transferors basis in that property on the date of acquisition by CCPT IV OP. Although the law is not entirely clear, CCPT IV OP generally intends to depreciate such depreciable property for federal income tax purposes over the same remaining useful lives and under the same methods used by the transferors.
Sale of the Operating Partnerships Property
Generally, any gain realized by CCPT IV OP on the sale of property held for more than one year will be long-term capital gain, except for any portion of such gain that is treated as depreciation or cost recovery recapture. Any gain recognized by CCPT IV OP upon the disposition of a property acquired by CCPT IV OP for cash will be allocated among the partners in accordance with their respective interests in CCPT IV OP.
Our share of any gain realized by CCPT IV OP on the sale of any property held by CCPT IV OP as inventory or other property held primarily for sale to customers in the ordinary course of CCPT IV OPs trade or business will be treated as income from a prohibited transaction that is subject to a 100% penalty tax. We, however, do not currently intend to acquire or hold or allow CCPT IV OP to acquire or hold any property that represents inventory or other property held primarily for sale to customers in the ordinary course of our or CCPT IV OPs trade or business.
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Medicare Tax on Unearned Income
For taxable years beginning after December 31, 2012, a U.S. stockholder that is an individual is subject to a 3.8% tax on the lesser of (1) the U.S. stockholders net investment income for the relevant taxable year and (2) the excess of the U.S. stockholders modified adjusted gross income for the taxable year over a certain threshold (which in the case of individuals will be between $125,000 and $250,000, depending on the individuals circumstances). A U.S. stockholder that is an estate or trust that does not fall into a special class of trusts that is exempt from such tax is subject to the same 3.8% tax on the lesser of its undistributed net investment income and the excess of its adjusted gross income over a certain threshold. A U.S. stockholders net investment income will include, among other things, dividends on and capital gains from the sale or other disposition of our shares. Prospective U.S. stockholders that are individuals, estates or trusts should consult their tax advisors regarding the effect, if any, of this Medicare tax on their ownership and disposition of our common stock.
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INVESTMENT BY TAX-EXEMPT ENTITIES AND ERISA CONSIDERATIONS
General
The following is a summary of some non-tax considerations associated with an investment in our shares by tax-qualified pension, stock bonus or profit-sharing plans, employee benefit plans described in Section 3(3) of ERISA, annuities described in Section 403(a) or (b) of the Internal Revenue Code, an individual retirement account or annuity described in Sections 408 or 408A of the Internal Revenue Code, an Archer MSA described in Section 220(d) of the Internal Revenue Code, a health savings account described in Section 223(d) of the Internal Revenue Code, or a Coverdell education savings account described in Section 530 of the Internal Revenue Code, which are generally referred to as Plans and IRAs, as applicable. This summary is based on provisions of ERISA and the Internal Revenue Code, including amendments thereto through the date of this prospectus, and relevant regulations and opinions issued by the Department of Labor and the Internal Revenue Service through the date of this prospectus. We cannot assure you that adverse tax decisions or legislative, regulatory or administrative changes that would significantly modify the statements expressed herein will not occur. Any such changes may or may not apply to transactions entered into prior to the date of their enactment.
This summary does not include a discussion of any laws, regulations, or statutes that may apply to investors not covered by ERISA, including, for example, investors such as plans or arrangements that constitute governmental plans or church plans which are exempt from ERISA and many Internal Revenue Code requirements. For such plans and arrangements, applicable laws (such as state laws) may impose fiduciary responsibility requirements in connection with the investment of assets, and may have prohibitions that operate similarly to the prohibited transaction rules of ERISA and the Internal Revenue Code, but which may also vary significantly from such prohibitions. For any governmental or church plan, or other plans or arrangements not subject to ERISA, those persons responsible for the investment of the assets of such a plan or arrangements should carefully consider the impact of such laws on an investment in shares of our common stock.
Our management has attempted to structure us in such a manner that we will be an attractive investment vehicle for Plans and IRAs. However, in considering an investment in our shares, those involved with making such an investment decision should consider applicable provisions of the Internal Revenue Code and ERISA. While each of the ERISA and Internal Revenue Code issues discussed below may not apply to all Plans and IRAs, individuals involved with making investment decisions with respect to Plans and IRAs should carefully review the rules and exceptions described below, and determine their applicability to their situation.
In general, individuals making investment decisions with respect to Plans and IRAs should, at a minimum, consider:
| whether the investment is in accordance with the documents and instruments governing such Plan or IRA; |
| whether the investment satisfies the prudence and diversification and other fiduciary requirements of ERISA, if applicable; |
| whether the investment will result in UBTI to the Plan or IRA (see Federal Income Tax Considerations Treatment of Tax-Exempt Stockholders); |
| whether there is sufficient liquidity for the Plan or IRA, considering the minimum and other distribution requirements under the Internal Revenue Code and the liquidity needs of such Plan or IRA, after taking this investment into account; |
| a need to value the assets of the Plan or IRA annually or more frequently; |
| whether the investment would constitute or give rise to a prohibited transaction under ERISA and/or the Internal Revenue Code, if applicable; |
| whether the investment is consistent with the applicable provisions of ERISA, the Internal Revenue Code, and other applicable laws; and |
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| whether the assets of the entity in which the investment is made will be treated as plan assets of the Plan or IRA investor. |
Additionally, individuals making investment decisions with respect to Plans and IRAs must remember that ERISA requires that the assets of an employee benefit plan must generally be held in trust, and that the trustee, or a duly authorized named fiduciary or investment manager, must have authority and discretion to manage and control the assets of an employee benefit plan.
Minimum and Other Distribution Requirements Plan Liquidity
Potential Plan or IRA investors who intend to purchase our shares should consider the limited liquidity of an investment in our shares as it relates to the minimum distribution requirements under the Internal Revenue Code, if applicable, and as it relates to other distributions (such as, for example, cash out distributions) that may be required under the terms of the Plan or IRA from time to time. If the shares are held in an IRA or Plan and, before we sell our properties, mandatory or other distributions are required to be made to the participant or beneficiary of such IRA or Plan, pursuant to the Internal Revenue Code, then this would require that a distribution of the shares be made in kind to such participant or beneficiary, or that a rollover of such shares be made to an IRA or other plan, which may not be permissible under the terms and provisions of the IRA or Plan making the distribution or rollover or the IRA or Plan receiving the rollover. Even if permissible, a distribution of shares in kind to a participant or beneficiary of an IRA or Plan must be included in the taxable income of the recipient for the year in which the shares are received at the then current fair market value of the shares, even though there would be no corresponding cash distribution with which to pay the income tax liability arising because of the distribution of shares. See Risk Factors Federal Income Tax Risks. The fair market value of any such distribution-in-kind can be only an estimated value per share because no public market for our shares exists or is likely to develop. See Annual or More Frequent Valuation Requirements below. Further, there can be no assurance that such estimated value could actually be realized by a stockholder because estimates do not necessarily indicate the price at which our shares could be sold. Also, for distributions subject to mandatory income tax withholding under Section 3405 or other tax withholding provisions of the Internal Revenue Code, the trustee of a Plan may have an obligation, even in situations involving in-kind distributions of shares, to liquidate a portion of the in-kind shares distributed in order to satisfy such withholding obligations, although there might be no market for such shares. There may also be similar state and/or local tax withholding or other tax obligations that should be considered.
Annual or More Frequent Valuation Requirements
Fiduciaries of Plans may be required to determine the fair market value of the assets of such Plans or IRAs on at least an annual basis and, sometimes, as frequently as daily. If the fair market value of any particular asset is not readily available, the fiduciary is required to make a good faith determination of that assets value. Also, a fiduciary of a Plan must provide a Plan participant with a statement of the value of the Plan every three years, every year, or every quarter, depending upon the type of Plan involved, and, in the case of an IRA, a trustee or custodian of the IRA must provide the Internal Revenue Service with a statement of the value of the IRA each year. However, currently, neither the Internal Revenue Service nor the Department of Labor has promulgated regulations specifying how fair market value should be determined for this purpose.
Unless and until our shares are listed on a national securities exchange, we do not expect that a public market for our shares will develop. To assist fiduciaries of Plans subject to the annual reporting requirements of ERISA and IRA trustees or custodians to prepare reports relating to an investment in our shares, we intend to provide reports of our determinations of the current estimated share value to those fiduciaries (including IRA trustees and custodians) who identify themselves to us and request the reports. During this offering, and unless determined otherwise by our board of directors in accordance with our valuation policy, until 18 months after the termination of this offering or the termination of any follow-on offering of our shares, we intend to use the most recent gross offering price of our shares of common stock as the per share value (unless we have made a special
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distribution to stockholders of net sales proceeds from the sale of one or more properties during such periods, in which case we will use the offering price less the per share amount of the special distribution). Estimates based solely on the most recent offering price of our shares of common stock will not reflect the book value or net asset value of our investments, nor our operating cash flows. Such estimates most likely will not reflect the value per share that you would receive upon our sale or liquidation, and will be subject to other limitations as described in the section of this prospectus captioned Description of Shares Valuation Policy.
Beginning no later than 18 months after the conclusion of this offering or any follow-on offering of our shares, at the determination by our board of directors, our board of directors will disclose a reasonable estimate of the per share value of our common stock that is not based solely on the offering price of our shares. For more information about our valuation policy, see Description of Shares Valuation Policy.
With respect to any estimate of the value of our common stock, there can be no assurance that the estimated value, or method used to estimate value, would be sufficient to enable an ERISA fiduciary or an IRA custodian to comply with the ERISA or other regulatory requirements. The Department of Labor or the Internal Revenue Service may determine that a plan fiduciary or an IRA custodian is required to take further steps to determine the value of our shares. Further, there can be no assurance with respect to any estimate of value of our common stock that such estimated value would actually be realized by our stockholders upon liquidation, or that our stockholders would be able to realize such estimated value if they were to attempt to sell their shares, or that such estimated value would be related to any appraisals of our shares or assets.
Fiduciary Obligations Prohibited Transactions
Any person identified as a fiduciary with respect to a Plan incurs duties and obligations under ERISA as discussed herein. For purposes of ERISA, any person who exercises any authority or control with respect to the management or disposition of the assets of a Plan is considered to be a fiduciary of such Plan. Further, many transactions between a Plan or an IRA and a party-in-interest or a disqualified person with respect to such Plan or IRA are prohibited by ERISA and/or the Internal Revenue Code. ERISA also requires generally that the assets of Plans be held in trust and that the trustee, or a duly authorized investment manager, have exclusive authority and discretion to manage and control the assets of the Plan.
In the event that our properties and other assets were deemed to be assets of a Plan or IRA, referred to herein as plan assets, our directors would, and employees of our affiliates might, be deemed fiduciaries of any Plans or IRAs investing as stockholders. If this were to occur, certain contemplated transactions between us and our directors and employees of our affiliates could be deemed to be prohibited transactions. Additionally, ERISAs fiduciary standards applicable to investments by Plans would extend to our directors and possibly employees of our affiliates as Plan fiduciaries with respect to investments made by us, and the requirement that Plan Assets be held in trust could be deemed to be violated.
Plan Assets Definition
Section 3(42) of ERISA defines Plan Assets in accordance with Department of Labor regulations with certain express exceptions. A Department of Labor regulation, referred to in this discussion as the Plan Asset Regulation, as modified by the express exceptions noted in the Pension Protection Act of 2006, provides guidelines as to whether, and under what circumstances, the underlying assets of an entity will be deemed to constitute Plan Assets. Under the Plan Asset Regulation, the assets of an entity in which a Plan or IRA makes an equity investment will generally be deemed to be assets of such Plan or IRA unless the entity satisfies one of the exceptions to this general rule. Generally, the exceptions require that the investment in the entity be one of the following:
| in securities issued by an investment company registered under the Investment Company Act; |
| in publicly offered securities, defined generally as interests that are freely transferable, widely held and registered with the Securities and Exchange Commission; |
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| in an operating company, which includes venture capital operating companies and real estate operating companies; or |
| in which equity participation by benefit plan investors is not significant. |
Plan Assets Registered Investment Company Exception
The shares we are offering will not be issued by a registered investment company. Therefore we do not anticipate that we will qualify for the exception for investments issued by a registered investment company.
Publicly Offered Securities Exemption
As noted above, if a Plan acquires publicly offered securities, the assets of the issuer of the securities will not be deemed to be Plan Assets under the Plan Asset Regulation. The definition of publicly offered securities requires that such securities be widely held, freely transferable and satisfy registration requirements under federal securities laws.
Under the Plan Asset Regulation, a class of securities will meet the registration requirements under federal securities laws if they are (i) part of a class of securities registered under section 12(b) or 12(g) of the Exchange Act, or (ii) part of an offering of securities to the public pursuant to an effective registration statement under the Securities Act and the class of securities of which such security is a part is registered under the Exchange Act within 120 days (or such later time as may be allowed by the Securities and Exchange Commission) after the end of the fiscal year of the issuer during which the offering of such securities to the public occurred. We anticipate that we will meet the registration requirements under the Plan Asset Regulation. Also under the Plan Asset Regulation, a class of securities will be widely held if it is held by 100 or more persons independent of the issuer. We anticipate that this requirement will be easily met. Although our shares are intended to satisfy the registration requirements under this definition, and we expect that our securities will be widely held, the freely transferable requirement must also be satisfied in order for us to qualify for the publicly offered securities exception.
The Plan Asset Regulation provides that whether a security is freely transferable is a factual question to be determined on the basis of all relevant facts and circumstances. Our shares are subject to certain restrictions on transferability typically found in REITs, and are intended to ensure that we continue to qualify for federal income tax treatment as a REIT. The Plan Asset Regulation provides, however, that where the minimum investment in a public offering of securities is $10,000 or less, the presence of a restriction on transferability intended to prohibit transfers that would result in a termination or reclassification of the entity for state or federal tax purposes will not ordinarily affect a determination that such securities are freely transferable. The allowed restrictions in examples contained in the Plan Asset Regulation are illustrative of restrictions commonly found in REITs that are imposed to comply with state and federal law, to assure continued eligibility for favorable tax treatment and to avoid certain practical administrative problems. The minimum investment in our shares is less than $10,000. Thus, the restrictions imposed in order to maintain our status as a REIT should not prevent the shares from being deemed freely transferable. Therefore, we anticipate that we will meet the publicly offered securities exception, although there are no assurances that we will qualify for this exception.
Plan Assets Operating Company Exception
If we are deemed not to qualify for the publicly offered securities exemption, the Plan Asset Regulation also provides an exception with respect to securities issued by an operating company, which includes venture capital operating companies and real estate operating companies. To constitute a venture capital operating company, generally 50% of more of the assets of the entity must be invested in venture capital investments. A venture capital investment is an investment in an operating company (other than a venture capital operating company) as to which the entity has or obtains direct management rights. To constitute a real estate operating
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company, generally 50% or more of the assets of an entity must be invested in real estate which is managed or developed and with respect to which such entity has the right to substantially participate directly in the management or development activities.
While the Plan Asset Regulation and relevant opinions issued by the Department of Labor regarding real estate operating companies are not entirely clear as to whether an investment in real estate must be direct, it is common practice to insure that an investment is made either (i) directly into real estate, (ii) through wholly-owned subsidiaries, or (iii) through entities in which all but a de minimis interest is separately held by an affiliate solely to comply with the minimum safe harbor requirements established by the Internal Revenue Service for classification as a partnership for federal tax purposes. We have structured ourselves, and our operating partnership, in this manner in order to enable us to meet the real estate operating company exception. To the extent interests in our operating partnership are obtained by third-party investors, it is possible that the real estate operating company exception will cease to apply to us. However, in such an event we believe that we are structured in a manner which would allow us to meet the venture capital operating company exception because our investment in our operating partnership, an entity investing directly in real estate over which we maintain substantially all of the control over the management and development activities, would constitute a venture capital investment.
Notwithstanding the foregoing, 50% of our, or our operating partnerships, investment, as the case may be, must be in real estate over which we maintain the right to substantially participate in the management and development activities. An example in the Plan Asset Regulation indicates that if 50% or more of an entitys properties are subject to long-term leases under which substantially all management and maintenance activities with respect to the properties are the responsibility of the lessee, such that the entity merely assumes the risk of ownership of income-producing real property, then the entity may not be eligible for the real estate operating company exception. By contrast, a second example in the Plan Asset Regulation indicates that if 50% or more of an entitys investments are in shopping centers in which individual stores are leased for relatively short periods to various merchants, as opposed to long-term leases where substantially all management and maintenance activities are the responsibility of the lessee, then the entity will likely qualify as a real estate operating company. The second example further provides that the entity may retain contractors, including affiliates, to conduct the management of the properties so long as the entity has the responsibility to supervise and the authority to terminate the contractors. We intend to use contractors over which we have the right to supervise and the authority to terminate. Due to the uncertainty of the application of the standards set forth in the Plan Asset Regulation, there can be no assurance as to our ability to structure our operations, or the operations of our operating partnership, as the case may be, to qualify for the real estate operating company exception.
Plan Assets Not Significant Investment Exception
The Plan Asset Regulation provides that equity participation in an entity by benefit plan investors is significant if at any time 25% or more of the value of any class of equity interests is held by benefit plan investors. The term benefit plan investor is defined to mean an employee benefit plan subject to Part 4 of Title I of ERISA, any plan to which Section 4975 of the Internal Revenue Code applies and any entity whose underlying assets include plan assets by reason of a plans investment in such entity. We do not intend to restrict ownership of each class of equity interests held by benefit plan investors to an aggregate value of less than 25% in order to qualify for the exception for investments in which equity participation by benefit plan investors is not significant. In fact, we expect that more than 25% of our outstanding shares of common stock will be held by benefit plan investors.
Consequences of Holding Plan Assets
In the event that our underlying assets were deemed to be Plan Assets under Section 3(42) of ERISA, our management would be treated as fiduciaries with respect to each Plan or IRA stockholder, and an investment in our shares might expose the fiduciaries of the Plan or IRA to co-fiduciary liability under ERISA for any breach
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by our management of the fiduciary duties mandated under ERISA. Further, if our assets are deemed to be Plan Assets, an investment by a Plan or IRA in our shares might be deemed to result in an impermissible commingling of Plan Assets with other property.
If our management or affiliates were treated as fiduciaries with respect to Plan or IRA stockholders, the prohibited transaction restrictions of ERISA would apply to any transaction involving our assets. These restrictions could, for example, require that we avoid transactions with entities that are affiliated with our affiliates or us unless such transactions otherwise were exempt, statutorily or administratively, from the prohibitions of ERISA and the Internal Revenue Code, or restructure our activities in order to obtain an administrative exemption from the prohibited transaction restrictions. Alternatively, we might have to provide Plan or IRA stockholders with the opportunity to sell their shares to us or we might dissolve or terminate.
Prohibited Transactions
Generally, both ERISA and the Internal Revenue Code prohibit Plans and IRAs from engaging in certain transactions involving Plan Assets with specified parties, such as sales or exchanges or leasing of property, loans or other extensions of credit, furnishing goods or services, or transfers to, or use of, Plan Assets. The specified parties are referred to as parties-in-interest under ERISA and as disqualified persons under the Internal Revenue Code. These definitions generally include both parties owning threshold percentage interests in an investment entity and persons providing services to the Plan or IRA, as well as employer sponsors of the Plan or IRA, fiduciaries and other individuals or entities affiliated with the foregoing.
A person generally is a fiduciary with respect to a Plan or IRA for these purposes if, among other things, the person has discretionary authority or control with respect to Plan Assets or provides investment advice for a direct or indirect fee with respect to Plan Assets. Under Department of Labor regulations, a person will be deemed to be providing investment advice if that person renders advice as to the advisability of investing in our shares, and that person regularly provides investment advice to the Plan or IRA pursuant to a mutual agreement or understanding (written or otherwise) that such advice will serve as the primary basis for investment decisions, and that the advice will be individualized for the Plan or IRA based on its particular needs. Thus, if we are deemed to hold Plan Assets, our management could be characterized as fiduciaries with respect to such assets, and each would be deemed to be a party-in-interest under ERISA and a disqualified person under the Internal Revenue Code with respect to investing Plans and IRAs. Whether or not we are deemed to hold Plan Assets, if we or our affiliates are affiliated with a Plan or IRA investor, we might be a disqualified person or party-in-interest with respect to such Plan or IRA investor, resulting in a prohibited transaction merely upon investment by such Plan or IRA in our shares.
Prohibited Transactions Consequences
ERISA and the Internal Revenue Code forbid Plans and IRAs from engaging in prohibited transactions. Fiduciaries of a Plan that allow a prohibited transaction to occur will breach their fiduciary responsibilities under ERISA, and may be liable for any damage sustained by the Plan, as well as civil penalties (generally 5% of the amount involved, unless the transaction is not timely corrected, in which case the penalty is 100% of the amount involved). Criminal penalties may also be possible if the violation was willful. If it is determined by the Department of Labor or the Internal Revenue Service that a prohibited transaction has occurred, any disqualified person or party-in-interest involved with the prohibited transaction would be required to reverse or unwind the transaction and, for a Plan, compensate the Plan for any loss resulting therefrom. Additionally, the Internal Revenue Code requires that a disqualified person involved with a prohibited transaction with a Plan or IRA must pay an excise tax equal to a percentage of the amount involved in the transaction for each year in which the transaction remains uncorrected. The percentage generally is 5%, but is increased to 100% if the prohibited transaction is not timely corrected. For IRAs, if an IRA engages in a prohibited transaction, the tax-exempt status of the IRA may be lost. With respect to an IRA that invests in our shares, the occurrence of a prohibited transaction involving the individual who established the IRA, or his or her beneficiary, could cause the IRA to lose its tax-exempt status under the Internal Revenue Code, and such individual generally would be taxable on the deemed distribution of all the assets in the IRA.
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The Offering
We are offering a maximum of 300,000,000 shares of our common stock to the public through Cole Capital Corporation, our dealer manager, a registered broker-dealer affiliated with our advisor. Of this amount, we are offering up to 250,000,000 shares in our primary offering at a price of $10.00 per share, except as provided below. The shares are being offered on a best efforts basis, which generally means that the dealer manager is required to use only its best efforts to sell the shares and it has no firm commitment or obligation to purchase any of the shares. We also are offering up to 50,000,000 shares for sale pursuant to our distribution reinvestment plan. The purchase price for shares sold under our distribution reinvestment plan will be $9.50 per share during this offering, and until such time as our board of directors determines a reasonable estimate of the value of our shares. Thereafter, the purchase price per share under our distribution reinvestment plan will be the most recent estimated value per share as determined by our board of directors. No selling commissions or dealer manager fees will be paid with respect to these shares. We reserve the right to reallocate the shares of our common stock we are offering between the primary offering and our distribution reinvestment plan. The offering of shares of our common stock will terminate on or before January 26, 2014, which is two years after the effective date of this offering; provided, however, that our board of directors may extend the primary offering. If we decide to extend the primary offering beyond January 26, 2014, we will provide that information in a prospectus supplement; however, in no event will we extend this offering beyond 180 days after the third anniversary of the initial effective date. In addition, at the discretion of our board of directors, we may elect to extend the termination date of our offering of shares reserved for issuance pursuant to our distribution reinvestment plan, or to file a new registration statement in connection with our distribution reinvestment plan, until we have sold all shares allocated to such plan, in which case participants in the plan will be notified. This offering must be registered, or exempt from registration, in every state in which we offer or sell shares. Generally, such registrations are for a period of one year. Therefore, we may have to stop selling shares in any state in which our registration is not renewed or otherwise extended annually. We reserve the right to terminate this offering at any time prior to the stated termination date.
Cole Capital Corporation
Cole Capital Corporation, our dealer manager, was organized in 1992 for the purpose of participating in and facilitating the distribution of securities in programs sponsored by Cole Capital Partners, its affiliates and its predecessors. Our dealer manager is an affiliate of our advisor and, as a result, is not in a position to make an independent review of us or this offering. Accordingly, you will have to rely on your own broker-dealer to make an independent review of the terms of this offering. If your broker-dealer conducts an independent review of this offering, and/or engages an independent due diligence reviewer to do so on its behalf, we expect that we will pay or reimburse the expenses associated with such review, which may create conflicts of interest. If your broker-dealer does not conduct such a review, you will not have the benefit of an independent review of the terms of this offering. For additional information about Cole Capital Corporation, including information relating to Cole Capital Corporations affiliation with us, see the Management Affiliated Dealer Manager section of this prospectus.
Compensation We Will Pay for the Sale of Our Shares
Except as provided below, we generally will pay to our affiliated dealer manager, Cole Capital Corporation, selling commissions in the amount of 7% of the gross proceeds of our primary offering. We also will pay the dealer manager a fee in the amount of 2% of the gross proceeds of our primary offering as compensation for acting as the dealer manager and for expenses incurred in connection with marketing and due diligence expense reimbursement. No sales commissions or dealer manager fees will be paid with respect to shares purchased pursuant to our distribution reinvestment plan. We will not pay referral or similar fees to any accountants, attorneys or other persons in connection with the distribution of the shares.
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The total amount of underwriting compensation, including selling commissions, dealer manager fees and other expenses paid or reimbursed by us, our sponsor or any other source in connection with the offering, will not exceed 10% of the gross proceeds of the primary offering. Our dealer manager is responsible for monitoring the total underwriting compensation to ensure that such amounts do not exceed 10% of the gross proceeds of the primary offering.
The dealer manager will reallow to other broker-dealers participating in this offering all of the selling commissions paid to the dealer manager in respect of shares sold by such participating broker-dealers. In addition, the dealer manager may reallow to each of the participating broker-dealers all or a portion of the dealer manager fee earned on the proceeds raised by the participating broker-dealer. This reallowance would be in the form of a non-accountable marketing allowance and due diligence expense reimbursement. The amount of the reallowance will be determined by the dealer manager based upon a number of factors including the number of shares sold by the participating broker-dealer in this offering, the broker-dealers level of marketing support, and bona fide conference fees incurred, each as compared to those of the other participating broker-dealers.
We expect our dealer manager to utilize two distribution channels to sell our shares, FINRA-registered broker-dealers and non-registered investment advisory representatives. In the event of the sale of shares in our primary offering by broker-dealers that are members of FINRA, the purchase price generally will be $10.00 per share. Selling commissions and dealer manager fees generally will be paid in connection with such sales as set forth in the table below. In the event of the sale of shares in our primary offering through an investment advisory representative, the purchase price for such shares will be $9.30 per share, reflecting the fact that we will not pay our dealer manager the 7% selling commission on such shares, as described in more detail below. All such sales must be made through a registered broker-dealer of record.
Per Share | Total Maximum | |||||||
Primary Offering |
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Price to Public |
$ | 10.00 | $ | 2,500,000,000 | ||||
Selling Commissions(1) |
0.70 | 175,000,000 | ||||||
Dealer Manager Fee(2) |
0.20 | 50,000,000 | ||||||
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Proceeds to Cole Credit Property Trust IV, Inc.(3) |
$ | 9.10 | $ | 2,275,000,000 | ||||
|
|
|
|
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Distribution Reinvestment Plan |
||||||||
Price to Public |
$ | 9.50 | $ | 475,000,000 | ||||
Selling Commissions |
| | ||||||
Dealer Manager Fee |
| | ||||||
|
|
|
|
|||||
Proceeds to Cole Credit Property Trust IV, Inc.(3) |
$ | 9.50 | $ | 475,000,000 | ||||
|
|
|
|
(1) | All selling commissions will be reallowed to participating broker-dealers. |
(2) | All or a portion of the dealer manager fee will be reallowed to participating broker-dealers. |
(3) | Before payment of other organization and offering expenses. |
We will not pay any selling commissions in connection with the sale of shares to investors whose contracts for investment advisory and related brokerage services include a fixed or wrap fee feature. In instances where the investment advisory representative is affiliated with a participating broker-dealer, investors may agree with their participating brokers to reduce the amount of selling commissions payable with respect to the sale of their shares down to zero (a) if the investor has engaged the services of a registered investment advisor or other financial advisor who will be paid compensation for investment advisory services or other financial or investment advice or (b) if the investor is investing through a bank trust account with respect to which the investor has delegated the decision-making authority for investments made through the account to a bank trust department. The net proceeds to us will not be affected by reducing the commissions payable in connection with such transaction. All investors will be deemed to have contributed the same amount per share to us for purposes of declaring and paying distributions. Neither our dealer manager nor its affiliates will directly or indirectly compensate any person engaged as an investment advisor or a bank trust department by a potential investor as an
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inducement for such investment advisor or bank trust department to advise favorably for an investment in our shares. In connection with the sale of shares to investors who elect the fixed or wrap fee feature, the dealer manager may pay to the investment advisor or other financial advisor or the company that sponsors the wrap account, marketing support, service or other denominated fees. In all events, the amount of the dealer manager fee and any services or other fee paid in connection with the sale of shares to investors whose contracts for investment advisor or related brokerage services include a fixed or wrap fee feature will not exceed 10% of the gross proceeds of the shares acquired by such investors.
We may sell shares in our primary offering to retirement plans of broker-dealers participating in the offering, to broker-dealers in their individual capacities, to IRAs and qualified plans of their registered representatives or to any one of their registered representatives in their individual capacities (and their spouses, parents and minor children) at a discount. The purchase price for such shares will be $9.30 per share, reflecting the fact that selling commissions in the amount of $0.70 per share will not be payable in connection with such sales. The net proceeds to us from such sales will not be affected by such sales of shares at a discount.
We or our affiliates also may provide permissible forms of non-cash compensation to registered representatives of our dealer manager and the participating broker-dealers, such as golf shirts, fruit baskets, cakes, chocolates, a bottle of wine, or tickets to a sporting event. In no event shall such items exceed an aggregate value of $100 per annum per participating salesperson, or be pre-conditioned on achievement of a sales target. The value of such items will be considered underwriting compensation in connection with this offering.
We have agreed to indemnify the participating broker-dealers, including our dealer manager and selected registered investment advisors, against certain liabilities arising under the Securities Act. However, the Securities and Exchange Commission takes the position that indemnification against liabilities arising under the Securities Act is against public policy and is unenforceable.
In addition to the compensation described above, our sponsor may pay certain costs associated with the sale and distribution of our shares. Such payments will be deemed to be underwriting compensation by FINRA. In accordance with the rules of FINRA, the table below sets forth the nature and estimated amount of all items that will be viewed as underwriting compensation by FINRA that are anticipated to be paid by us and our sponsor in connection with the offering. The amounts shown assume we sell all of the shares offered hereby and that all shares are sold in our primary offering through participating broker-dealers, which is the distribution channel with the highest possible selling commissions and dealer manager fees.
Estimated Amount |
Percent of Maximum Offering (Not Including Distribution Reinvestment Plan) |
|||||||
Selling commissions |
$ | 175,000,000 | 7.0 | % | ||||
Dealer manager fee(1) |
326,973 | 0.0 | %* | |||||
Dealer manager fee reallowance to participating broker-dealers |
33,750,000 | 1.4 | % | |||||
Dealer manager wholesaling commissions, salaries and expense reimbursement |
33,470,214 | 1.3 | % | |||||
Broker-dealer conference fees, training and education meetings, business entertainment, logoed items and sales incentives |
6,802,813 | 0.3 | % | |||||
Due diligence allowance |
400,000 | 0.0 | %* | |||||
Legal fees of the dealer manager |
250,000 | 0.0 | %* | |||||
|
|
|
|
|||||
Total(2) |
$ | 250,000,000 | 10.0 | % | ||||
|
|
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* | 0.01% or less. |
(1) | Represents the estimated amount of the dealer manager fee that will remain for the dealer manager after allocation to certain expenses noted in the table, such as the dealer managers wholesaling compensation. |
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(2) | Of this total amount, $175,000,000 and $50,000,000 (7% and 2% of gross offering proceeds, excluding proceeds from our distribution reinvestment plan) will be paid by us from the proceeds of this offering in the form of selling commissions and dealer manager fees, respectively. The remaining $25,000,000 (approximately 1% of gross offering proceeds, excluding proceeds from our distribution reinvestment plan) in expenses will be paid for reimbursements of other organization and offering expenses. |
It is important to note that we are permitted to reimburse our advisor an amount up to 2.0% of gross offering proceeds, including proceeds from sales of shares under our distribution reinvestment plan, for other organization and offering expenses, which includes both underwriting and non-underwriting expenses. As shown in the Management Compensation table elsewhere in this prospectus, we expect to reimburse non-underwriting organization and offering expenses up to $34,500,000. In no event will the total amount of underwriting compensation paid by us in the form of organization and offering expense reimbursements exceed an amount equal to 1% of the gross offering proceeds, excluding proceeds from our distribution reinvestment plan.
Shares Purchased by Affiliates
Our executive officers and directors, as well as officers and employees of CR IV Advisors and their family members (including spouses, parents, grandparents, children and siblings) or other affiliates, may purchase shares in the primary offering at a discount. The purchase price for such shares will be $9.10 per share, reflecting the fact that the 7% selling commission and the 2% dealer manager fee will not be payable in connection with such sales. The net offering proceeds we receive will not be affected by such sales of shares at a discount. Our executive officers, directors and other affiliates will be expected to hold their shares purchased as stockholders for investment and not with a view towards resale. In addition, shares purchased by CR IV Advisors or its affiliates will not be entitled to vote on any matter presented to the stockholders for a vote regarding the removal of our advisor or any director or any of their affiliates, or any transaction between us and any of them. Shares purchased by our executive officers, directors, advisor and any of their affiliates will not be subject to a lock-up agreement. With the exception of the 20,000 shares initially sold to a predecessor of CREInvestments in connection with our organization, no director, officer, advisor or any affiliate may own more than 9.8% (in value or number of shares, whichever is more restrictive) of the aggregate of our outstanding common stock. Pursuant to our charter, CREInvestments is prohibited from selling the 20,000 shares of our common stock for so long as Cole Real Estate Investments remains our sponsor; provided, however, that CREInvestments may transfer ownership of all or a portion of the 20,000 shares of our common stock to other affiliates of our sponsor.
Volume Discounts
We generally will pay to our affiliated dealer manager, Cole Capital Corporation, a selling commission equal to 7% of the gross proceeds of our primary offering. However, the selling commission we will pay in respect of purchases of $500,001 or more will be reduced with respect to the dollar volume of the purchase in excess of that amount. Volume discounts reduce the effective purchase price per share of common stock, allowing large volume purchasers to acquire more shares with their investment than would be possible if the full 7% selling commission was paid. Volume discounts will be made available to purchasers in accordance with the following table, based upon our $10.00 per share offering price:
Subscription Amount |
Selling Commission Percent |
Selling Commission per Share |
Effective Purchase Price per Share |
Dealer Manager Fee per Share |
Net Proceeds per Share |
|||||||||||||||
Up to $500,000 |
7.00 | % | $ | .70 | $ | 10.00 | $ | 0.20 | $ | 9.10 | ||||||||||
$500,001-$1,000,000 |
6.00 | % | $ | .60 | $ | 9.90 | $ | 0.20 | $ | 9.10 | ||||||||||
$1,000,001-$2,000,000 |
5.00 | % | $ | .50 | $ | 9.80 | $ | 0.20 | $ | 9.10 | ||||||||||
$2,000,001-$3,000,000 |
4.00 | % | $ | .40 | $ | 9.70 | $ | 0.20 | $ | 9.10 | ||||||||||
$3,000,001-$4,000,000 |
3.00 | % | $ | .30 | $ | 9.60 | $ | 0.20 | $ | 9.10 | ||||||||||
Over $4,000,000 |
2.00 | % | $ | .20 | $ | 9.50 | $ | 0.20 | $ | 9.10 |
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For example, a purchaser who invests $600,000 will be entitled to a discounted selling commission of 6% on the shares purchased in excess of $500,000, reducing the effective purchase price per share on the shares purchased in excess of $500,000 from $10 per share to $9.90 per share. Thus, a $600,000 investment would purchase 60,601 shares. As another example, for a subscription amount of $1,500,000, the selling commission for the first $500,000 is 7%; the discounted selling commission for the next $500,000 (up to $1,000,000) is 6%; and the discounted selling commission for the remaining $500,000 of the subscription amount is 5%.
In its sole discretion, our sponsor may agree to pay a participating broker-dealer all or a portion of the difference between the 7% selling commission and the discounted selling commission.
In addition, in order to encourage investments of more than $4,000,000, Cole Capital Corporation, with the agreement of the participating broker-dealer, may further agree to reduce or eliminate the dealer manager fee and/or the selling commission with respect to such investments.
The net proceeds to us will not be affected by volume discounts. All investors will be deemed to have contributed the same amount per share to us for purposes of declaring and paying distributions. Therefore, an investor who has received a volume discount will realize a better return on his or her investment in our shares than investors who do not qualify for a discount.
Subscriptions may be combined for the purpose of determining the volume discounts in the case of subscriptions made by any purchaser, as that term is defined below. Any request to combine more than one subscription must be made in writing, submitted simultaneously with the subscription for shares, and must set forth the basis for such request. Any request for volume discounts will be subject to our verification that all of the combined subscriptions were made by a single purchaser.
For the purposes of such volume discounts, the term purchaser includes:
| an individual, his or her spouse and their children under the age of 21 who purchase the shares for his, her or their own account; |
| a corporation, partnership, association, joint-stock company, trust fund or any organized group of persons, whether incorporated or not; |
| an employees trust, pension, profit-sharing or other employee benefit plan qualified under Section 401(a) of the Internal Revenue Code; and |
| all commingled trust funds maintained by a given bank. |
In addition, investors may request in writing to aggregate new or previous subscriptions in us and/or in other Cole-sponsored publicly offered programs that are not valued daily (collectively, Eligible Programs) for purposes of determining the dollar amount of shares purchased and any resulting volume discount. For example, if you previously purchased and still hold shares of our company or another Eligible Program with an aggregate purchase price of $500,000, and subsequently invest $100,000 in us and $100,000 in another Eligible Program, you may request a reduction in the selling commission on the $200,000 in new investments from 7% to 6%. Such requests may be made with respect to purchases by a single purchaser as defined above. For purposes of this paragraph, the dollar amount of new or previous subscriptions in Eligible Programs shall be the total purchase price paid for the shares before the deduction of selling commissions or dealer manager fees. Previous subscriptions will be counted only if the purchaser still holds the shares. Shares purchased pursuant to a distribution reinvestment plan (on which selling commissions and dealer manager fees are not paid) will not be counted toward the amount of previous subscriptions. Any request for a volume discount pursuant to this paragraph must be submitted with the order for which the discount is being requested, and will be subject to verification of the purchasers holdings.
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Minimum Purchase Requirement
The minimum investment generally is 250 shares. You may not transfer any of your shares if such transfer would result in your owning less than the minimum investment amount, unless you transfer all of your shares. In addition, you may not transfer or subdivide your shares so as to retain less than the number of shares required for the minimum purchase. In order to satisfy the minimum purchase requirements for retirement plans, unless otherwise prohibited by state law, a husband and wife may jointly contribute funds from their separate IRAs, provided that each such contribution is made in increments of $1,000. You should note that an investment in shares of our common stock will not, in itself, create a retirement plan and that, in order to create a retirement plan, you must comply with all applicable provisions of the Internal Revenue Code.
After you have purchased the minimum investment amount in this offering or have satisfied the minimum purchase requirement of any other Cole-sponsored public real estate program, any additional purchase must be in increments of at least 100 shares or made pursuant to our distribution reinvestment plan, which may be in lesser amounts.
Certain Selected Dealers
Our dealer manager may, from time to time, enter into selected dealer agreements that provide for a selling commission of up to 6% of the gross proceeds of the shares sold by such selected dealer, and a dealer manager fee of up to 3% of the gross proceeds of the shares sold by such selected dealer. The dealer manager may reallow up to all of the dealer manager fee to such selected dealers. In no event will the aggregate of the selling commissions and the dealer manager fee be greater than 9% of the gross proceeds of the shares sold by such selected dealer. The aggregate amount of selling commissions and the dealer manager fee that an investor would pay would not be affected by this change. In addition or alternatively, our dealer manager may enter into selected dealer agreements that provide for a selling commission of less than 7% of the gross proceeds of the shares sold by such selected dealer, with no corresponding increase in the dealer manager fee. Under this arrangement, the aggregate amount of selling commissions and the dealer manager fee that an investor would pay would be less than 9% of the gross proceeds of the shares sold by such selected dealer, reducing the effective purchase price per share paid by such investor to an amount less than $10.00 per share. The net proceeds to us will not be affected by either of these arrangements. For purposes of calculations in this Plan of Distribution section and elsewhere in this prospectus, we have assumed a selling commission of 7% of the gross proceeds of our primary offering and a dealer manager fee of 2% of the gross proceeds of our primary offering.
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Persons who meet the applicable minimum suitability standards described in the Suitability Standards section of this prospectus and suitability standards determined by such persons broker or financial advisor may purchase shares of common stock. After you have read the entire prospectus and the current supplement(s), if any, accompanying this prospectus, if you want to purchase shares, you must proceed as follows:
1) Complete the execution copy of the applicable subscription agreement. A specimen copy of the subscription agreement, including instructions for completing it for new investors, is included in this prospectus as Appendix B (residents of Alabama must use the form of subscription agreement included in this prospectus as Appendix E). After you become a stockholder, you may purchase additional shares by completing and signing an additional investment subscription agreement, a specimen copy of which is included in this prospectus as Appendix C (residents of Alabama must use the form of additional investment subscription agreement included in this prospectus as Appendix F). A specimen copy of an alternative version of the subscription agreement for new investors is attached as Appendix D. A specimen copy of an alternative version of the additional investment subscription agreement to be used by existing stockholders to purchase additional shares is attached as Appendix G.
2) Deliver a check to Cole Capital Corporation, or its designated agent, for the full purchase price of the shares being subscribed for, payable to Cole Credit Property Trust IV, Inc. or, alternatively, Cole Credit Property Trust IV or Cole REIT. Subscription funds must be accompanied by a subscription agreement similar to the one contained in this prospectus as Appendix B or Appendix D (residents of Alabama must use the form of subscription agreement included in this prospectus as Appendix E). Certain dealers who have net capital, as defined in the applicable federal securities regulations, of $250,000 or more may instruct their customers to make their checks payable directly to the dealer. In such case, the dealer will issue a check made payable to us for the purchase price of your subscription. The name of the dealer appears on the subscription agreement.
3) By executing the subscription agreement and paying the full purchase price for the shares subscribed for, you will attest that you meet the minimum net worth and/or income standards as provided in the Suitability Standards section of this prospectus and as stated in the subscription agreement.
An approved trustee must process through us and forward us subscriptions made through IRAs, 401(k) plans and other tax-deferred plans.
Subscriptions will be effective only upon our acceptance, and we reserve the right to reject any subscription in whole or in part. We may not accept a subscription for shares until at least five business days after the date you receive the final prospectus. Subject to compliance with Rule 15c2-4 of the Exchange Act, our dealer manager and/or the broker-dealers participating in the offering will promptly submit a subscribers check on the business day following receipt of the subscribers subscription documents and check. In certain circumstances where the suitability review procedures are more lengthy than customary or the subscribers subscription documents or check are not in good order, our bank will hold the check in accordance with applicable legal requirements pending our acceptance of your subscription.
We accept or reject subscriptions within 35 days after we receive them. If your subscription agreement is rejected, your funds, without interest or reductions for offering expenses, commissions or fees, will be returned to you within ten business days after the date of such rejection. If your subscription is accepted, we will send you a confirmation of your purchase after you have been admitted as an investor. We admit new investors at least monthly and we may admit new investors more frequently.
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In addition to this prospectus, we have used, and may continue to utilize, certain sales material in connection with the offering of the shares, although only when accompanied by or preceded by the delivery of this prospectus. The sales materials may include information relating to this offering, the past performance of our advisor and its affiliates, property brochures and articles and publications concerning real estate. In certain jurisdictions, some or all of our sales material may not be permitted and will not be used in those jurisdictions.
The offering of shares is made only by means of this prospectus. Although the information contained in our supplemental sales material will not conflict with any of the information contained in this prospectus, the supplemental materials do not purport to be complete, and should not be considered a part of this prospectus or the registration statement of which this prospectus is a part.
Venable LLP, Baltimore, Maryland, has passed upon the legality of the common stock and Morris, Manning & Martin, LLP, Atlanta, Georgia, has passed upon legal matters in connection with our status as a REIT for federal income tax purposes. Morris, Manning & Martin, LLP will rely on the opinion of Venable LLP as to all matters of Maryland law. Neither Venable LLP nor Morris, Manning & Martin, LLP purport to represent our stockholders or potential investors, who should consult their own counsel. Morris, Manning & Martin, LLP also provides legal services to CR IV Advisors, our advisor, as well as affiliates of CR IV Advisors, and may continue to do so in the future.
The consolidated financial statements, and the related financial statement schedule, incorporated in this Prospectus by reference from Cole Credit Property Trust IV, Inc.s Annual Report on Form 10-K for the year ended December 31, 2012, have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report, which is incorporated herein by reference. Such consolidated financial statements and financial statement schedule have been so incorporated in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.
The statement of revenues and certain operating expenses of MT Brooklyn NY for the year ended December 31, 2011, incorporated in this Prospectus by reference from the Current Report on Form 8-K/A of Cole Credit Property Trust IV, Inc., filed with the Securities and Exchange Commission on February 20, 2013, has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report, which is incorporated herein by reference (which report expresses an unqualified opinion and includes an explanatory paragraph referring to the purpose and basis of presentation of the statement). Such financial statement has been so incorporated in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.
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We have elected to incorporate by reference certain information into this prospectus. By incorporating by reference, we are disclosing important information to you by referring you to documents we have filed separately with the Securities and Exchange Commission, or SEC. The information incorporated by reference is deemed to be part of this prospectus, except for information incorporated by reference that is superseded by information contained in this prospectus. The following documents filed with the SEC are incorporated by reference in this prospectus (Commission File No. 333-169533) except for any document or portion thereof deemed to be furnished and not filed in accordance with SEC rules:
(1) | Annual Report on Form 10-K for the fiscal year ended December 31, 2012 filed with the SEC on March 29, 2013; |
(2) | Current Report on Form 8-K filed with the SEC on January 25, 2013; |
(3) | Current Report on Form 8-K/A filed with the SEC on February 20, 2013; |
(4) | Current Report on Form 8-K filed with the SEC on March 13, 2013; |
(5) | Current Report on Form 8-K filed with the SEC on March 14, 2013; and |
(6) | Current Report on Form 8-K filed with the SEC on April 10, 2013. |
All of the documents that we have incorporated by reference into this prospectus are available on the SECs website, www.sec.gov. In addition, these documents can be inspected and copied at the Public Reference Room maintained by the SEC at 100 F Street, NE, Washington, D.C. 20549. Copies also can be obtained by mail from the Public Reference Room at prescribed rates. Please call the SEC at (800) SEC-0330 for further information on the operation of the Public Reference Room.
In addition, we will provide to each person, including any beneficial owner of our common stock, to whom this prospectus is delivered, a copy of any or all of the information that we have incorporated by reference into this prospectus, as supplemented, but not delivered with this prospectus. To receive a free copy of any of the documents incorporated by reference in this prospectus, other than exhibits, unless they are specifically incorporated by reference in those documents, write us at 2325 E. Camelback Road, Suite 1100, Phoenix, Arizona, 85016, Attention: Investor Relations, or contact our offices at (866) 907-2653. The documents also may be accessed on our website at www.colecapital.com. The information relating to us contained in this prospectus does not purport to be comprehensive and should be read together with the information contained in the documents incorporated or deemed to be incorporated by reference in this prospectus.
WHERE YOU CAN FIND MORE INFORMATION
We have filed a registration statement on Form S-11 with the Securities and Exchange Commission with respect to the shares of our common stock to be issued in this offering. We are required to file annual, quarterly and current reports, proxy statements and other information with the Securities and Exchange Commission. You may request and obtain a copy of these filings, at no cost to you, by writing or telephoning us at the following address:
Cole Credit Property Trust IV, Inc.
Attn: Investor Relations
2325 East Camelback Road, Suite 1100
Phoenix, Arizona 85016
Tel: (866) 907-2653
One of our affiliates maintains an Internet site at http://www.colecapital.com, at which there is additional information about us. The contents of that site are not incorporated by reference in, or otherwise a part of, this prospectus.
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This prospectus, as permitted under the rules of the Securities and Exchange Commission, does not contain all of the information set forth in the registration statement and the exhibits related thereto. For additional information relating to us, we refer you to the registration statement and the exhibits to the registration statement. Statements contained in this prospectus as to the contents of any contract or document are necessarily summaries of such contract or document and in each instance, if we have filed the contract or document as an exhibit to the registration statement, we refer you to the copy of the contract or document filed as an exhibit to the registration statement.
You can read our registration statement and the exhibits thereto and our future Securities and Exchange Commission filings over the Internet at http://www.sec.gov. You may also read and copy any document we file with the Securities and Exchange Commission at its public reference room at 100 F Street, N.W., Washington, D.C. 20549. You may also obtain copies of the documents at prescribed rates by writing to the Public Reference Section of the Securities and Exchange Commission at 100 F Street, N.W., Washington, D.C. 20549. Please contact the Securities and Exchange Commission at 1-800-SEC-0330 or e-mail at publicinfo@sec.gov for further information about the public reference room.
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PRIOR PERFORMANCE TABLES
The prior performance tables that follow present certain information regarding certain real estate programs previously sponsored by entities affiliated with our sponsor, Cole Real Estate Investments, including this program. The Company has presented all prior programs subject to public reporting requirements (Prior Public Real Estate Programs) that have similar investment objectives to this offering. In determining which Prior Public Real Estate Programs have similar investment objectives to this offering, the Company considered factors such as the type of real estate acquired by the program, the extent to which the program was designed to provide current income through the payment of cash distributions or to protect and preserve capital contributions, and the extent to which the program seeks to increase the value of the investments made in the program. The information in this section should be read together with the summary information in this prospectus under Prior Performance Summary.
These tables contain information that may aid a potential investor in evaluating the program presented. However, the purchase of our shares will not create any ownership interest in the programs included in these tables.
The following tables are included in this section:
| Table I Experience in Raising and Investing Funds; |
| Table II Compensation to Sponsor; |
| Table III Operating Results of Prior Programs; and |
| Table V Sales or Disposals of Properties. |
Table IV (Results of Completed Programs) has been omitted since none of the Prior Public Real Estate Programs sponsored by Cole Real Estate Investments have completed their operations and sold all of their properties during the five years ended December 31, 2012.
For information regarding the acquisitions of properties by Prior Public Real Estate Programs sponsored by Cole Real Estate Investments during the three years ended December 31, 2012, see Table VI contained in Part II of our registration statement, which is not a part of this prospectus. We will provide a copy of Table VI to you upon written request and without charge.
Past performance is not necessarily indicative of future results.
A-1
TABLE I
EXPERIENCE IN RAISING AND INVESTING FUNDS (UNAUDITED)
This table provides a summary of the experience of the sponsors of Prior Public Real Estate Programs for which offerings have been closed since January 1, 2010. Information is provided with regard to the manner in which the proceeds of the offerings have been applied. Also set forth below is information pertaining to the timing and length of these offerings and the time period over which the proceeds have been invested in the properties. All figures are as of December 31, 2012.
Cole Credit Property Trust II, Inc.(5) |
Cole Credit Property Trust III, Inc.(6) |
|||||||
Dollar amount offered |
$ | 2,270,000,000 | $ | 5,940,000,000 | ||||
Dollar amount raised |
2,266,234,296 | 4,892,799,511 | ||||||
Percentage amount raised |
100.0 | % | 100.0 | % | ||||
Less offering expenses: |
||||||||
Selling commissions and discounts retained by affiliates |
6.0 | % | 6.5 | % | ||||
Organizational expenses(1) |
0.7 | % | 1.3 | % | ||||
Other(2) |
1.6 | % | 1.9 | % | ||||
Reserves |
0.1 | % | 0.1 | % | ||||
Percent available for investment |
91.6 | % | 90.2 | % | ||||
Acquisition costs:(3) |
||||||||
Prepaid items and fees related to purchase of property |
1.1 | % | 0.5 | % | ||||
Cash down payment |
88.5 | % | 87.7 | % | ||||
Acquisition fees(4) |
2.0 | % | 2.0 | % | ||||
Other |
| | ||||||
|
|
|
|
|||||
Total acquisition cost |
91.6 | % | 90.2 | % | ||||
Percent leverage |
51 | % | 45 | % | ||||
Date offering began |
6/27/2005 | 10/15/2008 | ||||||
Length of offering (in months) |
Ongoing | Ongoing | ||||||
Months to invest 90% of amount available for investment |
40 | 23 |
(1) | Organizational expenses include legal, accounting, printing, escrow, filing, recording and other related expenses associated with the formation and original organization of the program. |
(2) | These amounts include fees paid to our dealer manager, an affiliate of our sponsor. |
(3) | Acquisition costs expressed as a percentage represent the costs incurred to acquire real estate with the initial capital raised in the respective offerings and do not include the costs incurred to acquire additional real estate with the proceeds from financing transactions and excess working capital. |
(4) | Acquisition fees include fees paid to the sponsor or affiliates based upon the terms of the prospectus. |
(5) | These amounts include Cole Credit Property Trust II, Inc.s initial, follow-on and distribution reinvestment plan offerings. Cole Credit Property Trust II, Inc. began its initial offering on June 27, 2005 and closed its initial offering on May 22, 2007. The total dollar amount registered and available to be offered in the initial offering was $552.8 million. The total dollar amount raised in the initial offering was $547.4 million. Cole Credit Property Trust II, Inc. began its follow-on offering on May 23, 2007 and closed its follow-on offering on January 2, 2009. The total dollar amount registered and available to be offered in the follow-on offering was $1.5 billion. The total dollar amount raised in the follow-on offering was $1.5 billion. It took Cole Credit Property Trust II, Inc. 40 months to invest 90% of the amount available for investment in its initial |
Past performance is not necessarily indicative of future results.
A-2
TABLE I
EXPERIENCE IN RAISING AND INVESTING FUNDS (UNAUDITED) (Continued)
and follow-on offerings. Cole Credit Property Trust II, Inc. began its distribution reinvestment plan offering on September 18, 2008 and suspended its distribution reinvestment plan offering on December 6, 2012. The total initial dollar amount registered and available to be offered in the distribution reinvestment plan offering is $285.0 million. The total dollar amount raised in the distribution reinvestment plan offering was $261.3 million. |
(6) | These amounts include Cole Credit Property Trust III, Inc.s initial and follow-on offerings. Cole Credit Property Trust III, Inc. began its initial offering on October 1, 2008 and closed its initial offering on October 1, 2010. The total dollar amount registered and available to be offered in the initial offering was $2.49 billion. The total dollar amount raised in the initial offering was $2.2 billion. Cole Credit Property Trust III, Inc. began its follow-on offering after the termination of its initial offering on October 1, 2010 and closed its follow-on offering on April 27, 2012. The total dollar amount registered and available to be offered in the follow-on offering was $2.7 billion. The total dollar amount raised in the follow-on offering was $2.6 billion. It took Cole Credit Property Trust III, Inc. 23 months to invest 90% of the amount available for investment in its initial and follow-on offerings. Cole Credit Property Trust III, Inc. registered additional shares of common stock under a distribution reinvestment plan offering, which was filed with the Securities and Exchange Commission (the SEC) on March 14, 2012 and automatically became effective with the SEC upon filing. The total initial dollar amount registered and available to be offered in the distribution reinvestment plan offering is $712.5 million. The total dollar amount raised in the distribution reinvestment plan offering was $118.0 million as of December 31, 2012. |
Past performance is not necessarily indicative of future results.
A-3
TABLE II
COMPENSATION TO SPONSOR AND AFFILIATES (UNAUDITED)
This table sets forth the compensation paid to our sponsor and its affiliates, including compensation paid out of the offering proceeds and compensation paid in connection with the ongoing operations of Prior Public Real Estate Programs that have similar investment objectives to this program, including this program. Prior Public Real Estate Programs whose offerings have closed since January 1, 2010 are shown separately with amounts as of December 31, 2012. All other Public Real Estate Programs, including this program, have been aggregated to show compensation paid during such period.
Cole Credit Property Trust II, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||
Date offering commenced |
6/27/2005 | 10/15/2008 | ||||||
Dollar amount raised |
$ | 2,266,234,296 | $ | 4,892,799,511 | ||||
Amount paid to sponsor from proceeds of offering: |
||||||||
Underwriting fees |
25,741,562 | 67,053,734 | ||||||
Acquisition fees and real estate commissions (1) |
70,450,127 | 156,726,147 | ||||||
Advisory fees |
| | ||||||
Other (2) |
40,899,993 | 98,945,850 | ||||||
Amount of cash generated from operations before deducting payments to sponsor |
668,822,263 | 529,289,746 | ||||||
Amount paid to sponsor from operations: |
||||||||
Property management fees |
27,358,496 | 22,696,636 | ||||||
Partnership management fees (3) |
43,873,503 | 61,506,393 | ||||||
Reimbursements |
12,610,645 | 21,150,394 | ||||||
Leasing commissions |
546,695 | | ||||||
Other (4) |
125,260 | 26,829 | ||||||
Amount of property sales and refinancing before deducting payments to sponsor |
||||||||
Cash |
129,590,077 | (5) | 598,722,000 | (6) | ||||
Notes |
| 24,250,000 | ||||||
Amount paid to sponsor from property sales and refinancing |
||||||||
Incentive fees |
| | ||||||
Real estate commissions |
382,000 | | ||||||
Other |
| |
Past performance is not necessarily indicative of future results.
A-4
TABLE II
COMPENSATION TO SPONSOR AND AFFILIATES (UNAUDITED) (Continued)
4 Other Programs (7) |
||||
Date offering commenced |
N/A | |||
Dollar amount raised |
$ | 479,935,130 | ||
Amount paid to sponsor from proceeds of offering: |
||||
Underwriting fees |
40,678,189 | |||
Acquisition fees and real estate commissions (1) |
16,187,387 | |||
Advisory fees |
204,544 | |||
Other (2) |
8,607,518 | |||
Amount of cash generated from operations before deducting payments to sponsor |
13,970,952 | |||
Amount paid to sponsor from operations: |
||||
Property management fees |
1,369,544 | |||
Partnership management fees (3) |
| |||
Reimbursements |
251,040 | |||
Leasing commissions |
| |||
Other (4) |
| |||
Amount of property sales and refinancing before deducting payments to sponsor |
||||
Cash (8) |
11,921,733 | |||
Notes |
29,108,000 | |||
Amount paid to sponsor from property sales and refinancing |
||||
Incentive fees |
| |||
Real estate commissions |
191,000 | |||
Other |
|
(1) | Properties are acquired with a combination of funds from offering proceeds, debt and proceeds from the sale of properties and other investments. The acquisition and real estate commissions reported in this table include the total amount of fees paid to the sponsor or its affiliates regardless of the funding source for these costs. |
(2) | Amounts primarily relate to loan coordination fees, a development fee and reimbursement of certain offering costs paid by the sponsor. |
(3) | Amounts primarily relate to asset management fees and expenses. |
(4) | Amounts primarily relate to construction management fees. |
(5) | Amounts herein include gross proceeds received in connection with the sale of marketable securities of $82.1 million, the sale of unconsolidated joint ventures of $39.9 million and the sale of properties of $7.3 million. |
(6) | Amounts herein include gross proceeds received in connection with the sale of properties of $535.3 million and the sale of marketable securities of $63.4 million. |
(7) | Four of the offerings of the prior programs that have similar investment objectives to this program, aggregated herein, including this program, were not closed within the past three years and therefore are not shown separately. Amounts presented represent aggregate payments to the sponsor in the most recent three years for Cole Credit Property Trust, Inc., Cole Corporate Income Trust, Inc., Cole Real Estate Income Strategy (Daily NAV), Inc. and Cole Credit Property Trust IV, Inc. The programs have similar investment objectives to this program. |
(8) | Amounts herein include gross proceeds received in connection with the sale of five properties. |
Past performance is not necessarily indicative of future results.
A-5
TABLE III
ANNUAL OPERATING RESULTS OF PRIOR REAL ESTATE PROGRAMS (UNAUDITED)
The following sets forth the operating results of Prior Public Real Estate Programs sponsored by the sponsor of our program, the offerings of which have been closed since January 1, 2008. The information relates only to public programs with investment objectives similar to this program. All figures are as of December 31 of the year indicated.
Cole Credit Property Trust II,
Inc. June 2005 (Unaudited) |
||||||||||||||||||||
2008 | 2009 | 2010 | 2011 | 2012 | ||||||||||||||||
Gross Revenues |
$ | 202,282,667 | $ | 276,026,961 | $ | 269,274,321 | $ | 279,520,082 | $ | 282,892,655 | ||||||||||
Equity in income of unconsolidated joint venture |
470,978 | 612,432 | 964,828 | 665,645 | 1,157,096 | |||||||||||||||
Profit (loss) on sale of properties |
| | | 20,749,303 | (7) | 639,617 | (8) | |||||||||||||
Less: |
||||||||||||||||||||
Operating expenses(1) |
32,191,062 | 50,986,169 | 47,170,233 | 50,693,841 | 60,934,746 | |||||||||||||||
Interest expense |
78,063,338 | 98,996,703 | 102,976,724 | 108,185,870 | 107,962,191 | |||||||||||||||
Depreciation and amortization(2) |
63,858,422 | 90,750,170 | 85,162,219 | 88,246,266 | 89,239,450 | |||||||||||||||
Impairment of real estate assets |
3,550,000 | 13,500,000 | 4,500,435 | | 6,897,593 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net Income (loss) GAAP Basis(3) |
$ | 25,090,823 | $ | 22,406,351 | $ | 30,429,538 | $ | 53,809,053 | $ | 19,655,388 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Taxable income |
||||||||||||||||||||
from operations(4) |
$ | 42,432,587 | $ | 53,168,771 | $ | 45,529,029 | $ | 47,403,410 | $ | 50,073,516 | (5) | |||||||||
from gain on sale |
| | | 22,750,362 | | |||||||||||||||
Cash generated |
||||||||||||||||||||
from operations |
96,073,918 | 116,871,698 | 105,627,000 | 114,449,000 | 118,371,000 | |||||||||||||||
from sales |
| | | 100,830,000 | 28,583,000 | |||||||||||||||
from refinancing |
| | | | | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Cash generated from operations, sales and refinancing |
96,073,918 | 116,871,698 | 105,627,000 | 215,279,000 | 146,954,000 | |||||||||||||||
Less: Cash distributions to investors |
||||||||||||||||||||
from operating cash flow |
96,051,343 | 116,871,698 | 105,627,000 | 114,449,000 | 118,371,000 | |||||||||||||||
from sales and refinancing |
| | | 11,195,000 | 9,156,000 | |||||||||||||||
from other(6) |
| 18,111,554 | (9) | 23,623,894 | (10) | 5,359,000 | (11) | 3,851,000 | (12) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Cash generated (deficiency) after cash distributions |
22,575 | (18,111,554 | ) | (23,623,894 | ) | 84,276,000 | 15,576,000 | |||||||||||||
Less: Special items (not including sales and refinancing) |
| | | | | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Cash generated (deficiency) after cash distributions and special items |
$ | 22,575 | $ | (18,111,554 | ) | $ | (23,623,894 | ) | $ | 84,276,000 | $ | 15,576,000 | ||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Tax and distribution data per $1,000 invested |
||||||||||||||||||||
Federal income tax results: |
||||||||||||||||||||
Ordinary income (loss) |
||||||||||||||||||||
from operations |
$ | 21.02 | $ | 27.24 | $ | 22.03 | $ | 25.15 | $ | 26.56 | ||||||||||
from recapture |
| | | | | |||||||||||||||
Capital gain (loss) |
| | | 12.07 | | |||||||||||||||
Cash distributions to investors |
||||||||||||||||||||
Source (on a GAAP basis) |
||||||||||||||||||||
Investment income |
30.00 | 26.00 | 21.90 | 22.40 | 23.60 | |||||||||||||||
Return of capital |
36.00 | 41.00 | 40.50 | 29.20 | 38.50 | |||||||||||||||
Capital gain |
| | | 10.90 | | |||||||||||||||
Source (on a cash basis) |
||||||||||||||||||||
Sales |
| | | 5.34 | 4.33 | |||||||||||||||
Refinancing |
| | | | | |||||||||||||||
Operations |
66.00 | 58.01 | 50.99 | 54.60 | 55.95 | |||||||||||||||
Other(6) |
| 8.99 | 11.41 | 2.56 | 1.82 | |||||||||||||||
Amount (in percentage terms) remaining invested in program properties at the end of the last year reported in the table |
100 | % |
Past performance is not necessarily indicative of future results.
A-6
TABLE III
ANNUAL OPERATING RESULTS OF PRIOR REAL ESTATE PROGRAMS (UNAUDITED) (Continued)
Cole Credit Property Trust III,
Inc. October 2008 (Unaudited) |
||||||||||||||||||||
2008 | 2009 | 2010 | 2011 | 2012 | ||||||||||||||||
Gross Revenues |
$ | 3,621 | $ | 23,503,760 | $ | 144,833,874 | $ | 366,649,708 | $ | 581,042,087 | ||||||||||
Equity in income of unconsolidated joint venture |
| | (206,200 | ) | 1,474,801 | 2,182,588 | ||||||||||||||
Profit (loss) on sale of properties |
| | | | 121,575,768 | (13) | ||||||||||||||
Less: |
||||||||||||||||||||
Operating expenses(1) |
104,769 | 23,312,360 | 85,592,289 | 128,596,358 | 181,725,905 | |||||||||||||||
Interest expense |
| 2,538,176 | 26,311,592 | 87,436,309 | 151,536,676 | |||||||||||||||
Depreciation and amortization(2) |
| 5,474,070 | 39,326,534 | 106,322,593 | 168,099,550 | |||||||||||||||
Net (loss) income including noncontrolling interest |
(101,148 | ) | (7,820,846 | ) | (6,602,741 | ) | 45,769,249 | 81,862,544 | ||||||||||||
Net (loss) income allocated to noncontrolling interest |
| | (309,976 | ) | 474,501 | 100,104 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net (loss) income attributable to company GAAP Basis(3) |
$ | (101,148 | ) | $ | (7,820,846 | ) | $ | (6,602,741 | ) | $ | 45,294,748 | $ | 81,762,440 | |||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Taxable income |
||||||||||||||||||||
from operations(4) |
$ | (101,148 | ) | $ | (7,820,846 | ) | $ | 60,372,811 | $ | 121,091,397 | $ | 153,052,943 | (5) | |||||||
from gain on sale |
| | | | 45,932,181 | |||||||||||||||
Cash generated |
||||||||||||||||||||
from operations |
(27,507 | ) | 74,038 | 35,790,000 | 145,681,000 | 242,464,000 | ||||||||||||||
from sales |
| | | | 599,535,000 | |||||||||||||||
from refinancing |
| | | | | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Cash generated from operations, sales and refinancing |
(27,507 | ) | 74,038 | 35,792,000 | 145,681,000 | 841,999,000 | ||||||||||||||
Less: Cash distributions to investors |
||||||||||||||||||||
from operating cash flow |
| 74,038 | 35,792,000 | 145,681,000 | 242,464,000 | |||||||||||||||
from sales and refinancing |
| | | | | |||||||||||||||
from other(6) |
| 21,689,962 | (14) | 76,821,000 | (15) | 49,196,000 | (16) | 53,188,000 | (17) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Cash generated (deficiency) after cash distributions |
(27,507 | ) | (21,689,962 | ) | (76,821,000 | ) | (49,196,000 | ) | 546,347,000 | |||||||||||
Less: Special items (not including sales and refinancing) |
| | | | | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Cash generated (deficiency) after cash distributions and special items |
$ | (27,507 | ) | $ | (21,689,962 | ) | $ | (76,821,000 | ) | $ | (49,196,000 | ) | $ | 546,347,000 | ||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Tax and distribution data per $1,000 invested |
||||||||||||||||||||
Federal income tax results: |
||||||||||||||||||||
Ordinary income (loss) |
||||||||||||||||||||
from operations |
$ | (505.74 | ) | $ | (9.02 | ) | $ | 27.86 | $ | 36.40 | $ | 37.58 | ||||||||
from recapture |
| | | | | |||||||||||||||
Capital gain (loss) |
| | | | 11.28 | |||||||||||||||
Cash distributions to investors |
||||||||||||||||||||
Source (on a GAAP basis) |
||||||||||||||||||||
Investment income |
| 30.00 | 35.00 | 39.00 | 33.00 | |||||||||||||||
Return of capital |
| 24.00 | 29.00 | 24.00 | 21.00 | |||||||||||||||
Capital gain |
10.00 | |||||||||||||||||||
Source (on a cash basis) |
||||||||||||||||||||
Sales |
| | | | | |||||||||||||||
Refinancing |
| | | | | |||||||||||||||
Operations |
| 0.18 | 20.34 | 47.10 | 52.49 | |||||||||||||||
Other(6) |
| 53.82 | 43.66 | 15.90 | 11.51 | |||||||||||||||
Amount (in percentage terms) remaining invested in program properties at the end of the last year reported in the table |
100 | % |
Past performance is not necessarily indicative of future results.
A-7
TABLE III
ANNUAL OPERATING RESULTS OF PRIOR REAL ESTATE PROGRAMS (UNAUDITED) (Continued)
(1) | Operating expenses include management fees paid to affiliates for such services as accounting, property supervision, etc. |
(2) | Depreciation of commercial real property is determined on the straight-line method over an estimated useful life of 40 years. Leasehold interests are amortized over the life of the lease. |
(3) | Cole Credit Property Trust II, Inc. and Cole Credit Property Trust III, Inc. maintain their books on a GAAP basis of accounting rather than on a tax basis. |
(4) | Cash generated from operation generally includes net income plus depreciation and amortization plus any decreases in accounts receivable and accrued rental income or increases in accounts payable minus any increases in accounts receivable and accrued rental income or decreases in accounts payable. |
(5) | Due to the timing of tax return filings, amounts shown represent estimates and may change when tax returns are filed at a future date. |
(6) | Cash distributions to investors from other sources may include sources such as cash flows in excess of distributions from prior periods, borrowings, and proceeds from the issuance of common stock. We consider the real estate acquisition expenses, which reduce cash flow from operations, to have been funded with proceeds from our ongoing public offering of shares of common stock in the offering because the expenses were incurred to acquire real estate investments |
(7) | Consists of gain on the sale of securities of $15.6 million and gain on the sale of unconsolidated joint venture interests of $5.2 million. |
(8) | Consists of gain on the sale of real estate assets and property condemnation. |
(9) | Consists of proceeds from the offerings of $3.2 million, cash flows from operations in excess of distributions from previous periods of $6.8 million and borrowings of $8.1 million. |
(10) | Consists of distributions received in excess of income from unconsolidated joint ventures of $1.6 million, proceeds from the offerings of $3.4 million, and borrowings of $18.7 million. |
(11) | Consists of distributions received in excess of income from unconsolidated joint ventures of $2.3 million and proceeds from the offerings of $3.0 million. |
(12) | Consists of principal payments from mortgage notes receivable and real estate under direct financing leases of $3.6 million and proceeds from the issuance of common stock of $233,000. |
(13) | Consists of gain on the sale and condemnation of real estate assets of $109.1 million and gain on the sale of marketable securities of $12.5 million. |
(14) | Consists of proceeds from the issuance of common stock of $18.6 million and borrowings of $3.1 million. |
(15) | Consists of proceeds from the issuance of common stock of $58.7 million and borrowings of $18.1 million. |
(16) | Consists of distributions received in excess of income from unconsolidated joint ventures $1.1 million and proceeds from the issuance of common stock of $48.1 million. |
(17) | Consists of distributions received in excess of income from unconsolidated joint ventures of $5.1 million and proceeds from the issuance of common stock of $48.1 million. |
Past performance is not necessarily indicative of future results.
A-8
TABLE V
SALES OR DISPOSALS OF PROPERTIES (UNAUDITED)
This table provides summary information on the results of sales or disposals of properties since January 1, 2010 by Prior Public Real Estate Programs having similar investment objectives to those of this program. All amounts are through December 31, 2012.
Selling Price, Net of Closing Costs and GAAP Adjustments | Including Closing and Soft Costs | |||||||||||||||||||||||||||||||||||||||||||
Property |
Date Acquired |
Date of Sale |
Cash Received Net of Closing Costs |
Mortgage Balance at Time of Sale (1) |
Purchase Money Mortgage Taken Back by Program |
Adjustments Resulting from Application of GAAP |
Total (2) | Original Mortgage Financing |
Total Acquisition Cost, Capital Improvements, Closing and Soft Costs (3) |
Total | Excess (Deficiency) of Property Operating Cash Receipts Over Cash Expenditures |
|||||||||||||||||||||||||||||||||
Cole Credit Property Trust, Inc. |
||||||||||||||||||||||||||||||||||||||||||||
CarMax Merriam, KS |
04/04 | 12/11 | $ | 4,660,866 | $ | 14,175,000 | | | $ | 18,835,866 | (4) | $ | 14,175,000 | $ | 5,237,436 | $ | 19,412,436 | $ | 4,262,437 | |||||||||||||||||||||||||
Wawa Portfolio-Various |
07/04 | 07/12 | 5,061,248 | 8,580,000 | | | 13,641,248 | (5) | 7,688,248 | 5,604,087 | 13,292,335 | 10,925,248 | (6) | |||||||||||||||||||||||||||||||
Walgreens Hutchinson, KS |
07/05 | 09/12 | 1,215,771 | 3,462,000 | | | 4,677,771 | (7) | 3,462,000 | 2,121,134 | 5,583,134 | 835,402 | ||||||||||||||||||||||||||||||||
Walgreens Newton, KS |
07/05 | 09/12 | 1,013,121 | 2,891,000 | | | 3,904,121 | (8) | 2,891,000 | 1,779,402 | 4,670,402 | 712,887 | ||||||||||||||||||||||||||||||||
Cole Credit Property Trust II, Inc. |
||||||||||||||||||||||||||||||||||||||||||||
LBUBS 2007-C2 AJ |
09/08 | 05/11 | 29,282,000 | | | | 29,282,000 | (9) | | 26,921,503 | 26,921,503 | 5,215,399 | ||||||||||||||||||||||||||||||||
JPMCC 2008-C2 A3 |
10/08 | 04/11 | 18,583,428 | | | | 18,583,428 | (9) | | 15,402,491 | 15,402,491 | 2,884,531 | ||||||||||||||||||||||||||||||||
GCCFC 2007 GG11 AJ |
11/08 | 05/11 | 8,675,000 | | | | 8,675,000 | (9) | | 5,119,125 | 5,119,125 | 1,501,086 | ||||||||||||||||||||||||||||||||
BSCMS 2007-GG11 T28 AM |
11/08 | 05/11 | 5,314,075 | | | | 5,314,075 | (9) | | 2,586,098 | 2,586,098 | 731,398 | ||||||||||||||||||||||||||||||||
BSCMS 2005-T20 AJ |
01/09 | 03/11 | 6,001,875 | | | | 6,001,875 | (9) | | 2,547,450 | 2,547,450 | 695,554 | ||||||||||||||||||||||||||||||||
BSCMS 2005-PW10 AM |
01/09 | 03/11 | 14,203,700 | | | | 14,203,700 | (9) | | 7,947,177 | 7,947,177 | 1,619,721 | ||||||||||||||||||||||||||||||||
Cole/Spensa MS Portfolio AZ, LLC |
04/09 | 09/11 | 18,769,000 | | | | 18,769,000 | (10) | | 16,758,494 | 16,758,494 | 2,062,493 | (11) | |||||||||||||||||||||||||||||||
Pep Boys New Hartford, NY |
03/08 | 12/12 | 2,388,346 | | | | 2,380,813 | (12) | | 2,427,475 | 2,427,475 | 702,824 | ||||||||||||||||||||||||||||||||
Pep Boys Redlands, CA |
03/08 | 12/12 | 4,863,194 | | | | 4,802,810 | (13) | | 4,732,839 | 4,732,839 | 2,002,037 | ||||||||||||||||||||||||||||||||
Cole Credit Property Trust III, Inc. |
||||||||||||||||||||||||||||||||||||||||||||
Walgreens/CVS Portfolio-Various |
(9 | ) | 03/12 | 68,408,961 | | | | 68,408,961 | (14) | | 59,040,542 | 59,040,542 | 39,728,818 | (15) | ||||||||||||||||||||||||||||||
Home Depot San Jose, CA |
04/09 | 10/12 | 11,775,416 | | | | 11,775,416 | (16) | | 8,402,164 | 8,402,164 | 9,334,505 | ||||||||||||||||||||||||||||||||
City Center Plaza Bellevue, WA |
07/10 | 11/12 | 364,088,989 | | | | 364,088,989 | (17) | | 323,127,590 | 323,127,590 | 165,323,250 | ||||||||||||||||||||||||||||||||
Cracker Barrel Portfolio-Various |
06/09 | 11/12 | 18,448,972 | | | | 18,448,972 | (18) | | 14,467,161 | 14,467,161 | 14,052,550 | (19) | |||||||||||||||||||||||||||||||
CarMax Garland, TX |
01/10 | 11/12 | 16,559,682 | | | | 16,559,682 | (20) | | 14,594,240 | 14,594,240 | 10,043,245 | ||||||||||||||||||||||||||||||||
Kum & Go Portfolio-Various |
(11 | ) | 11/12 | 9,134,058 | | | | 9,134,058 | (21) | | 8,301,411 | 8,301,411 | 5,015,044 | (22) | ||||||||||||||||||||||||||||||
Manchester Highlands St. Louis, MO |
08/10 | 12/12 | 28,632,508 | 24,250,000 | | | 52,882,508 | (23) | | 50,551,109 | 50,551,109 | 18,183,996 | ||||||||||||||||||||||||||||||||
On the Border Portfolio-Ramsey, NJ |
06/10 | 12/12 | 6,557,415 | | | | 6,557,415 | (24) | | 4,548,509 | 4,548,509 | 5,610,544 | (25) | |||||||||||||||||||||||||||||||
Kohls Port Orange, FL |
07/09 | 12/12 | 11,694,723 | | | | 11,694,723 | (26) | | 10,177,368 | 10,177,368 | 6,339,948 | ||||||||||||||||||||||||||||||||
JPMCC 2011-C5 D |
09/11 | 12/12 | 15,644,812 | | | | 15,644,812 | (27) | | 12,792,426 | 12,792,426 | 1,034,396 | ||||||||||||||||||||||||||||||||
GSMS 2011-GC5 D |
10/11 | 12/12 | 14,565,820 | | | | 14,565,820 | (27) | | 11,525,694 | 11,525,694 | 953,559 | ||||||||||||||||||||||||||||||||
WFRBS 2011-C5 F |
11/11 | 12/12 | 13,475,560 | | | | 13,475,560 | (27) | | 9,769,121 | 9,769,121 | 951,923 | ||||||||||||||||||||||||||||||||
MSC 2011-C3 F |
10/11 | 10/12 | 4,601,306 | | | | 4,601,306 | (27) | | 4,150,249 | 4,150,249 | 331,898 | ||||||||||||||||||||||||||||||||
MSC 2012-C4 F |
03/12 | 10/12 | 5,670,096 | | | | 5,670,096 | (27) | | 3,831,955 | 3,831,955 | 157,465 | ||||||||||||||||||||||||||||||||
JPMCC 2012-C6 F |
04/12 | 10/12 | 461,393 | | | | 461,393 | (27) | | 479,192 | 479,192 | 18,696 | ||||||||||||||||||||||||||||||||
JPMCC 2012 C6 G |
04/12 | 10/12 | 4,681,636 | | | | 4,681,636 | (27) | | 3,792,758 | 3,792,758 | 115,457 | ||||||||||||||||||||||||||||||||
JPMCC 2012-C8 F |
10/12 | 10/12 | 4,304,476 | | | | 4,304,476 | (27) | | 3,295,738 | 3,295,738 | 7,028 |
(1) | Mortgage balance represents face amount of assumed loans and does not represent discounted current value. |
(2) | None of the amounts are being reported for tax purposes on the installment basis. |
(3) | The amounts shown do not include a pro rata share of the original offering costs. There were no carried interest received in lieu of commissions in connection with the acquisition of the property. |
(4) | Cole Credit Property Trust, Inc. recorded a taxable gain of $2.1 million related to the property sale, all of which was a capital gain. |
(5) | Cole Credit Property Trust, Inc. recorded a taxable gain of $2.8 million related to the sale of three properties, of which $303,000 was a ordinary gain. |
(6) | This sale represents the disposition of a three property convenience store portfolio that was owned by Cole Credit Property Trust Inc. |
Past performance is not necessarily indicative of future results.
A-9
TABLE V
SALES OR DISPOSALS OF PROPERTIES (UNAUDITED) (Continued)
(7) | Cole Credit Property Trust, Inc. recorded a taxable loss of $177,000 related to the property sale, all of which was a capital loss. |
(8) | Cole Credit Property Trust, Inc. recorded a taxable loss of $126,000 related to the property sale, all of which was a capital loss. |
(9) | Cole Credit Property Trust II, Inc. recorded a taxable gain of $21.5 million related to the sale of six CMBS, all of which was a capital gain. |
(10) | Cole Credit Property Trust II, Inc. recorded a taxable gain of $1.2 million related to the unconsolidated joint venture sale, all of which was a capital gain. |
(11) | This sale represents the disposition of a 10 property self-storage portfolio that was owned by Cole Credit Property Trust II Inc., through an unconsolidated joint venture. Amount included herein represents the distribution payments from the joint venture to Cole Credit Property Trust II, Inc. |
(12) | Cole Credit Property Trust II, Inc. recorded a taxable gain of $103,000 related to the property sale, all of which was a capital gain. |
(13) | Cole Credit Property Trust II, Inc. recorded a taxable gain of $534,000 related to the property sale, all of which was a capital gain. |
(14) | Cole Credit Property Trust III, Inc. recorded a taxable gain of $13.3 million related to the sale of 12 properties, all of which was a capital gain. |
(15) | This sale represents the disposition of a 12 property drugstore store portfolio that was owned by Cole Credit Property Trust III, Inc. The acquisition of these properties by Cole Credit Property Trust III Inc. were between the months of May 2009 through September 2009. |
(16) | Cole Credit Property Trust III, Inc. recorded a taxable gain of $3.5 million related to the property sale, all of which was a capital gain. |
(17) | Cole Credit Property Trust III, Inc. disposed of this property in a like-kind exchange under section 1031 of the Internal Revenue Code and thus, did not recognize a taxable gain on the disposal. |
(18) | Cole Credit Property Trust III, Inc. recorded a taxable gain of $5.2 million related to the sale of five properties, all of which was a capital gain. |
(19) | This sale represents the disposition of a five property restaurant portfolio that was owned by Cole Credit Property Trust III, Inc. |
(20) | Cole Credit Property Trust III, Inc. recorded a taxable gain of $3.0 million related to the property sale, all of which was a capital gain. |
(21) | Cole Credit Property Trust III, Inc. recorded a taxable gain of $1.5 million related to the sale of four properties, all of which was a capital gain. |
(22) | This sale represents the disposition of a four property convenience store portfolio that was owned by Cole Credit Property Trust III Inc. The acquisition of these properties were between the months of December 2009 through February 2010. |
(23) | Cole Credit Property Trust III, Inc. recorded a taxable gain of $6.0 million related to the property sale, all of which was a capital gain. |
Past performance is not necessarily indicative of future results.
A-10
TABLE V
SALES OR DISPOSALS OF PROPERTIES (UNAUDITED) (Continued)
(24) | Cole Credit Property Trust III, Inc. recorded a taxable gain of $2.4 million related to the sale of two properties, all of which was a capital gain. |
(25) | This sale represents the disposition of a two property restaurant portfolio that was owned by Cole Credit Property Trust III Inc. |
(26) | Cole Credit Property Trust III, Inc. recorded a taxable gain of $1.7 million related to the property sale, all of which was a capital gain. |
(27) | Cole Credit Property Trust III, Inc. recorded a taxable gain of $12.5 million related to the sale of six CMBS and half of its investment in two CMBS, all of which was a capital gain. |
Past performance is not necessarily indicative of future results.
A-11
NOT FOR USE IN ALABAMA
COLE CREDIT PROPERTY TRUST IV, INC. |
![]() |
INITIAL SUBSCRIPTION AGREEMENT FOR THE PURCHASE OF COMMON STOCK | 866.907.2653 |
A INVESTMENT (a separate Initial Subscription Agreement is required for each initial investment)
Investors should not sign this Initial Subscription Agreement for the offering unless they have received the current final Prospectus.
1. This subscription is in the amount of $ ¨ Check if amount is estimated
¨ | Initial Subscription (minimum $2,500) |
¨ | Additional Subscription (minimum $1,000) (complete all sections except for B and D or complete the separate simplified Additional Investment Subscription Agreement) |
Existing Cole Account #
2. Payment will be made with: ¨ Enclosed check ¨ Funds wired ¨ Funds to follow
¨ ACH
¨ Checking ¨ Savings
Financial Institution
|
| |
Routing/Transit # | Account # |
3. For purchases without selling commissions, please designate below, as applicable:
¨ RIA/WRAP Account ¨ Cole Employee, Affiliate, or their Family Member
IF A BOX IS CHECKED, COMMISSIONS WILL NOT BE PAID ON THE PURCHASE.
B TYPE OF REGISTRATION (please complete either section 1 or 2, but not both, and section 3, if applicable)
1. Non-Qualified Registration | 2. Qualified Registration (make check payable to the Custodian) | |
¨ Individual (one signature required) |
¨ Traditional IRA | |
¨ Joint Tenants with Right of Survivorship (all parties must sign) |
¨ Roth IRA | |
¨ Community Property (all parties must sign) |
¨ Keogh Plan | |
¨ Tenants-in-Common (all parties must sign) |
¨ Simplified Employee Pension/Trust (S.E.P.) | |
¨ Transfer on Death (fill out TOD Form to effect designation) |
¨ Pension or Profit Sharing Plan (exempt under 401(a)) | |
¨ Uniform Gifts to Minors Act or Uniform Transfer to Minors Act (UGMA/UTMA adult custodian signature required)
State of
Custodian for (minors name) |
¨Non-custodial ¨ Custodial ¨ Other (specify)
3. Custodian or Clearing Firm/Platform Information, if applicable (send all paperwork directly to the Custodian or Clearing Firm/Platform)
Name | |
¨ Corporate (authorized signature and Corporate Resolution or Cole Corporate Resolution Form required) |
||
¨ S-corp ¨ C-corp (will default to S-corp if nothing is marked) |
||
¨ Partnership (authorized signature and Partnership paperwork or Cole Corporate Resolution Form required) |
||
¨ Limited Liability Company (authorized signature and LLC paperwork or Cole Corporate Resolution Form required) |
Street/PO Box | |
¨ Taxable Pension or Profit Sharing
Plan |
City State Zip | |
¨ Trust (trustee or grantor signatures and trust documents or Cole Trustee Certification of Investment Power required) |
Custodian Tax ID # (provided by Custodian) | |
|
Custodian or Clearing Firm/Platform Account # | |
Type of Trust: (Specify i.e., Family, Living, Revocable, etc.)
|
||
Name of Trust
|
||
Date of Trust Tax ID # (if applicable) |
||
¨ Other (specify)
|
B-1
C REGISTRATION INFORMATION (or Trustees if applicable)
Investor Name |
Co-Investor Name (if applicable) | |
Mailing Address |
Mailing Address | |
City State Zip |
City State Zip | |
Phone Business Phone |
Phone Business Phone | |
Email Address |
SSN or Tax ID Date of Birth | |
SSN or Tax ID Date of Birth |
||
Street Address (if different from mailing address or mailing address is a PO Box)
|
||
City State Zip |
Volume Discounts
I (we) are making, or previously have made, investments in the following Cole-sponsored programs that are Eligible Programs, as defined in a Cole REIT Prospectus. (You may only include any investments made by the same purchaser, as defined in the Prospectus.) This information will help determine whether volume discounts may be applicable. All holdings are subject to verification.
Name of Cole Program
|
Cole Account #
|
SSN or Tax ID
| ||||||
Name of Cole Program |
Cole Account # | SSN or Tax ID |
D DISTRIBUTION INSTRUCTIONS (will default to Custodian or Clearing Firm/Platform or Address of Record if nothing is marked)
FOR CUSTODIAL OR CLEARING FIRM/PLATFORM ACCOUNTS:
¨ Custodian or Clearing Firm/Platform of Record
¨ Reinvest pursuant to Distribution Reinvestment Plan
FOR NON-CUSTODIAL OR NON-CLEARING FIRM/PLATFORM ACCOUNTS:
¨ Mail to Address of Record
¨ Reinvest pursuant to Distribution Reinvestment Plan
¨ Direct Deposit
|
¨ Checking ¨ Savings | |
Financial Institution
|
||
Routing/Transit # |
Account # | |
¨ Check if banking information is same as provided in Section A-2 |
||
¨ Mail to Brokerage Account or Third Party
|
||
Payee Name
|
Mailing Address | |
Account # |
City State Zip |
By signing this agreement, I authorize Cole Credit Property Trust IV, Inc. (CCPT IV) to deposit distributions into the account specified in Section D, and to debit that account in the amount of any distribution deposited in error. If I withdraw deposits made in error, I authorize CCPT IV to retain future distributions until the erroneous deposits are recovered. This authorization is effective until terminated in writing by either party.
B-2
E INVESTOR(S) ACKNOWLEDGEMENTS AND SIGNATURE (Investor(s) must initial each of sections 1-4 and those sections of 5-13 as appropriate)
I (we) (or, in the case of fiduciary accounts, the person authorized to sign on my (our) behalf) hereby acknowledge and/or represent the following:
INVESTOR | CO-INVESTOR
| | 1. I (we) have received the final Prospectus, whether over the Internet, on a CD-ROM, paper copies, or any other delivery method, relating to the shares of CCPT IV. |
| | 2. Excluding home, home furnishings and automobiles, I (we) either: (i) have a net worth of at least $70,000 and had during the last year or estimate that I (we) will have in the current year gross income of at least $70,000; or (ii) have a net worth of at least $250,000. In the case of sales to fiduciary accounts, the specific requirements shall be met by the beneficiary, the fiduciary account or by the donor or grantor who directly or indirectly supplies the funds for the purchase of the shares. |
| | 3. I am (we are) purchasing the shares for my (our) own account, or if I am (we are) purchasing shares on behalf of a trust or other entity of which I am (we are) trustee(s) or authorized agent(s), I (we) have due authority to execute this Initial Subscription Agreement and do hereby legally bind the trust or other entity of which I am (we are) trustee(s) or authorized agent(s). |
| | 4. I (we) acknowledge that the shares are not liquid. |
| | 5. For Arkansas residents: By signing below, you are not representing that you have read or understood this agreement. |
| | 6. For California residents: I (we) either: (i) have a net worth of at least $75,000 and had during the last year or estimate that I (we) will have in the current year gross income of at least $75,000; or (ii) have a net worth of at least $250,000. In addition, my (our) investment in CCPT IV does not exceed ten percent (10%) of my (our) net worth. |
| | 7. For Iowa and New Mexico residents: My (our) aggregate investment in CCPT IV and its affiliates does not exceed ten percent (10%) of my (our) liquid net worth. |
| | 8. For Kansas and Massachusetts residents: I (we) acknowledge that the Kansas and Massachusetts securities regulators recommend that I (we) should invest, in the aggregate, no more than ten percent (10%) of my (our) liquid net worth (as defined in the prospectus for Kansas and Massachusetts investors) in CCPT IV and the securities of similar direct participation programs. |
| | 9. For Kentucky, Michigan, Oregon, Pennsylvania and Tennessee residents: My (our) liquid net worth is at least ten (10) times my (our) maximum investment in CCPT IV. |
| | 10. For Maine residents: My (our) investment in CCPT IV and its affiliates does not exceed ten percent (10%) of my (our) net worth. |
| | 11. For Nebraska residents: Excluding home, furnishings and automobiles, I (we) either: (i) have a minimum net worth of $100,000 and an annual income of $70,000, or (ii) have a minimum net worth of $350,000. In addition, my (our) investment in CCPT IV does not exceed ten percent (10%) of my (our) net worth. |
| | 12. For North Dakota residents: My (our) liquid net worth is at least ten (10) times my (our) investment in CCPT IV and its affiliates. |
| | 13. For Ohio residents: My (our) aggregate investment in CCPT IV, its affiliates and other non-traded real estate investment programs does not exceed ten percent (10%) of my (our) liquid net worth (as defined in the Prospectus for Ohio investors). |
¨ By checking here I confirm I would like to go green and not receive in paper any documents that Cole can send to me electronically. (If you are choosing to go green, please make sure you provide your email address in Section C. If you decide later that you want to receive documents in paper, you can contact Cole Investor Services at 866.907.2653.)
SUBSTITUTE W-9: I HEREBY CERTIFY under penalty of perjury (i) that the taxpayer identification number shown on this Initial Subscription Agreement is true, correct and complete, (ii) that I am not subject to backup withholding either because I have not been notified that I am subject to backup withholding as a result of a failure to report all interest or distributions, or the Internal Revenue Service has notified me that I am no longer subject to backup withholding, and (iii) I am a U.S. person. |
You should not invest in CCPT IV unless you have read and understood this agreement and the Prospectus referred to above and understand the risks associated with an investment in CCPT IV. In deciding to invest in CCPT IV, you should rely only on the information contained in the Prospectus, and not on any other information or representations from any other person or source. CCPT IV and each person selling shares of CCPT IV common stock shall be responsible for making every reasonable effort to determine that such purchase of shares is a suitable and appropriate investment for each investor, based on the information provided by the prospective investor regarding the investors financial situation and investment objectives.
A sale of the shares may not be completed until at least five business days after the date the subscriber receives the final Prospectus. If a subscribers subscription is accepted, CCPT IV will send the subscriber confirmation of their purchase after they have been admitted as an investor.
Notice is hereby given to each investor that by executing this agreement you are not waiving any rights you may have under the Securities Act of 1933, as amended, or any state securities laws.
Investors Signature
|
Date
|
Custodian Signature | Date | |||||||
Co-Investors Signature |
Date |
B-3
F FINANCIAL ADVISOR INFORMATION (please complete A or B)
A) REGISTERED REPRESENTATIVE (to be completed by selling Registered Representative) | ||||||
1. |
|
2. |
| |||
Name of Registered Representative |
Name of Broker-Dealer | |||||
Representative ID # |
Representative CRD ID # | |||||
Mailing Address |
Have you changed firm affiliation (since last purchase)? ¨ Yes ¨ No | |||||
City State Zip |
||||||
Phone Email Address |
||||||
¨ Please check the box if the purchase is being made in the Registered Representatives or Broker Dealers personal account, in the account of one of their immediate family members or in the account of any licensed employee of the Broker-Dealer. IF THE BOX IS CHECKED, COMMISSIONS WILL NOT BE PAID ON THE PURCHASE.
| ||||||
B) REGISTERED INVESTMENT ADVISOR REPRESENTATIVE (to be completed by selling RIA Representative) | ||||||
1. | 2. | |||||
Name of Registered Representative |
Name of RIA Office | |||||
|
SEC Registered ¨ Yes ¨ No | |||||
Mailing Address |
State Registered ¨ Yes ¨ No | |||||
States Registered | ||||||
City State Zip |
||||||
Phone Email Address |
RIA IARD ID # | |||||
Have you changed firm affiliation (since last purchase)? ¨ Yes ¨ No |
Name of Clearing Firm | |||||
Name of Broker-Dealer |
G REPRESENTATIVE SIGNATURES
Based on the information I obtained from the investor regarding the investors financial situation and investment objectives, I hereby certify to Cole Capital Corporation, Cole Holdings Corporation and Cole Credit Property Trust IV, Inc. that I have reasonable grounds for believing that the purchase of the shares by the investor in Cole Credit Property Trust IV, Inc. is a suitable and appropriate investment for this investor.
Signature of Registered or RIA Representative |
Signature of Broker-Dealer or Clearing Firm/Platform |
¨ I am completing and signing this application pursuant to a power-of-attorney from the investor. I hereby certify that such power-of-attorney is legally valid and includes within its scope my completion and execution of this application on behalf of the investor.
ONCE COMPLETE, PLEASE |
Via Regular Mail: | Via Overnight/Express Mail: | ||
DELIVER THIS FORM TO: |
CCPT IV | CCPT IV | ||
DST Systems, Inc. | DST Systems, Inc. | |||
Via Fax: |
P.O. Box 219312 | 430 West 7th Street | ||
1.877.616.1118 |
Kansas City, MO 64121-9312 | Kansas City, MO 64105 |
© 2012 Cole Capital Advisors, Inc. All rights reserved | CCPT4-AGMT-05(10-12) |
B-4
NOT FOR USE IN ALABAMA
COLE CREDIT PROPERTY TRUST IV, INC. |
![]() |
ADDITIONAL SUBSCRIPTION AGREEMENT FOR THE PURCHASE OF COMMON STOCK | 866.907.2653 |
This form may be used by any current investor in Cole Credit Property Trust IV, Inc. (CCPT IV), who desires to purchase additional shares of CCPT IV and who purchased their shares directly from CCPT IV. Investors who acquired shares other than through use of an Initial Subscription Agreement (e.g., through a transfer of ownership or TOD) and who wish to make additional investments must complete the CCPT IV Initial Subscription Agreement.
A INVESTMENT (a completed Additional Subscription Agreement is required for each initial investment)
1. This subscription is in the amount of $ (minimum $1,000)
¨ Check if amount is estimated
2. Payment will be made with: ¨ Enclosed check ¨ Funds wired ¨ Funds to follow
¨ ACH
|
¨ Checking | ¨ Savings | ||
Financial Institution |
||||
Routing/Transit # |
Account # |
B REGISTRATION INFORMATION
Existing Cole Account Registration (name of Account) |
SSN or Tax ID # | |
Existing Cole Account # |
Volume Discounts
I (we) are making, or previously have made, investments in the following Cole-sponsored programs that are Eligible Programs, as defined in a Cole REIT Prospectus. (You may include any investments made by the same purchaser, as defined in the Prospectus.) This information will help determine whether volume discounts may be applicable. All holdings are subject to verification.
Name of Cole Program |
Cole Account # | SSN or Tax ID |
Name of Cole Program |
Cole Account # | SSN or Tax ID |
C INVESTOR(S) SIGNATURES (Investor(s) must initial each of sections 1-4 and those sections of 5-13 as appropriate)
I (we) (or, in the case of fiduciary accounts, the person authorized to sign on my (our) behalf) hereby acknowledge and/or represent the following:
INVESTOR | CO-INVESTOR
| | 1. I (we) have received the final Prospectus, whether over the Internet, on a CD-ROM, paper copies, or any other delivery method, relating to the shares of CCPT IV. | |
| | 2. Excluding home, home furnishings and automobiles, I (we) either: (i) have a net worth of at least $70,000 and had during the last year or estimate that I (we) will have in the current year gross income of at least $70,000; or (ii) have a net worth of at least $250,000. In the case of sales to fiduciary accounts, the specific requirements shall be met by the beneficiary, the fiduciary account or by the donor or grantor who directly or indirectly supplies the funds for the purchase of the shares. | |
| | 3. I am (we are) purchasing the shares for my (our) own account, or if I am (we are) purchasing shares on behalf of a trust or other entity of which I am (we are) trustee(s) or authorized agent(s), I (we) have due authority to execute this Subscription Agreement and do hereby legally bind the trust or other entity of which I am (we are) trustee(s) or authorized agent(s). | |
| | 4. I (we) acknowledge that the shares are not liquid.
| |
| | 5. For Arkansas residents: By signing below, you are not representing that you have read or understood this agreement. | |
| | 6. For California residents: I (we) either: (ii) have a net worth of at least $75,000 and had during the last year or estimate that I (we) will have in the current year gross income of at least $75,000; or (i) have a net worth of at least $250,000. In addition, my (our) investment in CCPT IV does not exceed ten percent (10%) of my (our) net worth. | |
| | 7. For Iowa and New Mexico residents: My (our) aggregate investment in CCPT IV and its affiliates does not exceed ten percent (10%) of my (our) liquid net worth. |
C-1
INVESTOR | CO-INVESTOR
| | 8. For Kansas and Massachusetts residents: I (we) acknowledge that the Kansas and Massachusetts securities regulators recommend that I (we) should invest, in the aggregate, no more than ten percent (10%) of my (our) liquid net worth (as defined in the prospectus for Kansas and Massachusetts investors) in CCPT IV and the securities of similar direct participation programs. | |
| | 9. For Kentucky, Michigan, Oregon, Pennsylvania and Tennessee residents: My (our) liquid net worth is at least ten (10) times my (our) maximum investment in CCPT IV. | |
| | 10. For Maine residents: My (our) investment in CCPT IV and its affiliates does not exceed ten percent (10%) of my (our) net worth. | |
| | 11. For Nebraska residents: Excluding home, furnishings and automobiles, I (we) either: (i) have a minimum net worth of $100,000 and an annual income of $70,000, or (ii) have a minimum net worth of $350,000. In addition, my (our) investment in CCPT IV does not exceed ten percent (10%) of my (our) net worth. | |
| | 12. For North Dakota residents: My (our) liquid net worth is at least ten (10) times my (our) investment in CCPT IV and its affiliates. | |
| | 13. For Ohio residents: My (our) aggregate investment in CCPT IV, its affiliates and other non-traded real estate investment programs does not exceed ten percent (10%) of my (our) liquid net worth (as defined in the Prospectus for Ohio investors). |
¨ By checking here I confirm I would like to go green and no longer receive in paper any documents that Cole can send to me electronically. If I decide later that I want to receive documents in paper, I can contact Cole Investor Services at 866.907.2653.
If you are choosing to go green, please provide your email address here:
SUBSTITUTE W-9: I HEREBY CERTIFY under penalty of perjury (i) that the taxpayer identification number shown on this Subscription Agreement is true, correct and complete, (ii) that I am not subject to backup withholding either because I have not been notified that I am subject to backup withholding as a result of a failure to report all interest or distributions, or the Internal Revenue Service has notified me that I am no longer subject to backup withholding, and (iii) I am a U.S. person.
You should not invest in CCPT IV unless you have read and understood this agreement and the Prospectus referred to above and understand the risks associated with an investment in CCPT IV. In deciding to invest in CCPT IV, you should rely only on the information contained in the Prospectus, and not on any other information or representations from any other person or source. CCPT IV and each person selling shares of CCPT IV common stock shall be responsible for making every reasonable effort to determine that such purchase of shares is a suitable and appropriate investment for each investor, based on the information provided by the prospective investor regarding the investors financial situation and investment objectives.
A sale of the shares may not be completed until at least five (5) business days after the date the subscriber receives the final Prospectus. If a subscribers subscription is accepted, CCPT IV will send the subscriber confirmation of their purchase after they have been admitted as an investor.
Notice is hereby given to each investor that by executing this agreement you are not waiving any rights you may have under the Securities Act of 1933, as amended, or any state securities laws.
Investors Signature
|
Date
|
Custodial Signature | Date | |||||
Co-Investors Signature | Date |
D REGISTERED REPRESENTATIVE (to be completed by selling Registered Representative)
Name of Registered Representative | Rep and Branch ID # |
E REGISTERED INVESTMENT ADVISOR (RIA) REPRESENTATIVE (to be completed by selling RIA Representative)
Name of RIA Representative | RIA IARD ID # |
F REPRESENTATIVE SIGNATURES
Based on the information I obtained from the investor regarding the investors financial situation and investment objectives, I hereby certify to Cole Capital Corporation, Cole Holdings Corporation and CCPT IV that I have reasonable grounds for believing that the purchase of the shares by the investor in CCPT IV is a suitable and appropriate investment for this investor.
Signature of Registered or RIA Representative | Signature of Broker-Dealer or Clearing Firm/Platform |
¨ I am completing and signing this application pursuant to a power-of-attorney from the investor. I hereby certify that such power-of-attorney is legally valid and includes within its scope my completion and execution of this application on behalf of the investor.
ONCE COMPLETE, PLEASE | Via Regular Mail: | Via Overnight/Express Mail: | ||
DELIVER THIS FORM TO: | CCPT IV | CCPT IV | ||
DST Systems, Inc. | DST Systems, Inc. | |||
Via Fax: | P.O. Box 219312 | 430 West 7th Street | ||
1.877.616.1118 | Kansas City, MO 64121-9312 | Kansas City, MO 64105 |
© 2012 Cole Capital Advisors, Inc. All rights reserved |
CCPT IV-AI-AGMT-04(06-12) |
C-2
NOT FOR USE IN ALABAMA, ARKANSAS, PENNSYLVANIA, SOUTH CAROLINA OR TENNESSEE
COLE CREDIT PROPERTY TRUST IV, INC. COLE CORPORATE INCOME TRUST, INC. |
![]() |
INITIAL SUBSCRIPTION AGREEMENT FOR THE PURCHASE OF COMMON STOCK | 866.907.2653 |
A INVESTMENT (an Initial Subscription Agreement is required for all initial investments)
1. | This subscription is in the amount(s) and for the Cole Real Estate Investment Trust(s) (Cole REIT(s)) listed below. Investors should not sign this Initial Subscription Agreement for either offering unless they have received the current final Prospectuses for BOTH offerings. |
a. $ COLE CREDIT PROPERTY TRUST IV, INC. |
¨ Initial Subscription (Minimum is $2,500) | |
¨ Additional Subscription (Minimum is $1,000) | ||
Existing Cole Account Number | ||
¨ Check if amount is estimated | ||
b. $ COLE CORPORATE INCOME TRUST, INC. |
¨ Initial Subscription (Minimum is $2,500) | |
¨ Additional Subscription (Minimum is $1,000) | ||
Existing Cole Account Number | ||
¨ Check if amount is estimated |
2. | Payment will be made with: ¨ Enclosed check ¨ Funds wired ¨ Funds to follow ¨ Checking ¨ Savings ¨ ACH |
|
| |
Financial Institution | Account # | |
|
||
Routing/Transit # |
3. | For purchases without selling commissions, please designate below, as applicable: |
¨ RIA/WRAP Account ¨ Cole Employee, Affiliate, or their Family Member |
IF A BOX IS CHECKED, COMMISSIONS WILL NOT BE PAID ON THE PURCHASE.
B TYPE OF REGISTRATION (please complete either section 1 or 2, but not both, and section 3, if applicable)
1. Non-Qualified Registration |
2. Qualified Registration (make check payable to the Custodian) | |
¨ Individual (one signature required) |
¨ Traditional IRA | |
¨ Joint Tenants with Right of Survivorship (all parties must sign) |
¨ Roth IRA | |
¨ Community Property (all parties must sign) |
¨ Keogh Plan | |
¨ Tenants-in-Common (all parties must sign) |
¨ Simplified Employee Pension/Trust (S.E.P.) | |
¨ Transfer on Death (fill out TOD Form to effect designation) |
¨ Pension or Profit Sharing Plan (exempt under 401(a)) | |
¨ Uniform Gifts to Minors Act or Uniform Transfer to Minors Act |
¨ Non-custodial ¨ Custodial | |
(UGMA/UTMA adult custodian signature required) |
¨ Other (specify) | |
State of |
||
Custodian for (minors name) |
| |
¨ Corporate (authorized signature and Corporate Resolution or Cole Corporate Resolution Form required) ¨ S-corp ¨ C-corp (will default to S-corp if nothing is marked) ¨ Partnership (authorized signature and Partnership paperwork or Cole Corporate Resolution Form required) ¨ Limited Liability Company (authorized signature and LLC paperwork or Cole Corporate Resolution Form required) ¨ Taxable Pension or Profit Sharing Plan (authorized signature and Plan paperwork required) ¨ Trust (trustee or grantor signatures and trust documents or Cole Trustee Certification of Investment Power required) |
3. Custodian or Clearing Firm/Platform Information, if applicable (send all paperwork directly to the Custodian or Clearing Firm/Platform) | |
Name
| ||
Street/PO Box
| ||
City State Zip | ||
Custodian Tax ID # (provided by Custodian) | ||
Type of Trust: (Specify i.e., Family, Living, Revocable, etc.) |
Custodian or Clearing Firm/Platform Account # | |
|
||
Name of Trust
|
||
Date of Trust Tax ID # (if applicable) |
||
¨ Other (specify) |
||
|
D-1
C REGISTRATION INFORMATION (or Trustees if applicable)
Investor Name |
Co-Investor Name (if applicable) | |||||||||||
Mailing Address |
Mailing Address | |||||||||||
City | State | Zip | City | State | Zip | |||||||
Phone |
Business Phone | Phone | Business Phone | |||||||||
Email Address |
SSN or Tax ID | Date of Birth | ||||||||||
SSN or Tax ID |
Date of Birth | |||||||||||
Street Address (if different from mailing address or mailing address is a PO Box) | ||||||||||||
City |
State | Zip |
¨ By checking here I confirm I would like to go green and not receive in paper any documents that Cole can send to me electronically. (If you are choosing to go green, please make sure you provide your email address in this section. If you decide later that you want to receive documents in paper, you can contact Cole Investor Services at 866.907.2653.)
Volume Discounts
I (we) are making, or previously have made, investments in the following Cole-sponsored programs that are Eligible Programs, as defined in a Cole REIT Prospectus. (You may only include any investments made by the same purchaser, as defined in the Prospectus.) This information will help determine whether volume discounts may be applicable. All holdings are subject to verification.
| ||||
Name of Cole Program | Cole Account # | SSN or Tax ID | ||
| ||||
Name of Cole Program | Cole Account # | SSN or Tax ID |
D DISTRIBUTION INSTRUCTIONS (will default to Custodian or Clearing Firm/Platform or Address of Record if nothing is marked)
FOR CUSTODIAL OR CLEARING FIRM/PLATFORM ACCOUNTS:
¨ | Custodian or Clearing Firm/Platform of Record |
¨ | Reinvest pursuant to Distribution Reinvestment Plan |
FOR NON-CUSTODIAL OR NON-CLEARING FIRM/PLATFORM ACCOUNTS:
¨ | Mail to Address of Record |
¨ | Reinvest pursuant to Distribution Reinvestment Plan |
¨ | Direct Deposit |
|
¨ Checking | ¨ Savings | ||||||||
Financial Institution |
||||||||||
|
| |||||||||
Routing/Transit # |
Account # | |||||||||
¨ Check if banking information is same as provided in Section A-2 |
||||||||||
¨ Mail to Brokerage Account or Third Party
|
||||||||||
|
| |||||||||
Payee Name |
Mailing Address | |||||||||
|
| |||||||||
Account # |
City | State | Zip |
By signing this agreement, I authorize the applicable Cole REIT to deposit distributions into the account specified in Section D, and to debit that account in the amount of any distribution deposited in error. If I withdraw deposits made in error, I authorize the applicable Cole REIT to retain future distributions until the erroneous deposits are recovered. This authorization is effective until terminated in writing by either party.
D-2
E INVESTOR(S) ACKNOWLEDGEMENT AND SIGNATURE (Investor(s) must initial each of sections 1-4 and any other applicable sections)
I (we) (or, in the case of fiduciary accounts, the person authorized to sign on my (our) behalf) hereby acknowledge and/or represent the following: For Investors in Either or Both Offerings:
INVESTOR | CO-INVESTOR
| | 1. I (we) have received the final Prospectuses, whether over the Internet, on a CD-ROM, paper copies, or any other delivery method, relating to the shares of Cole Credit Property Trust IV, Inc. (CCPT IV) and Cole Corporate Income Trust, Inc. (CCIT). | |
| | 2. Excluding home, home furnishings and automobiles, I (we) either: (i) have a net worth of at least $70,000 and had during the last year or estimate that I (we) will have in the current year gross income of at least $70,000; or (ii) have a net worth of at least $250,000. In the case of sales to fiduciary accounts, the specific requirements shall be met by the beneficiary, the fiduciary account or by the donor or grantor who directly or indirectly supplies the funds for the purchase of the shares. | |
| | 3. I am (we are) purchasing the shares for my (our) own account, or if I am (we are) purchasing shares on behalf of a trust or other entity of which I am (we are) trustee(s) or authorized agent(s), I (we) have due authority to execute this Initial Subscription Agreement and do hereby legally bind the trust or other entity of which I am (we are) trustee(s) or authorized agent(s). | |
| | 4. I (we) acknowledge that the shares are not liquid. |
For Investors in Cole Credit Property Trust IV, Inc.
INVESTOR | CO-INVESTOR
| | 5. For California residents: I (we) either: (i) have a net worth of at least $250,000; or (ii) have a net worth of at least $75,000 and had during the last year or estimate that I (we) will have in the current year gross income of at least $75,000. In addition, my (our) investment in CCPT IV does not exceed ten percent (10%) of my (our) net worth. | |
| | 6. For Iowa and New Mexico residents: My (our) aggregate investment in CCPT IV and its affiliates does not exceed ten percent (10%) of my (our) liquid net worth. | |
| | 7. For Kansas and Massachusetts residents: I (we) acknowledge that the Kansas and Massachusetts securities regulators recommend that I (we) should invest, in the aggregate, no more than ten percent (10%) of my (our) liquid net worth (as defined in the Prospectus for Kansas and Massachusetts investors) in CCPT IV and the securities of similar direct participation programs. | |
| | 8. For Kentucky, Michigan, and Oregon residents: My (our) liquid net worth is at least ten (10) times my (our) maximum investment in CCPT IV. | |
| | 9. For Maine residents: My (our) investment in CCPT IV and its affiliates does not exceed ten percent (10%) of my (our) net worth. | |
| | 10. For Nebraska residents: Excluding home, furnishings and automobiles, I (we) either: (i) have a minimum net worth of $100,000 and an annual income of $70,000, or (ii) have a minimum net worth of $350,000. In addition, my (our) investment in CCPT IV does not exceed ten percent (10%) of my (our) net worth. | |
| | 11. For North Dakota residents: My (our) liquid net worth is at least ten (10) times my (our) investment in CCPT IV and its affiliates. | |
| | 12. For Ohio residents: My (our) aggregate investment in CCPT IV, its affiliates and other non-traded real estate investment programs does not exceed ten percent (10%) of my (our) liquid net worth (as defined in the Prospectus for Ohio investors). |
For Investors in Cole Corporate Income Trust, Inc.
INVESTOR | CO-INVESTOR
| | 5. For California residents: I (we) either: (i) have a net worth of at least $250,000; or (ii) have a net worth of at least $75,000 and had during the last year or estimate that I (we) will have in the current year gross income of at least $75,000. In addition, my (our) investment in CCIT does not exceed ten percent (10%) of my (our) net worth. | |
| | 6. For Iowa and Ohio residents: My (our) investment in CCIT and its affiliates does not exceed ten percent (10%) of my (our) liquid net worth. | |
| | 7. For Kansas and Massachusetts residents: I (we) acknowledge that the Kansas and Massachusetts securities regulators recommend that I (we) should invest, in the aggregate, no more than ten percent (10%) of my (our) liquid net worth (as defined in the Prospectus for Kansas and Massachusetts investors) in CCIT and the securities of similar direct participation programs. | |
| | 8. For Kentucky, Michigan, and Oregon residents: My (our) liquid net worth is at least ten (10) times my (our) maximum investment in CCIT. | |
| | 9. For Maine residents: I (we) either: (i) have a net worth of at least $250,000, or (ii) have an annual gross income of at least $70,000 and a minimum net worth of $70,000. In addition, my (our) investment in CCIT and its affiliates does not exceed ten percent (10%) of my (our) net worth. | |
| | 10. For Nebraska residents: Excluding home, furnishings and automobiles, I (we) either: (i) have a minimum net worth of $100,000 and an annual income of $70,000, or (ii) have a minimum net worth of $350,000. In addition, my (our) investment in CCIT does not exceed ten percent (10%) of my (our) net worth. | |
| | 11. For North Dakota residents: My (our) liquid net worth is at least ten (10) times my (our) investment in CCIT and its affiliates. |
D-3
E INVESTOR(S) SIGNATURES (continued)
SUBSTITUTE W-9: I HEREBY CERTIFY under penalty of perjury (i) that the taxpayer identification number shown on this Initial Subscription Agreement is true, correct and complete, (ii) that I am not subject to backup withholding either because I have not been notified that I am subject to backup withholding as a result of a failure to report all interest or distributions, or the Internal Revenue Service has notified me that I am no longer subject to backup withholding, and (iii) I am a U.S. person.
You should not invest in a Cole REIT unless you have read and understood this agreement and the applicable Prospectuses referred to above and understand the risks associated with an investment in the Cole REIT. In deciding to invest in a Cole REIT, you should rely only on the information contained in the Prospectuses, and not on any other information or representations from any other person or source. Each Cole REIT and each person selling shares of its common stock shall be responsible for making every reasonable effort to determine that such purchase of shares is a suitable and appropriate investment for each investor, based on the information provided by the prospective investor regarding the investors financial situation and investment objectives.
A sale of the shares may not be completed until at least five business days after the date the subscriber receives the final Prospectus. If a subscribers subscription is accepted, Cole REIT will send the subscriber confirmation of their purchase after they have been admitted as an investor.
Notice is hereby given to each investor that by executing this agreement you are not waiving any rights you may have under the Securities Act of 1933, as amended, or any state securities laws.
|
| |
Investors Signature Date |
Custodian Signature Date | |
|
||
Co-Investors Signature Date |
F FINANCIAL ADVISOR INFORMATION (please complete A or B)
A) REGISTERED REPRESENTATIVE (to be completed by selling Registered Representative) | ||||||||||
1. |
|
2. |
| |||||||
Name of Registered Representative | Name of Broker-Dealer | |||||||||
|
| |||||||||
Representative ID # | Representative CRD #
| |||||||||
|
Have you changed firm affiliation (since last purchase)? ¨ Yes ¨ No ¨ Please check the box if the purchase is being made in the Registered Representatives or Broker-Dealers personal account, in the account of one of their immediate family members or in the account of any licensed employee of the Broker-Dealer. IF THE BOX IS CHECKED, COMMISSIONS WILL NOT BE PAID ON THE PURCHASE. | |||||||||
Mailing Address
|
||||||||||
City | State | Zip | ||||||||
|
||||||||||
Phone | Email Address |
B) REGISTERED INVESTMENT ADVISOR (RIA) REPRESENTATIVE (to be completed by selling RIA Representative) | ||||||||||
1. |
|
2. |
| |||||||
Name of RIA Representative | Name of RIA Office | |||||||||
|
SEC Registered RIA ¨ Yes ¨ No | |||||||||
Mailing Address | State Registered RIA ¨ Yes ¨ No | |||||||||
|
States Registered | |||||||||
City | State | Zip | ||||||||
|
| |||||||||
Phone | Email Address | RIA IARD # | ||||||||
Have you changed firm affiliation (since last purchase)? |
| |||||||||
¨ Yes ¨ No | Name of Clearing Firm | |||||||||
| ||||||||||
Name of Broker-Dealer |
G REPRESENTATIVE SIGNATURES
Based on the information I obtained from the investor regarding the investors financial situation and investment objectives, I hereby certify to Cole Capital Corporation, Cole Holdings Corporation, Cole Credit Property Trust IV, Inc. and Cole Corporate Income Trust, Inc. that I have reasonable grounds for believing that the purchase of the shares by the investor in the respective Cole REIT(s) is a suitable and appropriate investment for this investor.
|
| |
Signature of Registered or RIA Representative |
Signature of Broker-Dealer or Clearing Firm/Platform |
¨ I am completing and signing this application pursuant to a power-of-attorney from the investor. I hereby certify that such power-of-attorney is legally valid and includes within its scope my completion and execution of this application on behalf of the investor.
| ||||
ONCE COMPLETE, PLEASE | Via Regular Mail: | Via Overnight/Express Mail: | ||
DELIVER THIS FORM TO: | COLE REIT | COLE REIT | ||
DST Systems, Inc. | DST Systems, Inc. | |||
Via Fax: | P.O. Box 219312 | 430 West 7th Street | ||
1.877.616.1118 | Kansas City, MO 64121-9312 | Kansas City, MO 64105 | ||
© 2012 Cole Capital Advisors, Inc. All rights reserved |
JOINT-AGMT-04(10-12) |
D-4
FOR USE WITH ALABAMA INVESTORS
COLE CREDIT PROPERTY TRUST IV, INC. |
![]() |
INITIAL SUBSCRIPTION AGREEMENT FOR THE PURCHASE OF COMMON STOCK | 866.907.2653 |
A INVESTMENT (a separate Initial Subscription Agreement is required for each initial investment)
Investors should not sign this Initial Subscription Agreement for the offering unless they have received the current final Prospectus.
1. This subscription is in the amount of $ ¨ Check if amount is estimated
¨ | Initial Subscription (minimum $2,500) |
¨ | Additional Subscription (minimum $1,000) (complete all sections except for B and D or complete the separate simplified Additional Investment Subscription Agreement) |
Existing Cole Account #
2. Payment will be made with: ¨ Enclosed check ¨ Funds wired ¨ Funds to follow
¨ ACH
¨ Checking ¨ Savings
Financial Institution
|
| |
Routing/Transit # | Account # |
3. For purchases without selling commissions, please designate below, as applicable:
¨ RIA/WRAP Account ¨ Cole Employee, Affiliate, or their Family Member
IF A BOX IS CHECKED, COMMISSIONS WILL NOT BE PAID ON THE PURCHASE.
B TYPE OF REGISTRATION (please complete either section 1 or 2, but not both, and section 3, if applicable)
1. Non-Qualified Registration | 2. Qualified Registration (make check payable to the Custodian) | |
¨ Individual (one signature required) |
¨ Traditional IRA | |
¨ Joint Tenants with Right of Survivorship (all parties must sign) |
¨ Roth IRA | |
¨ Community Property (all parties must sign) |
¨ Keogh Plan | |
¨ Tenants-in-Common (all parties must sign) |
¨ Simplified Employee Pension/Trust (S.E.P.) | |
¨ Transfer on Death (fill out TOD Form to effect designation) |
¨ Pension or Profit Sharing Plan (exempt under 401(a)) | |
¨ Uniform Gifts to Minors Act or Uniform Transfer to Minors Act (UGMA/UTMA adult custodian signature required)
State of
Custodian for (minors name) |
¨Non-custodial ¨ Custodial ¨ Other (specify)
3. Custodian or Clearing Firm/Platform Information, if applicable (send all paperwork directly to the Custodian or Clearing Firm/Platform)
Name | |
¨ Corporate (authorized signature and Corporate Resolution or Cole Corporate Resolution Form required) |
||
¨ S-corp ¨ C-corp (will default to S-corp if nothing is marked) |
||
¨ Partnership (authorized signature and Partnership paperwork or Cole Corporate Resolution Form required) |
||
¨ Limited Liability Company (authorized signature and LLC paperwork or Cole Corporate Resolution Form required) |
Street/PO Box | |
¨ Taxable Pension or Profit Sharing Plan (authorized signature and Plan paperwork required) |
City State Zip | |
¨ Trust (trustee or grantor signatures and trust documents or Cole Trustee Certification of Investment Power required) |
Custodian Tax ID # (provided by Custodian) | |
|
Custodian or Clearing Firm/Platform Account # | |
Type of Trust: (Specify i.e., Family, Living, Revocable, etc.)
|
||
Name of Trust
|
||
Date of Trust Tax ID # (if applicable) |
||
¨ Other (specify)
|
E-1
C REGISTRATION INFORMATION (or Trustees if applicable)
Investor Name |
Co-Investor Name (if applicable) | |
Mailing Address |
Mailing Address | |
City State Zip |
City State Zip | |
Phone Business Phone |
Phone Business Phone | |
Email Address |
SSN or Tax ID Date of Birth | |
SSN or Tax ID Date of Birth |
||
Street Address (if different from mailing address or mailing address is a PO Box)
|
||
City State Zip |
Volume Discounts
I (we) are making, or previously have made, investments in the following Cole-sponsored programs that are Eligible Programs, as defined in a Cole REIT Prospectus. (You may only include any investments made by the same purchaser, as defined in the Prospectus.) This information will help determine whether volume discounts may be applicable. All holdings are subject to verification.
Name of Cole Program
|
Cole Account #
|
SSN or Tax ID
| ||||||
Name of Cole Program |
Cole Account # | SSN or Tax ID |
D DISTRIBUTION INSTRUCTIONS (will default to Custodian or Clearing Firm/Platform or Address of Record if nothing is marked)
FOR CUSTODIAL OR CLEARING FIRM/PLATFORM ACCOUNTS:
¨ Custodian or Clearing Firm/Platform of Record
¨ Reinvest pursuant to Distribution Reinvestment Plan
FOR NON-CUSTODIAL OR NON-CLEARING FIRM/PLATFORM ACCOUNTS:
¨ Mail to Address of Record
¨ Reinvest pursuant to Distribution Reinvestment Plan
¨ Direct Deposit
|
¨ Checking ¨ Savings | |
Financial Institution
|
||
Routing/Transit # |
Account # | |
¨ Check if banking information is same as provided in Section A-2 |
||
¨ Mail to Brokerage Account or Third Party
|
||
Payee Name
|
Mailing Address | |
Account # |
City State Zip |
By signing this agreement, I authorize Cole Credit Property Trust IV, Inc. (CCPT IV) to deposit distributions into the account specified in Section D, and to debit that account in the amount of any distribution deposited in error. If I withdraw deposits made in error, I authorize CCPT IV to retain future distributions until the erroneous deposits are recovered. This authorization is effective until terminated in writing by either party.
E-2
E INVESTOR(S) ACKNOWLEDGEMENTS AND SIGNATURE (Investor(s) must initial each of sections 1-5)
I (we) (or, in the case of fiduciary accounts, the person authorized to sign on my (our) behalf) hereby acknowledge and/or represent the following:
INVESTOR | CO-INVESTOR
| | 1. I (we) have received the final Prospectus, whether over the Internet, on a CD-ROM, paper copies, or any other delivery method, relating to the shares of CCPT IV at least five business days before signing this Subscription Agreement. |
| | 2. Excluding home, home furnishings and automobiles, I (we) either: (i) have a net worth of at least $70,000 and had during the last year or estimate that I (we) will have in the current year gross income of at least $70,000; or (ii) have a net worth of at least $250,000. In the case of sales to fiduciary accounts, the specific requirements shall be met by the beneficiary, the fiduciary account or by the donor or grantor who directly or indirectly supplies the funds for the purchase of the shares. |
| | 3. I am (we are) purchasing the shares for my (our) own account, or if I am (we are) purchasing shares on behalf of a trust or other entity of which I am (we are) trustee(s) or authorized agent(s), I (we) have due authority to execute this Initial Subscription Agreement and do hereby legally bind the trust or other entity of which I am (we are) trustee(s) or authorized agent(s). |
| | 4. I (we) acknowledge that the shares are not liquid. |
| | 5. My (our) liquid net worth is at least ten (10) times my (our) investment in this and similar programs. |
¨ By checking here I confirm I would like to go green and not receive in paper any documents that Cole can send to me electronically. (If you are choosing to go green, please make sure you provide your email address in Section C. If you decide later that you want to receive documents in paper, you can contact Cole Investor Services at 866.907.2653.)
SUBSTITUTE W-9: I HEREBY CERTIFY under penalty of perjury (i) that the taxpayer identification number shown on this Initial Subscription Agreement is true, correct and complete, (ii) that I am not subject to backup withholding either because I have not been notified that I am subject to backup withholding as a result of a failure to report all interest or distributions, or the Internal Revenue Service has notified me that I am no longer subject to backup withholding, and (iii) I am a U.S. person. |
You should not invest in CCPT IV unless you have read and understood this agreement and the Prospectus referred to above and understand the risks associated with an investment in CCPT IV. In deciding to invest in CCPT IV, you should rely only on the information contained in the Prospectus, and not on any other information or representations from any other person or source. CCPT IV and each person selling shares of CCPT IV common stock shall be responsible for making every reasonable effort to determine that such purchase of shares is a suitable and appropriate investment for each investor, based on the information provided by the prospective investor regarding the investors financial situation and investment objectives.
A sale of the shares may not be completed until at least five business days after the date the subscriber receives the final Prospectus. If a subscribers subscription is accepted, CCPT IV will send the subscriber confirmation of their purchase after they have been admitted as an investor.
Notice is hereby given to each investor that by executing this agreement you are not waiving any rights you may have under the Securities Act of 1933, as amended, or any state securities laws.
Investors Signature
|
Date
|
Custodian Signature | Date | |||||
Co-Investors Signature |
Date |
E-3
F FINANCIAL ADVISOR INFORMATION (please complete A or B)
A) REGISTERED REPRESENTATIVE (to be completed by selling Registered Representative) | ||||||
1. |
|
2. |
| |||
Name of Registered Representative |
Name of Broker-Dealer | |||||
Representative ID # |
Representative CRD ID # | |||||
Mailing Address |
Have you changed firm affiliation (since last purchase)? ¨ Yes ¨ No | |||||
City State Zip |
||||||
Phone Email Address |
||||||
¨ Please check the box if the purchase is being made in the Registered Representatives or Broker-Dealers personal account, in the account of one of their immediate family members or in the account of any licensed employee of the Broker-Dealer. IF THE BOX IS CHECKED, COMMISSIONS WILL NOT BE PAID ON THE PURCHASE. | ||||||
B) REGISTERED INVESTMENT ADVISOR REPRESENTATIVE (to be completed by selling RIA Representative) | ||||||
1. |
|
2. |
| |||
Name of Registered Representative |
Name of RIA Office | |||||
|
SEC Registered ¨ Yes ¨ No | |||||
Mailing Address |
State Registered ¨ Yes ¨ No | |||||
States Registered | ||||||
City State Zip |
||||||
Phone Email Address |
RIA IARD ID # | |||||
Have you changed firm affiliation (since last purchase)? ¨ Yes ¨ No |
Name of Clearing Firm | |||||
Name of Broker-Dealer |
G REPRESENTATIVE SIGNATURES
Based on the information I obtained from the investor regarding the investors financial situation and investment objectives, I hereby certify to Cole Capital Corporation, Cole Holdings Corporation and Cole Credit Property Trust IV, Inc. that I have reasonable grounds for believing that the purchase of the shares by the investor in CCPT IV is a suitable and appropriate investment for this investor.
Signature of Registered or RIA Representative |
Signature of Broker-Dealer or Clearing Firm/Platform |
ONCE COMPLETE, PLEASE |
Via Regular Mail: | Via Overnight/Express Mail: | ||
DELIVER THIS FORM TO: |
CCPT IV | CCPT IV | ||
DST Systems, Inc. | DST Systems, Inc. | |||
Via Fax: |
P.O. Box 219312 | 430 West 7th Street | ||
1.877.616.1118 |
Kansas City, MO 64121-9312 | Kansas City, MO 64105 |
© 2012 Cole Capital Advisors, Inc. All rights reserved | CCPT4-AGMT-AL-02(10-12) |
E-4
FOR USE WITH ALABAMA INVESTORS
COLE CREDIT PROPERTY TRUST IV, INC. |
![]() |
ADDITIONAL SUBSCRIPTION AGREEMENT FOR THE PURCHASE OF COMMON STOCK | 866.907.2653 |
This form may be used by any current investor in Cole Credit Property Trust IV, Inc. (CCPT IV), who desires to purchase additional shares of CCPT IV and who purchased their shares directly from CCPT IV. Investors who acquired shares other than through use of an Initial Subscription Agreement (e.g., through a transfer of ownership or TOD) and who wish to make additional investments must complete the CCPT IV Initial Subscription Agreement.
A INVESTMENT (a completed Additional Subscription Agreement is required for each additional investment)
1. This subscription is in the amount of $ (minimum $1,000)
¨ Check if amount is estimated
2. Payment will be made with: ¨ Enclosed check ¨ Funds wired ¨ Funds to follow
¨ ACH
|
¨ Checking | ¨ Savings | ||
Financial Institution |
||||
Routing/Transit # |
Account # |
B REGISTRATION INFORMATION
Existing Cole Account Registration (name of Account) |
SSN or Tax ID # | |
Existing Cole Account # |
Volume Discounts
I (we) are making, or previously have made, investments in the following Cole-sponsored programs that are Eligible Programs, as defined in a Cole REIT Prospectus. (You may include any investments made by the same purchaser, as defined in the Prospectus.) This information will help determine whether volume discounts may be applicable. All holdings are subject to verification.
Name of Cole Program |
Cole Account # | SSN or Tax ID |
Name of Cole Program |
Cole Account # | SSN or Tax ID |
C INVESTOR(S) SIGNATURES (Investor(s) must initial each of sections 1-5)
I (we) (or, in the case of fiduciary accounts, the person authorized to sign on my (our) behalf) hereby acknowledge and/or represent the following:
INVESTOR | CO-INVESTOR
| | 1. I (we) have received the final Prospectus, whether over the Internet, on a CD-ROM, paper copies, or any other delivery method, relating to the shares of CCPT IV at least five business days before signing this Subscription Agreement. | |
| | 2. Excluding home, home furnishings and automobiles, I (we) either: (i) have a net worth of at least $70,000 and had during the last year or estimate that I (we) will have in the current year gross income of at least $70,000; or (ii) have a net worth of at least $250,000. In the case of sales to fiduciary accounts, the specific requirements shall be met by the beneficiary, the fiduciary account or by the donor or grantor who directly or indirectly supplies the funds for the purchase of the shares. | |
| | 3. I am (we are) purchasing the shares for my (our) own account, or if I am (we are) purchasing shares on behalf of a trust or other entity of which I am (we are) trustee(s) or authorized agent(s), I (we) have due authority to execute this Subscription Agreement and do hereby legally bind the trust or other entity of which I am (we are) trustee(s) or authorized agent(s). | |
| | 4. I (we) acknowledge that the shares are not liquid. | |
| | 5. My (our) liquid net worth is at least ten (10) times my (our) investment in this and similar programs. |
F-1
¨ By checking here I confirm I would like to go green and no longer receive in paper any documents that Cole can send to me electronically. If I decide later that I want to receive documents in paper, I can contact Cole Investor Services at 866.907.2653.
If you are choosing to go green, please provide your email address here:
SUBSTITUTE W-9: I HEREBY CERTIFY under penalty of perjury (i) that the taxpayer identification number shown on this Subscription Agreement is true, correct and complete, (ii) that I am not subject to backup withholding either because I have not been notified that I am subject to backup withholding as a result of a failure to report all interest or distributions, or the Internal Revenue Service has notified me that I am no longer subject to backup withholding, and (iii) I am a U.S. person.
You should not invest in CCPT IV unless you have read and understood this agreement and the Prospectus referred to above and understand the risks associated with an investment in CCPT IV. In deciding to invest in CCPT IV, you should rely only on the information contained in the Prospectus, and not on any other information or representations from any other person or source. CCPT IV and each person selling shares of CCPT IV common stock shall be responsible for making every reasonable effort to determine that such purchase of shares is a suitable and appropriate investment for each investor, based on the information provided by the prospective investor regarding the investors financial situation and investment objectives.
A sale of the shares may not be completed until at least five (5) business days after the date the subscriber receives the final Prospectus. If a subscribers subscription is accepted, CCPT IV will send the subscriber confirmation of their purchase after they have been admitted as an investor.
Notice is hereby given to each investor that by executing this agreement you are not waiving any rights you may have under the Securities Act of 1933, as amended, or any state securities laws.
Investors Signature
|
Date
|
Custodial Signature | Date | |||||
Co-Investors Signature | Date |
D REGISTERED REPRESENTATIVE (to be completed by selling Registered Representative)
Name of Registered Representative | Rep and Branch ID # |
E REGISTERED INVESTMENT ADVISOR (RIA) REPRESENTATIVE (to be completed by selling RIA Representative)
Name of RIA Representative | RIA IARD ID # |
F REPRESENTATIVE SIGNATURES
Based on the information I obtained from the investor regarding the investors financial situation and investment objectives, I hereby certify to Cole Capital Corporation, Cole Holdings Corporation and CCPT IV that I have reasonable grounds for believing that the purchase of the shares by the investor in CCPT IV is a suitable and appropriate investment for this investor.
Signature of Registered or RIA Representative | Signature of Broker-Dealer or Clearing Firm/Platform |
ONCE COMPLETE, PLEASE | Via Regular Mail: | Via Overnight/Express Mail: | ||
DELIVER THIS FORM TO: | CCPT IV | CCPT IV | ||
DST Systems, Inc. | DST Systems, Inc. | |||
Via Fax: | P.O. Box 219312 | 430 West 7th Street | ||
1.877.616.1118 | Kansas City, MO 64121-9312 | Kansas City, MO 64105 |
© 2012 Cole Capital Advisors, Inc. All rights reserved |
CCPT IV-AI-AGMT-AL-02(07-12) |
F-2
NOT FOR USE IN ALABAMA, ARKANSAS, PENNSYLVANIA, SOUTH CAROLINA OR TENNESSEE
COLE CREDIT PROPERTY TRUST IV, INC. COLE CORPORATE INCOME TRUST, INC. |
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ADDITIONAL SUBSCRIPTION AGREEMENT FOR THE PURCHASE OF COMMON STOCK | 866.907.2653 |
This form may be used by any current investor in Cole Credit Property Trust IV, Inc. (CCPT IV) and/or Cole Corporate Income Trust, Inc. (CCIT), who desires to purchase additional shares of CCPT IV and/or CCIT and who purchased their shares directly from CCPT IV and/or CCIT. Investors who acquired shares other than through use of an Initial Subscription Agreement (e.g., through a transfer of ownership or TOD) and who wish to make additional investments must complete the CCPT IV Initial Subscription Agreement, CCIT Initial Subscription Agreement or the CCPT IV / CCIT Joint Initial Subscription Agreement.
A INVESTMENT (A completed Additional Subscription Agreement is required for each additional investment)
1. | This subscription is in the amount(s) and for the Cole Real Estate Investment Trust(s) (Cole REIT(s)) listed below. Investors should not sign this Additional Subscription Agreement for either offering unless they have received the current final Prospectuses for BOTH offerings. |
a. | $ COLE CREDIT PROPERTY TRUST IV, INC. (minimum $1,000) | ¨ | Check if amount is estimated | |||||
b. | $ COLE CORPORATE INCOME TRUST, INC. (minimum $1,000) | ¨ | Check if amount is estimated |
2. | Payment will be made with: ¨ Enclosed check ¨ Funds wired ¨ Funds to follow |
¨ ACH
|
¨ Checking | ¨ Savings | ||
Financial Institution |
||||
Routing/Transit # |
Account # |
B REGISTRATION INFORMATION
Existing Cole Account Registration (name of Account) |
SSN or Tax ID # | |
Existing Cole Account # |
Volume Discounts
I (we) are making, or previously have made, investments in the following Cole-sponsored programs that are Eligible Programs, as defined in a Cole REIT Prospectus. (You may only include any investments made by the same purchaser, as defined in the Prospectus.) This information will help determine whether volume discounts may be applicable. All holdings are subject to verification.
Name of Cole Program |
Cole Account # | SSN or Tax ID |
Name of Cole Program |
Cole Account # | SSN or Tax ID |
C INVESTOR(S) SIGNATURES (Investor(s) must initial each of sections 1-4 and any other applicable sections)
I (we) (or, in the case of fiduciary accounts, the person authorized to sign on my (our) behalf) hereby acknowledge and/or represent the following:
For Investors in Either or Both Offerings:
INVESTOR | CO-INVESTOR
| | 1. I (we) have received the final Prospectuses, whether over the Internet, on a CD-ROM, paper copies, or any other delivery method, relating to the shares of Cole Credit Property Trust IV, Inc. (CCPT IV) and Cole Corporate Income Trust, Inc. (CCIT). | |
| | 2. Excluding home, home furnishings and automobiles, I (we) either: (i) have a net worth of at least $70,000 and had during the last year or estimate that I (we) will have in the current year gross income of at least $70,000; or (ii) have a net worth of at least $250,000. In the case of sales to fiduciary accounts, the specific requirements shall be met by the beneficiary, the fiduciary account or by the donor or grantor who directly or indirectly supplies the funds for the purchase of the shares. | |
| | 3. I am (we are) purchasing the shares for my (our) own account, or if I am (we are) purchasing shares on behalf of a trust or other entity of which I am (we are) trustee(s) or authorized agent(s), I (we) have due authority to execute this Initial Subscription Agreement and do hereby legally bind the trust or other entity of which I am (we are) trustee(s) or authorized agent(s). | |
| | 4. I (we) acknowledge that the shares are not liquid. |
G-1
For Investors in Cole Credit Property Trust IV, Inc.
INVESTOR | CO-INVESTOR
| | 5. For California residents: I (we) either: (i) have a net worth of at least $250,000; or (ii) have a net worth of at least $75,000 and had during the last year or estimate that I (we) will have in the current year gross income of at least $75,000. In addition, my (our) investment in CCPT IV does not exceed ten percent (10%) of my (our) net worth. | |
| | 6. For Iowa and New Mexico residents: My (our) aggregate investment in CCPT IV and its affiliates does not exceed ten percent (10%) of my (our) liquid net worth. | |
| | 7. For Kansas and Massachusetts residents: I (we) acknowledge that the Kansas and Massachusetts securities regulators recommend that I (we) should invest, in the aggregate, no more than ten percent (10%) of my (our) liquid net worth (as defined in the Prospectus for Kansas and Massachusetts investors) in CCPT IV and the securities of similar direct participation programs. | |
| | 8. For Kentucky, Michigan, and Oregon residents: My (our) liquid net worth is at least ten (10) times my (our) maximum investment in CCPT IV. | |
| | 9. For Maine residents: My (our) investment in CCPT IV and its affiliates does not exceed ten percent (10%) of my (our) net worth. | |
| | 10. For Nebraska residents: Excluding home, furnishings and automobiles, I (we) either: (i) have a minimum net worth of $100,000 and an annual income of $70,000, or (ii) have a minimum net worth of $350,000. In addition, my (our) investment in CCPT IV does not exceed ten percent (10%) of my (our) net worth. | |
| | 11. For North Dakota residents: My (our) liquid net worth is at least ten (10) times my (our) investment in CCPT IV and its affiliates. | |
| | 12. For Ohio residents: My (our) aggregate investment in CCPT IV, its affiliates and other non-traded real estate investment programs does not exceed ten percent (10%) of my (our) liquid net worth (as defined in the Prospectus for Ohio investors). |
For Investors in Cole Corporate Income Trust, Inc.
INVESTOR | CO-INVESTOR
| | 5. For California residents: I (we) either: (i) have a net worth of at least $250,000; or (ii) have a net worth of at least $75,000 and had during the last year or estimate that I (we) will have in the current year gross income of at least $75,000. In addition, my (our) investment in CCIT does not exceed ten percent (10%) of my (our) net worth. | |
| | 6. For Iowa and Ohio residents: My (our) investment in CCIT and its affiliates does not exceed ten percent (10%) of my (our) liquid net worth. | |
| | 7. For Kansas and Massachusetts residents: I (we) acknowledge that the Kansas and Massachusetts securities regulators recommend that I (we) should invest, in the aggregate, no more than ten percent (10%) of my (our) liquid net worth (as defined in the Prospectus for Kansas and Massachusetts investors) in CCIT and the securities of similar direct participation programs. | |
| | 8. For Kentucky, Michigan, and Oregon residents: My (our) liquid net worth is at least ten (10) times my (our) maximum investment in CCIT. | |
| | 9. For Maine residents: I (we) either: (i) have a net worth of at least $250,000, or (ii) have an annual gross income of at least $70,000 and a minimum net worth of $70,000. In addition, my (our) investment in CCIT and its affiliates does not exceed ten percent (10%) of my (our) net worth. | |
| | 10. For Nebraska residents: Excluding home, furnishings and automobiles, I (we) either: (i) have a minimum net worth of $100,000 and an annual income of $70,000, or (ii) have a minimum net worth of $350,000. In addition, my (our) investment in CCIT does not exceed ten percent (10%) of my (our) net worth. | |
| | 11. For North Dakota residents: My (our) liquid net worth is at least ten (10) times my (our) investment in CCIT and its affiliates. |
¨ By checking here I confirm I would like to go green and no longer receive in paper any documents that Cole can send to me electronically. (If you decide later that you want to receive documents in paper, you can contact Cole Investor Services at 866.907.2653.)
If you are choosing to go green, please provide your email address here:
SUBSTITUTE W-9: I HEREBY CERTIFY under penalty of perjury (i) that the taxpayer identification number shown on this Initial Subscription Agreement is true, correct and complete, (ii) that I am not subject to backup withholding either because I have not been notified that I am subject to backup withholding as a result of a failure to report all interest or distributions, or the Internal Revenue Service has notified me that I am no longer subject to backup withholding, and (iii) I am a U.S. person.
You should not invest in a Cole REIT unless you have read and understood this agreement and the applicable Prospectuses referred to above and understand the risks associated with an investment in the Cole REIT. In deciding to invest in a Cole REIT, you should rely only on the information contained in the Prospectuses, and not on any other information or representations from any other person or source. Each Cole REIT and each person selling shares of its common stock shall be responsible for making every reasonable effort to determine that such purchase of shares is a suitable and appropriate investment for each investor, based on the information provided by the prospective investor regarding the investors financial situation and investment objectives.
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A sale of the shares may not be completed until at least five business days after the date the subscriber receives the final Prospectus. If a subscribers subscription is accepted, Cole REIT will send the subscriber confirmation of their purchase after they have been admitted as an investor.
Notice is hereby given to each investor that by executing this agreement you are not waiving any rights you may have under the Securities Act of 1933, as amended, or any state securities laws.
Investors Signature
|
Date
|
Custodian Signature | Date | |||||
Co-Investors Signature | Date |
D FINANCIAL ADVISOR INFORMATION (please complete A or B)
A) REGISTERED REPRESENTATIVE (to be completed by selling Registered Representative)
Name of Registered Representative | Rep and Branch ID # |
B) REGISTERED INVESTMENT ADVISOR (RIA) REPRESENTATIVE (to be completed by RIA Representative)
Name of RIA Representative | RIA IARD ID # |
E REPRESENTATIVE SIGNATURES
Based on the information I obtained from the investor regarding the investors financial situation and investment objectives, I hereby certify to Cole Capital Corporation, Cole Real Estate Investments, Cole Credit Property Trust IV, Inc. and Cole Corporate Income Trust, Inc. that I have reasonable grounds for believing that the purchase of the shares by the investor in the respective Cole REIT(s) is a suitable and appropriate investment for this investor.
Signature of Registered or RIA Representative | Signature of Broker-Dealer or Clearing Firm/Platform |
¨ I am completing and signing this application pursuant to a power-of-attorney from the investor. I hereby certify that such power-of-attorney is legally valid and includes within its scope my completion and execution of this application on behalf of the investor.
ONCE COMPLETE, PLEASE | Via Regular Mail: | Via Overnight/Express Mail: | ||
DELIVER THIS FORM TO: | COLE REIT | COLE REIT | ||
DST Systems, Inc. | DST Systems, Inc. | |||
Via Fax: | P.O. Box 219312 | 430 West 7th Street | ||
1.877.616.1118 | Kansas City, MO 64121-9312 | Kansas City, MO 64105 |
© 2013 Cole Capital Advisors, Inc. All rights reserved |
JOINT-AI-01 (1-13) |
G-3
DISTRIBUTION REINVESTMENT PLAN
COLE CREDIT PROPERTY TRUST IV, INC.
EFFECTIVE AS OF JANUARY 20, 2012
AS AMENDED EFFECTIVE JULY 16, 2012
Cole Credit Property Trust IV, Inc., a Maryland corporation (the Company), has adopted this Distribution Reinvestment Plan (the Plan), to be administered by the Company or an unaffiliated third party (the Administrator) as agent for participants in the Plan (Participants), on the terms and conditions set forth below.
1. Election to Participate. Any holder of shares of common stock of the Company, par value $.01 per share (the Shares), and, subject to Section 8(b) herein, any participant in any previous or subsequent publicly offered limited partnership, real estate investment trust or other real estate program sponsored by an affiliate of Cole REIT Advisors IV, LLC, the Companys advisor (an Affiliated Program), may become a Participant in the Plan by making a written election to participate in the Plan on such purchasers subscription agreement at the time of subscription for Shares or by completing and executing an authorization form obtained from the Administrator or any other appropriate documentation as may be acceptable to the Administrator. Participants in the Plan generally are required to have the full amount of their cash distributions (other than Excluded Distributions as defined below) with respect to all Shares or shares of stock or units of limited partnership interest of an Affiliated Program (collectively, Securities) owned by them reinvested pursuant to the Plan. However, the Administrator shall have the sole discretion, upon the request of a Participant, to accommodate a Participants request for less than all of the Participants Securities to be subject to participation in the Plan.
2. Distribution Reinvestment. The Administrator will receive all cash distributions (other than Excluded Distributions) paid by the Company or an Affiliated Program with respect to Securities of Participants (collectively, the Distributions). Participation will commence with the next Distribution payment after receipt of the Participants election pursuant to Paragraph 1 hereof, provided it is received on or prior to the last day of the period to which such Distribution relates. The election will apply to all Distributions attributable to such period and to all periods thereafter, unless and until termination of participation in the Plan, in accordance with Section 9. As used in this Plan, the term Excluded Distributions shall mean those cash or other distributions designated as Excluded Distributions by the Companys board of directors (the Board) or the board or general partner of an Affiliated Program, as applicable. A written election to participate must be received by the Administrator prior to the last business day of the month, in order to become a Plan Participant with respect to that months Distributions. If the period for Distribution payments shall be changed, then this paragraph shall also be changed, without the need for advance notice to Participants.
3. General Terms of Plan Investments.
The Administrator will apply all Distributions subject to this Plan, as follows:
(a) During the Companys public offering (the Offering) of Shares pursuant to the Companys registration statement on Form S-11 (File No. 333-169533 as amended or supplemented (the Registration Statement), and until such time as the Board determines a reasonable estimate of the value of the Shares, the Administrator will invest Distributions in Shares at a price equal to $9.50 less the aggregate distributions per Share of any net sale proceeds from the sale of one or more of the Companys assets, or other special distributions so designated by the Board, distributed to stockholders, regardless of the price per Share paid by the Participant for the Shares in respect of which the Distributions are paid. On or after the date the Board determines a reasonable estimate of the value of the Shares (the Initial Board Valuation) under the Companys valuation policy, as such valuation policy is amended from time to time (the Valuation Policy), the Administrator will invest Distributions in Shares at a price equal to the most recently disclosed
H-1
estimated value as determined in accordance with the Valuation Policy less the aggregate distributions per Share of any net sale proceeds from the sale of one or more of the Companys assets, or other special distributions so designated by the Board, distributed to stockholders. No advance notice of pricing pursuant to this Paragraph 3(a) shall be required other than to the extent the issue is a material event requiring the public filing of a Form 8-K.
(b) After termination of the Registration Statement, the Administrator will invest Distributions in Shares that are registered with the Securities and Exchange Commission (the Commission) pursuant to an effective registration statement for Shares for use in the Plan (a Future Registration). No advance notice of pricing pursuant to this Paragraph 3(b) shall be required other than to the extent the issue is a material event requiring the public filing of a Form 8-K.
(c) Selling commissions will not be paid for the Shares purchased pursuant to the Plan.
(d) Dealer manager fees will not be paid for the Shares purchased pursuant to the Plan.
(e) For each Participant, the Administrator will maintain an account which shall reflect for each period in which Distributions are paid (a Distribution Period) the Distributions received by the Administrator on behalf of such Participant. A Participants account shall be reduced as purchases of Shares are made on behalf of such Participant.
(f) Distributions shall be invested in Shares by the Administrator promptly following the payment date with respect to such Distributions to the extent Shares are available for purchase under the Plan. If sufficient Shares are not available, any such funds that have not been invested in Shares within 30 days after receipt by the Administrator and, in any event, by the end of the fiscal quarter in which they are received, will be distributed to Participants. Any interest earned on such accounts will be returned to the respective Participant.
(g) Participants may acquire fractional Shares, computed to three decimal places, so that 100% of the Distributions will be used to acquire Shares. The ownership of the Shares shall be reflected on the books of the Company or its transfer agent.
(h) A Participant will not be able to acquire Shares under the Plan to the extent that such purchase would cause the Participant to exceed the ownership limits set forth in the Companys charter, as amended, unless exempted by the Board.
4. Absence of Liability. Neither the Company nor the Administrator shall have any responsibility or liability as to the value of the Shares or any change in the value of the Shares acquired for the Participants account. Neither the Company nor the Administrator shall be liable for any act done in good faith, or for any good faith omission to act hereunder.
5. [intentionally omitted]
6. Reports to Participants. Within ninety (90) days after the end of each calendar year, the Administrator will mail to each Participant a statement of account describing, as to such Participant, the Distributions received, the number of Shares purchased and the per Share purchase price for such Shares pursuant to the Plan during the prior year. Each statement also shall advise the Participant that, in accordance with Section 5 hereof, the Participant is required to notify the Administrator in the event there is any material change in the Participants financial condition or if any representation made by the Participant under the subscription agreement for the Participants initial purchase of Securities becomes inaccurate. Tax information regarding a Participants participation in the Plan will be sent to each Participant by the Company or the Administrator at least annually.
7. Taxes. Taxable Participants may incur a tax liability for Distributions even though they have elected not to receive their Distributions in cash but rather to have their Distributions reinvested in Shares under the Plan.
H-2
8. Reinvestment in Subsequent Programs.
(a) After the termination of the Companys Offering of Shares pursuant to the Registration Statement, as may be amended or supplemented, the Company may determine, in its sole discretion, to cause the Administrator to provide to each Participant notice of the opportunity to have some or all of such Participants Distributions (at the discretion of the Administrator and, if applicable, the Participant) invested through the Plan in any publicly offered Affiliated Program (a Subsequent Program). If the Company makes such an election, Participants may invest Distributions in equity securities issued by such Subsequent Program through the Plan only if the following conditions are satisfied:
(i) prior to the time of such reinvestment, the Participant has received the final prospectus and any supplements thereto offering interests in the Subsequent Program and such prospectus allows investment pursuant to a distribution reinvestment plan;
(ii) a registration statement covering the interests in the Subsequent Program has been declared effective under the Securities Act of 1933, as amended;
(iii) the offering and sale of such interests are qualified for sale under the applicable state securities laws;
(iv) the Participant executes the subscription agreement included with the prospectus for the Subsequent Program; and
(v) the Participant qualifies under applicable investor suitability standards as contained in the prospectus for the Subsequent Program.
(b) The Company may determine, in its sole discretion, to cause the Administrator to allow one or more participants of an Affiliated Program to become a Participant. If the Company makes such an election, such Participants may invest distributions received from the Affiliated Program in Shares through this Plan, if the following conditions are satisfied:
(i) prior to the time of such reinvestment, the Participant has received the final prospectus and any supplements thereto offering interests in the Plan and such prospectus allows investment pursuant to the Plan;
(ii) a registration statement covering the interests in the Plan has been declared effective under the Securities Act of 1933, as amended;
(iii) the offering and sale of such interests are qualified for sale under the applicable state securities laws;
(iv) the Participant executes the subscription agreement included with the prospectus for the Plan; and
(v) the Participant qualifies under applicable investor suitability standards as contained in the prospectus for the Plan.
9. Termination.
(a) A Participant may terminate or modify his participation in the Plan at any time by written notice to the Administrator. To be effective for any Distribution, such notice must be received by the Administrator on or prior to the last day of the Distribution Period to which it relates.
(b) As the Distribution Period is presently monthly, a written election to terminate must be received by the Administrator prior to the last business day of the month, in order to terminate participation in the Plan for that month. If the period for Distribution payments shall be changed, then this paragraph shall also be changed, without the need for advance notice to Participants.
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(c) A Participants transfer of Shares will terminate participation in the Plan with respect to such transferred Shares as of the first day of the Distribution Period in which such transfer is effective, unless the transferee of such Shares in connection with such transfer demonstrates to the Administrator that such transferee meets the requirements for participation hereunder and affirmatively elects participation by delivering an executed authorization form or other instrument required by the Administrator.
(d) In the event that a Participant requests a redemption of all of the Participants Shares, the Participant will be deemed to have given written notice to the Administrator, at the time the redemption request is submitted, that the Participant is terminating his or her participation in the Plan, and is electing to receive all future distributions in cash. This election will continue in effect even if less than all of the Participants Shares are redeemed unless the Participant notifies the Administrator that he or she elects to resume participation in the Plan.
10. State Regulatory Restrictions. The Administrator is authorized to deny participation in the Plan to residents of any state or foreign jurisdiction that imposes restrictions on participation in the Plan that conflict with the general terms and provisions of this Plan, including, without limitation, any general prohibition on the payment of broker-dealer commissions for purchases under the Plan.
11. Amendment or Termination by Company.
(a) The terms and conditions of this Plan may be amended by the Company at any time, including but not limited to an amendment to the Plan to substitute a new Administrator to act as agent for the Participants, by mailing an appropriate notice at least ten (10) days prior to the effective date thereof to each Participant, provided, however, the Company may not amend the Plan to (a) provide for selling commissions or dealer manager fees to be paid for shares purchased pursuant to this Plan or (b) to revoke a Participants right to terminate or modify his participation in the Plan.
(b) The Administrator may terminate a Participants individual participation in the Plan and the Company may terminate the Plan itself, at any time by providing ten (10) days prior written notice to a Participant, or to all Participants, as the case may be.
(c) After termination of the Plan or termination of a Participants participation in the Plan, the Administrator will send to each Participant a check for the amount of any Distributions in the Participants account that have not been invested in Shares. Any future Distributions with respect to such former Participants Shares made after the effective date of the termination of the Participants participation will be sent directly to the former Participant.
12. Participation by Limited Partners of Cole Corporate Income Partnership, LP. For purposes of this Plan, stockholders shall be deemed to include limited partners of Cole Corporate Income Operating Partnership, LP (the Partnership), Participants shall be deemed to include limited partners of the Partnership that elect to participate in the Plan, and Distribution, when used with respect to a limited partner of the Partnership, shall mean cash distributions on limited partnership interests held by such limited partner.
13. Governing Law. This Plan and the Participants election to participate in the Plan shall be governed by the laws of the State of Maryland.
14. Notice. Any notice or other communication required or permitted to be given by any provision of this Plan shall be in writing and, if to the Administrator, addressed to Investor Services Department, 2325 East Camelback Road, Suite 1100, Phoenix, Arizona 85016, or such other address as may be specified by the Administrator by written notice to all Participants. Notices to a Participant may be given by letter addressed to the Participant at the Participants last address of record with the Administrator. Each Participant shall notify the Administrator promptly in writing of any changes of address.
H-4
Cole Credit Property Trust IV, Inc.
Prospectus
Up to 300,000,000 Shares of Common Stock
Offered to the Public
ALPHABETICAL INDEX |
Page | |||
61 | ||||
87 | ||||
138 | ||||
62 | ||||
193 | ||||
162 | ||||
192 | ||||
180 | ||||
94 | ||||
193 | ||||
65 | ||||
80 | ||||
Managements Discussion and Analysis of Financial Conditions and Results of Operations |
114 | |||
158 | ||||
186 | ||||
128 | ||||
8 | ||||
1 | ||||
26 | ||||
127 | ||||
i | ||||
154 | ||||
193 | ||||
194 |
We have not authorized any dealer, salesperson or other individual to give any information or to make any representations that are not contained in this prospectus. If any such information or statements are given or made, you should not rely upon such information or representation. This prospectus does not constitute an offer to sell any securities other than those to which this prospectus relates, or an offer to sell, or a solicitation of an offer to buy, to any person in any jurisdiction where such an offer or solicitation would be unlawful. This prospectus speaks as of the date set forth below. You should not assume that the delivery of this prospectus or that any sale made pursuant to this prospectus implies that the information contained in this prospectus will remain fully accurate and correct as of any time subsequent to the date of this prospectus.
Cole Capital Corporation
, 2013
CCPT4-PRO-03
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 31. | Other Expenses of Issuance and Distribution. |
The following table itemizes the expenses incurred by us in connection with the issuance and registration of the securities being registered hereunder. All amounts shown are estimates except the SEC registration fee and the FINRA filing fee.
SEC registration fee |
$ | 285,200 | ||
FINRA filing fee |
75,500 | |||
Printing expenses |
2,383,500 | |||
Legal fees and expenses |
1,500,000 | |||
Accounting fees and expenses |
1,500,000 | |||
Blue sky fees and expenses |
805,000 | |||
Due diligence expenses |
700,000 | |||
Literature |
7,356,500 | |||
Advertising and sales expenses |
9,486,382 | |||
Transfer agent and escrow fees |
4,550,000 | |||
Miscellaneous expenses |
381,150 | |||
|
|
|||
Total expenses |
$ | 29,023,232 | ||
|
|
Item 32. | Sales to Special Parties. |
Our executive officers and directors, as well as officers and employees of CR IV Advisors and their family members (including spouses, parents, grandparents, children and siblings) or other affiliates, may purchase shares offered in this offering at a discount. The purchase price for such shares will be $9.10 per share, reflecting the fact that the 7% selling commission and the 2% dealer manager fee will not be payable in connection with such sales. The net offering proceeds we receive will not be affected by such sales of shares at a discount. In addition, volume discounts are permitted as set forth in the Plan of Distribution section of the prospectus.
Item 33. | Recent Sales of Unregistered Securities. |
On August 11, 2010, Cole Holdings Corporation purchased 20,000 shares of our common stock for total cash consideration of $200,000 to provide our initial capitalization. The issuance and purchase of such shares was effected in reliance upon an exemption from registration provided by Section 4(2) under the Securities Act of 1933, as amended (the Securities Act).
Item 34. | Indemnification of the Officers and Directors |
The Maryland General Corporation Law, as amended (the MGCL), permits a Maryland corporation to include in its charter a provision limiting the liability of its directors and officers to the corporation and its stockholders for money damages except for liability resulting from (a) actual receipt of an improper benefit or profit in money, property or services or (b) active and deliberate dishonesty established by a final judgment as being material to the cause of action. Our charter contains a provision that eliminates directors and officers liability for money damages to the maximum extent permitted by Maryland law, provided that certain conditions are met, and subject to the NASAA REIT Guidelines.
The MGCL requires a Maryland corporation (unless its charter provides otherwise, which our charter does not) to indemnify a director or officer who has been successful, on the merits or otherwise, in the defense of any proceeding to which he or she is made a party by reason of his service in that capacity. The MGCL permits a
II-1
Maryland corporation to indemnify its present and former directors and officers, among others, against judgments, penalties, fines, settlements and reasonable expenses actually incurred by them in connection with any proceeding to which they may be made a party by reason of their service in those or other capacities unless it is established that (a) the act or omission of the director or officer was material to the matter giving rise to the proceeding and (i) was committed in bad faith or (ii) was the result of active and deliberate dishonesty, (b) the director or officer actually received an improper personal benefit in money, property or services or (c) in the case of any criminal proceeding, the director or officer had reasonable cause to believe that the act or omission was unlawful. However, under the MGCL a Maryland corporation may not indemnify for an adverse judgment in a suit by or in the right of the corporation or for a judgment of liability on the basis that personal benefit was improperly received, unless in either case a court orders indemnification and then only for expenses. In addition, the MGCL permits a corporation to advance reasonable expenses to a director or officer upon the corporations receipt of (a) a written affirmation by the director or officer of his good faith belief that he or she has met the standard of conduct necessary for indemnification and (b) a written undertaking by or on his behalf to repay the amount paid or reimbursed if it shall ultimately be determined that the standard of conduct was not met. It is the position of the Securities and Exchange Commission that indemnification of directors and officers for liabilities arising under the Securities Act is against public policy and is unenforceable pursuant to Section 14 of the Securities Act.
Our charter provides that we shall indemnify and hold harmless a director, officer, advisor or affiliate against any and all losses or liabilities reasonably incurred by such director, officer, advisor or affiliate in connection with or by reason of any act or omission performed or omitted to be performed on our behalf in such capacity. We may, with the approval of our board of directors or any duly authorized committee thereof, provide such indemnification to our employees and agents, subject to the limitations of Maryland law and the NASAA REIT Guidelines.
However, under our charter, we shall not indemnify the directors, officers, employees, agents, advisor or any affiliate for any liability or loss suffered by the directors, officers, employees, agents, advisors or affiliates, nor shall we provide that the directors, officers, employees, agents, advisors or affiliates be held harmless for any loss or liability suffered by us, unless all of the following conditions are met: (i) the directors, our advisor or its affiliates have determined, in good faith, that the course of conduct which caused the loss or liability was in our best interests; (ii) the directors, our advisor or its affiliates were acting on our behalf or performing services for us; (iii) such liability or loss was not the result of (A) negligence or misconduct by the non-independent directors, our advisor or its affiliates; or (B) gross negligence or willful misconduct by the independent directors; and (iv) such indemnification or agreement to hold harmless is recoverable only out of our net assets and not from stockholders. Notwithstanding the foregoing, the directors, our advisor or its affiliates and any persons acting as a broker-dealer shall not be indemnified by us for any losses, liability or expenses arising from or out of an alleged violation of federal or state securities laws by such party unless one or more of the following conditions are met: (i) there has been a successful adjudication on the merits of each count involving alleged securities law violations as to the particular indemnitee; (ii) such claims have been dismissed with prejudice on the merits by a court of competent jurisdiction as to the particular indemnitee; and (iii) a court of competent jurisdiction approves a settlement of the claims against a particular indemnitee and finds that indemnification of the settlement and the related costs should be made, and the court considering the request for indemnification has been advised of the position of the Securities and Exchange Commission and of the published position of any state securities regulatory authority in which our securities were offered or sold as to indemnification for violations of securities laws.
Our charter provides that the advancement of funds to our directors, our advisor or our advisors affiliates for legal expenses and other costs incurred as a result of any legal action for which indemnification is being sought is permissible only if all of the following conditions are satisfied: (i) the legal action relates to acts or omissions with respect to the performance of duties or services on our behalf; (ii) our directors, our advisor or our advisors affiliates provide us with written affirmation of their good faith belief that they have met the standard of conduct necessary for indemnification; (iii) the legal action is initiated by a third party who is not a
II-2
stockholder, or if the legal action is initiated by a stockholder acting in his or her capacity as such, a court of competent jurisdiction approves such advancement; and (iv) our directors, our advisor or our advisors affiliates agree in writing to repay the advanced funds to us together with the applicable legal rate of interest thereon, in cases in which such persons are found not to be entitled to indemnification.
We intend to purchase and maintain insurance on behalf of all of our directors and executive officers against liability asserted against or incurred by them in their official capacities with us, whether or not we are required or have the power to indemnify them against the same liability.
Item 35. | Treatment of Proceeds from Shares Being Registered. |
Not applicable.
Item 36. | Financial Statements and Exhibits. |
(a) | Financial Statements. |
See page FS-1 for an index of the financial statements included in the registration statement.
(b) | Exhibits. |
See the Exhibit Index on the page immediately preceding the exhibits for a list of exhibits filed as part of this registration statement on Form S-11, which Exhibit Index is incorporated herein by reference.
Item 37. | Undertakings. |
1. The undersigned registrant hereby undertakes:
(a) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the Securities Act.
(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the Calculation of Registration Fee table in the effective registration statement.
(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.
(b) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment will be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time will be deemed to be the initial bona fide offering thereof.
(c) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(d) That all post-effective amendments will comply with the applicable forms, rules and regulations of the SEC in effect at the time such post-effective amendments are filed.
(e) That, for the purpose of determining liability under the Securities Act to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of the registration statement relating to the offering, other
II-3
than a registration statement relying on Rule 430B or other than a prospectus filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.
(f) That, for the purpose of determining liability of the registrant under the Securities Act to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
(i) any preliminary prospectus or prospectus of the registrant relating to the offering required to be filed pursuant to Rule 424;
(ii) any free writing prospectus relating to the offering prepared by or on behalf of the registrant or used or referred to by the registrant;
(iii) the portion of any other free writing prospectus relating to the offering containing material information about the registrant or its securities provided by or on behalf of the registrant; and
(iv) any other communication that is an offer in the offering made by the registrant to the purchaser.
2. The registrant undertakes to send to each stockholder, at least on an annual basis, a detailed statement of any transactions with the advisor or its affiliates, and of fees, commissions, compensation and other benefits paid or accrued to the advisor or its affiliates for the fiscal year completed, showing the amount paid or accrued to each recipient and the services performed.
3. The registrant undertakes to provide to the stockholders the financial statements required by Form 10-K for the first full fiscal year of operations of the registrant.
4. The registrant undertakes to file a sticker supplement pursuant to Rule 424(c) under the Securities Act during the distribution period describing each property not identified in the prospectus at such time as there arises a reasonable probability that such property will be acquired and to consolidate all such stickers into a post-effective amendment filed at least once every three months, with the information contained in such amendment provided simultaneously to the existing stockholders. Each sticker supplement will disclose all compensation and fees received by the advisor and its affiliates in connection with any such acquisition. The post-effective amendment will include audited financial statements meeting the requirements Rule 3-14 of Regulation S-X only for properties acquired during the distribution period.
5. The registrant undertakes to file, after the end of the distribution period, a current report on Form 8-K containing the financial statements and additional information required by Rule 3-14 of Regulation S-X, to reflect each commitment (i.e., the signing of a binding purchase agreement) made after the end of the distribution period involving the use of 10% or more (on a cumulative basis) of the net proceeds of the offering and to provide the information contained in such report to the stockholders at least once each quarter after the distribution period of the offering has ended.
6. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions and otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as
II-4
expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
II-5
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED)
Table VI presents summary information on properties acquired in the three years ended December 31, 2012 by Prior Public Real Estate Programs with similar investment objectives. This table provides information regarding the general type and location of the properties and the manner in which the properties were acquired.
Program: |
Cole Credit Property Trust II, Inc. |
Cole Credit Property Trust II, Inc. |
||||||||||
Name, location, type of property | L.A. Fitness League City, TX Fitness & Health |
Tractor Supply Lowville, NY Specialty Retail |
||||||||||
Gross leasable square footage |
45,000 | 19,097 | ||||||||||
Date of purchase |
5/21/2010 | 6/3/2010 | ||||||||||
Mortgage financing at date of purchase |
$ | | $ | | ||||||||
Cash down payment |
7,481,700 | 2,246,040 | ||||||||||
|
|
|
|
|||||||||
Contract purchase price plus acquisition fee |
7,481,700 | 2,246,040 | ||||||||||
Other cash expenditures expensed |
63,035 | 31,086 | ||||||||||
Other cash expenditures capitalized |
| | ||||||||||
|
|
|
|
|||||||||
Total acquisition cost |
$ | 7,544,735 | $ | 2,277,126 | ||||||||
|
|
|
|
|||||||||
Program: |
Cole Credit Property Trust II, Inc. |
Cole Credit Property Trust II, Inc. |
Cole Credit Property Trust II, Inc. |
|||||||||
Name, location, type of property | Tractor Supply Malone, NY Specialty Retail |
L.A. Fitness Naperville, IL Fitness & Health |
CVS Indianapolis (21st St), IN Drugstore |
|||||||||
Gross leasable square footage |
19,097 | 45,000 | 12,222 | |||||||||
Date of purchase |
6/3/2010 | 6/30/2010 | 7/21/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
2,292,960 | 9,384,000 | 3,282,386 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
2,292,960 | 9,384,000 | 3,282,386 | |||||||||
Other cash expenditures expensed |
31,723 | 66,148 | 19,675 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 2,324,683 | $ | 9,450,148 | $ | 3,302,061 | ||||||
|
|
|
|
|
|
II-6
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust II, Inc. |
Cole Credit Property Trust II, Inc. |
Cole Credit Property Trust II, Inc. |
|||||||||
Name, location, type of property | Tractor Supply Elletsville, IN Specialty Retail |
CVS Lincoln, IL Drugstore |
Ruths Chris Metairie, LA Restaurant |
|||||||||
Gross leasable square footage |
19,097 | 13,255 | 5,189 | |||||||||
Date of purchase |
9/13/2010 | 9/17/2010 | 9/27/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
2,658,182 | 3,243,600 | 3,616,364 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
2,658,182 | 3,243,600 | 3,616,364 | |||||||||
Other cash expenditures expensed |
46,081 | 20,032 | 24,344 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 2,704,263 | $ | 3,263,632 | $ | 3,640,708 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust II, Inc. |
Cole Credit Property Trust II, Inc. |
Cole Credit Property Trust II, Inc. |
|||||||||
Name, location, type of property | Ruths Chris Sarasota, FL Restaurant |
Columbus Fish Grandview, OH Restaurant |
J. Jill Distribution |
|||||||||
Gross leasable square footage |
7,725 | 7,766 | 573,000 | |||||||||
Date of purchase |
9/27/2010 | 9/27/2010 | 9/30/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
3,078,998 | 3,327,054 | 23,538,461 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
3,078,998 | 3,327,054 | 23,538,461 | |||||||||
Other cash expenditures expensed |
20,272 | 23,975 | 218,593 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 3,099,270 | $ | 3,351,029 | $ | 23,757,054 | ||||||
|
|
|
|
|
|
II-7
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust II, Inc. |
Cole Credit Property Trust II, Inc. |
Cole Credit Property Trust II, Inc. |
|||||||||
Name, location, type of property | Childtime Childcare Cuyahoga Falls, OH Childcare & Development |
Childtime Childcare Arlington, TX Childcare & Development |
Childtime Childcare Oklahoma City (May), OK Childcare & Development |
|||||||||
Gross leasable square footage |
5,934 | 10,856 | 6,656 | |||||||||
Date of purchase |
12/15/2010 | 12/15/2010 | 12/15/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
837,082 | 997,767 | 529,217 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
837,082 | 997,767 | 529,217 | |||||||||
Other cash expenditures expensed |
34,802 | 38,818 | 28,221 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 871,884 | $ | 1,036,585 | $ | 557,438 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust II, Inc. |
Cole Credit Property Trust II, Inc. |
Cole Credit Property Trust II, Inc. |
|||||||||
Name, location, type of property | Childtime Childcare Oklahoma City (Penn), OK Childcare & Development |
Childtime Childcare Rochester, NY Childcare & Development |
Tutor Time Pittsburgh, PA Childcare & Development |
|||||||||
Gross leasable square footage |
6,671 | 4,801 | 10,071 | |||||||||
Date of purchase |
12/15/2010 | 12/15/2010 | 12/15/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
913,645 | 733,724 | 1,222,192 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
913,645 | 733,724 | 1,222,192 | |||||||||
Other cash expenditures expensed |
37,707 | 32,349 | 46,330 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 951,352 | $ | 766,073 | $ | 1,268,522 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust II, Inc. |
Cole Credit Property Trust II, Inc. |
Cole Credit Property Trust II, Inc. |
|||||||||
Name, location, type of property | Childtime Childcare Modesto (Honey), CA Childcare & Development |
CVS Azle, TX Drugstore |
Logans Roadhouse Trussville, AL Restaurant |
|||||||||
Gross leasable square footage |
6,464 | 12,900 | 7,236 | |||||||||
Date of purchase |
12/15/2010 | 12/16/2010 | 12/17/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
899,581 | 4,947,000 | 2,789,259 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
899,581 | 4,947,000 | 2,789,259 | |||||||||
Other cash expenditures expensed |
36,303 | 27,188 | 24,121 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 935,884 | $ | 4,974,188 | $ | 2,813,380 | ||||||
|
|
|
|
|
|
II-8
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust II, Inc. |
Cole Credit Property Trust II, Inc. |
Cole Credit Property Trust II, Inc. |
|||||||||
Name, location, type of property | Logans Roadhouse Wichita Falls, TX Restaurant |
Ivex Packaging New Castle, PA Distribution |
Walgreens Mt. Pleasant, TX Drugstore |
|||||||||
Gross leasable square footage |
8,026 | 135,303 | 14,820 | |||||||||
Date of purchase |
12/17/2010 | 12/20/2010 | 12/21/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
2,789,259 | 5,100,000 | 5,647,740 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
2,789,259 | 5,100,000 | 5,647,740 | |||||||||
Other cash expenditures expensed |
25,050 | 37,769 | 28,900 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 2,814,309 | $ | 5,137,769 | $ | 5,676,640 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust II, Inc. |
Cole Credit Property Trust II, Inc. |
Cole Credit Property Trust II, Inc. |
|||||||||
Name, location, type of property | Advance Auto Irvington, NJ Automotive Parts |
Advance Auto Midwest City, OK Automotive Parts |
Advance Auto Penns Grove, NJ Automotive Parts |
|||||||||
Gross leasable square footage |
6,684 | 7,000 | 7,000 | |||||||||
Date of purchase |
12/22/2010 | 12/22/2010 | 12/22/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
2,297,126 | 1,703,886 | 1,585,823 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
2,297,126 | 1,703,886 | 1,585,823 | |||||||||
Other cash expenditures expensed |
58,558 | 31,382 | 45,921 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 2,355,684 | $ | 1,735,268 | $ | 1,631,744 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust II, Inc. |
Cole Credit Property Trust II, Inc. |
Cole Credit Property Trust II, Inc. |
|||||||||
Name, location, type of property | Advance Auto St. Francis, WI Automotive Parts |
Advance Auto Willingboro, NJ Automotive Parts |
Advance Auto Charlotte, NC Automotive Parts |
|||||||||
Gross leasable square footage |
6,889 | 6,781 | 6,896 | |||||||||
Date of purchase |
12/22/2010 | 12/22/2010 | 12/22/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,653,698 | 1,822,973 | 1,656,805 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,653,698 | 1,822,973 | 1,656,805 | |||||||||
Other cash expenditures expensed |
25,830 | 48,799 | 25,629 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,679,528 | $ | 1,871,772 | $ | 1,682,434 | ||||||
|
|
|
|
|
|
II-9
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust II, Inc. |
Cole Credit Property Trust II, Inc. |
Cole Credit Property Trust II, Inc. |
|||||||||
Name, location, type of property | Advance Auto Dunellen, NJ Automotive Parts |
Jo-Ann Fabrics Independence, MO Distribution |
CVS Fairview Township, PA Drugstore |
|||||||||
Gross leasable square footage |
6,781 | 46,350 | 10,880 | |||||||||
Date of purchase |
12/22/2010 | 12/23/2010 | 1/27/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
2,753,375 | 4,625,700 | 3,177,300 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
2,753,375 | 4,625,700 | 3,177,300 | |||||||||
Other cash expenditures expensed |
61,645 | 28,086 | 62,289 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 2,815,020 | $ | 4,653,786 | $ | 3,239,589 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust II, Inc. |
Cole Credit Property Trust II, Inc. |
Cole Credit Property Trust II, Inc. |
|||||||||
Name, location, type of property | Walgreens Richmond Hill, GA Drugstore |
CVS St. Augustine, FL Drugstore |
L.A. Fitness West Chester, OH Fitness & Health |
|||||||||
Gross leasable square footage |
14,820 | 13,220 | 45,000 | |||||||||
Date of purchase |
2/25/2011 | 4/26/2011 | 4/27/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
5,666,666 | 4,039,117 | 8,402,250 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
5,666,666 | 4,039,117 | 8,402,250 | |||||||||
Other cash expenditures expensed |
23,894 | 22,244 | 58,740 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 5,690,560 | $ | 4,061,361 | $ | 8,460,990 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust II, Inc. |
Cole Credit Property Trust II, Inc. |
Cole Credit Property Trust II, Inc. |
|||||||||
Name, location, type of property | Burger King Durham, NC Restaurant |
Office Depot Durham, NC Office Supply |
Office Depot Balcones Heights, TX Office Supply |
|||||||||
Gross leasable square footage |
2,996 | (2) | 20,000 | 20,400 | ||||||||
Date of purchase |
4/29/2011 | 4/29/2011 | 4/29/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
854,250 | 2,914,140 | 3,863,760 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
854,250 | 2,914,140 | 3,863,760 | |||||||||
Other cash expenditures expensed |
9,443 | 26,706 | 29,871 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 863,693 | $ | 2,940,846 | $ | 3,893,631 | ||||||
|
|
|
|
|
|
II-10
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust II, Inc. |
Cole Credit Property Trust II, Inc. |
Cole Credit Property Trust II, Inc. |
|||||||||
Name, location, type of property | Ryans Buffet Decatur, AL Restaurant |
Ryans Buffet Florence, AL Restaurant |
Ryans Buffet Dothan, AL Restaurant |
|||||||||
Gross leasable square footage |
10,956 | 10,920 | 10,080 | |||||||||
Date of purchase |
4/29/2011 | 4/29/2011 | 4/29/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
2,654,683 | 2,568,289 | 2,269,500 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
2,654,683 | 2,568,289 | 2,269,500 | |||||||||
Other cash expenditures expensed |
24,529 | 21,716 | 22,530 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 2,679,212 | $ | 2,590,005 | $ | 2,292,030 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust II, Inc. |
Cole Credit Property Trust II, Inc. |
Cole Credit Property Trust II, Inc. |
|||||||||
Name, location, type of property | Ryans Buffet Carrollton, GA Restaurant |
Ryans Buffet Hiram, GA Restaurant |
Ryans Buffet Albany, GA Restaurant |
|||||||||
Gross leasable square footage |
10,553 | 10,136 | 10,942 | |||||||||
Date of purchase |
4/29/2011 | 4/29/2011 | 4/29/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,871,700 | 1,994,100 | 3,073,280 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,871,700 | 1,994,100 | 3,073,280 | |||||||||
Other cash expenditures expensed |
18,660 | 18,845 | 19,629 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,890,360 | $ | 2,012,945 | $ | 3,092,909 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust II, Inc. |
Cole Credit Property Trust II, Inc. |
Cole Credit Property Trust II, Inc. |
|||||||||
Name, location, type of property | Ryans Buffet Dawsonville, GA Restaurant |
Ryans Buffet Corydon, IN Restaurant |
Ryans Buffet Bowling Green, KY Restaurant |
|||||||||
Gross leasable square footage |
10,972 | 10,170 | 10,155 | |||||||||
Date of purchase |
4/29/2011 | 4/29/2011 | 4/29/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,744,200 | 2,040,000 | 4,048,666 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,744,200 | 2,040,000 | 4,048,666 | |||||||||
Other cash expenditures expensed |
18,298 | 21,146 | 27,896 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,762,498 | $ | 2,061,146 | $ | 4,076,562 | ||||||
|
|
|
|
|
|
II-11
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust II, Inc. |
Cole Credit Property Trust II, Inc. |
Cole Credit Property Trust II, Inc. |
|||||||||
Name, location, type of property | Ryans Buffet Lake Charles, LA Restaurant |
Ryans Buffet Johnstown, PA Restaurant |
Ryans Buffet Picayune, MS Restaurant |
|||||||||
Gross leasable square footage |
11,874 | 10,116 | 10,349 | |||||||||
Date of purchase |
4/29/2011 | 4/29/2011 | 4/29/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
2,931,031 | 1,756,440 | 2,736,364 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
2,931,031 | 1,756,440 | 2,736,364 | |||||||||
Other cash expenditures expensed |
26,141 | 26,741 | 24,452 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 2,957,172 | $ | 1,783,181 | $ | 2,760,816 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust II, Inc. |
Cole Credit Property Trust II, Inc. |
Cole Credit Property Trust II, Inc. |
|||||||||
Name, location, type of property | Ryans Buffet Tupelo, MS Restaurant |
Ryans Buffet Charleston, SC Restaurant |
Ryans Buffet Conroe, TX Restaurant |
|||||||||
Gross leasable square footage |
10,349 | 11,099 | 10,736 | |||||||||
Date of purchase |
4/29/2011 | 4/29/2011 | 4/29/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
2,399,550 | 1,943,100 | 4,221,607 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
2,399,550 | 1,943,100 | 4,221,607 | |||||||||
Other cash expenditures expensed |
23,636 | 19,575 | 39,513 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 2,423,186 | $ | 1,962,675 | $ | 4,261,120 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust II, Inc. |
Cole Credit Property Trust II, Inc. |
Cole Credit Property Trust II, Inc. |
|||||||||
Name, location, type of property | Ryans Buffet Princeton, WV Restaurant |
Best Buy Kansas City, KS Electronics Retail |
Kohls Olathe, KS Department Store |
|||||||||
Gross leasable square footage |
10,888 | 46,267 | 80,684 | |||||||||
Date of purchase |
4/29/2011 | 6/10/2011 | 8/23/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
2,967,659 | 8,297,700 | 8,770,082 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
2,967,659 | 8,297,700 | 8,770,082 | |||||||||
Other cash expenditures expensed |
23,501 | 86,842 | 32,047 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 2,991,160 | $ | 8,384,542 | $ | 8,802,129 | ||||||
|
|
|
|
|
|
II-12
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust II, Inc. |
Cole Credit Property Trust II, Inc. |
Cole Credit Property Trust II, Inc. |
|||||||||
Name, location, type of property | Golden Corral Albuquerque, NM Restaurant |
Tractor Supply Mt. Sterling, KY Specialty Retail |
Chapel Hill Centre Douglasville, GA Shopping Center |
|||||||||
Gross leasable square footage |
14,100 | 19,097 | 66,970 | |||||||||
Date of purchase |
9/28/2011 | 10/27/2011 | 10/28/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
5,044,966 | 2,914,285 | 8,556,257 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
5,044,966 | 2,914,285 | 8,556,257 | |||||||||
Other cash expenditures expensed |
34,935 | 37,330 | 52,902 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 5,079,901 | $ | 2,951,615 | $ | 8,609,159 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust II, Inc. |
|||||||||||
Name, location, type of property | Gallina Centro II Collierville, TN Shopping Center |
|||||||||||
Gross leasable square footage |
48,625 | |||||||||||
Date of purchase |
11/15/2012 | |||||||||||
Mortgage financing at date of purchase |
$ | | ||||||||||
Cash down payment |
7,229,373 | |||||||||||
|
|
|||||||||||
Contract purchase price plus acquisition fee |
7,229,373 | |||||||||||
Other cash expenditures expensed |
70,688 | |||||||||||
Other cash expenditures capitalized |
| |||||||||||
|
|
|||||||||||
Total acquisition cost |
$ | 7,300,061 | ||||||||||
|
|
II-13
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
||||||||||
Name, location, type of property |
|
Walgreens Twin Falls, ID Drugstore |
|
|
Walgreens Loves Park, IL Drugstore |
| ||||||
Gross leasable square footage |
14,820 | 14,490 | ||||||||||
Date of purchase |
1/14/2010 | 1/19/2010 | ||||||||||
Mortgage financing at date of purchase |
$ | | $ | | ||||||||
Cash down payment |
4,926,600 | 4,018,800 | ||||||||||
|
|
|
|
|||||||||
Contract purchase price plus acquisition fee |
4,926,600 | 4,018,800 | ||||||||||
Other cash expenditures expensed |
27,767 | 25,120 | ||||||||||
Other cash expenditures capitalized |
| | ||||||||||
|
|
|
|
|||||||||
Total acquisition cost |
$ | 4,954,367 | $ | 4,043,920 | ||||||||
|
|
|
|
|||||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Walgreens Framingham, MA Drugstore |
Carmax Garland, TX Auto Dealership |
Walgreens Drugstore |
|||||||||
Gross leasable square footage |
14,820 | 82,165 | 16,853 | |||||||||
Date of purchase |
1/19/2010 | 1/29/2010 | 2/3/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
6,082,260 | 14,280,000 | 3,843,360 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
6,082,260 | 14,280,000 | 3,843,360 | |||||||||
Other cash expenditures expensed |
26,355 | 34,240 | 21,591 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 6,108,615 | $ | 14,314,240 | $ | 3,864,951 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | L.A. Fitness Highland, CA Fitness & Health |
Walgreens Drugstore |
Walgreens Drugstore |
|||||||||
Gross leasable square footage |
45,000 | 14,820 | 14,490 | |||||||||
Date of purchase |
2/4/2010 | 2/10/2010 | 2/18/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
9,399,300 | 5,559,000 | 5,407,020 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
9,399,300 | 5,559,000 | 5,407,020 | |||||||||
Other cash expenditures expensed |
24,631 | 25,467 | 23,603 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 9,423,931 | $ | 5,584,467 | $ | 5,430,623 | ||||||
|
|
|
|
|
|
II-14
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Walgreens Greenville, NC Drugstore |
Walgreens Lancaster, SC Drugstore |
Walgreens Baytown, TX Drugstore |
|||||||||
Gross leasable square footage |
14,490 | 14,820 | 14,820 | |||||||||
Date of purchase |
2/19/2010 | 2/19/2010 | 2/23/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
6,314,935 | 6,015,134 | 4,901,100 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
6,314,935 | 6,015,134 | 4,901,100 | |||||||||
Other cash expenditures expensed |
33,705 | 39,359 | 27,914 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 6,348,640 | $ | 6,054,493 | $ | 4,929,014 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Walgreens North Platte, NE Drugstore |
Cigna Pointe Plano, TX Fitness & Health |
Kum & Go Story City, IA Convenience Store |
|||||||||
Gross leasable square footage |
14,820 | 209,089 | 3,414 | |||||||||
Date of purchase |
2/23/2010 | 2/24/2010 | 2/25/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
5,143,421 | 50,490,000 | 2,091,000 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
5,143,421 | 50,490,000 | 2,091,000 | |||||||||
Other cash expenditures expensed |
25,636 | 73,830 | 28,704 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 5,169,057 | $ | 50,563,830 | $ | 2,119,704 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Kum & Go Ottumwa, IA Convenience Store |
Kum & Go West Branch, IA Convenience Store |
Walgreens Omaha, NE Drugstore |
|||||||||
Gross leasable square footage |
4,177 | 3,164 | 14,550 | |||||||||
Date of purchase |
2/25/2010 | 2/25/2010 | 2/25/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,860,000 | 1,116,000 | 5,304,000 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,860,000 | 1,116,000 | 5,304,000 | |||||||||
Other cash expenditures expensed |
28,283 | 28,244 | 25,781 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,888,283 | $ | 1,144,244 | $ | 5,329,781 | ||||||
|
|
|
|
|
|
II-15
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Walgreens Kingman, AZ Drugstore |
Walgreens Augusta, ME Drugstore |
OReilly Automotive New Roads, LA Automotive Parts |
|||||||||
Gross leasable square footage |
15,696 | 14,065 | 6,800 | |||||||||
Date of purchase |
2/25/2010 | 3/5/2010 | 3/12/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
6,145,500 | 6,552,727 | 837,041 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
6,145,500 | 6,552,727 | 837,041 | |||||||||
Other cash expenditures expensed |
23,940 | 43,781 | 22,658 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 6,169,440 | $ | 6,596,508 | $ | 859,699 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | OReilly Automotive La Place, LA Automotive Parts |
OReilly Automotive Breaux Bridge, LA Automotive Parts |
Cargill Blair, NE Distribution |
|||||||||
Gross leasable square footage |
7,000 | 6,800 | 30,000 | |||||||||
Date of purchase |
3/12/2010 | 3/15/2010 | 3/17/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,041,498 | 823,319 | 5,054,103 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,041,498 | 823,319 | 5,054,103 | |||||||||
Other cash expenditures expensed |
22,492 | 22,465 | 40,230 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,063,990 | $ | 845,784 | $ | 5,094,333 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Walgreens North Mankato, MN Drugstore |
Kohls McAllen, TX Department Store |
Sunset Valley Austin, TX Shopping Center |
|||||||||
Gross leasable square footage |
14,550 | 88,248 | 147,763 | (2) | ||||||||
Date of purchase |
3/18/2010 | 3/26/2010 | 3/26/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
5,171,400 | 7,446,000 | 36,210,000 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
5,171,400 | 7,446,000 | 36,210,000 | |||||||||
Other cash expenditures expensed |
28,975 | 36,265 | 111,611 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 5,200,375 | $ | 7,482,265 | $ | 36,321,611 | ||||||
|
|
|
|
|
|
II-16
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | CVS New Port Richey, FL Drugstore |
Walgreens Birmingham, AL Drugstore |
L.A. Fitness Denton, TX Fitness & Health |
|||||||||
Gross leasable square footage |
13,813 | 13,905 | 45,000 | |||||||||
Date of purchase |
3/26/2010 | 3/30/2010 | 3/31/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
3,381,300 | 3,188,520 | 7,981,500 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
3,381,300 | 3,188,520 | 7,981,500 | |||||||||
Other cash expenditures expensed |
21,015 | 24,251 | 40,265 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 3,402,315 | $ | 3,212,771 | $ | 8,021,765 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Aaron Rents Valley, AL Specialty Retail |
Aaron Rents Springdale, AR Specialty Retail |
Aaron Rents Auburndale, FL Specialty Retail |
|||||||||
Gross leasable square footage |
6,950 | 8,000 | 148,922 | |||||||||
Date of purchase |
3/31/2010 | 3/31/2010 | 3/31/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
804,000 | 1,330,000 | 5,283,000 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
804,000 | 1,330,000 | 5,283,000 | |||||||||
Other cash expenditures expensed |
33,843 | 47,444 | 125,645 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 837,843 | $ | 1,377,444 | $ | 5,408,645 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Aaron Rents Redford, MI Specialty Retail |
Aaron Rents Bowling Green, OH Specialty Retail |
Aaron Rents North Olmsted, OH Specialty Retail |
|||||||||
Gross leasable square footage |
8,025 | 8,321 | 7,800 | |||||||||
Date of purchase |
3/31/2010 | 3/31/2010 | 3/31/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
901,000 | 1,180,000 | 928,000 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
901,000 | 1,180,000 | 928,000 | |||||||||
Other cash expenditures expensed |
35,604 | 42,707 | 37,843 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 936,604 | $ | 1,222,707 | $ | 965,843 | ||||||
|
|
|
|
|
|
II-17
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Aaron Rents Bloomsburg, PA Specialty Retail |
Aaron Rents Mission, TX Specialty Retail |
Aaron Rents Oneonta, AL Specialty Retail |
|||||||||
Gross leasable square footage |
12,000 | 8,000 | 8,000 | |||||||||
Date of purchase |
3/31/2010 | 3/31/2010 | 3/31/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
825,000 | 1,091,000 | 1,170,000 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
825,000 | 1,091,000 | 1,170,000 | |||||||||
Other cash expenditures expensed |
45,227 | 39,324 | 41,455 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 870,227 | $ | 1,130,324 | $ | 1,211,455 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Aaron Rents Lafayette, IN Specialty Retail |
Aaron Rents Magnolia, MS Specialty Retail |
Aaron Rents Kennett, MO Specialty Retail |
|||||||||
Gross leasable square footage |
5,935 | 125,000 | 7,276 | |||||||||
Date of purchase |
3/31/2010 | 3/31/2010 | 3/31/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,102,000 | 2,945,000 | 641,000 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,102,000 | 2,945,000 | 641,000 | |||||||||
Other cash expenditures expensed |
40,369 | 79,936 | 29,783 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,142,369 | $ | 3,024,936 | $ | 670,783 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Aaron Rents Charlotte, NC Specialty Retail |
Aaron Rents Kent, OH Specialty Retail |
Aaron Rents Marion, SC Specialty Retail |
|||||||||
Gross leasable square footage |
8,775 | 16,516 | 8,000 | |||||||||
Date of purchase |
3/31/2010 | 3/31/2010 | 3/31/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,195,000 | 1,225,000 | 627,000 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,195,000 | 1,225,000 | 627,000 | |||||||||
Other cash expenditures expensed |
41,605 | 46,100 | 30,258 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,236,605 | $ | 1,271,100 | $ | 657,258 | ||||||
|
|
|
|
|
|
II-18
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Aaron Rents Kingsville, TX Specialty Retail |
Advance Auto Delaware, OH Automotive Parts |
Advance Auto Canton, OH Automotive Parts |
|||||||||
Gross leasable square footage |
8,000 | 7,000 | 7,000 | |||||||||
Date of purchase |
3/31/2010 | 3/31/2010 | 3/31/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,193,000 | 1,524,900 | 1,390,260 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,193,000 | 1,524,900 | 1,390,260 | |||||||||
Other cash expenditures expensed |
40,424 | 30,690 | 30,788 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,233,424 | $ | 1,555,590 | $ | 1,421,048 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Advance Auto Twinsburg, OH Automotive Parts |
Advance Auto Holland, OH Automotive Parts |
Applebees Marion, IL Restaurant |
|||||||||
Gross leasable square footage |
6,000 | 6,000 | 5,403 | |||||||||
Date of purchase |
3/31/2010 | 3/31/2010 | 3/31/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,291,320 | 1,349,460 | 1,768,680 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,291,320 | 1,349,460 | 1,768,680 | |||||||||
Other cash expenditures expensed |
30,226 | 30,164 | 22,189 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,321,546 | $ | 1,379,624 | $ | 1,790,869 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Applebees Madisonville, KY Restaurant |
Applebees Joplin, MO Restaurant |
Applebees Farmington, MO Restaurant |
|||||||||
Gross leasable square footage |
5,393 | 5,386 | 3,894 | |||||||||
Date of purchase |
3/31/2010 | 3/31/2010 | 3/31/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,922,700 | 2,152,200 | 2,161,992 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,922,700 | 2,152,200 | 2,161,992 | |||||||||
Other cash expenditures expensed |
21,874 | 21,858 | 22,065 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,944,574 | $ | 2,174,058 | $ | 2,184,057 | ||||||
|
|
|
|
|
|
II-19
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Applebees Elizabeth City, NC Restaurant |
Applebees Vincenness, IN Restaurant |
Applebees Memphis, TN Restaurant |
|||||||||
Gross leasable square footage |
4,676 | 5,940 | 4,830 | |||||||||
Date of purchase |
3/31/2010 | 3/31/2010 | 3/31/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,938,000 | 1,882,104 | 2,132,820 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,938,000 | 1,882,104 | 2,132,820 | |||||||||
Other cash expenditures expensed |
18,460 | 20,295 | 20,845 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,956,460 | $ | 1,902,399 | $ | 2,153,665 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Applebees Rolla, MO Restaurant |
Tractor Supply Pearsall, TX Specialty Retail |
Walgreens Janesville (West Court), WI Drugstore |
|||||||||
Gross leasable square footage |
4,791 | 18,948 | 14,820 | |||||||||
Date of purchase |
3/31/2010 | 4/9/2010 | 4/13/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
2,239,920 | 2,485,953 | 4,360,500 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
2,239,920 | 2,485,953 | 4,360,500 | |||||||||
Other cash expenditures expensed |
21,225 | 25,629 | 24,595 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 2,261,145 | $ | 2,511,582 | $ | 4,385,095 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Tractor Supply Summerdale, AL Specialty Retail |
National Tire & Battery Nashville, TN Automotive Parts |
Kum & Go Sloan, IA Convenience Store |
|||||||||
Gross leasable square footage |
19,097 | 8,074 | 4,794 | |||||||||
Date of purchase |
4/14/2010 | 4/21/2010 | 4/23/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
2,517,625 | 1,744,047 | 2,652,000 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
2,517,625 | 1,744,047 | 2,652,000 | |||||||||
Other cash expenditures expensed |
22,885 | 20,821 | 26,132 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 2,540,510 | $ | 1,764,868 | $ | 2,678,132 | ||||||
|
|
|
|
|
|
II-20
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | FedEx Beekmantown, NY Distribution |
FedEx Lafayette, IN Distribution |
Advanced Auto Sylvania, OH Automotive Parts |
|||||||||
Gross leasable square footage |
49,780 | 22,194 | 6,000 | |||||||||
Date of purchase |
4/23/2010 | 4/27/2010 | 4/28/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
5,431,500 | 4,582,860 | 1,265,820 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
5,431,500 | 4,582,860 | 1,265,820 | |||||||||
Other cash expenditures expensed |
28,890 | 23,630 | 30,508 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 5,460,390 | $ | 4,606,490 | $ | 1,296,328 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Walgreens Drugstore |
Tractor Supply Kenedy, TX Specialty Retail |
Academy Sports Killeen, TX Sporting Goods |
|||||||||
Gross leasable square footage |
14,820 | 18,800 | 96,645 | |||||||||
Date of purchase |
4/28/2010 | 4/29/2010 | 4/29/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
5,916,000 | 2,526,279 | 6,834,000 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
5,916,000 | 2,526,279 | 6,834,000 | |||||||||
Other cash expenditures expensed |
22,973 | 26,672 | 30,636 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 5,938,973 | $ | 2,552,951 | $ | 6,864,636 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Experian Headquarters Schaumburg, IL Professional Services |
Tractor Supply Glenpool, OK Specialty Retail |
Tractor Supply Stillwater, OK Specialty Retail |
|||||||||
Gross leasable square footage |
177,893 | 19,097 | 19,180 | |||||||||
Date of purchase |
4/30/2010 | 5/4/2010 | 5/4/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
30,600,000 | 2,413,320 | 2,475,540 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
30,600,000 | 2,413,320 | 2,475,540 | |||||||||
Other cash expenditures expensed |
60,672 | 25,297 | 25,591 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 30,660,672 | $ | 2,438,617 | $ | 2,501,131 | ||||||
|
|
|
|
|
|
II-21
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Tractor Supply Gibsonia, PA Specialty Retail |
Walgreens Lancaster, CA Drugstore |
Northern Tool Ocala, FL Specialty Retail |
|||||||||
Gross leasable square footage |
19,097 | 13,650 | 26,054 | |||||||||
Date of purchase |
5/5/2010 | 5/17/2010 | 5/20/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
3,185,460 | 5,647,740 | 3,588,360 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
3,185,460 | 5,647,740 | 3,588,360 | |||||||||
Other cash expenditures expensed |
60,239 | 42,143 | 30,727 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 3,245,699 | $ | 5,689,883 | $ | 3,619,087 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Walgreens Beloit, WI Drugstore |
Tractor Supply Murphy, NC Specialty Retail |
Tractor Supply Ballinger, TX Specialty Retail |
|||||||||
Gross leasable square footage |
14,820 | 19,097 | 19,097 | |||||||||
Date of purchase |
5/20/2010 | 5/21/2010 | 5/21/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
4,396,200 | 2,898,935 | 2,543,595 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
4,396,200 | 2,898,935 | 2,543,595 | |||||||||
Other cash expenditures expensed |
23,002 | 26,365 | 27,186 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 4,419,202 | $ | 2,925,300 | $ | 2,570,781 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Igloo Headquarters Katy, TX Distribution |
Walgreens Rocky Mount, NC Drugstore |
Kum & Go Tipton, IA Convenience Store |
|||||||||
Gross leasable square footage |
914,195 | 14,820 | 5,118 | |||||||||
Date of purchase |
5/21/2010 | 5/26/2010 | 5/28/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
38,862,000 | 5,980,260 | 2,544,000 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
38,862,000 | 5,980,260 | 2,544,000 | |||||||||
Other cash expenditures expensed |
99,997 | 19,953 | 33,070 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 38,961,997 | $ | 6,000,213 | $ | 2,577,070 | ||||||
|
|
|
|
|
|
II-22
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Whole Foods Hinsdale, IL Grocery |
AT&T Dallas, TX Communications |
AutoZone Hamilton, OH Automotive Parts |
|||||||||
Gross leasable square footage |
48,835 | 206,040 | 7,370 | |||||||||
Date of purchase |
5/28/2010 | 5/28/2010 | 6/9/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
11,842,200 | 29,988,000 | 1,668,720 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
11,842,200 | 29,988,000 | 1,668,720 | |||||||||
Other cash expenditures expensed |
28,837 | 86,703 | 26,959 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 11,871,037 | $ | 30,074,703 | $ | 1,695,679 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | AutoZone Mt. Orab, OH Automotive Parts |
AutoZone Blanchester, OH Automotive Parts |
AutoZone Trenton, OH Automotive Parts |
|||||||||
Gross leasable square footage |
6,816 | 7,370 | 6,816 | |||||||||
Date of purchase |
6/9/2010 | 6/9/2010 | 6/9/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,391,280 | 1,075,590 | 1,031,220 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,391,280 | 1,075,590 | 1,031,220 | |||||||||
Other cash expenditures expensed |
25,643 | 27,429 | 26,048 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,416,923 | $ | 1,103,019 | $ | 1,057,268 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | AutoZone Nashville, TN Automotive Parts |
Home Depot Evans, GA Home Improvement |
Evans Exchange Evans, GA Shopping Center |
|||||||||
Gross leasable square footage |
6,786 | 131,000 | (2) | 65,049 | ||||||||
Date of purchase |
6/9/2010 | 6/11/2010 | 6/11/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | 5,840,667 | $ | | ||||||
Cash down payment |
1,706,460 | 324,114 | 13,623,219 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,706,460 | 6,164,781 | 13,623,219 | |||||||||
Other cash expenditures expensed |
24,597 | | 228,968 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,731,057 | $ | 6,164,781 | $ | 13,852,187 | ||||||
|
|
|
|
|
|
II-23
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Staples Houston, TX Office Supply |
CVS Ft. Myers, FL Drugstore |
Walgreens Fort Mill, SC Drugstore |
|||||||||
Gross leasable square footage |
20,060 | 12,900 | 14,820 | |||||||||
Date of purchase |
6/17/2010 | 6/18/2010 | 6/24/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
3,765,840 | 6,085,320 | 4,445,969 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
3,765,840 | 6,085,320 | 4,445,969 | |||||||||
Other cash expenditures expensed |
25,693 | 24,609 | 45,257 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 3,791,533 | $ | 6,109,929 | $ | 4,491,226 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Lowes Sanford, ME Home Improvement |
Stripes San Benito, TX Convenience Store |
Stripes Palmhurst, TX Convenience Store |
|||||||||
Gross leasable square footage |
138,134 | (2) | 4,847 | 2,925 | ||||||||
Date of purchase |
6/28/2010 | 6/29/2010 | 6/29/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
9,562,500 | 2,703,214 | 1,030,613 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
9,562,500 | 2,703,214 | 1,030,613 | |||||||||
Other cash expenditures expensed |
67,591 | 16,030 | 15,719 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 9,630,091 | $ | 2,719,244 | $ | 1,046,332 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Stripes Edinburg, TX Convenience Store |
Stripes Eagle Pass, TX Convenience Store |
Tractor Supply Belchertown, MA Specialty Retail |
|||||||||
Gross leasable square footage |
3,604 | 4,847 | 19,097 | |||||||||
Date of purchase |
6/29/2010 | 6/29/2010 | 6/29/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
2,473,655 | 2,912,567 | 3,712,438 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
2,473,655 | 2,912,567 | 3,712,438 | |||||||||
Other cash expenditures expensed |
15,719 | 15,719 | 28,218 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 2,489,374 | $ | 2,928,286 | $ | 3,740,656 | ||||||
|
|
|
|
|
|
II-24
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Tractor Supply Southwick, MA Specialty Retail |
Atascocita Commons Humble, TX Shopping Center |
On The Border College Station, TX Restaurant |
|||||||||
Gross leasable square footage |
19,097 | 316,529 | (2) | 6,652 | ||||||||
Date of purchase |
6/29/2010 | 6/29/2010 | 6/30/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
4,487,185 | 57,630,000 | 2,978,865 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
4,487,185 | 57,630,000 | 2,978,865 | |||||||||
Other cash expenditures expensed |
27,528 | 141,889 | 21,830 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 4,514,713 | $ | 57,771,889 | $ | 3,000,695 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | On The Border Columbus, OH Restaurant |
On The Border Concord Mills, NC Restaurant |
On The Border Denton, TX Restaurant |
|||||||||
Gross leasable square footage |
7,671 | 6,102 | 5,661 | |||||||||
Date of purchase |
6/30/2010 | 6/30/2010 | 6/30/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
2,971,056 | 2,979,296 | 2,880,412 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
2,971,056 | 2,979,296 | 2,880,412 | |||||||||
Other cash expenditures expensed |
19,525 | 15,533 | 21,315 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 2,990,581 | $ | 2,994,829 | $ | 2,901,727 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | On The Border DeSoto, TX Restaurant |
Chilis Flanders, NJ Restaurant |
On The Border Fort Worth, TX Restaurant |
|||||||||
Gross leasable square footage |
9,231 | 6,046 | 7,127 | |||||||||
Date of purchase |
6/30/2010 | 6/30/2010 | 6/30/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
3,270,358 | 2,478,532 | 3,542,132 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
3,270,358 | 2,478,532 | 3,542,132 | |||||||||
Other cash expenditures expensed |
22,314 | 32,252 | 23,145 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 3,292,672 | $ | 2,510,784 | $ | 3,565,277 | ||||||
|
|
|
|
|
|
II-25
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | On The Border Garland, TX Restaurant |
On The Border Kansas City, MO Restaurant |
On The Border Lees Summit, MO Restaurant |
|||||||||
Gross leasable square footage |
5,948 | 6,760 | 5,780 | |||||||||
Date of purchase |
6/30/2010 | 6/30/2010 | 6/30/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
2,221,582 | 2,564,167 | 2,407,823 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
2,221,582 | 2,564,167 | 2,407,823 | |||||||||
Other cash expenditures expensed |
18,643 | 15,131 | 15,185 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 2,240,225 | $ | 2,579,298 | $ | 2,423,008 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | On The Border Alpharetta, GA Restaurant |
On The Border Auburn Hills, MI Restaurant |
On The Border Buford, GA Restaurant |
|||||||||
Gross leasable square footage |
6,660 | 8,367 | 6,088 | |||||||||
Date of purchase |
6/30/2010 | 6/30/2010 | 6/30/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
2,997,871 | 3,234,227 | 2,705,505 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
2,997,871 | 3,234,227 | 2,705,505 | |||||||||
Other cash expenditures expensed |
15,080 | 14,950 | 14,919 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 3,012,951 | $ | 3,249,177 | $ | 2,720,424 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | On The Border Burleson, TX Restaurant |
On The Border Lubbock, TX Restaurant |
On The Border Mesa, AZ Restaurant |
|||||||||
Gross leasable square footage |
6,082 | 6,745 | 6,586 | |||||||||
Date of purchase |
6/30/2010 | 6/30/2010 | 6/30/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
3,257,494 | 3,313,867 | 2,964,131 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
3,257,494 | 3,313,867 | 2,964,131 | |||||||||
Other cash expenditures expensed |
22,280 | 22,431 | 13,528 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 3,279,774 | $ | 3,336,298 | $ | 2,977,659 | ||||||
|
|
|
|
|
|
II-26
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | On The Border Mt. Laurel, NJ Restaurant |
On The Border Naperville, IL Restaurant |
On The Border Novi, MI Restaurant |
|||||||||
Gross leasable square footage |
7,041 | 7,086 | 8,017 | |||||||||
Date of purchase |
6/30/2010 | 6/30/2010 | 6/30/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
2,869,419 | 3,465,155 | 2,881,239 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
2,869,419 | 3,465,155 | 2,881,239 | |||||||||
Other cash expenditures expensed |
35,538 | 20,535 | 14,703 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 2,904,957 | $ | 3,485,690 | $ | 2,895,942 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | On The Border Oklahoma City, OK Restaurant |
On The Border Peoria, AZ Restaurant |
Chilis Ramsey, NJ |
|||||||||
Gross leasable square footage |
7,402 | 6,506 | 6,148 | |||||||||
Date of purchase |
6/30/2010 | 6/30/2010 | 6/30/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
2,936,070 | 2,601,532 | 1,850,337 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
2,936,070 | 2,601,532 | 1,850,337 | |||||||||
Other cash expenditures expensed |
18,744 | 13,407 | 35,468 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 2,954,814 | $ | 2,614,939 | $ | 1,885,805 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | On The Border Rockwall, TX Restaurant |
On The Border Rogers, AR Restaurant |
On The Border Tulsa, OK Restaurant |
|||||||||
Gross leasable square footage |
6,668 | 5,782 | 7,559 | |||||||||
Date of purchase |
6/30/2010 | 6/30/2010 | 6/30/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
3,081,477 | 1,939,417 | 3,395,252 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
3,081,477 | 1,939,417 | 3,395,252 | |||||||||
Other cash expenditures expensed |
21,805 | 19,997 | 19,057 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 3,103,282 | $ | 1,959,414 | $ | 3,414,309 | ||||||
|
|
|
|
|
|
II-27
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | On The Border West Springfield, MA Restaurant |
On The Border West Windsor, NJ Restaurant |
On The Border Woodbridge, VA Restaurant |
|||||||||
Gross leasable square footage |
8,248 | 7,913 | 7,878 | |||||||||
Date of purchase |
6/30/2010 | 6/30/2010 | 6/30/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
3,954,279 | 3,579,566 | 3,569,830 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
3,954,279 | 3,579,566 | 3,569,830 | |||||||||
Other cash expenditures expensed |
17,808 | 55,155 | 29,054 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 3,972,087 | $ | 3,634,721 | $ | 3,598,884 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | AutoZone Pearl River, LA Automotive Parts |
AutoZone Rapid City, SD Automotive Parts |
Macaroni Grill Flanders, NJ Restaurant |
|||||||||
Gross leasable square footage |
7,370 | 7,370 | 6,847 | |||||||||
Date of purchase |
6/30/2010 | 6/30/2010 | 6/30/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,428,000 | 1,186,770 | 1,343,414 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,428,000 | 1,186,770 | 1,343,414 | |||||||||
Other cash expenditures expensed |
39,006 | 27,731 | 35,695 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,467,006 | $ | 1,214,501 | $ | 1,379,109 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Macaroni Grill Mt. Laurel, NJ Restaurant |
Macaroni Grill Ramsey, NJ Restaurant |
Macaroni Grill West Windsor, NJ Restaurant |
|||||||||
Gross leasable square footage |
7,058 | 8,074 | 7,611 | |||||||||
Date of purchase |
6/30/2010 | 6/30/2010 | 6/30/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,403,122 | 2,537,561 | 1,562,341 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,403,122 | 2,537,561 | 1,562,341 | |||||||||
Other cash expenditures expensed |
37,670 | 39,106 | 27,934 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,440,792 | $ | 2,576,667 | $ | 1,590,275 | ||||||
|
|
|
|
|
|
II-28
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Best Buy Montgomery, AL Electronics Retail |
City Center Plaza Bellevue, WA Shopping Center |
AutoZone Hartville, OH Automotive Parts |
|||||||||
Gross leasable square footage |
30,505 | 583,179 | 7,370 | |||||||||
Date of purchase |
7/6/2010 | 7/9/2010 | 7/14/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
6,222,000 | 316,200,000 | 1,236,240 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
6,222,000 | 316,200,000 | 1,236,240 | |||||||||
Other cash expenditures expensed |
30,793 | 727,590 | 24,761 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 6,252,793 | $ | 316,927,590 | $ | 1,261,001 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Walgreens Leland, NC Drugstore |
Walgreens Durham (Guess), NC Drugstore |
Tire Kingdom Auburndale, FL Automotive Parts |
|||||||||
Gross leasable square footage |
14,820 | 14,606 | 6,922 | |||||||||
Date of purchase |
7/15/2010 | 7/20/2010 | 7/20/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
4,901,100 | 5,513,350 | 2,297,040 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
4,901,100 | 5,513,350 | 2,297,040 | |||||||||
Other cash expenditures expensed |
22,506 | 50,012 | 20,062 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 4,923,606 | $ | 5,563,362 | $ | 2,317,102 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Tractor Supply St. John, IN Specialty Retail |
Home Depot Slidell, LA Home Improvement |
Stop & Shop Stamford, CT Grocery |
|||||||||
Gross leasable square footage |
24,727 | 108,003 | (2) | 69,733 | ||||||||
Date of purchase |
7/28/2010 | 7/28/2010 | 7/30/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | 15,000,000 | ||||||
Cash down payment |
4,549,200 | 3,777,784 | 16,110,000 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
4,549,200 | 3,777,784 | 31,110,000 | |||||||||
Other cash expenditures expensed |
10,842 | 58,002 | 68,643 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 4,560,042 | $ | 3,835,786 | $ | 31,178,643 | ||||||
|
|
|
|
|
|
II-29
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole
Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Home Depot Tolleson, AZ Home Improvement |
Advance Auto Sapulpa, OK Automotive Parts |
Advance Auto Franklin, IN Automotive Parts |
|||||||||
Gross leasable square footage |
466,694 | 6,784 | 6,157 | |||||||||
Date of purchase |
7/30/2010 | 8/3/2010 | 8/12/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
31,054,152 | 1,441,266 | 1,490,279 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
31,054,152 | 1,441,266 | 1,490,279 | |||||||||
Other cash expenditures expensed |
99,537 | 20,805 | 22,545 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 31,153,689 | $ | 1,462,071 | $ | 1,512,824 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole
Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Advance Auto Grand Rapids, MI Automotive Parts |
Tractor Supply Alton, IL Specialty Retail |
Tractor Supply Union, MO Specialty Retail |
|||||||||
Gross leasable square footage |
6,133 | 19,097 | 19,097 | |||||||||
Date of purchase |
8/12/2010 | 8/13/2010 | 8/13/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,366,800 | 2,914,286 | 2,914,286 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,366,800 | 2,914,286 | 2,914,286 | |||||||||
Other cash expenditures expensed |
20,167 | 22,785 | 25,588 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,386,967 | $ | 2,937,071 | $ | 2,939,874 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole
Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Tractor Supply Troy, MO Specialty Retail |
L.A. Fitness Dallas, TX Fitness & Health |
FedEx Northwood, OH Distribution |
|||||||||
Gross leasable square footage |
19,100 | 45,000 | 89,921 | |||||||||
Date of purchase |
8/13/2010 | 8/17/2010 | 8/17/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
2,671,429 | 9,792,000 | 4,970,460 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
2,671,429 | 9,792,000 | 4,970,460 | |||||||||
Other cash expenditures expensed |
25,499 | 34,141 | 28,367 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 2,696,928 | $ | 9,826,141 | $ | 4,998,827 | ||||||
|
|
|
|
|
|
II-30
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Carmax Austin, TX |
Academy Sports Austin, TX Sporting Goods |
Manchester St. Louis, MO |
|||||||||
Gross leasable square footage |
55,888 | 89,807 | 354,073 | (2) | ||||||||
Date of purchase |
8/25/2010 | 8/26/2010 | 8/26/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
21,675,000 | 10,544,760 | 49,470,000 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
21,675,000 | 10,544,760 | 49,470,000 | |||||||||
Other cash expenditures expensed |
39,470 | 35,790 | 111,109 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 21,714,470 | $ | 10,580,550 | $ | 49,581,109 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Whittwood Town Whittier, CA |
Lowes Ticonderoga, NY Home Improvement |
CVS/Tres Amigos Ringgold, GA Drugstore/Restaurant |
|||||||||
Gross leasable square footage |
785,674 | (2) | 124,631 | (2) | 15,029 | (2) | ||||||
Date of purchase |
8/27/2010 | 8/31/2010 | 8/31/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
85,170,000 | 8,899,329 | 4,069,800 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
85,170,000 | 8,899,329 | 4,069,800 | |||||||||
Other cash expenditures expensed |
198,046 | 52,880 | 39,661 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 85,368,046 | $ | 8,952,209 | $ | 4,109,461 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | CVS/Noble Roman Mishawaka, IN Drugstore/Restaurant |
Tractor Supply Sellersburg, IN Specialty Retail |
Tractor Supply Wauseon, OH Specialty Retail |
|||||||||
Gross leasable square footage |
12,376 | 19,097 | 19,097 | |||||||||
Date of purchase |
9/8/2010 | 9/13/2010 | 9/13/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
4,702,960 | 2,658,182 | 2,548,081 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
4,702,960 | 2,658,182 | 2,548,081 | |||||||||
Other cash expenditures expensed |
31,896 | 21,251 | 47,079 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 4,734,856 | $ | 2,679,433 | $ | 2,595,160 | ||||||
|
|
|
|
|
|
II-31
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Lakeshore Crossing Gainesville, GA Shopping Center |
Tractor Supply Hamilton, OH Specialty Retail |
Advance Auto Bonita Springs, FL Automotive Parts |
|||||||||
Gross leasable square footage |
123,948 | 40,700 | 6,880 | |||||||||
Date of purchase |
9/15/2010 | 9/17/2010 | 9/22/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
9,180,000 | 1,713,600 | 2,894,901 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
9,180,000 | 1,713,600 | 2,894,901 | |||||||||
Other cash expenditures expensed |
44,775 | 26,369 | 22,717 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 9,224,775 | $ | 1,739,969 | $ | 2,917,618 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Tractor Supply Nixa, MO Specialty Retail |
Tractor Supply Lawrence, KS Specialty Retail |
Tractor Supply Dixon, CA Specialty Retail |
|||||||||
Gross leasable square footage |
19,180 | 19,097 | 24,727 | |||||||||
Date of purchase |
9/24/2010 | 9/24/2010 | 9/24/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
2,395,980 | 2,826,420 | 5,117,850 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
2,395,980 | 2,826,420 | 5,117,850 | |||||||||
Other cash expenditures expensed |
24,716 | 25,414 | 29,290 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 2,420,696 | $ | 2,851,834 | $ | 5,147,140 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Albertsons Phoenix, AZ Grocery |
Albertsons Mesa, AZ Grocery |
Albertsons Grocery |
|||||||||
Gross leasable square footage |
56,742 | 51,393 | 60,315 | |||||||||
Date of purchase |
9/29/2010 | 9/29/2010 | 9/29/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
7,139,812 | 6,188,945 | 11,077,940 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
7,139,812 | 6,188,945 | 11,077,940 | |||||||||
Other cash expenditures expensed |
22,109 | 20,959 | 22,787 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 7,161,921 | $ | 6,209,904 | $ | 11,100,727 | ||||||
|
|
|
|
|
|
II-32
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | CVS Weaverville, NC Drugstore |
L.A. Fitness Oakdale, MN Fitness & Health |
Advance Auto Janesville, WI Automotive Parts |
|||||||||
Gross leasable square footage |
13,225 | 42,348 | 6,892 | |||||||||
Date of purchase |
9/30/2010 | 9/30/2010 | 9/30/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
6,260,296 | 8,807,700 | 1,726,860 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
6,260,296 | 8,807,700 | 1,726,860 | |||||||||
Other cash expenditures expensed |
34,653 | 28,524 | 17,218 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 6,294,949 | $ | 8,836,224 | $ | 1,744,078 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Advance Auto Appleton, WI Automotive Parts |
WaWa Portsmouth, VA Convenience Store |
Tractor Supply Augusta, ME Specialty Retail |
|||||||||
Gross leasable square footage |
6,892 | 5,940 | (2) | 19,097 | ||||||||
Date of purchase |
9/30/2010 | 9/30/2010 | 10/12/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,470,840 | 2,346,000 | 2,835,600 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,470,840 | 2,346,000 | 2,835,600 | |||||||||
Other cash expenditures expensed |
17,146 | 42,648 | 43,648 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,487,986 | $ | 2,388,648 | $ | 2,879,248 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Shoppes at Port Port Arthur, TX |
CVS Lynchburg, VA |
CVS Gulf Breeze, FL Drugstore |
|||||||||
Gross leasable square footage |
95,877 | 10,125 | 13,225 | (2) | ||||||||
Date of purchase |
10/12/2010 | 10/12/2010 | 10/13/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
15,300,000 | 3,278,280 | 1,904,340 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
15,300,000 | 3,278,280 | 1,904,340 | |||||||||
Other cash expenditures expensed |
65,192 | 42,761 | 24,052 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 15,365,192 | $ | 3,321,041 | $ | 1,928,392 | ||||||
|
|
|
|
|
|
II-33
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Applebees Wytheville, VA Restaurant |
Applebees West Memphis, AR Restaurant |
Applebees Swansea, IL Restaurant |
|||||||||
Gross leasable square footage |
4,352 | 4,237 | 5,728 | |||||||||
Date of purchase |
10/13/2010 | 10/13/2010 | 10/13/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,676,273 | 1,523,786 | 1,888,308 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,676,273 | 1,523,786 | 1,888,308 | |||||||||
Other cash expenditures expensed |
21,826 | 22,810 | 20,885 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,698,099 | $ | 1,546,596 | $ | 1,909,193 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Applebees Owatonna, MN Restaurant |
Applebees Norton, VA Restaurant |
Applebees Adrian, MI Restaurant |
|||||||||
Gross leasable square footage |
5,459 | 3,670 | 5,589 | |||||||||
Date of purchase |
10/13/2010 | 10/13/2010 | 10/13/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
2,458,461 | 1,691,317 | 2,285,679 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
2,458,461 | 1,691,317 | 2,285,679 | |||||||||
Other cash expenditures expensed |
19,400 | 21,686 | 20,530 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 2,477,861 | $ | 1,713,003 | $ | 2,306,209 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Applebees Chambersburg, PA Restaurant |
Applebees Horn Lake, MS Restaurant |
Applebees Kalamazoo, MI Restaurant |
|||||||||
Gross leasable square footage |
5,553 | 5,035 | 5,675 | |||||||||
Date of purchase |
10/13/2010 | 10/13/2010 | 10/13/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
2,013,574 | 1,687,048 | 2,208,849 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
2,013,574 | 1,687,048 | 2,208,849 | |||||||||
Other cash expenditures expensed |
24,628 | 21,253 | 20,379 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 2,038,202 | $ | 1,708,301 | $ | 2,229,228 | ||||||
|
|
|
|
|
|
II-34
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole
Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Applebees Lufkin, TX Restaurant |
Applebees Bartlett, TN Restaurant |
Applebees Tyler, TX Restaurant |
|||||||||
Gross leasable square footage |
5,199 | 4,360 | 5,895 | |||||||||
Date of purchase |
10/13/2010 | 10/13/2010 | 10/13/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
2,013,574 | 1,904,733 | 2,772,308 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
2,013,574 | 1,904,733 | 2,772,308 | |||||||||
Other cash expenditures expensed |
27,927 | 20,714 | 31,597 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 2,041,501 | $ | 1,925,447 | $ | 2,803,905 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole
Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | CompUSA Arlington, TX Electronics Retail |
Big O Tires Phoenix, AZ Automotive Parts |
FedEx Dublin, VA |
|||||||||
Gross leasable square footage |
25,612 | 4,560 | 32,105 | |||||||||
Date of purchase |
10/18/2010 | 10/20/2010 | 10/21/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
3,340,500 | 1,511,028 | 3,341,772 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
3,340,500 | 1,511,028 | 3,341,772 | |||||||||
Other cash expenditures expensed |
57,362 | 19,396 | 49,051 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 3,397,862 | $ | 1,530,424 | $ | 3,390,823 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole
Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | CVS
Madison Heights, VA |
Petco & Portrait Innovations Lake Charles, LA Shopping Center |
Albertsons Grocery |
|||||||||
Gross leasable square footage |
10,125 | 17,678 | 57,471 | |||||||||
Date of purchase |
10/22/2010 | 10/25/2010 | 10/26/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
2,973,300 | 3,978,872 | 7,245,285 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
2,973,300 | 3,978,872 | 7,245,285 | |||||||||
Other cash expenditures expensed |
41,106 | 45,022 | 17,503 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 3,014,406 | $ | 4,023,894 | $ | 7,262,788 | ||||||
|
|
|
|
|
|
II-35
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Albertsons Yuma, AZ Grocery |
Albertsons Scottsdale, AZ Grocery |
Albertsons Tucson (Grant), AZ Grocery |
|||||||||
Gross leasable square footage |
57,835 | 62,119 | 49,491 | |||||||||
Date of purchase |
10/26/2010 | 10/26/2010 | 10/26/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
8,966,372 | 11,570,435 | 5,551,817 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
8,966,372 | 11,570,435 | 5,551,817 | |||||||||
Other cash expenditures expensed |
17,837 | 18,191 | 16,144 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 8,984,209 | $ | 11,588,626 | $ | 5,567,961 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Albertsons Fort Worth (Oakmont), TX Grocery |
Albertsons Grocery |
Albertsons Grocery |
|||||||||
Gross leasable square footage |
64,886 | 52,700 | 61,247 | |||||||||
Date of purchase |
10/26/2010 | 10/26/2010 | 10/26/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
7,247,564 | 9,669,780 | 6,424,391 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
7,247,564 | 9,669,780 | 6,424,391 | |||||||||
Other cash expenditures expensed |
22,109 | 24,688 | 21,232 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 7,269,673 | $ | 9,694,468 | $ | 6,445,623 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Albertsons Fort Worth (Sycamore), TX Grocery |
Albertsons
Lafayette, LA |
Albertsons
Clovis, NM Grocery |
|||||||||
Gross leasable square footage |
58,723 | 74,493 | 43,484 | |||||||||
Date of purchase |
10/26/2010 | 10/26/2010 | 10/26/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
7,833,635 | 10,974,484 | 8,010,855 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
7,833,635 | 10,974,484 | 8,010,855 | |||||||||
Other cash expenditures expensed |
22,733 | 25,432 | 25,986 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 7,856,368 | $ | 10,999,916 | $ | 8,036,841 | ||||||
|
|
|
|
|
|
II-36
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Albertsons
Bossier City, LA |
Albertsons Baton Rouge (George), LA Grocery |
Albertsons Baton Rouge (College), LA Grocery |
|||||||||
Gross leasable square footage |
59,777 | 66,057 | 61,741 | |||||||||
Date of purchase |
10/26/2010 | 10/26/2010 | 10/26/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
7,341,428 | 9,652,184 | 8,019,573 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
7,341,428 | 9,652,184 | 8,019,573 | |||||||||
Other cash expenditures expensed |
21,820 | 24,286 | 22,774 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 7,363,248 | $ | 9,676,470 | $ | 8,042,347 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Albertsons Baton Rouge (Airline), LA Grocery |
Albertsons Albuquerque (Academy), NM Grocery |
Albertsons Albuquerque (Lomas), NM Grocery |
|||||||||
Gross leasable square footage |
66,430 | 65,413 | 65,145 | |||||||||
Date of purchase |
10/26/2010 | 10/26/2010 | 10/26/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
11,066,478 | 9,180,554 | 8,996,059 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
11,066,478 | 9,180,554 | 8,996,059 | |||||||||
Other cash expenditures expensed |
25,857 | 27,705 | 27,159 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 11,092,335 | $ | 9,208,259 | $ | 9,023,218 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Albertsons Abilene, TX Grocery |
Albertsons Arlington, TX Grocery |
Albertsons Alexandria, LA Grocery |
|||||||||
Gross leasable square footage |
67,270 | 63,124 | 62,117 | |||||||||
Date of purchase |
10/26/2010 | 10/26/2010 | 10/26/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
8,122,046 | 8,580,788 | 8,384,352 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
8,122,046 | 8,580,788 | 8,384,352 | |||||||||
Other cash expenditures expensed |
22,715 | 23,528 | 22,436 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 8,144,761 | $ | 8,604,316 | $ | 8,406,788 | ||||||
|
|
|
|
|
|
II-37
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Albertsons Fort Collins, CO Grocery |
Albertsons El Paso, TX |
Albertsons Farmington, NM Grocery |
|||||||||
Gross leasable square footage |
51,230 | 55,143 | 57,100 | |||||||||
Date of purchase |
10/26/2010 | 10/26/2010 | 10/26/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
8,828,668 | 9,054,216 | 5,233,715 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
8,828,668 | 9,054,216 | 5,233,715 | |||||||||
Other cash expenditures expensed |
21,976 | 23,707 | 23,005 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 8,850,644 | $ | 9,077,923 | $ | 5,256,720 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Albertsons Durango, CO Grocery |
Albertsons Denver, CO Grocery |
Albertsons Los Lunas, NM |
|||||||||
Gross leasable square footage |
47,481 | 53,208 | 54,349 | |||||||||
Date of purchase |
10/26/2010 | 10/26/2010 | 10/26/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
7,690,091 | 7,834,467 | 8,329,111 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
7,690,091 | 7,834,467 | 8,329,111 | |||||||||
Other cash expenditures expensed |
21,551 | 21,571 | 26,691 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 7,711,642 | $ | 7,856,038 | $ | 8,355,802 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Albertsons Midland, TX Grocery |
Albertsons Odessa, TX Grocery |
Albertsons Silver City, NM Grocery |
|||||||||
Gross leasable square footage |
66,068 | 61,955 | 39,385 | |||||||||
Date of purchase |
10/26/2010 | 10/26/2010 | 10/26/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
11,505,417 | 10,363,093 | 7,261,509 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
11,505,417 | 10,363,093 | 7,261,509 | |||||||||
Other cash expenditures expensed |
26,316 | 25,776 | 25,096 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 11,531,733 | $ | 10,388,869 | $ | 7,286,605 | ||||||
|
|
|
|
|
|
II-38
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Albertsons Weatherford, TX Grocery |
Kohls Salina, KS |
Giant Eagle Lancaster, OH Grocery |
|||||||||
Gross leasable square footage |
57,671 | 64,239 | 92,490 | (2) | ||||||||
Date of purchase |
10/26/2010 | 10/29/2010 | 10/29/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
8,024,559 | 4,941,900 | 15,874,161 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
8,024,559 | 4,941,900 | 15,874,161 | |||||||||
Other cash expenditures expensed |
22,261 | 46,752 | 44,800 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 8,046,820 | $ | 4,988,652 | $ | 15,918,961 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | FedEx Bossier City, LA |
CVS Lake Wales, FL |
CVS Auburndale, FL |
|||||||||
Gross leasable square footage |
64,402 | 11,220 | 13,086 | |||||||||
Date of purchase |
11/1/2010 | 11/1/2010 | 11/1/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
5,386,020 | 3,244,445 | 2,984,744 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
5,386,020 | 3,244,445 | 2,984,744 | |||||||||
Other cash expenditures expensed |
47,210 | 34,582 | 34,357 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 5,433,230 | $ | 3,279,027 | $ | 3,019,101 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Ulta Salon Jackson, TN Specialty Retail |
Tractor Supply Little Rock, AR Specialty Retail |
Tractor Supply Jefferson City, MO Specialty Retail |
|||||||||
Gross leasable square footage |
9,991 | 19,097 | 19,500 | |||||||||
Date of purchase |
11/5/2010 | 11/9/2010 | 11/9/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
2,733,600 | 2,507,160 | 1,941,060 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
2,733,600 | 2,507,160 | 1,941,060 | |||||||||
Other cash expenditures expensed |
37,312 | 24,595 | 22,700 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 2,770,912 | $ | 2,531,755 | $ | 1,963,760 | ||||||
|
|
|
|
|
|
II-39
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Walgreens Tucson (River), AZ Drugstore |
Wal-Mart Pueblo, CO Discount Retail |
Volusia Square Daytona Beach, FL Shopping Center |
|||||||||
Gross leasable square footage |
15,120 | 202,847 | 231,996 | (2) | ||||||||
Date of purchase |
11/12/2010 | 11/12/2010 | 11/12/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
5,559,000 | 15,300,000 | 31,620,000 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
5,559,000 | 15,300,000 | 31,620,000 | |||||||||
Other cash expenditures expensed |
44,712 | 39,285 | 66,822 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 5,603,712 | $ | 15,339,285 | $ | 31,686,822 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | CSAA
Oklahoma City, OK |
Dell Perot
Lincoln, NE |
Breakfast Pointe Shopping Center |
|||||||||
Gross leasable square footage |
147,107 | 150,000 | 97,931 | |||||||||
Date of purchase |
11/15/2010 | 11/15/2010 | 11/18/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
29,937,000 | 22,542,000 | 16,320,000 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
29,937,000 | 22,542,000 | 16,320,000 | |||||||||
Other cash expenditures expensed |
48,037 | 36,058 | 90,888 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 29,985,037 | $ | 22,578,058 | $ | 16,410,888 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Stripes
Carrizo Springs, TX |
Stripes
Haskell, TX |
Stripes Laredo (La Pita |
|||||||||
Gross leasable square footage |
6,838 | 6,309 | 4,679 | |||||||||
Date of purchase |
11/22/2010 | 11/22/2010 | 11/22/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
2,910,904 | 2,538,604 | 2,881,609 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
2,910,904 | 2,538,604 | 2,881,609 | |||||||||
Other cash expenditures expensed |
14,456 | 14,606 | 14,706 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 2,925,360 | $ | 2,553,210 | $ | 2,896,315 | ||||||
|
|
|
|
|
|
II-40
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Tractor Supply Franklin, NC Specialty Retail |
Walgreens Matteson, IL Drugstore |
Walgreens New Albany, OH |
|||||||||
Gross leasable square footage |
19,097 | 14,550 | 14,820 | |||||||||
Date of purchase |
11/30/2010 | 11/30/2010 | 12/2/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
2,927,400 | 4,182,000 | 4,182,000 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
2,927,400 | 4,182,000 | 4,182,000 | |||||||||
Other cash expenditures expensed |
25,532 | 21,975 | 28,267 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 2,952,932 | $ | 4,203,975 | $ | 4,210,267 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Prairie Market
Oswego, IL |
Walgreens
Grayson, GA |
Walgreens Drugstore |
|||||||||
Gross leasable square footage |
113,002 | (2) | 14,560 | 14,490 | ||||||||
Date of purchase |
12/3/2010 | 12/7/2010 | 12/7/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
25,602,000 | 4,712,400 | 5,197,920 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
25,602,000 | 4,712,400 | 5,197,920 | |||||||||
Other cash expenditures expensed |
171,389 | 23,463 | 23,999 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 25,773,389 | $ | 4,735,863 | $ | 5,221,919 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property |
Walgreens Pueblo, CO |
Wells Fargo / Hillsboro, |
Stearns Crossing |
|||||||||
Gross leasable square footage |
13,813 | 212,363 | 96,613 | |||||||||
Date of purchase |
12/7/2010 | 12/8/2010 | 12/9/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
3,564,900 | 27,540,000 | 12,622,500 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
3,564,900 | 27,540,000 | 12,622,500 | |||||||||
Other cash expenditures expensed |
27,576 | 270,111 | 56,321 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 3,592,476 | $ | 27,810,111 | $ | 12,678,821 | ||||||
|
|
|
|
|
|
II-41
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Tractor Supply Sedalia, MO Specialty Retail |
Sherwin Williams Muskegon, MI Specialty Retail |
Kohls Onalaska, WI |
|||||||||
Gross leasable square footage |
19,028 | 8,000 | 86,432 | |||||||||
Date of purchase |
12/10/2010 | 12/10/2010 | 12/13/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
2,174,640 | 1,453,500 | 7,395,000 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
2,174,640 | 1,453,500 | 7,395,000 | |||||||||
Other cash expenditures expensed |
22,604 | 27,086 | 27,010 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 2,197,244 | $ | 1,480,586 | $ | 7,422,010 | ||||||
|
|
|
|
|
|
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | CVS Athens, GA |
CVS Boca Raton, FL |
CVS Brownsville, TX |
|||||||||
Gross leasable square footage |
14,781 | 14,422 | 13,000 | |||||||||
Date of purchase |
12/14/2010 | 12/14/2010 | 12/14/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
6,375,450 | 3,850,039 | 5,947,965 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
6,375,450 | 3,850,039 | 5,947,965 | |||||||||
Other cash expenditures expensed |
28,951 | 25,654 | 51,891 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 6,404,401 | $ | 3,875,693 | $ | 5,999,856 | ||||||
|
|
|
|
|
|
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | CVS Cayce, SC Drugstore |
CVS City of Industry, CA |
CVS Jacksonville, FL |
|||||||||
Gross leasable square footage |
11,982 | 12,837 | 13,204 | |||||||||
Date of purchase |
12/14/2010 | 12/14/2010 | 12/14/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
5,082,330 | 3,614,892 | 6,838,403 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
5,082,330 | 3,614,892 | 6,838,403 | |||||||||
Other cash expenditures expensed |
31,954 | 22,818 | 27,771 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 5,114,284 | $ | 3,637,710 | $ | 6,866,174 | ||||||
|
|
|
|
|
|
II-42
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole
Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | CVS
Minneapolis, MN |
CVS
Naples, FL |
CVS Southaven |
|||||||||
Gross leasable square footage |
13,000 | 12,944 | 13,938 | |||||||||
Date of purchase |
12/14/2010 | 12/14/2010 | 12/14/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
4,356,245 | 3,862,522 | 6,916,177 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
4,356,245 | 3,862,522 | 6,916,177 | |||||||||
Other cash expenditures expensed |
25,177 | 25,591 | 38,429 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 4,381,422 | $ | 3,888,113 | $ | 6,954,606 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | CVS The Village, OK |
CVS Lawrence, KS |
CVS Lawrenceville, NJ Drugstore |
|||||||||
Gross leasable square footage |
12,939 | 12,900 | 15,260 | |||||||||
Date of purchase |
12/14/2010 | 12/14/2010 | 12/14/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
5,544,256 | 5,519,185 | 9,243,493 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
5,544,256 | 5,519,185 | 9,243,493 | |||||||||
Other cash expenditures expensed |
36,407 | 26,400 | 137,775 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 5,580,663 | $ | 5,545,585 | $ | 9,381,268 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | CVS
Mineola, NY |
Childtime Childcare Modesto (Floyd), CA Childcare & Development |
Tutor Time Downington, PA Childcare & Development |
|||||||||
Gross leasable square footage |
12,838 | 6,310 | 11,757 | |||||||||
Date of purchase |
12/14/2010 | 12/15/2010 | 12/15/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
4,317,320 | 1,224,999 | 2,026,353 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
4,317,320 | 1,224,999 | 2,026,353 | |||||||||
Other cash expenditures expensed |
37,204 | 44,399 | 66,344 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 4,354,524 | $ | 1,269,398 | $ | 2,092,697 | ||||||
|
|
|
|
|
|
II-43
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Tutor Time
Austin, TX Childcare & |
Childrens Courtyard
Grand Prairie, TX |
Childtime Childcare Oklahoma City (Western), OK Childcare & Development |
|||||||||
Gross leasable square footage |
10,994 | 8,409 | 6,597 | |||||||||
Date of purchase |
12/15/2010 | 12/15/2010 | 12/15/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,752,110 | 949,683 | 767,359 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,752,110 | 949,683 | 767,359 | |||||||||
Other cash expenditures expensed |
57,986 | 37,663 | 33,761 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,810,096 | $ | 987,346 | $ | 801,120 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Childtime Childcare Oklahoma City (Rockwell), OK Childcare & Development |
Childtime Childcare
Bedford, OH |
Folsum Gateway II
Folsum, CA Center |
|||||||||
Gross leasable square footage |
6,594 | 5,500 | 115,291 | |||||||||
Date of purchase |
12/15/2010 | 12/15/2010 | 12/15/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
714,582 | 796,250 | 36,720,000 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
714,582 | 796,250 | 36,720,000 | |||||||||
Other cash expenditures expensed |
32,409 | 35,640 | 139,876 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 746,991 | $ | 831,890 | $ | 36,859,876 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | HealthNow Buffalo, NY Fitness & Health |
Thorntons Clarksville, IN Convenience Store |
Thorntons Jeffersonville, IN Convenience Store |
|||||||||
Gross leasable square footage |
430,458 | 4,889 | 3,080 | |||||||||
Date of purchase |
12/16/2010 | 12/17/2010 | 12/17/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
86,190,000 | 2,029,800 | 3,011,040 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
86,190,000 | 2,029,800 | 3,011,040 | |||||||||
Other cash expenditures expensed |
366,612 | 10,399 | 9,824 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 86,556,612 | $ | 2,040,199 | $ | 3,020,864 | ||||||
|
|
|
|
|
|
II-44
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Thorntons Franklin Park, IL |
Thorntons Westmont, IL Convenience Store |
Thorntons Springfield, IL Convenience Store |
|||||||||
Gross leasable square footage |
3,321 | 3,840 | 3,034 | |||||||||
Date of purchase |
12/17/2010 | 12/17/2010 | 12/17/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
3,302,760 | 3,818,880 | 4,016,760 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
3,302,760 | 3,818,880 | 4,016,760 | |||||||||
Other cash expenditures expensed |
9,765 | 9,765 | 9,765 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 3,312,525 | $ | 3,828,645 | $ | 4,026,525 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Thorntons Ottawa, IL |
Thorntons Bloomington, IL Convenience Store |
Thorntons Joliet, IL |
|||||||||
Gross leasable square footage |
4,901 | 2,971 | 3,840 | |||||||||
Date of purchase |
12/17/2010 | 12/17/2010 | 12/17/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
2,728,500 | 1,993,080 | 3,573,060 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
2,728,500 | 1,993,080 | 3,573,060 | |||||||||
Other cash expenditures expensed |
9,765 | 9,765 | 9,765 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 2,738,265 | $ | 2,002,845 | $ | 3,582,825 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Thorntons Summit, IL |
Thorntons Waukegan, IL Convenience Store |
Thorntons Roselle, IL |
|||||||||
Gross leasable square footage |
3,840 | 3,840 | 3,080 | |||||||||
Date of purchase |
12/17/2010 | 12/17/2010 | 12/17/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
2,123,640 | 2,277,660 | 2,837,640 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
2,123,640 | 2,277,660 | 2,837,640 | |||||||||
Other cash expenditures expensed |
9,765 | 9,765 | 9,765 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 2,133,405 | $ | 2,287,425 | $ | 2,847,405 | ||||||
|
|
|
|
|
|
II-45
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Thorntons Plainfield, IL Convenience Store |
Thorntons South Elgin, IL |
Thorntons Galloway, OH Convenience Store |
|||||||||
Gross leasable square footage |
3,080 | 3,080 | 3,758 | |||||||||
Date of purchase |
12/17/2010 | 12/17/2010 | 12/17/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
2,306,220 | 3,194,640 | 1,999,200 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
2,306,220 | 3,194,640 | 1,999,200 | |||||||||
Other cash expenditures expensed |
9,765 | 9,765 | 9,824 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 2,315,985 | $ | 3,204,405 | $ | 2,009,024 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Thorntons Terre Haute, IN |
Thorntons Henderson, KY Convenience Store |
Thorntons Evansville, IN Convenience Store |
|||||||||
Gross leasable square footage |
3,080 | 3,846 | 2,939 | |||||||||
Date of purchase |
12/17/2010 | 12/17/2010 | 12/17/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
2,825,400 | 4,136,100 | 2,121,600 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
2,825,400 | 4,136,100 | 2,121,600 | |||||||||
Other cash expenditures expensed |
9,824 | 9,824 | 9,824 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 2,835,224 | $ | 4,145,924 | $ | 2,131,424 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Thorntons Evansville (Rosenberger), IN Convenience Store |
Thorntons Henderson (Green), KY Convenience Store |
Thorntons
Shelbyville, KY |
|||||||||
Gross leasable square footage |
2,800 | 3,434 | 3,150 | |||||||||
Date of purchase |
12/17/2010 | 12/17/2010 | 12/17/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
2,097,120 | 2,041,020 | 2,341,920 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
2,097,120 | 2,041,020 | 2,341,920 | |||||||||
Other cash expenditures expensed |
9,824 | 9,824 | 9,824 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 2,106,944 | $ | 2,050,844 | $ | 2,351,744 | ||||||
|
|
|
|
|
|
II-46
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Thorntons Louisville, KY Convenience Store |
Thorntons Edinburg, IN Convenience Store |
Thorntons Oaklawn, IL Convenience Store |
|||||||||
Gross leasable square footage |
4,390 | 3,080 | 2,210 | |||||||||
Date of purchase |
12/17/2010 | 12/17/2010 | 12/17/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
2,094,060 | 2,261,340 | 2,179,740 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
2,094,060 | 2,261,340 | 2,179,740 | |||||||||
Other cash expenditures expensed |
9,824 | 9,824 | 9,765 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 2,103,884 | $ | 2,271,164 | $ | 2,189,505 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Advance Auto
Howell, MI |
Advance Auto
Salem, OH |
Waterside Marketplace Chesterfield, MI Shopping Center |
|||||||||
Gross leasable square footage |
6,782 | 6,141 | 243,934 | |||||||||
Date of purchase |
12/20/2010 | 12/20/2010 | 12/20/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,652,301 | 1,298,182 | 27,030,000 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,652,301 | 1,298,182 | 27,030,000 | |||||||||
Other cash expenditures expensed |
29,723 | 28,006 | 429,126 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,682,024 | $ | 1,326,188 | $ | 27,459,126 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Advance Auto Lehigh Acres, FL Automotive Parts |
Advance Auto Bethel, OH Automotive Parts |
Advance Auto Crestwood, KY Automotive Parts |
|||||||||
Gross leasable square footage |
6,913 | 6,786 | 6,124 | |||||||||
Date of purchase |
12/21/2010 | 12/22/2010 | 12/22/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
2,391,894 | 1,417,399 | 1,759,152 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
2,391,894 | 1,417,399 | 1,759,152 | |||||||||
Other cash expenditures expensed |
21,498 | 25,501 | 26,321 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 2,413,392 | $ | 1,442,900 | $ | 1,785,473 | ||||||
|
|
|
|
|
|
II-47
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Advance Auto Hillview, KY Automotive Parts |
CVS Gainesville, TX |
OReilly Automotive Christiansburg, VA Automotive Parts |
|||||||||
Gross leasable square footage |
6,128 | 13,813 | 7,200 | |||||||||
Date of purchase |
12/22/2010 | 12/23/2010 | 12/23/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,441,142 | 3,188,334 | 1,187,739 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,441,142 | 3,188,334 | 1,187,739 | |||||||||
Other cash expenditures expensed |
26,338 | 21,266 | 39,077 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,467,480 | $ | 3,209,600 | $ | 1,226,816 | ||||||
|
|
|
|
|
|
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | OReilly Automotive San Antonio, TX |
OReilly Automotive Highlands, TX Automotive Parts |
Red Oak Village San Marcos, TX Shopping Center |
|||||||||
Gross leasable square footage |
6,800 | 6,000 | 176,528 | (2) | ||||||||
Date of purchase |
12/23/2010 | 12/23/2010 | 12/23/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,331,100 | 955,485 | 22,440,000 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,331,100 | 955,485 | 22,440,000 | |||||||||
Other cash expenditures expensed |
35,022 | 30,321 | 90,950 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,366,122 | $ | 985,806 | $ | 22,530,950 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Falcon Valley Lenexa, KS Shopping Center |
Best Buy Pineville, NC Electronics Retail |
Walgreens Fayetteville, NC Drugstore |
|||||||||
Gross leasable square footage |
76,784 | 50,548 | 14,820 | |||||||||
Date of purchase |
12/23/2010 | 12/28/2010 | 12/30/2010 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | 5,528,999 | $ | | ||||||
Cash down payment |
12,750,000 | 3,202,201 | 6,287,672 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
12,750,000 | 8,731,200 | 6,287,672 | |||||||||
Other cash expenditures expensed |
62,787 | 47,509 | 26,432 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 12,812,787 | $ | 8,778,709 | $ | 6,314,104 | ||||||
|
|
|
|
|
|
II-48
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Stripes Fort Stockton, TX |
Stripes Portales, NM |
Advance Auto Bedford, IN Automotive Parts |
|||||||||
Gross leasable square footage |
9,950 | 4,833 | 6,783 | |||||||||
Date of purchase |
12/30/2010 | 12/30/2010 | 1/4/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
4,963,934 | 2,629,378 | 1,317,555 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
4,963,934 | 2,629,378 | 1,317,555 | |||||||||
Other cash expenditures expensed |
20,642 | 20,033 | 23,327 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 4,984,576 | $ | 2,649,411 | $ | 1,340,882 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Staples Pensacola, FL Office Supply |
CVS Dover, DE |
Hanesbrands Rural Hall, NC |
|||||||||
Gross leasable square footage |
20,388 | 13,225 | (2) | 930,451 | ||||||||
Date of purchase |
1/6/2011 | 1/7/2011 | 1/10/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
4,293,318 | 3,868,965 | 32,334,000 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
4,293,318 | 3,868,965 | 32,334,000 | |||||||||
Other cash expenditures expensed |
16,353 | 14,367 | 379,861 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 4,309,671 | $ | 3,883,332 | $ | 32,713,861 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | OReilly Automotive Houston, TX Automotive Parts |
OReilly Automotive Ravenna, OH Automotive Parts |
Albertsons Las Cruces, NM Grocery |
|||||||||
Gross leasable square footage |
6,800 | 6,750 | 51,922 | |||||||||
Date of purchase |
1/13/2011 | 1/25/2011 | 1/28/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,067,175 | 1,121,949 | 11,036,400 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,067,175 | 1,121,949 | 11,036,400 | |||||||||
Other cash expenditures expensed |
10,726 | 10,310 | 41,312 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,077,901 | $ | 1,132,259 | $ | 11,077,712 | ||||||
|
|
|
|
|
|
II-49
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole
Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Pinehurst Square Bismarck, ND Shopping Center |
Family Fare Battle Creek, MI Grocery |
Lowes Denver, CO Home Improvement |
|||||||||
Gross leasable square footage |
69,119 | 46,625 | 122,132 | (2) | ||||||||
Date of purchase |
1/28/2011 | 1/31/2011 | 2/2/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
10,455,000 | 8,693,650 | 13,260,000 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
10,455,000 | 8,693,650 | 13,260,000 | |||||||||
Other cash expenditures expensed |
59,826 | 26,217 | 33,777 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 10,514,826 | $ | 8,719,867 | $ | 13,293,777 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Lowes Columbia, SC Home Improvement |
Best Buy Marquette, MI Electronics Retail |
Petco Dardenne Prairie, MO Specialty Retail |
|||||||||
Gross leasable square footage |
138,491 | (2) | 30,040 | 14,995 | ||||||||
Date of purchase |
2/10/2011 | 2/16/2011 | 2/22/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
7,542,900 | 5,051,196 | 2,832,540 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
7,542,900 | 5,051,196 | 2,832,540 | |||||||||
Other cash expenditures expensed |
42,574 | 27,706 | 28,459 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 7,585,474 | $ | 5,078,902 | $ | 2,860,999 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Dicks Sporting Jackson, TN Sporting Goods |
Walgreens |
Kohls Palm Coast, FL Department Store |
|||||||||
Gross leasable square footage |
45,000 | 14,820 | 89,089 | (2) | ||||||||
Date of purchase |
2/25/2011 | 3/9/2011 | 3/10/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
6,146,520 | 4,947,000 | 12,246,120 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
6,146,520 | 4,947,000 | 12,246,120 | |||||||||
Other cash expenditures expensed |
37,966 | 28,094 | 57,257 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 6,184,486 | $ | 4,975,094 | $ | 12,303,377 | ||||||
|
|
|
|
|
|
II-50
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Kohls Saginaw, MI Department Store |
Apollo Group Phoenix, AZ Education |
Best Buy Norton Shores, MI Electronics Retail |
|||||||||
Gross leasable square footage |
80,684 | 599,664 | 30,056 | |||||||||
Date of purchase |
3/10/2011 | 3/24/2011 | 3/30/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
7,789,740 | 173,400,000 | 5,397,840 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
7,789,740 | 173,400,000 | 5,397,840 | |||||||||
Other cash expenditures expensed |
31,906 | 111,459 | 26,395 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 7,821,646 | $ | 173,511,459 | $ | 5,424,235 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Walgreens
Brownwood, TX |
L.A. Fitness
Indianapolis, IN |
Walgreens Liberty Township, OH Drugstore |
|||||||||
Gross leasable square footage |
14,820 | 42,148 | 14,490 | |||||||||
Date of purchase |
3/30/2011 | 3/31/2011 | 3/31/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
5,712,464 | 8,313,000 | 5,525,000 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
5,712,464 | 8,313,000 | 5,525,000 | |||||||||
Other cash expenditures expensed |
28,788 | 42,128 | 19,535 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 5,741,252 | $ | 8,355,128 | $ | 5,544,535 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property |
Walgreens |
CVS |
Northpoint Shopping Center Cape Coral, FL Shopping Center |
|||||||||
Gross leasable square footage |
14,820 | 13,052 | (2) | 115,840 | (2) | |||||||
Date of purchase |
3/31/2011 | 4/13/2011 | 4/13/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
4,299,300 | 3,311,883 | 10,200,000 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
4,299,300 | 3,311,883 | 10,200,000 | |||||||||
Other cash expenditures expensed |
29,535 | 28,804 | 48,780 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 4,328,835 | $ | 3,340,687 | $ | 10,248,780 | ||||||
|
|
|
|
|
|
II-51
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
||||||||||
Name, location, type of property |
|
Oxford Exchange Oxford, AL Shopping Center |
|
|
Davita Dialysis Grand Rapids, MI Fitness & Health |
| ||||||
Gross leasable square footage | 333,866 | 8,500 | ||||||||||
Date of purchase |
4/18/2011 | 4/19/2011 | ||||||||||
Mortgage financing at date of purchase |
$ | | $ | | ||||||||
Cash down payment |
46,410,000 | 1,708,500 | ||||||||||
|
|
|
|
|||||||||
Contract purchase price plus acquisition fee |
46,410,000 | 1,708,500 | ||||||||||
Other cash expenditures expensed |
131,336 | 28,673 | ||||||||||
Other cash expenditures capitalized |
| | ||||||||||
|
|
|
|
|||||||||
Total acquisition cost |
$ | 46,541,336 | $ | 1,737,173 | ||||||||
|
|
|
|
|||||||||
Program: |
Cole Credit Property Trust III, Inc |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Walgreens
Wilmington, NC Drugstore |
Walgreens
Roanoke, VA |
CVS St. Augustine |
|||||||||
Gross leasable square footage |
14,820 | 14,820 | 13,053 | |||||||||
Date of purchase |
4/21/2011 | 4/26/2011 | 4/26/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
6,090,857 | 5,464,286 | 5,072,009 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
6,090,857 | 5,464,286 | 5,072,009 | |||||||||
Other cash expenditures expensed |
46,688 | 42,933 | 22,460 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 6,137,545 | $ | 5,507,219 | $ | 5,094,469 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | CVS
Charlotte, NC |
Walgreens (N Canfield), IL Drugstore |
Office Depot
Corsicana, TX |
|||||||||
Gross leasable square footage |
12,203 | 19,332 | 20,931 | |||||||||
Date of purchase |
4/26/2011 | 4/28/2011 | 4/29/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
3,238,670 | 4,747,080 | 2,517,360 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
3,238,670 | 4,747,080 | 2,517,360 | |||||||||
Other cash expenditures expensed |
22,748 | 31,039 | 25,541 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 3,261,418 | $ | 4,778,119 | $ | 2,542,901 | ||||||
|
|
|
|
|
|
II-52
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Office Depot Houston, TX Office Supply |
Office Depot Mobile, AL Office Supply |
Ryans Buffet Jasper, AL Restaurant |
|||||||||
Gross leasable square footage |
20,898 | 20,898 | 10,665 | |||||||||
Date of purchase |
4/29/2011 | 4/29/2011 | 4/29/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
4,085,100 | 2,873,340 | 2,692,088 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
4,085,100 | 2,873,340 | 2,692,088 | |||||||||
Other cash expenditures expensed |
30,270 | 28,533 | 24,503 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 4,115,370 | $ | 2,901,873 | $ | 2,716,591 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Ryans Buffet Prattville, AL Restaurant |
Fire Mountain Buffet Cullman, AL Restaurant |
Ryans Buffet Columbus, GA Restaurant |
|||||||||
Gross leasable square footage |
10,571 | 11,003 | 10,919 | |||||||||
Date of purchase |
4/29/2011 | 4/29/2011 | 4/29/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
2,472,855 | 2,575,634 | 3,368,664 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
2,472,855 | 2,575,634 | 3,368,664 | |||||||||
Other cash expenditures expensed |
23,740 | 23,698 | 20,907 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 2,496,595 | $ | 2,599,332 | $ | 3,389,571 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Ryans Buffet Commerce, GA Restaurant |
Ryans Buffet Rome, GA Restaurant |
Ryans Buffet Paducah, KY Restaurant |
|||||||||
Gross leasable square footage |
10,418 | 9,745 | 10,167 | |||||||||
Date of purchase |
4/29/2011 | 4/29/2011 | 4/29/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
2,142,000 | 2,193,000 | 2,222,267 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
2,142,000 | 2,193,000 | 2,222,267 | |||||||||
Other cash expenditures expensed |
19,063 | 19,133 | 24,642 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 2,161,063 | $ | 2,212,133 | $ | 2,246,909 | ||||||
|
|
|
|
|
|
II-53
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Ryans Buffet Owensboro, KY Restaurant |
Fire Mountain Buffet Bossier City, LA Restaurant |
Fire Mountain Buffet Horn Lake, MS Restaurant |
|||||||||
Gross leasable square footage |
10,382 | 11,101 | 10,948 | |||||||||
Date of purchase |
4/29/2011 | 4/29/2011 | 4/29/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
2,504,077 | 3,194,411 | 2,744,390 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
2,504,077 | 3,194,411 | 2,744,390 | |||||||||
Other cash expenditures expensed |
27,415 | 27,060 | 24,221 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 2,531,492 | $ | 3,221,471 | $ | 2,768,611 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Ryans Buffet Pearl, MS Restaurant |
Ryans Buffet Asheville, NC Restaurant |
Ryans Buffet Coon Rapids, MN Restaurant |
|||||||||
Gross leasable square footage |
10,867 | 10,624 | 9,097 | |||||||||
Date of purchase |
4/29/2011 | 4/29/2011 | 4/29/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
2,474,374 | 3,043,924 | 2,984,010 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
2,474,374 | 3,043,924 | 2,984,010 | |||||||||
Other cash expenditures expensed |
23,894 | 19,094 | 20,795 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 2,498,268 | $ | 3,063,018 | $ | 3,004,805 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Ryans Buffet Sevierville, TN Restaurant |
Ryans Buffet Texas City, TX Restaurant |
Ryans Buffet Beckley, WV Restaurant |
|||||||||
Gross leasable square footage |
10,982 | 11,042 | 10,790 | |||||||||
Date of purchase |
4/29/2011 | 4/29/2011 | 4/29/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,550,400 | 2,898,805 | 3,024,090 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,550,400 | 2,898,805 | 3,024,090 | |||||||||
Other cash expenditures expensed |
19,746 | 33,573 | 24,322 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,570,146 | $ | 2,932,378 | $ | 3,048,412 | ||||||
|
|
|
|
|
|
II-54
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Bi-Lo Greenwood, SC Grocery |
Bi-Lo Mt. Pleasant, SC Grocery |
Kohls Rice Lake, WI Department Store |
|||||||||
Gross leasable square footage |
41,417 | 64,368 | 64,080 | |||||||||
Date of purchase |
5/3/2011 | 5/3/2011 | 5/5/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
4,013,700 | 9,393,119 | 6,060,926 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
4,013,700 | 9,393,119 | 6,060,926 | |||||||||
Other cash expenditures expensed |
30,485 | 39,966 | 15,934 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 4,044,185 | $ | 9,433,085 | $ | 6,076,860 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Walgreens Medina, OH Drugstore |
Walgreens Chicago (79th St.), IL Drugstore |
Walgreens Decatur, GA Drugstore |
|||||||||
Gross leasable square footage |
14,490 | 11,228 | 14,440 | |||||||||
Date of purchase |
5/5/2011 | 5/5/2011 | 5/5/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
4,536,000 | 3,540,000 | 4,241,424 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
4,536,000 | 3,540,000 | 4,241,424 | |||||||||
Other cash expenditures expensed |
28,396 | 50,506 | 30,296 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 4,564,396 | $ | 3,590,506 | $ | 4,271,720 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Walgreens Muscatine, IA Drugstore |
Walgreens Independence, MO Drugstore |
FedEx McComb, MS Distribution |
|||||||||
Gross leasable square footage |
15,120 | 15,120 | 26,878 | |||||||||
Date of purchase |
5/5/2011 | 5/5/2011 | 5/5/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
3,300,000 | 4,287,000 | 3,424,140 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
3,300,000 | 4,287,000 | 3,424,140 | |||||||||
Other cash expenditures expensed |
25,081 | 29,004 | 25,541 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 3,325,081 | $ | 4,316,004 | $ | 3,449,681 | ||||||
|
|
|
|
|
|
II-55
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Walgreens LaCrosse, WI Drugstore |
Advance Auto Charlotte (Albemarle), NC Automotive Parts |
Advance Auto Rock Hill, SC Automotive Parts |
|||||||||
Gross leasable square footage |
14,550 | 6,874 | 8,049 | |||||||||
Date of purchase |
5/6/2011 | 5/12/2011 | 5/12/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
5,479,440 | 1,323,629 | 1,156,394 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
5,479,440 | 1,323,629 | 1,156,394 | |||||||||
Other cash expenditures expensed |
24,680 | 22,120 | 25,186 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 5,504,120 | $ | 1,345,749 | $ | 1,181,580 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Camp Creek Marketplace East Point, GA Shopping Center |
L.A. Fitness Broadview, IL Fitness & Health |
Glens Market Manistee, MI Grocery |
|||||||||
Gross leasable square footage |
424,640 | 50,040 | 38,392 | |||||||||
Date of purchase |
5/13/2011 | 5/18/2011 | 5/19/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
77,877,000 | 10,235,700 | 5,875,853 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
77,877,000 | 10,235,700 | 5,875,853 | |||||||||
Other cash expenditures expensed |
207,611 | 37,850 | 27,987 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 78,084,611 | $ | 10,273,550 | $ | 5,903,840 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | St. Lukes Urgent Care Creve Coeur, MO Fitness & Health |
Banner Life Insurance Urbana, MD Insurance |
Riverside Centre St. Augustine, FL Shopping Center |
|||||||||
Gross leasable square footage |
14,862 | 115,758 | 62,000 | |||||||||
Date of purchase |
5/20/2011 | 6/1/2011 | 6/8/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
5,559,000 | 38,964,000 | 4,819,500 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
5,559,000 | 38,964,000 | 4,819,500 | |||||||||
Other cash expenditures expensed |
44,542 | 525,603 | 38,274 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 5,603,542 | $ | 39,489,603 | $ | 4,857,774 | ||||||
|
|
|
|
|
|
II-56
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Century Town Center Vero Beach, FL Shopping Center |
OReilly Automotive Central, LA Automotive Parts |
Advance Auto Milwaukee, WI Automotive Parts |
|||||||||
Gross leasable square footage |
107,049 | (2) | 6,800 | 6,790 | ||||||||
Date of purchase |
6/9/2011 | 6/10/2011 | 6/10/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
15,070,500 | 945,540 | 1,842,324 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
15,070,500 | 945,540 | 1,842,324 | |||||||||
Other cash expenditures expensed |
97,410 | 24,327 | 40,405 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 15,167,910 | $ | 969,867 | $ | 1,882,729 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | CVS Sherman, TX Drugstore |
ConAgra Milton, PA Food Production |
Associated Wholesaler Grocers Johnston, IA Grocery |
|||||||||
Gross leasable square footage |
10,908 | 718,910 | 67,820 | |||||||||
Date of purchase |
6/10/2011 | 6/14/2011 | 6/15/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
4,242,079 | 29,070,000 | 8,568,000 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
4,242,079 | 29,070,000 | 8,568,000 | |||||||||
Other cash expenditures expensed |
36,689 | 350,445 | 31,581 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 4,278,768 | $ | 29,420,445 | $ | 8,599,581 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Associated Wholesaler Grocers Des Moines (Ingersoll), IA Grocery |
Associated Wholesaler Grocers Des Moines (Beaver), IA Grocery |
Associated Wholesaler Grocers Des Moines (Fleur), IA Grocery |
|||||||||
Gross leasable square footage |
74,412 | 26,425 | 53,600 | |||||||||
Date of purchase |
6/15/2011 | 6/15/2011 | 6/15/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
13,260,000 | 4,284,000 | 2,346,000 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
13,260,000 | 4,284,000 | 2,346,000 | |||||||||
Other cash expenditures expensed |
35,081 | 27,642 | 25,945 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 13,295,081 | $ | 4,311,642 | $ | 2,371,945 | ||||||
|
|
|
|
|
|
II-57
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Hobby Lobby Avon, IN Specialty Retail |
Advance Auto Vermillon, OH Automotive Parts |
Advance Auto Massillon, OH Automotive Parts |
|||||||||
Gross leasable square footage |
56,100 | 6,783 | 6,846 | |||||||||
Date of purchase |
6/17/2011 | 6/21/2011 | 6/21/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
5,865,000 | 1,174,167 | 1,870,083 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
5,865,000 | 1,174,167 | 1,870,083 | |||||||||
Other cash expenditures expensed |
43,545 | 21,144 | 58,204 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 5,908,545 | $ | 1,195,311 | $ | 1,928,287 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Advance Auto Monroe, MI Automotive Parts |
Advance Auto South Lyon, MI Automotive Parts |
Nature Coast Commons Spring Hill, FL Shopping Center |
|||||||||
Gross leasable square footage |
6,786 | 6,765 | 229,501 | (2) | ||||||||
Date of purchase |
6/21/2011 | 6/21/2011 | 6/21/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,636,173 | 1,649,066 | 29,580,000 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,636,173 | 1,649,066 | 29,580,000 | |||||||||
Other cash expenditures expensed |
17,586 | 17,589 | 240,669 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,653,759 | $ | 1,666,655 | $ | 29,820,669 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Walgreens Clarkston, MI Drugstore |
Walgreens Madisonville, KY Drugstore |
Walgreens Springdale, AR Drugstore |
|||||||||
Gross leasable square footage |
13,905 | 14,820 | 14,550 | |||||||||
Date of purchase |
6/24/2011 | 6/28/2011 | 6/29/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
5,134,680 | 4,286,380 | 5,602,860 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
5,134,680 | 4,286,380 | 5,602,860 | |||||||||
Other cash expenditures expensed |
36,074 | 33,946 | 43,486 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 5,170,754 | $ | 4,320,326 | $ | 5,646,346 | ||||||
|
|
|
|
|
|
II-58
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Stripes Odessa, TX Convenience Store |
Kohls Monroe, MI Department Store |
Santa Rosa Commons Pace, FL Shopping Center |
|||||||||
Gross leasable square footage |
4,731 | 68,727 | 138,850 | (2) | ||||||||
Date of purchase |
6/30/2011 | 6/30/2011 | 6/30/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | 5,300,748 | $ | | ||||||
Cash down payment |
2,574,304 | 676,154 | 25,959,000 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
2,574,304 | 5,976,902 | 25,959,000 | |||||||||
Other cash expenditures expensed |
19,734 | 16,092 | 68,300 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 2,594,038 | $ | 5,992,994 | $ | 26,027,300 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Tractor Supply Grayson, KY Specialty Retail |
Telegraph Plaza Monroe, MI Shopping Center |
California Pizza Kitchen Alpharetta, GA Restaurant |
|||||||||
Gross leasable square footage |
19,097 | 73,186 | 6,496 | |||||||||
Date of purchase |
6/30/2011 | 6/30/2011 | 7/7/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
2,870,280 | 7,181,098 | 4,106,976 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
2,870,280 | 7,181,098 | 4,106,976 | |||||||||
Other cash expenditures expensed |
31,315 | 49,437 | 17,520 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 2,901,595 | $ | 7,230,535 | $ | 4,124,496 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | California Pizza Kitchen Atlanta, GA Restaurant |
California Pizza Kitchen Grapevine, TX Restaurant |
California Pizza Kitchen Scottsdale, AZ Restaurant |
|||||||||
Gross leasable square footage |
5,996 | 6,150 | 6,182 | |||||||||
Date of purchase |
7/7/2011 | 7/7/2011 | 7/7/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
3,764,316 | 3,437,892 | 3,427,884 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
3,764,316 | 3,437,892 | 3,427,884 | |||||||||
Other cash expenditures expensed |
17,085 | 24,075 | 15,730 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 3,781,401 | $ | 3,461,967 | $ | 3,443,614 | ||||||
|
|
|
|
|
|
II-59
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | California Pizza Kitchen Schaumburg, IL Restaurant |
Shelby Corners Utica, MI Shopping Center |
Owens Corning Newark, OH Distribution |
|||||||||
Gross leasable square footage |
6,964 | 77,088 | 480,545 | |||||||||
Date of purchase |
7/7/2011 | 7/8/2011 | 7/8/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
3,877,932 | 4,340,100 | 12,138,000 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
3,877,932 | 4,340,100 | 12,138,000 | |||||||||
Other cash expenditures expensed |
17,587 | 47,927 | 60,248 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 3,895,519 | $ | 4,388,027 | $ | 12,198,248 | ||||||
|
|
|
|
|
|
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | CVS Dolton, IL |
CVS Lawrenceville, GA Drugstore |
CVS Evansville, IN Drugstore |
|||||||||
Gross leasable square footage |
13,050 | 13,279 | 10,125 | |||||||||
Date of purchase |
7/8/2011 | 7/8/2011 | 7/11/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
5,749,555 | 5,452,920 | 3,475,034 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
5,749,555 | 5,452,920 | 3,475,034 | |||||||||
Other cash expenditures expensed |
58,917 | 32,131 | 25,151 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 5,808,472 | $ | 5,485,051 | $ | 3,500,185 | ||||||
|
|
|
|
|
|
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Best Buy Kenosha, WI Electronics Retail |
The Crossing Killeen, TX Shopping Center |
Best Buy Indianapolis, IN Electronics Retail |
|||||||||
Gross leasable square footage |
30,085 | 60,438 | 30,067 | |||||||||
Date of purchase |
7/12/2011 | 7/15/2011 | 7/20/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
6,732,000 | 9,180,000 | 4,845,000 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
6,732,000 | 9,180,000 | 4,845,000 | |||||||||
Other cash expenditures expensed |
51,986 | 48,573 | 53,335 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 6,783,986 | $ | 9,228,573 | $ | 4,898,335 | ||||||
|
|
|
|
|
|
II-60
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole
Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Petsmart Westlake Village, CA Specialty Retail |
Petsmart Boca Raton, FL Specialty Retail |
Petsmart Lake Mary, FL Specialty Retail |
|||||||||
Gross leasable square footage |
25,895 | 28,389 | 26,118 | |||||||||
Date of purchase |
7/21/2011 | 7/21/2011 | 7/21/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
8,144,292 | 9,140,628 | 4,989,228 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
8,144,292 | 9,140,628 | 4,989,228 | |||||||||
Other cash expenditures expensed |
22,079 | 52,003 | 37,792 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 8,166,371 | $ | 9,192,631 | $ | 5,027,020 | ||||||
|
|
|
|
|
|
Program: |
Cole
Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Petsmart Plantation, FL Specialty Retail |
Petsmart Tallahassee, FL Specialty Retail |
Petsmart Evanston, IL Specialty Retail |
|||||||||
Gross leasable square footage |
26,017 | 26,738 | 26,432 | |||||||||
Date of purchase |
7/21/2011 | 7/21/2011 | 7/21/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
6,981,900 | 2,664,444 | 7,155,504 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
6,981,900 | 2,664,444 | 7,155,504 | |||||||||
Other cash expenditures expensed |
44,105 | 30,216 | 23,730 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 7,026,005 | $ | 2,694,660 | $ | 7,179,234 | ||||||
|
|
|
|
|
|
Program: |
Cole
Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Petsmart Braintree, MA Specialty Retail |
Petsmart Oxon Hill, MD Specialty Retail |
Petsmart Flint, MI Specialty Retail |
|||||||||
Gross leasable square footage |
26,000 | 26,956 | 26,054 | |||||||||
Date of purchase |
7/21/2011 | 7/21/2011 | 7/21/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
10,808,736 | 5,985,564 | 4,823,172 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
10,808,736 | 5,985,564 | 4,823,172 | |||||||||
Other cash expenditures expensed |
20,430 | 22,162 | 92,245 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 10,829,166 | $ | 6,007,726 | $ | 4,915,417 | ||||||
|
|
|
|
|
|
II-61
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole
Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Petsmart Dallas, TX Specialty Retail |
Petsmart Southlake, TX Specialty Retail |
Food Lion Moyock, NC Grocery |
|||||||||
Gross leasable square footage |
26,329 | 34,325 | 38,118 | |||||||||
Date of purchase |
7/21/2011 | 7/21/2011 | 7/21/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
6,476,184 | 8,310,348 | 3,527,160 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
6,476,184 | 8,310,348 | 3,527,160 | |||||||||
Other cash expenditures expensed |
26,653 | 29,380 | 41,007 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 6,502,837 | $ | 8,339,728 | $ | 3,568,167 | ||||||
|
|
|
|
|
|
Program: |
Cole
Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Denver West Plaza Lakewood, CO Shopping Center |
The Forum Fort Myers, FL Shopping Center |
Hobby Lobby Center Greenville, SC Shopping Center |
|||||||||
Gross leasable square footage |
71,249 | 189,642 | (2) | 68,912 | ||||||||
Date of purchase |
7/22/2011 | 7/22/2011 | 7/22/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
14,280,000 | 34,935,000 | 6,426,000 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
14,280,000 | 34,935,000 | 6,426,000 | |||||||||
Other cash expenditures expensed |
50,922 | 90,247 | 48,224 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 14,330,922 | $ | 35,025,247 | $ | 6,474,224 | ||||||
|
|
|
|
|
|
Program: |
Cole
Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Davita Dialysis Douglasville, GA Fitness & Health |
Wal-Mart Riverside, CA Distribution Center |
Walgreens Watertown, NY Drugstore |
|||||||||
Gross leasable square footage |
7,350 | 496,064 | 14,490 | |||||||||
Date of purchase |
7/22/2011 | 7/25/2011 | 7/26/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,597,320 | 93,330,000 | 5,816,040 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,597,320 | 93,330,000 | 5,816,040 | |||||||||
Other cash expenditures expensed |
23,860 | 71,117 | 44,845 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,621,180 | $ | 93,401,117 | $ | 5,860,885 | ||||||
|
|
|
|
|
|
II-62
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole
Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Best Buy Richmond, IN Electronics Retail |
Davita Dialysis Augusta, GA Fitness & Health |
Sams Club Douglasville, GA Warehouse Club |
|||||||||
Gross leasable square footage |
30,983 | 7,200 | 129,562 | |||||||||
Date of purchase |
7/27/2011 | 7/28/2011 | 7/28/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
4,870,500 | 1,564,680 | 12,590,236 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
4,870,500 | 1,564,680 | 12,590,236 | |||||||||
Other cash expenditures expensed |
39,817 | 23,854 | 30,989 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 4,910,317 | $ | 1,588,534 | $ | 12,621,225 | ||||||
|
|
|
|
|
|
Program: |
Cole
Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Wal-Mart Douglasville, GA Discount Retail |
Walgreens Wichita, KS Drugstore |
Walgreens Bartlett, TN Drugstore |
|||||||||
Gross leasable square footage |
222,511 | 15,120 | 14,490 | |||||||||
Date of purchase |
7/28/2011 | 8/1/2011 | 8/1/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
20,865,764 | 4,080,000 | 3,843,360 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
20,865,764 | 4,080,000 | 3,843,360 | |||||||||
Other cash expenditures expensed |
28,116 | 32,097 | 45,259 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 20,893,880 | $ | 4,112,097 | $ | 3,888,619 | ||||||
|
|
|
|
|
|
Program: |
Cole
Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Stripes Laredo, TX Convenience Store |
Petsmart Parma, OH Specialty Retail |
Stop & Shop Cranston, RI Grocery |
|||||||||
Gross leasable square footage |
4,730 | 26,931 | 52,137 | (2) | ||||||||
Date of purchase |
8/3/2011 | 8/4/2011 | 8/5/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
2,884,980 | 4,296,750 | 13,791,897 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
2,884,980 | 4,296,750 | 13,791,897 | |||||||||
Other cash expenditures expensed |
18,953 | 36,353 | 63,279 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 2,903,933 | $ | 4,333,103 | $ | 13,855,176 | ||||||
|
|
|
|
|
|
II-63
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Walgreens Dubuque, IA Drugstore |
The Plaza Queen Creek, AZ Shopping Center |
Walgreens Cape Carteret, NC Drugstore |
|||||||||
Gross leasable square footage |
14,568 | 70,973 | (2) | 14,820 | ||||||||
Date of purchase |
8/12/2011 | 8/12/2011 | 8/15/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
4,712,400 | 13,515,000 | 4,258,500 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
4,712,400 | 13,515,000 | 4,258,500 | |||||||||
Other cash expenditures expensed |
31,725 | 52,911 | 40,887 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 4,744,125 | $ | 13,567,911 | $ | 4,299,387 | ||||||
|
|
|
|
|
|
Program: |
Cole Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Kohls Brownsville, TX Department Store |
Highlands Ranch Highland Ranch, CO Shopping Center |
Kingman Gateway Kingman, AZ Shopping Center |
|||||||||
Gross leasable square footage |
89,915 | (2) | 50,511 | 49,208 | ||||||||
Date of purchase |
8/16/2011 | 8/16/2011 | 8/16/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
6,701,400 | 6,472,920 | 4,851,120 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
6,701,400 | 6,472,920 | 4,851,120 | |||||||||
Other cash expenditures expensed |
39,114 | 39,722 | 25,823 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 6,740,514 | $ | 6,512,642 | $ | 4,876,943 | ||||||
|
|
|
|
|
|
Program: |
Cole Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | CVS & Huntington Bank Northville, MI Shopping Center |
PLS Check Cashers Tucson, AZ Professional Services |
PLS Check Cashers Calumet Park, IL Professional Services |
|||||||||
Gross leasable square footage |
15,816 | (2) | 2,550 | 4,135 | ||||||||
Date of purchase |
8/17/2011 | 8/18/2011 | 8/18/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
3,873,168 | 1,374,570 | 1,554,247 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
3,873,168 | 1,374,570 | 1,554,247 | |||||||||
Other cash expenditures expensed |
53,353 | 24,343 | 24,343 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 3,926,521 | $ | 1,398,913 | $ | 1,578,590 | ||||||
|
|
|
|
|
|
II-64
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole
Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | PLS Check Cashers Chicago (Diversey), IL Professional Services |
PLS Check Cashers Dallas (Camp Wisdom), TX Professional Services |
PLS Check Cashers Dallas (Davis), TX Professional Services |
|||||||||
Gross leasable square footage |
1,267 | 1,653 | 2,234 | |||||||||
Date of purchase |
8/18/2011 | 8/18/2011 | 8/18/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,234,986 | 1,419,582 | 1,246,279 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,234,986 | 1,419,582 | 1,246,279 | |||||||||
Other cash expenditures expensed |
24,343 | 24,343 | 24,343 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,259,329 | $ | 1,443,925 | $ | 1,270,622 | ||||||
|
|
|
|
|
|
Program: |
Cole
Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | PLS Check Cashers Fort Worth, TX Professional Services |
PLS Check Cashers Grand Prairie, TX Professional Services |
PLS Check Cashers Houston, TX Professional Services |
|||||||||
Gross leasable square footage |
2,492 | 2,400 | 1,681 | |||||||||
Date of purchase |
8/18/2011 | 8/18/2011 | 8/18/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,429,271 | 1,273,168 | 1,160,348 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,429,271 | 1,273,168 | 1,160,348 | |||||||||
Other cash expenditures expensed |
24,343 | 24,343 | 24,343 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,453,614 | $ | 1,297,511 | $ | 1,184,691 | ||||||
|
|
|
|
|
|
Program: |
Cole
Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | PLS Check Cashers Kenosha, WI Professional Services |
PLS Check Cashers Mesa (Broadway), AZ Professional Services |
PLS Check Cashers Mesquite, TX Professional Services |
|||||||||
Gross leasable square footage |
4,023 | 1,960 | 1,734 | |||||||||
Date of purchase |
8/18/2011 | 8/18/2011 | 8/18/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
884,132 | 1,198,432 | 1,679,517 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
884,132 | 1,198,432 | 1,679,517 | |||||||||
Other cash expenditures expensed |
24,343 | 24,343 | 24,343 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 908,475 | $ | 1,222,775 | $ | 1,703,860 | ||||||
|
|
|
|
|
|
II-65
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Tractor Supply Rincon, GA Specialty Retail |
Petsmart Phoenix, AZ |
Kohls Plaza Napa, CA Shopping Center |
|||||||||
Gross leasable square footage |
19,097 | 365,672 | 77,280 | |||||||||
Date of purchase |
8/23/2011 | 8/23/2011 | 8/23/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
2,652,000 | 104,550,000 | 20,221,500 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
2,652,000 | 104,550,000 | 20,221,500 | |||||||||
Other cash expenditures expensed |
32,476 | 103,358 | 49,746 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 2,684,476 | $ | 104,653,358 | $ | 20,271,246 | ||||||
|
|
|
|
|
|
Program: |
Cole Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Walgreens Anthony, TX Drugstore |
Dicks Sporting Charleston, SC |
L.A. Fitness Avondale, AZ Fitness & Health |
|||||||||
Gross leasable square footage |
14,820 | 47,082 | 45,000 | |||||||||
Date of purchase |
8/29/2011 | 8/31/2011 | 8/31/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
4,947,000 | 7,650,000 | 8,251,263 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
4,947,000 | 7,650,000 | 8,251,263 | |||||||||
Other cash expenditures expensed |
34,013 | 83,400 | 49,382 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 4,981,013 | $ | 7,733,400 | $ | 8,300,645 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Walgreens Union City, GA Drugstore |
Lowes Miamisburg, OH Home Improvement |
CVS Drugstore |
|||||||||
Gross leasable square footage |
14,550 | 125,357 | 10,880 | |||||||||
Date of purchase |
9/9/2011 | 9/9/2011 | 9/16/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
4,921,679 | 11,883,000 | 7,788,006 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
4,921,679 | 11,883,000 | 7,788,006 | |||||||||
Other cash expenditures expensed |
39,105 | 84,785 | 88,662 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 4,960,784 | $ | 11,967,785 | $ | 7,876,668 | ||||||
|
|
|
|
|
|
II-66
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | CVS Lake Havasu, AZ Drugstore |
CVS Phoenix, AZ Drugstore |
Carmax Henderson, NV Auto Dealership |
|||||||||
Gross leasable square footage |
14,512 | 13,013 | 59,792 | |||||||||
Date of purchase |
9/16/2011 | 9/16/2011 | 9/21/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
6,204,368 | 8,616,027 | 18,780,240 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
6,204,368 | 8,616,027 | 18,780,240 | |||||||||
Other cash expenditures expensed |
28,581 | 29,256 | 108,170 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 6,232,949 | $ | 8,645,283 | $ | 18,888,410 | ||||||
|
|
|
|
|
|
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Advance Auto Brownstown, MI Automotive Parts |
Advance Auto Romulus, MI Automotive Parts |
Advance Auto Washington Township, MI Automotive Parts |
|||||||||
Gross leasable square footage |
7,000 | 7,000 | 7,000 | |||||||||
Date of purchase |
9/23/2011 | 9/23/2011 | 9/23/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,940,040 | 1,810,500 | 2,078,760 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,940,040 | 1,810,500 | 2,078,760 | |||||||||
Other cash expenditures expensed |
36,981 | 36,073 | 37,687 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,977,021 | $ | 1,846,573 | $ | 2,116,447 | ||||||
|
|
|
|
|
|
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | L.A. Fitness Duncanville, TX Fitness & Health |
Best Buy Southaven, MS Electronics Retail |
Dimond Crossing Anchorage, AK Shopping Center |
|||||||||
Gross leasable square footage |
45,000 | 30,000 | 85,356 | (2) | ||||||||
Date of purchase |
9/26/2011 | 9/26/2011 | 9/27/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
7,344,000 | 5,049,000 | 14,663,010 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
7,344,000 | 5,049,000 | 14,663,010 | |||||||||
Other cash expenditures expensed |
50,719 | 47,776 | 75,278 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 7,394,719 | $ | 5,096,776 | $ | 14,738,288 | ||||||
|
|
|
|
|
|
II-67
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Golden Corral Independence, MO Restaurant |
Glynn Isles Brunswick, GA Shopping Center |
Emdeon Nashville, TN Professional Services |
|||||||||
Gross leasable square footage |
12,767 | 193,064 | 54,558 | |||||||||
Date of purchase |
9/28/2011 | 9/29/2011 | 9/29/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
3,490,721 | 38,760,000 | 9,792,000 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
3,490,721 | 38,760,000 | 9,792,000 | |||||||||
Other cash expenditures expensed |
27,720 | 155,188 | 82,700 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 3,518,441 | $ | 38,915,188 | $ | 9,874,700 | ||||||
|
|
|
|
|
|
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Winchester Station Winchester, VA Shopping Center |
BJs Wholesale Club Deptford, NJ Warehouse Club |
BJs Wholesale Club Westminster, MD Warehouse Club |
|||||||||
Gross leasable square footage |
182,851 | (2) | 116,386 | 109,310 | ||||||||
Date of purchase |
9/29/2011 | 9/30/2011 | 9/30/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
27,418,652 | 17,045,187 | 21,413,419 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
27,418,652 | 17,045,187 | 21,413,419 | |||||||||
Other cash expenditures expensed |
204,845 | 40,243 | 40,243 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 27,623,497 | $ | 17,085,430 | $ | 21,453,662 | ||||||
|
|
|
|
|
|
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | BJs Wholesale Club Pembroke Pines, FL Warehouse Club |
BJs Wholesale Club Lancaster, PA Warehouse Club |
BJs Wholesale Club Greenfield, MA Warehouse Club |
|||||||||
Gross leasable square footage |
108,625 | 108,447 | 69,060 | |||||||||
Date of purchase |
9/30/2011 | 9/30/2011 | 9/30/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
14,015,195 | 21,058,920 | 13,387,138 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
14,015,195 | 21,058,920 | 13,387,138 | |||||||||
Other cash expenditures expensed |
40,243 | 40,243 | 40,243 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 14,055,438 | $ | 21,099,163 | $ | 13,427,381 | ||||||
|
|
|
|
|
|
II-68
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | BJs Wholesale Club Uxbridge, MA Warehouse Club |
BJs Wholesale Club Leominster, MA Warehouse Club |
BJs Wholesale Club Lexington Park, MD Warehouse Club |
|||||||||
Gross leasable square footage |
617,676 | 109,544 | 91,937 | |||||||||
Date of purchase |
9/30/2011 | 9/30/2011 | 9/30/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
28,874,555 | 20,579,915 | 17,727,601 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
28,874,555 | 20,579,915 | 17,727,601 | |||||||||
Other cash expenditures expensed |
40,743 | 33,447 | 33,447 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 28,915,298 | $ | 20,613,362 | $ | 17,761,048 | ||||||
|
|
|
|
|
|
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | BJs Wholesale Club Auburn, ME Warehouse Club |
BJs Wholesale Club Boynton Beach, FL Warehouse Club |
BJs Wholesale Club Portsmouth, NH Warehouse Club |
|||||||||
Gross leasable square footage |
77,046 | 108,758 | 118,850 | |||||||||
Date of purchase |
9/30/2011 | 9/30/2011 | 9/30/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
14,793,291 | 17,895,143 | 23,008,567 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
14,793,291 | 17,895,143 | 23,008,567 | |||||||||
Other cash expenditures expensed |
33,447 | 33,447 | 33,447 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 14,826,738 | $ | 17,928,590 | $ | 23,042,014 | ||||||
|
|
|
|
|
|
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | BJs Wholesale Club Jacksonville, FL Warehouse Club |
Walgreens Xenia, OH |
Giant/Eagle Columbus, OH Grocery |
|||||||||
Gross leasable square footage |
478,898 | 14,550 | 116,238 | |||||||||
Date of purchase |
9/30/2011 | 10/4/2011 | 10/5/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
20,493,215 | 5,686,749 | 19,900,200 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
20,493,215 | 5,686,749 | 19,900,200 | |||||||||
Other cash expenditures expensed |
33,447 | 63,637 | 79,625 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 20,526,662 | $ | 5,750,386 | $ | 19,979,825 | ||||||
|
|
|
|
|
|
II-69
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | CVS Cherry Hill, NJ Drugstore |
HH Gregg North Fayette, PA Electronics Retail |
Hobby Lobby Logan, UT Specialty Retail |
|||||||||
Gross leasable square footage |
15,225 | (2) | 27,689 | 55,137 | ||||||||
Date of purchase |
10/13/2011 | 10/14/2011 | 10/20/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
6,636,492 | 4,004,385 | 4,998,000 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
6,636,492 | 4,004,385 | 4,998,000 | |||||||||
Other cash expenditures expensed |
124,627 | 89,197 | 42,736 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 6,761,119 | $ | 4,093,582 | $ | 5,040,736 | ||||||
|
|
|
|
|
|
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | PLS Check Cashers Compton, CA Professional Services |
Davita Dialysis Willow Grove, PA Fitness & Health |
Del Monte Plaza Reno, NV Shopping Center |
|||||||||
Gross leasable square footage |
1,461 | 10,600 | 82,758 | |||||||||
Date of purchase |
10/26/2011 | 10/28/2011 | 11/2/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,683,000 | 3,310,136 | 18,666,000 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,683,000 | 3,310,136 | 18,666,000 | |||||||||
Other cash expenditures expensed |
35,550 | 86,012 | 58,860 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,718,550 | $ | 3,396,148 | $ | 18,724,860 | ||||||
|
|
|
|
|
|
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Caremark Towers Glenview, IL Drugstore |
PLS Check Cashers Phoenix, AZ Professional Services |
Office Depot Alvin, TX Office Supply |
|||||||||
Gross leasable square footage |
195,116 | 2,234 | 21,000 | |||||||||
Date of purchase |
11/3/2011 | 11/4/2011 | 11/4/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
45,135,000 | 1,053,235 | 2,922,300 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
45,135,000 | 1,053,235 | 2,922,300 | |||||||||
Other cash expenditures expensed |
81,666 | 18,362 | 61,792 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 45,216,666 | $ | 1,071,597 | $ | 2,984,092 | ||||||
|
|
|
|
|
|
II-70
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | CVS Bellevue, OH Drugstore |
CVS Warren, OH Drugstore |
CVS Titusville, PA Drugstore |
|||||||||
Gross leasable square footage |
10,165 | 10,127 | 10,104 | |||||||||
Date of purchase |
11/4/2011 | 11/4/2011 | 11/4/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
2,041,020 | 1,726,860 | 2,761,140 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
2,041,020 | 1,726,860 | 2,761,140 | |||||||||
Other cash expenditures expensed |
31,409 | 31,336 | 48,105 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 2,072,429 | $ | 1,758,196 | $ | 2,809,245 | ||||||
|
|
|
|
|
|
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Home Depot Kennesaw, GA Home Improvement |
Tractor Supply Bainbridge, GA Specialty Retail |
Walgreens Albuquerque, NM Drugstore |
|||||||||
Gross leasable square footage |
79,992 | 19,097 | 15,930 | |||||||||
Date of purchase |
11/4/2011 | 11/16/2011 | 11/17/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,640,000 | 2,745,840 | 3,439,440 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,640,000 | 2,745,840 | 3,439,440 | |||||||||
Other cash expenditures expensed |
| 23,563 | 32,752 | |||||||||
Other cash expenditures capitalized |
19,159 | | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,659,159 | $ | 2,769,403 | $ | 3,472,192 | ||||||
|
|
|
|
|
|
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Tractor Supply Mishawaka, IN Specialty Retail |
MedAssets Plano, TX Fitness & Health |
United Technologies Bradenton, FL Specialty Retail |
|||||||||
Gross leasable square footage |
19,097 | | (3) | 106,790 | ||||||||
Date of purchase |
11/18/2011 | 11/22/2011 | 12/8/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
2,808,311 | 6,589,060 | 20,502,000 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
2,808,311 | 6,589,060 | 20,502,000 | |||||||||
Other cash expenditures expensed |
29,921 | | 80,410 | |||||||||
Other cash expenditures capitalized |
| 8,115 | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 2,838,232 | $ | 6,597,175 | $ | 20,582,410 | ||||||
|
|
|
|
|
|
II-71
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole
Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Davita Dialysis Casselberry, FL Fitness & Health |
Hobby Lobby Concord, NC Specialty Retail |
Shoppes at Sugarmill Woods Homosassa, FL Shopping Center |
|||||||||
Gross leasable square footage |
6,232 | 60,000 | 53,162 | |||||||||
Date of purchase |
12/9/2011 | 12/12/2011 | 12/13/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
2,346,000 | 5,916,000 | 8,262,000 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
2,346,000 | 5,916,000 | 8,262,000 | |||||||||
Other cash expenditures expensed |
22,387 | 41,235 | 58,242 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 2,368,387 | $ | 5,957,235 | $ | 8,320,242 | ||||||
|
|
|
|
|
|
Program: |
Cole
Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Bellview Plaza Pensacola, FL Shopping Center |
Kohls Fort Dodge, IA Department Store |
Davita Dialysis Sanford, FL Fitness & Health |
|||||||||
Gross leasable square footage |
82,910 | 55,858 | 8,586 | |||||||||
Date of purchase |
12/13/2011 | 12/14/2011 | 12/19/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
8,364,000 | 4,794,000 | 2,924,340 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
8,364,000 | 4,794,000 | 2,924,340 | |||||||||
Other cash expenditures expensed |
41,157 | 30,675 | 17,347 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 8,405,157 | $ | 4,824,675 | $ | 2,941,687 | ||||||
|
|
|
|
|
|
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Crossroads Marketplace Warner Robbins, GA Shopping Center |
Midtowne Park Anderson, SC Shopping Center |
Cleveland Towne Cleveland, TN |
|||||||||
Gross leasable square footage |
77,667 | (2) | 167,341 | 153,118 | ||||||||
Date of purchase |
12/20/2011 | 12/20/2011 | 12/20/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
11,475,000 | 26,112,000 | 18,003,000 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
11,475,000 | 26,112,000 | 18,003,000 | |||||||||
Other cash expenditures expensed |
100,746 | 68,670 | 107,564 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 11,575,746 | $ | 26,180,670 | $ | 18,110,564 | ||||||
|
|
|
|
|
|
II-72
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | RaceTrac Atlanta, GA Convenience Store |
RaceTrac Belleview, FL Convenience Store |
RaceTrac Bessermer, AL Convenience Store |
|||||||||
Gross leasable square footage |
2,243 | 5,001 | 3,974 | |||||||||
Date of purchase |
12/21/2011 | 12/21/2011 | 12/21/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
2,550,000 | 4,590,000 | 3,315,000 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
2,550,000 | 4,590,000 | 3,315,000 | |||||||||
Other cash expenditures expensed |
18,971 | 19,682 | 21,274 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 2,568,971 | $ | 4,609,682 | $ | 3,336,274 | ||||||
|
|
|
|
|
|
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | RaceTrac Denton, TX Convenience Store |
RaceTrac Houston (Hwy 6N), TX Convenience Store |
RaceTrac Houston (Kuykendahl), TX Convenience Store |
|||||||||
Gross leasable square footage |
4,030 | 2,988 | 2,976 | |||||||||
Date of purchase |
12/21/2011 | 12/21/2011 | 12/21/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
3,315,000 | 2,244,000 | 2,550,000 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
3,315,000 | 2,244,000 | 2,550,000 | |||||||||
Other cash expenditures expensed |
29,164 | 28,446 | 26,705 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 3,344,164 | $ | 2,272,446 | $ | 2,576,705 | ||||||
|
|
|
|
|
|
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | RaceTrac Jacksonville, FL Convenience Store |
RaceTrac Leesburg, FL Convenience Store |
RaceTrac Mobile, AL Convenience Store |
|||||||||
Gross leasable square footage |
5,138 | 5,079 | 2,884 | |||||||||
Date of purchase |
12/21/2011 | 12/21/2011 | 12/21/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
4,335,000 | 4,335,000 | 1,836,000 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
4,335,000 | 4,335,000 | 1,836,000 | |||||||||
Other cash expenditures expensed |
19,792 | 19,792 | 19,562 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 4,354,792 | $ | 4,354,792 | $ | 1,855,562 | ||||||
|
|
|
|
|
|
II-73
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | AGCO Corporation Duluth, GA Food Production |
Wal-Mart Lancaster, SC Discount Retail |
VA Oceanside Clinic Oceanside, CA Fitness & Health |
|||||||||
Gross leasable square footage |
125,800 | 208,470 | 65,536 | |||||||||
Date of purchase |
12/22/2011 | 12/22/2011 | 12/22/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
18,283,500 | 14,943,000 | 55,590,000 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
18,283,500 | 14,943,000 | 55,590,000 | |||||||||
Other cash expenditures expensed |
84,947 | 75,790 | 47,187 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 18,368,447 | $ | 15,018,790 | $ | 55,637,187 | ||||||
|
|
|
|
|
|
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Silverado Plaza Tucson, AZ Shopping Center |
Irving Oil Belfast, ME Convenience Store |
Irving Oil Bethel, ME Convenience Store |
|||||||||
Gross leasable square footage |
77,691 | 4,017 | 5,517 | |||||||||
Date of purchase |
12/22/2011 | 12/29/2011 | 12/29/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
9,435,000 | 1,007,407 | 505,630 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
9,435,000 | 1,007,407 | 505,630 | |||||||||
Other cash expenditures expensed |
71,170 | 12,564 | 12,564 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 9,506,170 | $ | 1,019,971 | $ | 518,194 | ||||||
|
|
|
|
|
|
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Irving Oil Boothbay Harbor, ME Convenience Store |
Irving Oil Caribou, ME Convenience Store |
Irving Oil Conway, ME Convenience Store |
|||||||||
Gross leasable square footage |
3,355 | 2,918 | 1,599 | |||||||||
Date of purchase |
12/29/2011 | 12/29/2011 | 12/29/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
907,011 | 580,191 | 680,000 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
907,011 | 580,191 | 680,000 | |||||||||
Other cash expenditures expensed |
12,564 | 12,564 | 18,306 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 919,575 | $ | 592,755 | $ | 698,306 | ||||||
|
|
|
|
|
|
II-74
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Irving Oil Dover, NH Convenience Store |
Irving Oil Fort Kent, ME Convenience Store |
Irving Oil Kennebunk, ME Convenience Store |
|||||||||
Gross leasable square footage |
2,411 | 2,938 | 3,617 | |||||||||
Date of purchase |
12/29/2011 | 12/29/2011 | 12/29/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,058,735 | 695,678 | 1,091,614 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,058,735 | 695,678 | 1,091,614 | |||||||||
Other cash expenditures expensed |
18,306 | 12,564 | 12,564 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,077,041 | $ | 708,242 | $ | 1,104,178 | ||||||
|
|
|
|
|
|
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Irving Oil Lincoln, ME Convenience Store |
Irving Oil Orono, ME Convenience Store |
Irving Oil Rochester, NH Convenience Store |
|||||||||
Gross leasable square footage |
3,615 | 2,478 | 3,391 | |||||||||
Date of purchase |
12/29/2011 | 12/29/2011 | 12/29/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
701,189 | 495,393 | 1,007,407 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
701,189 | 495,393 | 1,007,407 | |||||||||
Other cash expenditures expensed |
12,564 | 12,564 | 18,306 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 713,753 | $ | 507,957 | $ | 1,025,713 | ||||||
|
|
|
|
|
|
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Irving Oil Rutland, VT Convenience Store |
Irving Oil Saco, ME Convenience Store |
Irving Oil Skowhegan, ME Convenience Store |
|||||||||
Gross leasable square footage |
2,478 | 1,500 | 2,999 | |||||||||
Date of purchase |
12/29/2011 | 12/29/2011 | 12/29/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
433,185 | 890,535 | 1,007,407 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
433,185 | 890,535 | 1,007,407 | |||||||||
Other cash expenditures expensed |
14,443 | 12,564 | 12,564 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 447,628 | $ | 903,099 | $ | 1,019,971 | ||||||
|
|
|
|
|
|
II-75
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Irving Oil West Dummerston, VT Convenience Store |
Irving Oil Westminister, VT Convenience Store |
Kyle Marketplace Kyle, TX Shopping Center |
|||||||||
Gross leasable square footage |
2,237 | 3,307 | 219,111 | (2) | ||||||||
Date of purchase |
12/29/2011 | 12/29/2011 | 12/30/2011 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
528,889 | 543,597 | 45,900,000 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
528,889 | 543,597 | 45,900,000 | |||||||||
Other cash expenditures expensed |
14,443 | 14,443 | 103,751 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 543,332 | $ | 558,040 | $ | 46,003,751 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
|||||||||||
Name, location, type of property | Sams Club Colorado Springs, CO Warehouse Club |
|||||||||||
Gross leasable square footage |
128,065 | |||||||||||
Date of purchase |
1/20/2012 | |||||||||||
Mortgage financing at date of purchase |
$ | | ||||||||||
Cash down payment |
17,646,000 | |||||||||||
|
|
|||||||||||
Contract purchase price plus acquisition fee |
17,646,000 | |||||||||||
Other cash expenditures expensed |
58,335 | |||||||||||
Other cash expenditures capitalized |
| |||||||||||
|
|
|||||||||||
Total acquisition cost |
$ | 17,704,335 | ||||||||||
|
|
II-76
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole
Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Indian Lakes Crossing Virginia Beach, VA Shopping Center |
PetSmart/Hallmark Cincinnati, OH Shopping Center |
Davita Dialysis Ft. Wayne, IN Fitness and Health |
|||||||||
Gross leasable square footage |
71,020 | (2) | 33,579 | 7,930 | ||||||||
Date of purchase |
1/31/2012 | 2/14/2012 | 2/16/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
14,484,000 | 5,142,432 | 2,844,780 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
14,484,000 | 5,142,432 | 2,844,780 | |||||||||
Other cash expenditures expensed |
100,013 | 52,677 | 29,725 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 14,584,013 | $ | 5,195,109 | $ | 2,874,505 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | HH Gregg Joliet, IL Specialty Retail |
HH Gregg Merrillville, IN Specialty Retail |
Fairlane Green Allen Park, MI Shopping Center |
|||||||||
Gross leasable square footage |
22,541 | 32,691 | 269,598 | (2) | ||||||||
Date of purchase |
2/17/2012 | 2/17/2012 | 2/22/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
2,883,350 | 4,788,324 | 47,940,000 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
2,883,350 | 4,788,324 | 47,940,000 | |||||||||
Other cash expenditures expensed |
41,099 | 31,468 | 222,809 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 2,924,449 | $ | 4,819,791 | $ | 48,162,809 | ||||||
|
|
|
|
|
|
II-77
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | The Medicines Parsippany, NJ |
Michaels Lafayette, LA Specialty Retail |
Outback Steakhouse Fort Smith, AR Restaurant |
|||||||||
Gross leasable square footage |
178,978 | 34,458 | 6,188 | |||||||||
Date of purchase |
2/27/2012 | 3/9/2012 | 3/14/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
54,023,377 | 4,528,800 | 3,064,807 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
54,023,377 | 4,528,800 | 3,064,807 | |||||||||
Other cash expenditures expensed |
745,572 | 60,906 | 8,942 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 54,768,949 | $ | 4,589,706 | $ | 3,073,750 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Outback Steakhouse Centennial, CO Restaurant |
Outback Steakhouse Jacksonville, FL Restaurant |
Outback Steakhouse Sebring, FL Restaurant |
|||||||||
Gross leasable square footage |
6,713 | 6,100 | 6,947 | |||||||||
Date of purchase |
3/14/2012 | 3/14/2012 | 3/14/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
2,762,446 | 2,884,586 | 2,797,918 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
2,762,446 | 2,884,586 | 2,797,918 | |||||||||
Other cash expenditures expensed |
4,601 | 13,436 | 13,168 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 2,767,047 | $ | 2,898,021 | $ | 2,811,086 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Outback Steakhouse Fort Wayne, IN Restaurant |
Outback Steakhouse Lexington, KY Restaurant |
Outback Steakhouse Baton Rouge, LA Restaurant |
|||||||||
Gross leasable square footage |
6,300 | 6,174 | 5,885 | |||||||||
Date of purchase |
3/14/2012 | 3/14/2012 | 3/14/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
3,062,599 | 3,248,407 | 1,994,522 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
3,062,599 | 3,248,407 | 1,994,522 | |||||||||
Other cash expenditures expensed |
5,618 | 6,412 | 5,378 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 3,068,217 | $ | 3,254,819 | $ | 1,999,900 | ||||||
|
|
|
|
|
|
II-78
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole
Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Outback Steakhouse Southgate, MI Restaurant |
Outback Steakhouse Lees Summit, MO Restaurant |
Outback Steakhouse Las Cruces, NM Restaurant |
|||||||||
Gross leasable square footage |
6,536 | 6,246 | 6,192 | |||||||||
Date of purchase |
3/14/2012 | 3/14/2012 | 3/14/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
3,391,338 | 1,578,077 | 2,063,129 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
3,391,338 | 1,578,077 | 2,063,129 | |||||||||
Other cash expenditures expensed |
17,851 | 4,820 | 4,481 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 3,409,189 | $ | 1,582,897 | $ | 2,067,609 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Outback Steakhouse Garner, NC Restaurant |
Outback Steakhouse Boardman Township, OH Restaurant |
Outback Steakhouse Pittsburg, PA Restaurant |
|||||||||
Gross leasable square footage |
6,205 | 6,161 | 7,035 | |||||||||
Date of purchase |
3/14/2012 | 3/14/2012 | 3/14/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
2,910,573 | 3,326,369 | 2,988,976 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
2,910,573 | 3,326,369 | 2,988,976 | |||||||||
Other cash expenditures expensed |
7,414 | 10,246 | 37,675 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 2,917,987 | $ | 3,336,614 | $ | 3,026,652 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole
Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Outback Steakhouse Restaurant |
Outback Steakhouse Houston, TX Restaurant |
Outback Steakhouse McAllen, TX Restaurant |
|||||||||
Gross leasable square footage |
6,186 | 6,173 | 6,195 | |||||||||
Date of purchase |
3/14/2012 | 3/14/2012 | 3/14/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
2,716,059 | 2,989,705 | 1,188,917 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
2,716,059 | 2,989,705 | 1,188,917 | |||||||||
Other cash expenditures expensed |
3,141 | 4,641 | 4,641 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 2,719,200 | $ | 2,994,345 | $ | 1,193,558 | ||||||
|
|
|
|
|
|
II-79
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Outback Restaurant |
Outback Restaurant |
Outback Steakhouse Winchester, VA Restaurant |
|||||||||
Gross leasable square footage |
6,285 | 6,039 | 6,145 | |||||||||
Date of purchase |
3/14/2012 | 3/14/2012 | 3/14/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
3,968,905 | 3,677,198 | 4,025,427 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
3,968,905 | 3,677,198 | 4,025,427 | |||||||||
Other cash expenditures expensed |
12,013 | 11,454 | 12,121 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 3,980,917 | $ | 3,688,652 | $ | 4,037,548 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Flemings Englewood, CO Restaurant |
Bonefish Grill Lakeland, FL Restaurant |
Bonefish Grill Independence, OH Restaurant |
|||||||||
Gross leasable square footage |
6,718 | 5,601 | 5,811 | |||||||||
Date of purchase |
3/14/2012 | 3/14/2012 | 3/14/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
4,235,923 | 2,656,418 | 3,313,376 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
4,235,923 | 2,656,418 | 3,313,376 | |||||||||
Other cash expenditures expensed |
6,316 | 12,699 | 10,192 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 4,242,239 | $ | 2,669,117 | $ | 3,323,568 | ||||||
|
|
|
|
|
|
II-80
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole
Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Outback Steakhouse Independence, OH Restaurant |
Bonefish Grill Gainesville, VA Restaurant |
Carrabbas Scottsdale, AZ Restaurant |
|||||||||
Gross leasable square footage |
6,186 | 5,444 | 6,790 | |||||||||
Date of purchase |
3/14/2012 | 3/14/2012 | 3/14/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
2,364,840 | 3,274,395 | 2,168,637 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
2,364,840 | 3,274,395 | 2,168,637 | |||||||||
Other cash expenditures expensed |
8,514 | 10,651 | 4,936 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 2,373,355 | $ | 3,285,046 | $ | 2,173,573 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Carrabbas Restaurant |
Carrabbas Tampa, FL Restaurant |
Carrabbas Duluth, GA Restaurant |
|||||||||
Gross leasable square footage |
6,971 | 6,849 | 6,330 | |||||||||
Date of purchase |
3/14/2012 | 3/14/2012 | 3/14/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
2,277,004 | 3,729,172 | 3,807,134 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
2,277,004 | 3,729,172 | 3,807,134 | |||||||||
Other cash expenditures expensed |
4,945 | 16,416 | 7,084 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 2,281,949 | $ | 3,745,588 | $ | 3,814,218 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Carrabbas Bowie, MD Restaurant |
Carrabbas Brooklyn, OH Restaurant |
Carrabbas Washington Township, OH Restaurant |
|||||||||
Gross leasable square footage |
6,500 | 6,404 | 6,858 | |||||||||
Date of purchase |
3/14/2012 | 3/14/2012 | 3/14/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
3,885,095 | 3,118,472 | 2,825,855 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
3,885,095 | 3,118,472 | 2,825,855 | |||||||||
Other cash expenditures expensed |
46,999 | 10,243 | 8,476 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 3,932,094 | $ | 3,128,715 | $ | 2,834,331 | ||||||
|
|
|
|
|
|
II-81
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole
Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Carrabbas Columbia, SC Restaurant |
Carrabbas Johnson City, TN Restaurant |
West Marine Fort Lauderdale, FL Sporting Goods |
|||||||||
Gross leasable square footage |
6,838 | 6,316 | 50,000 | |||||||||
Date of purchase |
3/14/2012 | 3/14/2012 | 3/15/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
3,209,427 | 3,670,701 | 13,005,000 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
3,209,427 | 3,670,701 | 13,005,000 | |||||||||
Other cash expenditures expensed |
10,312 | 11,079 | 58,856 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 3,219,738 | $ | 3,681,779 | $ | 13,063,856 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Petsmart/Travis Credit Union Mercad, CA Shopping Center |
Petsmart/Bevmo Redding, CA Shopping Center |
Golden Corral Bakersfield, CA Restaurant |
|||||||||
Gross leasable square footage |
30,849 | 44,948 | 14,503 | |||||||||
Date of purchase |
3/21/2012 | 3/21/2012 | 3/21/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
5,476,576 | 5,903,824 | 4,611,285 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
5,476,576 | 5,903,824 | 4,611,285 | |||||||||
Other cash expenditures expensed |
34,266 | 33,598 | 25,986 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 5,510,842 | $ | 5,937,422 | $ | 4,637,271 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Golden Corral San Angelo, TX Restaurant |
L.A. Fitness Oswego, IL Fitness and Health |
Davita Dialysis Lawrenceville, NJ Fitness and Health |
|||||||||
Gross leasable square footage |
7,852 | 45,000 | 7,930 | |||||||||
Date of purchase |
3/21/2012 | 3/23/2012 | 3/23/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
2,146,080 | 9,389,100 | 2,989,620 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
2,146,080 | 9,389,100 | 2,989,620 | |||||||||
Other cash expenditures expensed |
21,374 | 65,834 | 42,802 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 2,167,454 | $ | 9,454,934 | $ | 3,032,422 | ||||||
|
|
|
|
|
|
II-82
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Greenway Commons Houston, TX Shopping Center |
San Tan Marketplace Gilbert, AZ Shopping Center |
Tractor Supply Columbia, SC Specialty Retail |
|||||||||
Gross leasable square footage |
252,999 | (2) | 285,486 | (2) | 19,097 | |||||||
Date of purchase |
3/23/2012 | 3/30/2012 | 3/30/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
69,615,000 | 55,875,600 | 3,156,054 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
69,615,000 | 55,875,600 | 3,156,054 | |||||||||
Other cash expenditures expensed |
173,579 | 440,068 | 38,307 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 69,788,579 | $ | 56,315,668 | $ | 3,194,361 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | MotoMart Saint Charles, MO Convenience Store |
Golden Corral Spring, TX Restaurant |
Toys R Us / Mr. Hero Parma, OH Shopping Center |
|||||||||
Gross leasable square footage |
4,116 | 14,232 | 48,320 | (2) | ||||||||
Date of purchase |
3/30/2012 | 4/5/2012 | 4/11/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
2,988,600 | 4,335,872 | 3,823,560 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
2,988,600 | 4,335,872 | 3,823,560 | |||||||||
Other cash expenditures expensed |
31,673 | 32,312 | 48,354 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 3,020,273 | $ | 4,368,184 | $ | 3,871,914 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit PropertyTrust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Tractor Supply Alamogordo, NM Specialty Retail |
CVS Anderson, SC |
CVS Eden, NC |
|||||||||
Gross leasable square footage |
19,097 | 10,125 | 10,125 | |||||||||
Date of purchase |
4/20/2012 | 4/26/2012 | 4/26/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
3,073,546 | 2,147,289 | 2,556,000 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
3,073,546 | 2,147,289 | 2,556,000 | |||||||||
Other cash expenditures expensed |
39,491 | 29,909 | 28,826 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 3,113,037 | $ | 2,177,198 | $ | 2,584,826 | ||||||
|
|
|
|
|
|
II-83
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | CVS Greenville, SC Drugstore |
CVS Kernersville, NC Drugstore |
CVS Madison, NC |
|||||||||
Gross leasable square footage |
10,125 | 10,125 | 10,125 | |||||||||
Date of purchase |
4/26/2012 | 4/26/2012 | 4/26/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
3,389,422 | 2,553,834 | 2,458,500 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
3,389,422 | 2,553,834 | 2,458,500 | |||||||||
Other cash expenditures expensed |
34,590 | 29,655 | 28,770 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 3,424,012 | $ | 2,583,489 | $ | 2,487,270 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | CVS Moonville, SC Drugstore |
Goodyear Corpus Christi, TX Automotive Parts & Service |
L.A. Fitness Easton, PA Fitness and Health |
|||||||||
Gross leasable square footage |
10,125 | 6,594 | 37,923 | |||||||||
Date of purchase |
4/26/2012 | 4/27/2012 | 4/27/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
2,141,244 | 2,236,401 | 8,595,880 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
2,141,244 | 2,236,401 | 8,595,880 | |||||||||
Other cash expenditures expensed |
29,757 | 27,621 | 151,193 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 2,171,001 | $ | 2,264,022 | $ | 8,747,072 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Lowes Burlington, IA Home Improvement |
Shoppes at Lake Worth, FL |
Amazon Chattanooga, TN Distribution |
|||||||||
Gross leasable square footage |
131,644 | 57,913 | 1,016,148 | |||||||||
Date of purchase |
4/27/2012 | 4/27/2012 | 4/30/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
9,064,740 | 10,710,000 | 64,036,674 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
9,064,740 | 10,710,000 | 64,036,674 | |||||||||
Other cash expenditures expensed |
46,173 | 66,227 | 73,249 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 9,110,913 | $ | 10,776,227 | $ | 64,109,923 | ||||||
|
|
|
|
|
|
II-84
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Amazon West Columbia, SC Distribution |
Amazon Charleston, TN Distribution |
Family Dollar Alexandria, LA Discount Retail |
|||||||||
Gross leasable square footage |
1,016,148 | 1,016,148 | 9,216 | |||||||||
Date of purchase |
4/30/2012 | 4/30/2012 | 4/30/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
65,820,609 | 60,490,679 | 779,369 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
65,820,609 | 60,490,679 | 779,369 | |||||||||
Other cash expenditures expensed |
68,394 | 77,530 | 7,379 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 65,889,003 | $ | 60,568,208 | $ | 786,748 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Family Dollar Apopka, FL Discount Retail |
Family Dollar Beaver, UT Discount Retail |
Family Dollar Berkeley, MO Discount Retail |
|||||||||
Gross leasable square footage |
8,232 | 8,069 | 7,887 | |||||||||
Date of purchase |
4/30/2012 | 4/30/2012 | 4/30/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,916,737 | 1,098,443 | 1,646,635 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,916,737 | 1,098,443 | 1,646,635 | |||||||||
Other cash expenditures expensed |
6,197 | 12,276 | 7,217 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,922,934 | $ | 1,110,719 | $ | 1,653,852 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Family Dollar Bristol, FL Discount Retail |
Family Dollar El Dorado, AR Discount Retail |
Family Dollar Gainesville, FL Discount Retail |
|||||||||
Gross leasable square footage |
8,006 | 8,160 | 8,336 | |||||||||
Date of purchase |
4/30/2012 | 4/30/2012 | 4/30/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,073,483 | 1,126,365 | 1,703,491 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,073,483 | 1,126,365 | 1,703,491 | |||||||||
Other cash expenditures expensed |
5,784 | 5,829 | 6,145 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,079,267 | $ | 1,132,194 | $ | 1,709,636 | ||||||
|
|
|
|
|
|
II-85
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole
Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Family Dollar Homedale, ID Discount Retail |
Family Dollar Houston, TX Discount Retail |
Family Dollar Jacksonville, AR Discount Retail |
|||||||||
Gross leasable square footage |
9,236 | 7,848 | 7,936 | |||||||||
Date of purchase |
4/30/2012 | 4/30/2012 | 4/30/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,654,456 | 1,505,479 | 970,494 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,654,456 | 1,505,479 | 970,494 | |||||||||
Other cash expenditures expensed |
12,593 | 7,002 | 5,829 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,667,049 | $ | 1,512,481 | $ | 976,323 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole
Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Family Dollar Jemison, AL Discount Retail |
Family Dollar Kentwood, LA Discount Retail |
Family Dollar Las Vegas, NV Discount Retail |
|||||||||
Gross leasable square footage |
8,043 | 7,842 | 9,995 | |||||||||
Date of purchase |
4/30/2012 | 4/30/2012 | 4/30/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,286,187 | 1,161,581 | 1,488,928 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,286,187 | 1,161,581 | 1,488,928 | |||||||||
Other cash expenditures expensed |
6,983 | 8,004 | 11,292 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,293,171 | $ | 1,169,585 | $ | 1,500,220 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Family Dollar Lufkin, TX Discount Retail |
Family Dollar Lynn, MA Discount Retail |
Family Dollar Macon, GA Discount Retail |
|||||||||
Gross leasable square footage |
9,327 | 10,240 | 9,180 | |||||||||
Date of purchase |
4/30/2012 | 4/30/2012 | 4/30/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,959,287 | 2,077,474 | 1,144,408 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,959,287 | 2,077,474 | 1,144,408 | |||||||||
Other cash expenditures expensed |
7,490 | 6,954 | 6,079 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,966,777 | $ | 2,084,428 | $ | 1,150,487 | ||||||
|
|
|
|
|
|
II-86
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Family Dollar McAllen, TX Discount Retail |
Family Dollar Milwaukee, WI Discount Retail |
Family Dollar Montgomery, AL Discount Retail |
|||||||||
Gross leasable square footage |
9,207 | 7,830 | 9,180 | |||||||||
Date of purchase |
4/30/2012 | 4/30/2012 | 4/30/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,456,453 | 1,649,517 | 1,630,891 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,456,453 | 1,649,517 | 1,630,891 | |||||||||
Other cash expenditures expensed |
6,949 | 6,079 | 7,119 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,463,402 | $ | 1,655,597 | $ | 1,638,010 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property |
|
Family Dollar Okeechobee, FL Discount Retail |
|
|
Family Dollar Penn Yan, NY Discount Retail |
|
|
Family Dollar Pensacola, FL Discount Retail |
| |||
Gross leasable square footage |
8,043 | 7,908 | 7,833 | |||||||||
Date of purchase |
4/30/2012 | 4/30/2012 | 4/30/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,519,416 | 892,716 | 950,824 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,519,416 | 892,716 | 950,824 | |||||||||
Other cash expenditures expensed |
6,100 | 5,929 | 5,943 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,525,516 | $ | 898,645 | $ | 956,767 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole
Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Family Dollar Petersburg, VA Discount Retail |
Family Dollar Robstown, TX Discount Retail |
Family Dollar Royse City, TX Discount Retail |
|||||||||
Gross leasable square footage |
7,755 | 7,848 | 7,979 | |||||||||
Date of purchase |
4/30/2012 | 4/30/2012 | 4/30/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,611,112 | 934,410 | 1,652,400 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,611,112 | 934,410 | 1,652,400 | |||||||||
Other cash expenditures expensed |
6,079 | 6,367 | 7,160 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,617,192 | $ | 940,777 | $ | 1,659,560 | ||||||
|
|
|
|
|
|
II-87
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole
Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Family Dollar San Angelo, TX Discount Retail |
Family Dollar San Antonio (Culebra), TX Discount Retail |
Family Dollar San Antonio |
|||||||||
Gross leasable square footage |
9,209 | 9,238 | 9,289 | |||||||||
Date of purchase |
4/30/2012 | 4/30/2012 | 4/30/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,514,036 | 1,469,246 | 1,017,098 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,514,036 | 1,469,246 | 1,017,098 | |||||||||
Other cash expenditures expensed |
7,011 | 6,963 | 6,475 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,521,047 | $ | 1,476,208 | $ | 1,023,573 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole
Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Family Dollar Discount Retail |
Family Dollar Discount Retail |
Family Dollar Tampa (22nd St.), FL Discount Retail |
|||||||||
Gross leasable square footage |
7,942 | 7,885 | 9,235 | |||||||||
Date of purchase |
4/30/2012 | 4/30/2012 | 4/30/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,359,519 | 1,652,621 | 1,708,626 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,359,519 | 1,652,621 | 1,708,626 | |||||||||
Other cash expenditures expensed |
6,844 | 7,219 | 5,916 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,366,364 | $ | 1,659,840 | $ | 1,714,543 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole
Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Family Dollar Tyler, TX Discount Retail |
Family Dollar Waco, TX Discount Retail |
Family Dollar Altha, FL Discount Retail |
|||||||||
Gross leasable square footage |
7,914 | 7,902 | 8,006 | |||||||||
Date of purchase |
4/30/2012 | 4/30/2012 | 4/30/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
706,799 | 747,672 | 990,296 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
706,799 | 747,672 | 990,296 | |||||||||
Other cash expenditures expensed |
6,069 | 6,123 | 5,767 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 712,868 | $ | 753,795 | $ | 996,063 | ||||||
|
|
|
|
|
|
II-88
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Family Dollar Baton Discount Retail |
Family Dollar Battle Mountain, NV Discount Retail |
Family Dollar Discount Retail |
|||||||||
Gross leasable square footage |
8,268 | 8,072 | 7,838 | |||||||||
Date of purchase |
4/30/2012 | 4/30/2012 | 4/30/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,232,115 | 1,773,913 | 1,142,164 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,232,115 | 1,773,913 | 1,142,164 | |||||||||
Other cash expenditures expensed |
8,107 | 9,756 | 6,611 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,240,222 | $ | 1,783,668 | $ | 1,148,775 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Family Dollar Beaumont (Washington), TX Discount Retail |
Family Dollar Brazoria, TX Discount Retail |
Family Dollar Brooklyn, MI Discount Retail |
|||||||||
Gross leasable square footage |
9,825 | 7,837 | 8,050 | |||||||||
Date of purchase |
4/30/2012 | 4/30/2012 | 4/30/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,650,404 | 1,287,553 | 897,404 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,650,404 | 1,287,553 | 897,404 | |||||||||
Other cash expenditures expensed |
7,157 | 6,767 | 7,201 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,657,561 | $ | 1,294,320 | $ | 904,605 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole
Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Family Dollar Casa Grande, AZ Discount Retail |
Family Dollar Fort Mohave, AZ Discount Retail |
Family Dollar Gallup, NM Discount Retail |
|||||||||
Gross leasable square footage |
8,050 | 9,810 | 9,000 | |||||||||
Date of purchase |
4/30/2012 | 4/30/2012 | 4/30/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
867,441 | 987,577 | 1,949,530 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
867,441 | 987,577 | 1,949,530 | |||||||||
Other cash expenditures expensed |
7,538 | 7,526 | 8,291 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 874,978 | $ | 995,104 | $ | 1,957,821 | ||||||
|
|
|
|
|
|
II-89
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole
Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Family Dollar Green Bay, WI Discount Retail |
Family Dollar Greenville, MS Discount Retail |
Family Dollar Guadalupe, AZ Discount Retail |
|||||||||
Gross leasable square footage |
8,019 | 8,054 | 9,274 | |||||||||
Date of purchase |
4/30/2012 | 4/30/2012 | 4/30/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,515,715 | 1,102,705 | 1,100,138 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,515,715 | 1,102,705 | 1,100,138 | |||||||||
Other cash expenditures expensed |
6,079 | 6,579 | 7,519 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,521,794 | $ | 1,109,284 | $ | 1,107,657 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole
Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Family Dollar Gulfport, MS Discount Retail |
Family Dollar Hot Springs, AR Discount Retail |
Family Dollar Houston (Mount), TX Discount Retail |
|||||||||
Gross leasable square footage |
9,214 | 8,320 | 7,854 | |||||||||
Date of purchase |
4/30/2012 | 4/30/2012 | 4/30/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,740,132 | 1,197,022 | 1,303,196 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,740,132 | 1,197,022 | 1,303,196 | |||||||||
Other cash expenditures expensed |
6,579 | 5,829 | 6,784 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,746,711 | $ | 1,202,851 | $ | 1,309,980 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole
Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Family Dollar Houston (Jester), TX Discount Retail |
Family Dollar Discount Retail |
Family Dollar Kingston, OK Discount Retail |
|||||||||
Gross leasable square footage |
7,812 | 9,112 | 7,970 | |||||||||
Date of purchase |
4/30/2012 | 4/30/2012 | 4/30/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
864,224 | 1,953,300 | 702,970 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
864,224 | 1,953,300 | 702,970 | |||||||||
Other cash expenditures expensed |
6,275 | 7,483 | 6,079 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 870,499 | $ | 1,960,783 | $ | 709,049 | ||||||
|
|
|
|
|
|
II-90
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole
Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Family Dollar Marshall, TX Discount Retail |
Family Dollar Memphis (Austin), TN Discount Retail |
Family Dollar Mexia, TX Discount Retail |
|||||||||
Gross leasable square footage |
7,912 | 7,800 | 7,891 | |||||||||
Date of purchase |
4/30/2012 | 4/30/2012 | 4/30/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
841,044 | 1,400,105 | 674,962 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
841,044 | 1,400,105 | 674,962 | |||||||||
Other cash expenditures expensed |
6,245 | 6,079 | 6,028 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 847,289 | $ | 1,406,184 | $ | 680,989 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Family Dollar Mohave Valley, AZ Discount Retail |
Family Dollar Ocala (28th St.), FL |
Family Dollar Ormond Beach, FL Discount Retail |
|||||||||
Gross leasable square footage |
7,816 | 9,151 | 8,134 | |||||||||
Date of purchase |
4/30/2012 | 4/30/2012 | 4/30/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
664,002 | 1,578,406 | 1,806,119 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
664,002 | 1,578,406 | 1,806,119 | |||||||||
Other cash expenditures expensed |
7,456 | 5,912 | 6,170 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 671,458 | $ | 1,584,318 | $ | 1,812,289 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole
Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Family Dollar Discount Retail |
Family Dollar Plant City (Gordon), FL Discount Retail |
Family Dollar Rio Discount Retail |
|||||||||
Gross leasable square footage |
10,077 | 8,151 | 7,848 | |||||||||
Date of purchase |
4/30/2012 | 4/30/2012 | 4/30/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
2,089,670 | 1,310,342 | 1,584,105 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
2,089,670 | 1,310,342 | 1,584,105 | |||||||||
Other cash expenditures expensed |
7,943 | 6,049 | 7,086 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 2,097,613 | $ | 1,316,390 | $ | 1,591,191 | ||||||
|
|
|
|
|
|
II-91
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole
Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Family Dollar Saginaw, MI Discount Retail |
Family Dollar Seymour, IN Discount Retail |
Family Dollar St. Louis (Ferry), MO Discount Retail |
|||||||||
Gross leasable square footage |
10,000 | 7,934 | 7,866 | |||||||||
Date of purchase |
4/30/2012 | 4/30/2012 | 4/30/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,471,334 | 1,171,283 | 1,648,187 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,471,334 | 1,171,283 | 1,648,187 | |||||||||
Other cash expenditures expensed |
7,267 | 6,897 | 7,217 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,478,601 | $ | 1,178,180 | $ | 1,655,405 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole
Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Family Dollar Tallahassee, FL Discount Retail |
Family Dollar Topeka, KS Discount Retail |
Family Dollar Victoria, TX Discount Retail |
|||||||||
Gross leasable square footage |
8,316 | 9,234 | 7,850 | |||||||||
Date of purchase |
4/30/2012 | 4/30/2012 | 4/30/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,683,185 | 1,816,358 | 657,057 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,683,185 | 1,816,358 | 657,057 | |||||||||
Other cash expenditures expensed |
6,140 | 7,277 | 6,004 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,689,325 | $ | 1,823,634 | $ | 663,062 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Family Dollar Avondale, AZ Discount Retail |
Family Dollar Beaumont (Highway 105), TX Discount Retail |
Family Dollar Burton, MI Discount Retail |
|||||||||
Gross leasable square footage |
8,171 | 7,745 | 8,050 | |||||||||
Date of purchase |
4/30/2012 | 4/30/2012 | 4/30/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,656,170 | 1,112,381 | 1,472,547 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,656,170 | 1,112,381 | 1,472,547 | |||||||||
Other cash expenditures expensed |
7,757 | 6,579 | 7,267 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,663,927 | $ | 1,118,960 | $ | 1,479,815 | ||||||
|
|
|
|
|
|
II-92
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Family Dollar Canton, OH Discount Retail |
Family Dollar Converse, TX Discount Retail |
Family Dollar Coolidge, AZ Discount Retail |
|||||||||
Gross leasable square footage |
9,278 | 7,899 | 7,857 | |||||||||
Date of purchase |
4/30/2012 | 4/30/2012 | 4/30/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
781,852 | 695,005 | 1,024,973 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
781,852 | 695,005 | 1,024,973 | |||||||||
Other cash expenditures expensed |
7,649 | 6,054 | 7,486 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 789,501 | $ | 701,058 | $ | 1,032,459 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Family Dollar Dacano, CO Discount Retail |
Family Dollar Deland, FL Discount Retail |
Family Dollar Fort Dodge, IA Discount Retail |
|||||||||
Gross leasable square footage |
7,888 | 8,099 | 7,843 | |||||||||
Date of purchase |
4/30/2012 | 4/30/2012 | 4/30/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,286,796 | 1,796,645 | 693,242 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,286,796 | 1,796,645 | 693,242 | |||||||||
Other cash expenditures expensed |
6,769 | 6,168 | 6,300 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,293,566 | $ | 1,802,813 | $ | 699,542 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Family Dollar Fort Lupton, CO Discount Retail |
Family Dollar Fort Myers, FL Discount Retail |
Family Dollar Hernandez, NM Discount Retail |
|||||||||
Gross leasable square footage |
9,283 | 7,798 | 8,000 | |||||||||
Date of purchase |
4/30/2012 | 4/30/2012 | 4/30/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,556,710 | 1,654,617 | 1,959,065 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,556,710 | 1,654,617 | 1,959,065 | |||||||||
Other cash expenditures expensed |
7,075 | 6,133 | 7,886 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,563,785 | $ | 1,660,750 | $ | 1,966,951 | ||||||
|
|
|
|
|
|
II-93
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole
Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Family Dollar Discount Retail |
Family Dollar Hudson, MI Discount Retail |
Family Dollar Jacksonville (Moncrief), FL Discount Retail |
|||||||||
Gross leasable square footage |
7,654 | 9,286 | 9,198 | |||||||||
Date of purchase |
4/30/2012 | 4/30/2012 | 4/30/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,549,304 | 1,415,437 | 1,341,724 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,549,304 | 1,415,437 | 1,341,724 | |||||||||
Other cash expenditures expensed |
7,049 | 7,259 | 6,056 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,556,352 | $ | 1,422,695 | $ | 1,347,781 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Family Dollar Jacksonville (Lem Turner), FL Discount Retail |
Family Dollar Kansas City (Blue Ridge), MO Discount Retail |
Family Dollar Kansas City (State), KS Discount Retail |
|||||||||
Gross leasable square footage |
9,091 | 7,843 | 7,860 | |||||||||
Date of purchase |
4/30/2012 | 4/30/2012 | 4/30/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,747,653 | 1,161,744 | 1,669,030 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,747,653 | 1,161,744 | 1,669,030 | |||||||||
Other cash expenditures expensed |
5,921 | 7,045 | 7,225 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,753,574 | $ | 1,168,790 | $ | 1,676,255 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Family Dollar Kentwood, MI Discount Retail |
Family Dollar Lakeland, FL Discount Retail |
Family Dollar Leander, TX Discount Retail |
|||||||||
Gross leasable square footage |
10,150 | 7,842 | 9,207 | |||||||||
Date of purchase |
4/30/2012 | 4/30/2012 | 4/30/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,256,350 | 1,243,561 | 946,770 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,256,350 | 1,243,561 | 946,770 | |||||||||
Other cash expenditures expensed |
7,235 | 6,032 | 6,383 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,263,586 | $ | 1,249,593 | $ | 953,154 | ||||||
|
|
|
|
|
|
II-94
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Family Dollar Little Rock, AR Discount Retail |
Family Dollar Memphis (Lamar), TN Discount Retail |
Family Dollar Milton, FL Discount Retail |
|||||||||
Gross leasable square footage |
7,986 | 9,800 | 8,007 | |||||||||
Date of purchase |
4/30/2012 | 4/30/2012 | 4/30/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
794,571 | 1,084,121 | 1,095,078 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
794,571 | 1,084,121 | 1,095,078 | |||||||||
Other cash expenditures expensed |
5,829 | 6,079 | 5,796 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 800,400 | $ | 1,090,200 | $ | 1,100,874 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Family Dollar Newaygo, MI Discount Retail |
Family Dollar Noonday, TX Discount Retail |
Family Dollar Ocala (Maricamp), FL Discount Retail |
|||||||||
Gross leasable square footage |
8,080 | 9,196 | 8,432 | |||||||||
Date of purchase |
4/30/2012 | 4/30/2012 | 4/30/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,171,556 | 1,063,260 | 1,645,935 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,171,556 | 1,063,260 | 1,645,935 | |||||||||
Other cash expenditures expensed |
7,223 | 6,526 | 5,897 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,178,779 | $ | 1,069,786 | $ | 1,651,832 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Family Dollar Pembroke Park, FL Discount Retail |
Family Dollar Phoenix (McDowell), AZ Discount Retail |
Family Dollar Plant City (Baker), FL Discount Retail |
|||||||||
Gross leasable square footage |
8,991 | 10,011 | 9,223 | |||||||||
Date of purchase |
4/30/2012 | 4/30/2012 | 4/30/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,939,774 | 1,768,379 | 1,994,147 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,939,774 | 1,768,379 | 1,994,147 | |||||||||
Other cash expenditures expensed |
6,203 | 7,805 | 6,216 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,945,977 | $ | 1,776,184 | $ | 2,000,363 | ||||||
|
|
|
|
|
|
II-95
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Family Dollar Port Arthur, TX Discount Retail |
Family Dollar Discount Retail |
Family Dollar Discount Retail |
|||||||||
Gross leasable square footage |
7,820 | 9,235 | 9,280 | |||||||||
Date of purchase |
4/30/2012 | 4/30/2012 | 4/30/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,773,913 | 860,661 | 1,236,972 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,773,913 | 860,661 | 1,236,972 | |||||||||
Other cash expenditures expensed |
7,290 | 6,271 | 6,713 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,781,203 | $ | 866,931 | $ | 1,243,685 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Family Dollar St. Peter, MN |
Family Dollar Tampa (MLK), FL |
Family Dollar Abbeville, LA Discount Retail |
|||||||||
Gross leasable square footage |
8,365 | 8,390 | 9,140 | |||||||||
Date of purchase |
4/30/2012 | 4/30/2012 | 4/30/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
694,753 | 1,985,526 | 1,257,396 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
694,753 | 1,985,526 | 1,257,396 | |||||||||
Other cash expenditures expensed |
7,529 | 5,965 | 8,076 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 702,282 | $ | 1,991,490 | $ | 1,265,472 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Family Dollar Alamogordo, NM Discount Retail |
Family Dollar Discount Retail |
Family Dollar Cleveland Discount Retail |
|||||||||
Gross leasable square footage |
8,000 | 8,564 | 12,388 | |||||||||
Date of purchase |
4/30/2012 | 4/30/2012 | 4/30/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
891,013 | 1,033,259 | 2,329,259 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
891,013 | 1,033,259 | 2,329,259 | |||||||||
Other cash expenditures expensed |
6,733 | 6,011 | 9,347 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 897,746 | $ | 1,039,270 | $ | 2,338,605 | ||||||
|
|
|
|
|
|
II-96
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Family Dollar Clovis, NM Discount Retail |
Family Dollar Cockrell Hill, TX Discount Retail |
Family Dollar Dallas, TX Discount Retail |
|||||||||
Gross leasable square footage |
8,000 | 7,907 | 9,064 | |||||||||
Date of purchase |
4/30/2012 | 4/30/2012 | 4/30/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,117,667 | 1,649,074 | 1,066,374 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,117,667 | 1,649,074 | 1,066,374 | |||||||||
Other cash expenditures expensed |
7,052 | 7,057 | 6,461 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,124,719 | $ | 1,656,131 | $ | 1,072,835 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Family Dollar Discount Retail |
Family Dollar Discount Retail |
Family Dollar IA Discount Retail |
|||||||||
Gross leasable square footage |
9,202 | 8,142 | 9,844 | |||||||||
Date of purchase |
4/30/2012 | 4/30/2012 | 4/30/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,165,754 | 1,770,783 | 1,398,142 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,165,754 | 1,770,783 | 1,398,142 | |||||||||
Other cash expenditures expensed |
5,945 | 6,093 | 6,232 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,171,699 | $ | 1,776,876 | $ | 1,404,373 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Family Dollar Dickinson, TX Discount Retail |
Family Dollar Farmerville, LA Discount Retail |
Family Dollar Fort Meade, FL Discount Retail |
|||||||||
Gross leasable square footage |
8,540 | 7,830 | 8,052 | |||||||||
Date of purchase |
4/30/2012 | 4/30/2012 | 4/30/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,157,494 | 1,226,995 | 709,565 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,157,494 | 1,226,995 | 709,565 | |||||||||
Other cash expenditures expensed |
6,559 | 8,031 | 5,757 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,164,053 | $ | 1,235,026 | $ | 715,322 | ||||||
|
|
|
|
|
|
II-97
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Family Dollar Houston (Freeway), TX Discount Retail |
Family Dollar Discount Retail |
Family Dollar Kansas City (Meyer), MO Discount Retail |
|||||||||
Gross leasable square footage |
9,035 | 7,920 | 8,108 | |||||||||
Date of purchase |
4/30/2012 | 4/30/2012 | 4/30/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,564,732 | 1,042,129 | 1,648,187 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,564,732 | 1,042,129 | 1,648,187 | |||||||||
Other cash expenditures expensed |
6,997 | 6,828 | 7,149 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,571,729 | $ | 1,048,957 | $ | 1,655,336 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Family Dollar Kansas City (Prospect), MO Discount Retail |
Family Dollar Kissimmee, FL Discount Retail |
Family Dollar Lake City, FL Discount Retail |
|||||||||
Gross leasable square footage |
9,911 | 7,965 | 8,016 | |||||||||
Date of purchase |
4/30/2012 | 4/30/2012 | 4/30/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
2,058,848 | 1,648,888 | 1,057,716 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
2,058,848 | 1,648,888 | 1,057,716 | |||||||||
Other cash expenditures expensed |
7,294 | 6,063 | 5,713 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 2,066,142 | $ | 1,654,951 | $ | 1,063,428 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Family Dollar Memphis (Millbranch), TN Discount Retail |
Family Dollar Memphis (Neely), TN Discount Retail |
Family Dollar Discount Retail |
|||||||||
Gross leasable square footage |
10,000 | 8,000 | 7,833 | |||||||||
Date of purchase |
4/30/2012 | 4/30/2012 | 4/30/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
2,127,365 | 1,653,730 | 1,122,505 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
2,127,365 | 1,653,730 | 1,122,505 | |||||||||
Other cash expenditures expensed |
6,011 | 6,011 | 7,987 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 2,133,376 | $ | 1,659,741 | $ | 1,130,492 | ||||||
|
|
|
|
|
|
II-98
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Family Dollar New Orleans, LA Discount Retail |
Family Dollar Palestine, TX Discount Retail |
Family Dollar Pharr, TX Discount Retail |
|||||||||
Gross leasable square footage |
9,157 | 7,913 | 7,849 | |||||||||
Date of purchase |
4/30/2012 | 4/30/2012 | 4/30/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,948,865 | 1,140,729 | 1,647,744 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,948,865 | 1,140,729 | 1,647,744 | |||||||||
Other cash expenditures expensed |
9,093 | 6,541 | 7,086 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,957,958 | $ | 1,147,270 | $ | 1,654,830 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Family Dollar Pontiac, MI Discount Retail |
Family Dollar Princeton, IN Discount Retail |
Family Dollar Raymondville, TX Discount Retail |
|||||||||
Gross leasable square footage |
8,140 | 7,931 | 7,840 | |||||||||
Date of purchase |
4/30/2012 | 4/30/2012 | 4/30/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,635,991 | 894,947 | 921,094 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,635,991 | 894,947 | 921,094 | |||||||||
Other cash expenditures expensed |
7,264 | 6,828 | 6,281 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,643,256 | $ | 901,775 | $ | 927,375 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Family Dollar Roswell, NM Discount Retail |
Family Dollar San Antonio (Cupples), TX Discount Retail |
Family Dollar San Benito, TX Discount Retail |
|||||||||
Gross leasable square footage |
8,000 | 9,256 | 7,803 | |||||||||
Date of purchase |
4/30/2012 | 4/30/2012 | 4/30/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,302,745 | 1,943,544 | 1,016,373 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,302,745 | 1,943,544 | 1,016,373 | |||||||||
Other cash expenditures expensed |
7,313 | 7,404 | 6,406 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,310,058 | $ | 1,950,948 | $ | 1,022,779 | ||||||
|
|
|
|
|
|
II-99
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Family Dollar San Diego, TX Discount Retail |
Family Dollar Shreveport, LA Discount Retail |
Family Dollar St. Petersburg (34th), FL Discount Retail |
|||||||||
Gross leasable square footage |
7,858 | 7,851 | 8,433 | |||||||||
Date of purchase |
4/30/2012 | 4/30/2012 | 4/30/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,022,600 | 1,516,299 | 1,857,715 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,022,600 | 1,516,299 | 1,857,715 | |||||||||
Other cash expenditures expensed |
6,413 | 8,457 | 5,961 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,029,013 | $ | 1,524,757 | $ | 1,863,676 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Family Dollar Terre Haute, IN Discount Retail |
Petsmart Bellingham, WA Specialty Retail |
West Marine Harrison Township, MI Sporting Goods |
|||||||||
Gross leasable square footage |
8,070 | 25,310 | 15,500 | |||||||||
Date of purchase |
4/30/2012 | 4/30/2012 | 4/30/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
670,628 | 3,959,640 | 4,080,000 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
670,628 | 3,959,640 | 4,080,000 | |||||||||
Other cash expenditures expensed |
6,828 | 43,019 | 37,445 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 677,456 | $ | 4,002,659 | $ | 4,117,445 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Widewater Commons Uniontown, PA Shopping Center |
Eastland Center West Covina, CA Shopping Center |
Advanced Auto Frankfort, KY Automotive Parts |
|||||||||
Gross leasable square footage |
46,702 | 809,444 | (2) | 7,000 | ||||||||
Date of purchase |
4/30/2012 | 5/14/2012 | 5/15/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
6,732,000 | 148,818,000 | 1,768,404 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
6,732,000 | 148,818,000 | 1,768,404 | |||||||||
Other cash expenditures expensed |
177,491 | 284,499 | 31,501 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 6,909,491 | $ | 149,102,499 | $ | 1,799,905 | ||||||
|
|
|
|
|
|
II-100
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole
Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Advanced Auto Georgetown, KY Automotive Parts |
Golden Corral Akron, OH Restaurant |
Golden Corral Canton, OH Restaurant |
|||||||||
Gross leasable square footage |
7,000 | 10,445 | 10,055 | |||||||||
Date of purchase |
5/15/2012 | 5/16/2012 | 5/16/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,700,157 | 2,201,344 | 2,421,979 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,700,157 | 2,201,344 | 2,421,979 | |||||||||
Other cash expenditures expensed |
35,915 | 21,892 | 23,157 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,736,073 | $ | 2,223,235 | $ | 2,445,136 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole
Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Golden Corral Cincinnati, OH Restaurant |
Golden Corral Clarksville, IN Restaurant |
Golden Corral Cleveland, OH Restaurant |
|||||||||
Gross leasable square footage |
10,073 | 10,024 | 10,441 | |||||||||
Date of purchase |
5/16/2012 | 5/16/2012 | 5/16/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
2,349,260 | 2,914,366 | 2,635,474 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
2,349,260 | 2,914,366 | 2,635,474 | |||||||||
Other cash expenditures expensed |
23,101 | 22,570 | 22,937 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 2,372,361 | $ | 2,936,937 | $ | 2,658,411 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole
Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Golden Corral Dayton (Kingsridge), OH Restaurant |
Golden Corral Dayton (Miller), OH Restaurant |
Golden Corral Dayton, OH Restaurant |
|||||||||
Gross leasable square footage |
9,974 | 9,916 | 9,986 | |||||||||
Date of purchase |
5/16/2012 | 5/16/2012 | 5/16/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,651,594 | 3,004,262 | 1,916,987 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,651,594 | 3,004,262 | 1,916,987 | |||||||||
Other cash expenditures expensed |
22,456 | 28,400 | 17,761 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,674,050 | $ | 3,032,663 | $ | 1,934,748 | ||||||
|
|
|
|
|
|
II-101
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Golden Corral Elyria, OH Restaurant |
Golden Corral Fairfield, OH Restaurant |
Golden Corral Grove City, OH Restaurant |
|||||||||
Gross leasable square footage |
10,583 | 10,076 | 10,647 | |||||||||
Date of purchase |
5/16/2012 | 5/16/2012 | 5/16/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
2,121,339 | 1,580,507 | 2,140,810 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
2,121,339 | 1,580,507 | 2,140,810 | |||||||||
Other cash expenditures expensed |
22,360 | 22,457 | 22,890 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 2,143,699 | $ | 1,602,965 | $ | 2,163,699 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Golden Corral Louisville, KY Restaurant |
Golden Corral Monroeville, PA Restaurant |
Golden Corral Northfield, OH Restaurant |
|||||||||
Gross leasable square footage |
10,218 | 10,406 | 10,624 | |||||||||
Date of purchase |
5/16/2012 | 5/16/2012 | 5/16/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
2,026,157 | 1,625,347 | 1,447,492 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
2,026,157 | 1,625,347 | 1,447,492 | |||||||||
Other cash expenditures expensed |
23,328 | 23,348 | 22,176 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 2,049,485 | $ | 1,648,694 | $ | 1,469,668 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Golden Corral Ontario, OH Restaurant |
Golden Corral Richmond, IN Restaurant |
Golden Corral Springfield, OH Restaurant |
|||||||||
Gross leasable square footage |
10,466 | 9,968 | 10,055 | |||||||||
Date of purchase |
5/16/2012 | 5/16/2012 | 5/16/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
2,606,925 | 1,381,017 | 1,264,043 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
2,606,925 | 1,381,017 | 1,264,043 | |||||||||
Other cash expenditures expensed |
23,384 | 22,692 | 22,183 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 2,630,309 | $ | 1,403,709 | $ | 1,286,226 | ||||||
|
|
|
|
|
|
II-102
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Golden Corral Toledo, OH Restaurant |
Goodyear Automotive |
Goodyear Cumming (Old Atlanta), GA Automotive Parts & Service |
|||||||||
Gross leasable square footage |
10,504 | 7,385 | 6,921 | |||||||||
Date of purchase |
5/16/2012 | 5/23/2012 | 5/23/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
3,249,147 | 2,708,100 | 3,064,080 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
3,249,147 | 2,708,100 | 3,064,080 | |||||||||
Other cash expenditures expensed |
22,748 | 24,089 | 22,951 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 3,271,895 | $ | 2,732,189 | $ | 3,087,031 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Goodyear Cumming, GA Automotive Parts & Service |
CVS Oklahoma Drugstore |
Sherwood Retail Center Sherwood, AR Shopping Center |
|||||||||
Gross leasable square footage |
6,870 | 9,889 | 119,002 | |||||||||
Date of purchase |
5/23/2012 | 6/4/2012 | 6/4/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
2,973,300 | 2,256,391 | 5,941,500 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
2,973,300 | 2,256,391 | 5,941,500 | |||||||||
Other cash expenditures expensed |
23,283 | 35,735 | 77,160 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 2,996,583 | $ | 2,292,126 | $ | 6,018,660 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | OReilly Automotive Willard, OH Automotive Parts |
AutoZone Hernando, MS Automotive Parts & Service |
Advanced Auto Dayton, OH Automotive Parts |
|||||||||
Gross leasable square footage |
6,629 | 5,400 | 7,000 | |||||||||
Date of purchase |
6/8/2012 | 6/11/2012 | 6/21/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,095,842 | 942,480 | 1,787,203 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,095,842 | 942,480 | 1,787,203 | |||||||||
Other cash expenditures expensed |
29,422 | 35,422 | 31,377 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,125,264 | $ | 977,902 | $ | 1,818,580 | ||||||
|
|
|
|
|
|
II-103
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Advanced Auto Florence, KY Automotive Parts |
Advanced Auto Mishawaka, IN Automotive Parts |
Advanced Auto Richmond, IN Automotive Parts |
|||||||||
Gross leasable square footage |
7,000 | 7,000 | 7,000 | |||||||||
Date of purchase |
6/21/2012 | 6/21/2012 | 6/21/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,854,159 | 1,706,582 | 1,898,370 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,854,159 | 1,706,582 | 1,898,370 | |||||||||
Other cash expenditures expensed |
31,820 | 29,440 | 29,635 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,885,979 | $ | 1,736,022 | $ | 1,928,005 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Advanced Auto Spring, TX Automotive Parts |
Tractor Supply Middletown, DE Specialty Retail |
Dicks Sporting Goods Fort Gratiot, MI Sporting Goods |
|||||||||
Gross leasable square footage |
7,000 | 21,842 | 44,255 | |||||||||
Date of purchase |
6/21/2012 | 6/29/2012 | 6/29/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,765,334 | 4,523,229 | 6,282,431 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,765,334 | 4,523,229 | 6,282,431 | |||||||||
Other cash expenditures expensed |
35,384 | 126,090 | 58,929 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,800,718 | $ | 4,649,319 | $ | 6,341,360 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
||||||||||
Name, location, type of property | Ulta Salon Fort Gratiot, MI Specialty Retail |
Pier 1 Imports Victoria, TX Specialty Retail |
||||||||||
Gross leasable square footage |
10,570 | 8,914 | ||||||||||
Date of purchase |
6/29/2012 | 7/2/2012 | ||||||||||
Mortgage financing at date of purchase |
$ | | $ | | ||||||||
Cash down payment |
2,033,064 | 2,111,400 | ||||||||||
|
|
|
|
|||||||||
Contract purchase price plus acquisition fee |
2,033,064 | 2,111,400 | ||||||||||
Other cash expenditures expensed |
59,563 | 34,784 | ||||||||||
Other cash expenditures capitalized |
| | ||||||||||
|
|
|
|
|||||||||
Total acquisition cost |
$ | 2,092,627 | $ | 2,146,184 | ||||||||
|
|
|
|
II-104
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | OReilly Automotive Louisville, KY Automotive Parts |
Family Dollar Bethel, OH Discount Retail |
Family Dollar Cleveland, OH Discount Retail |
|||||||||
Gross leasable square footage |
6,794 | 9,211 | 9,463 | |||||||||
Date of purchase |
7/10/2012 | 7/11/2012 | 7/11/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,506,128 | 1,447,736 | 1,834,836 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,506,128 | 1,447,736 | 1,834,836 | |||||||||
Other cash expenditures expensed |
34,649 | 7,041 | 7,231 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,540,777 | $ | 1,454,777 | $ | 1,842,067 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Trader Joes Lexington, KY Grocery |
Mattress Firm Fairview Heights, IL Furniture Retail |
RSA Security Bedford, MA Other Professional Services |
|||||||||
Gross leasable square footage |
15,162 | 5,011 | 328,232 | |||||||||
Date of purchase |
7/17/2012 | 7/23/2012 | 7/25/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
6,481,755 | 1,082,220 | 95,370,000 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
6,481,755 | 1,082,220 | 95,370,000 | |||||||||
Other cash expenditures expensed |
50,779 | 22,934 | 93,069 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 6,532,534 | $ | 1,105,154 | $ | 95,463,069 | ||||||
|
|
|
|
|
|
|||||||
|
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Golds Gym Broken Arrow, OK Fitness |
Benihana Maple Grove, MN Restaurant |
Benihana Restaurant |
|||||||||
Gross leasable square footage |
40,961 | 6,706 | 7,960 | |||||||||
Date of purchase |
8/15/2012 | 8/21/2012 | 8/21/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
6,885,000 | 4,219,772 | 4,684,216 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
6,885,000 | 4,219,772 | 4,684,216 | |||||||||
Other cash expenditures expensed |
40,334 | 26,869 | 27,482 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 6,925,334 | $ | 4,246,640 | $ | 4,711,698 | ||||||
|
|
|
|
|
|
II-105
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole
Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Benihana Anchorage, AK Restaurant |
Benihana Dallas, TX |
Benihana North Bay Village, FL Restaurant |
|||||||||
Gross leasable square footage |
7,288 | 8,922 | 9,981 | |||||||||
Date of purchase |
8/21/2012 | 8/21/2012 | 8/21/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
3,467,102 | 4,500,642 | 4,179,379 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
3,467,102 | 4,500,642 | 4,179,379 | |||||||||
Other cash expenditures expensed |
29,687 | 26,543 | 30,443 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 3,496,790 | $ | 4,527,185 | $ | 4,209,822 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Benihana Stuart, FL |
Benihana Schaumburg, IL Restaurant |
Benihana Alpharetta, GA |
|||||||||
Gross leasable square footage |
8,257 | 8,636 | 8,795 | |||||||||
Date of purchase |
8/21/2012 | 8/21/2012 | 8/21/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
3,944,357 | 3,560,133 | 1,201,180 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
3,944,357 | 3,560,133 | 1,201,180 | |||||||||
Other cash expenditures expensed |
30,040 | 27,900 | 25,130 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 3,974,397 | $ | 3,588,032 | $ | 1,226,310 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Benihana Wheeling, IL Restaurant |
USAA Fayetteville, NC Insurance Services |
WaWa Gap, PA |
|||||||||
Gross leasable square footage |
8,455 | 5,210 | 5,744 | |||||||||
Date of purchase |
8/21/2012 | 8/29/2012 | 8/29/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
923,576 | 2,488,800 | 5,818,443 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
923,576 | 2,488,800 | 5,818,443 | |||||||||
Other cash expenditures expensed |
24,409 | 44,975 | 115,166 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 947,986 | $ | 2,533,775 | $ | 5,933,609 | ||||||
|
|
|
|
|
|
II-106
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | White Oak Village Richmond, VA Shopping Center |
Road Ranger Winnebago, IL Convenience Store |
Stripes Brady, TX |
|||||||||
Gross leasable square footage |
432,956 | (2) | 3,824 | 4,675 | ||||||||
Date of purchase |
8/30/2012 | 8/30/2012 | 8/30/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
69,360,000 | 4,282,635 | 3,203,302 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
69,360,000 | 4,282,635 | 3,203,302 | |||||||||
Other cash expenditures expensed |
526,367 | 21,562 | 23,124 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 69,886,367 | $ | 4,304,198 | $ | 3,226,426 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Stripes Brownsville, TX Convenience Store |
Stripes Corpus Christi |
Stripes Corpus Christi |
|||||||||
Gross leasable square footage |
6,303 | 4,749 | 6,318 | |||||||||
Date of purchase |
8/30/2012 | 8/30/2012 | 8/30/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
3,675,314 | 3,960,724 | 3,794,598 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
3,675,314 | 3,960,724 | 3,794,598 | |||||||||
Other cash expenditures expensed |
23,732 | 23,939 | 23,760 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 3,699,046 | $ | 3,984,663 | $ | 3,818,358 | ||||||
|
|
|
|
|
|
|||||||
|
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Stripes Corpus Christi |
Stripes Edinburg (Hwy107), TX |
Stripes Edinburg (Longoria), TX |
|||||||||
Gross leasable square footage |
4,738 | 4,740 | 4,728 | |||||||||
Date of purchase |
8/30/2012 | 8/30/2012 | 8/30/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
2,622,835 | 3,172,885 | 2,691,635 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
2,622,835 | 3,172,885 | 2,691,635 | |||||||||
Other cash expenditures expensed |
22,849 | 23,091 | 22,573 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 2,645,684 | $ | 3,195,977 | $ | 2,714,208 | ||||||
|
|
|
|
|
|
II-107
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Stripes Houston, TX |
Stripes Midland (Rankin), TX |
Stripes Mission (Hwy83), TX |
|||||||||
Gross leasable square footage |
3,895 | 7,347 | 9,349 | |||||||||
Date of purchase |
8/30/2012 | 8/30/2012 | 8/30/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
2,933,804 | 5,796,549 | 3,686,468 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
2,933,804 | 5,796,549 | 3,686,468 | |||||||||
Other cash expenditures expensed |
22,934 | 25,883 | 23,811 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 2,956,737 | $ | 5,822,431 | $ | 3,710,279 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Stripes Odessa |
Stripes San Angelo |
Stripes San Angelo (Bryant), TX |
|||||||||
Gross leasable square footage |
4,166 | 14,734 | 3,727 | |||||||||
Date of purchase |
8/30/2012 | 8/30/2012 | 8/30/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
7,235,810 | 4,113,083 | 4,742,433 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
7,235,810 | 4,113,083 | 4,742,433 | |||||||||
Other cash expenditures expensed |
27,060 | 24,103 | 25,230 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 7,262,869 | $ | 4,137,185 | $ | 4,767,663 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Sysmex Lincolnshire, IL Manufacturing |
JoAnn Fabrics Shakopee, MN Sports and hobby |
L.A. Fitness Marana, AZ Fitness and Health |
|||||||||
Gross leasable square footage |
162,739 | 17,040 | 45,000 | |||||||||
Date of purchase |
8/31/2012 | 9/1/2012 | 9/13/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
50,728,000 | 2,612,934 | 7,875,474 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
50,728,000 | 2,612,934 | 7,875,474 | |||||||||
Other cash expenditures expensed |
152,325 | 37,275 | 28,128 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 50,880,325 | $ | 2,650,209 | $ | 7,903,602 | ||||||
|
|
|
|
|
|
II-108
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | HH Gregg Chesterfield, MO Specialty Retail |
Family Dollar Loveland, OH Discount Retail |
Trader Joes Sarasota, FL Grocery |
|||||||||
Gross leasable square footage |
25,000 | 7,907 | 17,565 | |||||||||
Date of purchase |
9/18/2012 | 9/24/2012 | 9/25/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
5,100,000 | 1,356,660 | 7,377,300 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
5,100,000 | 1,356,660 | 7,377,300 | |||||||||
Other cash expenditures expensed |
44,539 | 7,711 | 36,069 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 5,144,539 | $ | 1,364,371 | $ | 7,413,369 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Toys R Us/ Babys R Us Coral Springs, FL Sports and Hobby |
Advanced Auto Automotive Parts |
Hillside Town Center Chicago, IL Shopping Center |
|||||||||
Gross leasable square footage |
46,079 | 6,125 | 164,923 | |||||||||
Date of purchase |
9/27/2012 | 9/28/2012 | 9/28/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
8,850,540 | 1,642,200 | 27,484,337 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
8,850,540 | 1,642,200 | 27,484,337 | |||||||||
Other cash expenditures expensed |
51,333 | 31,825 | 306,816 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 8,901,873 | $ | 1,674,025 | $ | 27,791,153 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Mattress Firm Melbourne, FL Home furnishings |
Kohls/Academy Sports Hixson, TN Shopping Center |
Sprouts Centennial, CO Grocery |
|||||||||
Gross leasable square footage |
4,307 | 131,578 | 25,444 | |||||||||
Date of purchase |
10/5/2012 | 11/13/2012 | 11/14/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,458,600 | 10,984,380 | 9,180,000 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,458,600 | 10,984,380 | 9,180,000 | |||||||||
Other cash expenditures expensed |
28,745 | 102,682 | 56,913 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,487,345 | $ | 11,087,062 | $ | 9,236,913 | ||||||
|
|
|
|
|
|
II-109
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Tractor Supply Specialty Retail |
Encana Oil & Gas Mining and Natural |
Dollar General LA Retail- Discount |
|||||||||
Gross leasable square footage |
19,290 | 318,582 | 9,100 | |||||||||
Date of purchase |
11/21/2012 | 11/27/2012 | 11/30/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
2,932,500 | 122,400,000 | 1,382,282 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
2,932,500 | 122,400,000 | 1,382,282 | |||||||||
Other cash expenditures expensed |
35,863 | 105,179 | 25,037 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 2,968,363 | $ | 122,505,179 | $ | 1,407,319 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Dollar General Lake Charles, LA Retail - Discount |
Dollar General Retail - Discount |
Dollar General Vidor, TX Retail -Discount |
|||||||||
Gross leasable square footage |
9,026 | 9,026 | 9,100 | |||||||||
Date of purchase |
11/30/2012 | 11/30/2012 | 11/30/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,201,029 | 1,349,754 | 1,138,823 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,201,029 | 1,349,754 | 1,138,823 | |||||||||
Other cash expenditures expensed |
24,993 | 18,766 | 23,799 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,226,022 | $ | 1,368,519 | $ | 1,162,622 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Dollar General Phenix City, AL Retail - Discount |
Dollar General Retail - Discount |
Dollar General Lowell, OH Retail -Discount |
|||||||||
Gross leasable square footage |
9,100 | 9,026 | 9,026 | |||||||||
Date of purchase |
11/30/2012 | 11/30/2012 | 11/30/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,218,648 | 1,259,211 | 1,254,531 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,218,648 | 1,259,211 | 1,254,531 | |||||||||
Other cash expenditures expensed |
23,578 | 23,766 | 25,196 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,242,226 | $ | 1,282,977 | $ | 1,279,727 | ||||||
|
|
|
|
|
|
II-110
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Kohls SC |
Merrill Lynch Hopewell Township, NJ Financial Services |
Garden Ridge GA |
|||||||||
Gross leasable square footage |
88,904 | 481,854 | 141,284 | |||||||||
Date of purchase |
12/6/2012 | 12/12/2012 | 12/17/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
8,721,000 | 137,700,000 | 9,537,000 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
8,721,000 | 137,700,000 | 9,537,000 | |||||||||
Other cash expenditures expensed |
69,969 | 1,530,435 | 45,064 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 8,790,969 | $ | 139,230,435 | $ | 9,582,064 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Tractor Supply Jackson, CA Specialty Retail |
Dollar General Lakeland, FL Retail - Discount |
Dollar General Cade, LA Retail - Discount |
|||||||||
Gross leasable square footage |
19,813 | 12,406 | 9,026 | |||||||||
Date of purchase |
12/18/2012 | 12/18/2012 | 12/18/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
5,283,600 | 2,237,880 | 1,291,739 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
5,283,600 | 2,237,880 | 1,291,739 | |||||||||
Other cash expenditures expensed |
42,670 | 24,182 | 14,406 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 5,326,270 | $ | 2,262,062 | $ | 1,306,146 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Valley Bend Huntsville, AL Shopping Center |
Cigna Phoenix, AZ |
Giant/Eagle Gahanna, OH Grocery |
|||||||||
Gross leasable square footage |
805,520 | (2) | 90,389 | 95,098 | ||||||||
Date of purchase |
12/19/2012 | 12/19/2012 | 12/20/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
73,980,600 | 24,257,172 | 22,132,391 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
73,980,600 | 24,257,172 | 22,132,391 | |||||||||
Other cash expenditures expensed |
260,519 | 170,856 | 68,958 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 74,241,119 | $ | 24,428,028 | $ | 22,201,350 | ||||||
|
|
|
|
|
|
II-111
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Dollar General Ponca City, OK Retail - Discount |
Dollar General Tahlequah, OK Retail - Discount |
Dollar General Wagoner, OK Retail - Discount |
|||||||||
Gross leasable square footage |
9,100 | 9,026 | 9,026 | |||||||||
Date of purchase |
12/20/2012 | 12/20/2012 | 12/20/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,300,500 | 1,206,660 | 1,105,680 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,300,500 | 1,206,660 | 1,105,680 | |||||||||
Other cash expenditures expensed |
24,523 | 23,832 | 23,831 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,325,023 | $ | 1,230,492 | $ | 1,129,511 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Pick N Save Center Wauwatosa, WI Shopping Center |
Wal-mart Cary, NC Discount store |
Kirklands Home furnishings |
|||||||||
Gross leasable square footage |
69,855 | 54,500 | 7,100 | |||||||||
Date of purchase |
12/21/2012 | 12/21/2012 | 12/21/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
16,514,351 | 8,801,750 | 2,136,078 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
16,514,351 | 8,801,750 | 2,136,078 | |||||||||
Other cash expenditures expensed |
58,975 | 44,046 | 30,875 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 16,573,326 | $ | 8,845,797 | $ | 2,166,953 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Wendys Henderson (Lake Mead), NV Restaurant |
Wendys Henderson (Green Valley), NV Restaurant |
Wendys Henderson (Eastern), NV Restaurant |
|||||||||
Gross leasable square footage |
3,326 | 3,784 | 3,162 | |||||||||
Date of purchase |
12/27/2012 | 12/27/2012 | 12/27/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,380,396 | 2,129,168 | 1,513,485 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,380,396 | 2,129,168 | 1,513,485 | |||||||||
Other cash expenditures expensed |
3,600 | 3,600 | 3,600 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,383,996 | $ | 2,132,768 | $ | 1,517,085 | ||||||
|
|
|
|
|
|
II-112
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Wendys Las Vegas |
Wendys Las Vegas |
Wendys Carmel (116th St), IN Restaurant |
|||||||||
Gross leasable square footage |
2,651 | 3,210 | 3,146 | |||||||||
Date of purchase |
12/27/2012 | 12/27/2012 | 12/27/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,031,594 | 1,663,868 | 1,202,142 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,031,594 | 1,663,868 | 1,202,142 | |||||||||
Other cash expenditures expensed |
3,600 | 3,600 | 3,617 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,035,194 | $ | 1,667,468 | $ | 1,205,759 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Wendys Carmel (Michigan Rd), IN Restaurant |
Wendys Restaurant |
Wendys Fishers (Olivia), IN Restaurant |
|||||||||
Gross leasable square footage |
3,270 | 3,015 | 3,103 | |||||||||
Date of purchase |
12/27/2012 | 12/27/2012 | 12/27/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,579,486 | 1,404,422 | 1,360,000 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,579,486 | 1,404,422 | 1,360,000 | |||||||||
Other cash expenditures expensed |
3,617 | 3,617 | 3,617 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,583,103 | $ | 1,408,039 | $ | 1,363,617 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole
Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Wendys Lebanon, IN Restaurant |
Wendys Noblesville, IN Restaurant |
Wendys Greenfield, IN Restaurant |
|||||||||
Gross leasable square footage |
3,857 | 2,750 | 2,356 | |||||||||
Date of purchase |
12/27/2012 | 12/27/2012 | 12/27/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,836,656 | 673,399 | 942,276 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,836,656 | 673,399 | 942,276 | |||||||||
Other cash expenditures expensed |
3,617 | 3,617 | 3,625 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,840,273 | $ | 677,016 | $ | 945,901 | ||||||
|
|
|
|
|
|
II-113
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Wendys Indianapolis, IN Restaurant |
Wendys Avon, IN Restaurant |
Wendys Avon, IN Restaurant |
|||||||||
Gross leasable square footage |
2,982 | 3,155 | 3,170 | |||||||||
Date of purchase |
12/27/2012 | 12/27/2012 | 12/27/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,405,071 | 1,408,787 | 1,708,165 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,405,071 | 1,408,787 | 1,708,165 | |||||||||
Other cash expenditures expensed |
3,625 | 3,625 | 3,625 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,408,697 | $ | 1,412,413 | $ | 1,711,791 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Wendys San Antonio |
Wendys San Antonio |
Wendys San Antonio |
|||||||||
Gross leasable square footage |
3,199 | 3,299 | 3,355 | |||||||||
Date of purchase |
12/27/2012 | 12/27/2012 | 12/27/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,351,894 | 2,004,672 | 1,586,418 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,351,894 | 2,004,672 | 1,586,418 | |||||||||
Other cash expenditures expensed |
3,687 | 3,687 | 3,687 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,355,581 | $ | 2,008,359 | $ | 1,590,105 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Wendys San Antonio |
Wendys Selma, TX Restaurant |
Wendys San Antonio, TX Restaurant |
|||||||||
Gross leasable square footage |
3,061 | 3,277 | 3,064 | |||||||||
Date of purchase |
12/27/2012 | 12/27/2012 | 12/27/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
781,437 | 874,924 | 869,939 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
781,437 | 874,924 | 869,939 | |||||||||
Other cash expenditures expensed |
3,687 | 3,687 | 3,687 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 785,124 | $ | 878,611 | $ | 873,626 | ||||||
|
|
|
|
|
|
II-114
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Wendys Schertz, TX Restaurant |
Wendys San Marcos, TX |
Wendys Las Vegas Restaurant |
|||||||||
Gross leasable square footage |
3,353 | 2,810 | 3,710 | |||||||||
Date of purchase |
12/27/2012 | 12/27/2012 | 12/27/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
868,988 | 1,808,051 | 1,316,193 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
868,988 | 1,808,051 | 1,316,193 | |||||||||
Other cash expenditures expensed |
3,687 | 3,687 | 3,600 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 872,675 | $ | 1,811,738 | $ | 1,319,793 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Wendys Las Vegas |
Wendys Las Vegas |
Wendys Las Vegas |
|||||||||
Gross leasable square footage |
3,117 | 3,566 | 3,683 | |||||||||
Date of purchase |
12/27/2012 | 12/27/2012 | 12/27/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,321,117 | 1,770,598 | 974,315 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,321,117 | 1,770,598 | 974,315 | |||||||||
Other cash expenditures expensed |
3,600 | 3,600 | 3,600 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,324,717 | $ | 1,774,198 | $ | 977,915 | ||||||
|
|
|
|
|
|
|
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Wendys Bellingham, WA Restaurant |
Wendys Bothell, WA Restaurant |
Wendys Port |
|||||||||
Gross leasable square footage |
2,966 | 2,987 | 2,600 | |||||||||
Date of purchase |
12/27/2012 | 12/27/2012 | 12/27/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,043,479 | 797,385 | 1,853,668 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,043,479 | 797,385 | 1,853,668 | |||||||||
Other cash expenditures expensed |
3,622 | 3,622 | 3,622 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,047,101 | $ | 801,007 | $ | 1,857,290 | ||||||
|
|
|
|
|
|
II-115
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
|||||||||
Name, location, type of property | Wendys Redmond, WA Restaurant |
Wendys Silverdale, WA Restaurant |
Cost Plus La Quinta, CA |
|||||||||
Gross leasable square footage |
2,752 | 2,884 | 18,262 | |||||||||
Date of purchase |
12/27/2012 | 12/27/2012 | 12/31/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
899,052 | 2,847,166 | 6,094,500 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
899,052 | 2,847,166 | 6,094,500 | |||||||||
Other cash expenditures expensed |
3,622 | 3,622 | 64,941 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 902,674 | $ | 2,850,787 | $ | 6,159,441 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust III, Inc. |
Cole Credit Property Trust III, Inc. |
||||||||||
Name, location, type of property | East Valley Center Saginaw, MI Shopping Center |
West Valley Center Saginaw, MI |
||||||||||
Gross leasable square footage |
121,318 | 283,782 | (2) | |||||||||
Date of purchase |
12/31/2012 | 12/31/2012 | ||||||||||
Mortgage financing at date of purchase |
$ | | $ | | ||||||||
Cash down payment |
4,453,320 | 26,642,237 | ||||||||||
|
|
|
|
|||||||||
Contract purchase price plus acquisition fee |
4,453,320 | 26,642,237 | ||||||||||
Other cash expenditures expensed |
33,714 | 72,915 | ||||||||||
Other cash expenditures capitalized |
| | ||||||||||
|
|
|
|
|||||||||
Total acquisition cost |
$ | 4,487,034 | $ | 26,715,152 | ||||||||
|
|
|
|
II-116
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust IV, Inc. |
|||||||||||
Name, location, type of property | Advance Auto Parts North Ridgeville, OH |
|||||||||||
Gross leasable square footage |
6,000 | |||||||||||
Date of purchase |
4/13/2012 | |||||||||||
Mortgage financing at date of purchase |
$ | | ||||||||||
Cash down payment |
1,706,460 | |||||||||||
|
|
|||||||||||
Contract purchase price plus acquisition fee |
1,706,460 | |||||||||||
Other cash expenditures expensed |
33,026 | |||||||||||
Other cash expenditures capitalized |
| |||||||||||
|
|
|||||||||||
Total acquisition cost |
$ | 1,739,486 | ||||||||||
|
|
|||||||||||
Program: |
Cole Credit Property Trust IV, Inc. |
Cole Credit Property Trust IV, Inc. |
Cole Credit Property Trust IV, Inc. |
|||||||||
Name, location, type of property | PetSmart Wilkesboro, NC Specialty Retail |
Nordstrom Rack Tampa, FL |
Walgreens Blair, NE Drugstore |
|||||||||
Gross leasable square footage |
12,259 | 44,925 | 14,820 | |||||||||
Date of purchase |
4/13/2012 | 4/16/2012 | 4/18/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
2,703,000 | 12,238,000 | 4,327,272 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
2,703,000 | 12,238,000 | 4,327,272 | |||||||||
Other cash expenditures expensed |
31,608 | 105,750 | 52,103 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 2,734,608 | $ | 12,343,750 | $ | 4,379,375 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust IV, Inc. |
Cole Credit Property Trust IV, Inc. |
Cole Credit Property Trust IV, Inc. |
|||||||||
Name, location, type of property | CVS Corpus Christi, TX |
CVS Charleston, SC |
CVS Asheville, NC Drugstore |
|||||||||
Gross leasable square footage |
11,306 | 10,125 | 10,125 | |||||||||
Date of purchase |
4/19/2012 | 4/26/2012 | 4/26/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
3,468,000 | 2,180,534 | 2,412,554 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
3,468,000 | 2,180,534 | 2,412,554 | |||||||||
Other cash expenditures expensed |
38,750 | 30,604 | 28,464 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 3,506,750 | $ | 2,211,138 | $ | 2,441,018 | ||||||
|
|
|
|
|
|
II-117
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust IV, Inc. |
Cole Credit Property Trust IV, Inc. |
Cole Credit Property Trust IV, Inc. |
|||||||||
Name, location, type of property | OReilly Auto Parts Brownfield, TX Automotive |
OReilly Auto Parts Columbus, TX Automotive |
Walgreens Suffolk, VA Drugstore |
|||||||||
Gross leasable square footage |
6,365 | 6,047 | 14,820 | |||||||||
Date of purchase |
5/8/2012 | 5/8/2012 | 5/14/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
984,756 | 1,152,817 | 5,023,500 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
984,756 | 1,152,817 | 5,023,500 | |||||||||
Other cash expenditures expensed |
25,678 | 25,867 | 32,339 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,010,434 | $ | 1,178,684 | $ | 5,055,839 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole
Credit Property Trust IV, Inc. |
Cole Credit Property Trust IV, Inc. |
Cole Credit Property Trust IV, Inc. |
|||||||||
Name, location, type of property | Walgreens Springfield, IL Drugstore |
Walgreens Montgomery, AL Drugstore |
Tractor Supply Cambridge, MN Home Improvement |
|||||||||
Gross leasable square footage |
14,820 | 14,820 | 18,000 | |||||||||
Date of purchase |
5/14/2012 | 5/14/2012 | 5/14/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
5,327,460 | 4,566,540 | 2,289,900 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
5,327,460 | 4,566,540 | 2,289,900 | |||||||||
Other cash expenditures expensed |
25,255 | 39,837 | 41,255 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 5,352,715 | $ | 4,606,377 | $ | 2,331,155 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole
Credit Property Trust IV, Inc. |
Cole Credit Property Trust IV, Inc. |
Cole Credit Property Trust IV, Inc. |
|||||||||
Name, location, type of property | HEB Center Waxahachie, TX Shopping Center |
CVS Bainbridge, GA Drugstore |
Advance Auto Starkville, MS Automotive |
|||||||||
Gross leasable square footage |
82,458 | 10,125 | 6,129 | |||||||||
Date of purchase |
6/27/2012 | 6/27/2012 | 6/29/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
13,260,000 | 2,703,000 | 1,371,863 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
13,260,000 | 2,703,000 | 1,371,863 | |||||||||
Other cash expenditures expensed |
65,685 | 35,876 | 38,564 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 13,325,685 | $ | 2,738,876 | $ | 1,410,427 | ||||||
|
|
|
|
|
|
II-118
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust IV, Inc. |
Cole Credit Property Trust IV, Inc. |
Cole Credit Property Trust IV, Inc. |
|||||||||
Name, location, type of property | AutoZone Philipsburg, PA Automotive |
Benihana Golden Valley, MN Restaurant |
Benihana Lauderdale by the Sea, FL Restaurant |
|||||||||
Gross leasable square footage |
7,380 | 8,362 | 8,965 | |||||||||
Date of purchase |
7/27/2012 | 8/21/2012 | 8/21/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,652,400 | 5,466,836 | 4,613,600 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,652,400 | 5,466,836 | 4,613,600 | |||||||||
Other cash expenditures expensed |
66,518 | 27,654 | 32,027 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,718,918 | $ | 5,494,490 | $ | 4,645,627 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust IV, Inc. |
Cole Credit Property Trust IV, Inc. |
Cole Credit Property Trust IV, Inc. |
|||||||||
Name, location, type of property | Benihana Lombard, IL Restaurant |
Benihana The Woodlands, TX Restaurant |
Wawa Cape May, NJ |
|||||||||
Gross leasable square footage |
9,184 | 10,400 | 5,594 | |||||||||
Date of purchase |
8/21/2012 | 8/21/2012 | 8/29/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
5,520,106 | 2,081,930 | 7,792,694 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
5,520,106 | 2,081,930 | 7,792,694 | |||||||||
Other cash expenditures expensed |
23,848 | 24,639 | 131,765 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 5,543,954 | $ | 2,106,569 | $ | 7,924,459 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust IV, Inc. |
Cole Credit Property Trust IV, Inc. |
Cole Credit Property Trust IV, Inc. |
|||||||||
Name, location, type of property | Wawa Galloway, NJ |
Stripes Brownsville, TX |
Stripes Brownwood, TX Convenience Store |
|||||||||
Gross leasable square footage |
5,605 | 4,765 | 3,917 | |||||||||
Date of purchase |
8/29/2012 | 8/30/2012 | 8/30/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
8,286,405 | 2,869,969 | 4,012,765 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
8,286,405 | 2,869,969 | 4,012,765 | |||||||||
Other cash expenditures expensed |
138,162 | 22,860 | 23,740 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 8,424,567 | $ | 2,892,829 | $ | 4,036,505 | ||||||
|
|
|
|
|
|
II-119
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust IV, Inc. |
Cole Credit Property Trust IV, Inc. |
Cole Credit Property Trust IV, Inc. |
|||||||||
Name, location, type of property | Stripes McAllen, TX |
Stripes Midland, TX |
Stripes Mission, TX |
|||||||||
Gross leasable square footage |
4,715 | 3,912 | 4,728 | |||||||||
Date of purchase |
8/30/2012 | 8/30/2012 | 8/30/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
2,890,471 | 6,985,941 | 2,632,253 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
2,890,471 | 6,985,941 | 2,632,253 | |||||||||
Other cash expenditures expensed |
22,600 | 26,933 | 22,322 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 2,913,071 | $ | 7,012,874 | $ | 2,654,575 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust IV, Inc. |
Cole Credit Property Trust IV, Inc. |
Cole Credit Property Trust IV, Inc. |
|||||||||
Name, location, type of property | Stripes Odessa, TX |
Pickn Save Sheboygan, WI Grocery |
The Marquis Williamsburg, VA Shopping Center |
|||||||||
Gross leasable square footage |
3,604 | 70,072 | 134,911 | |||||||||
Date of purchase |
8/30/2012 | 9/6/2012 | 9/21/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
6,276,919 | 14,404,440 | 14,545,200 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
6,276,919 | 14,404,440 | 14,545,200 | |||||||||
Other cash expenditures expensed |
26,304 | 42,245 | 84,715 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 6,303,223 | $ | 14,446,685 | $ | 14,629,915 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust IV, Inc. |
Cole Credit Property Trust IV, Inc. |
Cole Credit Property Trust IV, Inc. |
|||||||||
Name, location, type of property | Golden Corral Garland, TX Restaurant |
Ross Ft. Worth, TX |
CVS Irving, TX |
|||||||||
Gross leasable square footage |
12,763 | 32,400 | 10,908 | |||||||||
Date of purchase |
9/21/2012 | 10/4/2012 | 10/5/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
3,981,060 | 4,998,000 | 3,995,908 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
3,981,060 | 4,998,000 | 3,995,908 | |||||||||
Other cash expenditures expensed |
23,773 | 67,955 | 33,390 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 4,004,833 | $ | 5,065,955 | $ | 4,029,298 | ||||||
|
|
|
|
|
|
II-120
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust IV, Inc. |
Cole Credit Property Trust IV, Inc. |
Cole Credit Property Trust IV, Inc. |
|||||||||
Name, location, type of property | Mattress Firm Jonesboro, AR Furniture Store |
Petsmart Baton Rouge, LA Pet Supplies |
Walgreens Lubbock (82nd), TX Drugstore |
|||||||||
Gross leasable square footage |
6,000 | 25,265 | 15,120 | (2) | ||||||||
Date of purchase |
10/5/2012 | 10/11/2012 | 10/11/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
2,232,780 | 4,182,000 | 4,325,310 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
2,232,780 | 4,182,000 | 4,325,310 | |||||||||
Other cash expenditures expensed |
36,928 | 55,441 | 34,677 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 2,269,708 | $ | 4,237,441 | $ | 4,359,987 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust IV, Inc. |
Cole Credit Property Trust IV, Inc. |
Cole Credit Property Trust IV, Inc. |
|||||||||
Name, location, type of property | Walgreens Lubbock (Indiana), TX Drugstore |
Kohls Hutchinson, KS |
CVS Cartersville, GA |
|||||||||
Gross leasable square footage |
13,905 | 55,000 | 13,225 | (2) | ||||||||
Date of purchase |
10/11/2012 | 10/19/2012 | 10/22/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
3,772,470 | 3,452,700 | 2,668,320 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
3,772,470 | 3,452,700 | 2,668,320 | |||||||||
Other cash expenditures expensed |
30,307 | 33,675 | 30,504 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 3,802,777 | $ | 3,486,375 | $ | 2,698,824 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust IV, Inc. |
Cole Credit Property Trust IV, Inc. |
Cole Credit Property Trust IV, Inc. |
|||||||||
Name, location, type of property | Logans Roadhouse Lancaster, TX Restaurant |
Logans Roadhouse Opelika, AL Restaurant |
Logans Roadhouse Sanford, FL |
|||||||||
Gross leasable square footage |
6,555 | 8,140 | 8,670 | |||||||||
Date of purchase |
10/23/2012 | 10/23/2012 | 10/23/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
3,228,300 | 3,019,009 | 3,698,259 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
3,228,300 | 3,019,009 | 3,698,259 | |||||||||
Other cash expenditures expensed |
29,407 | 27,028 | 27,028 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 3,257,707 | $ | 3,046,037 | $ | 3,725,287 | ||||||
|
|
|
|
|
|
II-121
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust IV, Inc. |
Cole Credit Property Trust IV, Inc. |
Cole Credit Property Trust IV, Inc. |
|||||||||
Name, location, type of property | Logans Roadhouse Troy, OH Restaurant |
Advance Auto Corydon, IN Automotive |
Mattress Firm Pineville, NC Furniture Store |
|||||||||
Gross leasable square footage |
6,533 | 6,895 | 10,837 | |||||||||
Date of purchase |
10/23/2012 | 10/26/2012 | 10/29/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
3,167,100 | 1,543,661 | 3,456,780 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
3,167,100 | 1,543,661 | 3,456,780 | |||||||||
Other cash expenditures expensed |
29,407 | 37,718 | 37,735 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 3,196,507 | $ | 1,581,379 | $ | 3,494,515 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust IV, Inc. |
Cole Credit Property Trust IV, Inc. |
Cole Credit Property Trust IV, Inc. |
|||||||||
Name, location, type of property | Tractor Supply Newnan, GA Home and Garden |
Cost Plus Shopping Center Kansas City, MO Discount Store |
Michaels Bowling Green, KY Sports and Hobby |
|||||||||
Gross leasable square footage |
19,097 | 26,967 | 18,391 | |||||||||
Date of purchase |
11/6/2012 | 11/13/2012 | 11/20/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
4,021,860 | 3,942,300 | 3,172,200 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
4,021,860 | 3,942,300 | 3,172,200 | |||||||||
Other cash expenditures expensed |
42,075 | 46,721 | 52,410 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 4,063,935 | $ | 3,989,021 | $ | 3,224,610 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust IV, Inc. |
Cole Credit Property Trust IV, Inc. |
Cole Credit Property Trust IV, Inc. |
|||||||||
Name, location, type of property | Tractor Supply Spencer, WV Home and Garden |
Dollar General Hanceville, AL Discount Store |
Dollar General Piedmont, AL Discount Store |
|||||||||
Gross leasable square footage |
19,127 | 20,707 | 20,707 | |||||||||
Date of purchase |
11/20/2012 | 11/21/2012 | 11/21/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
3,003,900 | 3,376,518 | 3,299,382 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
3,003,900 | 3,376,518 | 3,299,382 | |||||||||
Other cash expenditures expensed |
51,793 | 21,911 | 21,334 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 3,055,693 | $ | 3,398,429 | $ | 3,320,716 | ||||||
|
|
|
|
|
|
II-122
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust IV, Inc. |
Cole Credit Property Trust IV, Inc. |
Cole Credit Property Trust IV, Inc. |
|||||||||
Name, location, type of property | Kirklands Jonesboro, AR Home Furnishings |
Dollar General Maynardville, TN Discount Store |
Dollar General Lima, OH Discount Store |
|||||||||
Gross leasable square footage |
9,000 | 9,026 | 9,002 | |||||||||
Date of purchase |
11/27/2012 | 11/30/2012 | 11/30/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
2,961,291 | 1,252,013 | 1,368,617 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
2,961,291 | 1,252,013 | 1,368,617 | |||||||||
Other cash expenditures expensed |
37,571 | 19,866 | 59,708 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 2,998,862 | $ | 1,271,879 | $ | 1,428,325 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust IV, Inc. |
Cole Credit Property Trust IV, Inc. |
Cole Credit Property Trust IV, Inc. |
|||||||||
Name, location, type of property | Dollar General Whitwell, TN Discount Store |
Dollar General Cleveland, TX Discount Store |
Dollar General Brownsville, TX Discount Store |
|||||||||
Gross leasable square footage |
12,406 | 9,026 | 9,026 | |||||||||
Date of purchase |
11/30/2012 | 11/30/2012 | 11/30/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,470,141 | 1,153,411 | 1,386,711 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,470,141 | 1,153,411 | 1,386,711 | |||||||||
Other cash expenditures expensed |
35,495 | 34,141 | 23,579 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,505,636 | $ | 1,187,552 | $ | 1,410,290 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust IV, Inc. |
Cole Credit Property Trust IV, Inc. |
Cole Credit Property Trust IV, Inc. |
|||||||||
Name, location, type of property | Dollar General Greenwell Springs, LA Discount Store |
Dollar General Breaux Bridge, LA Discount Store |
Tire Kingdom Tarpon Springs, FL Automotive |
|||||||||
Gross leasable square footage |
9,026 | 9,100 | 6,100 | |||||||||
Date of purchase |
11/30/2012 | 11/30/2012 | 11/30/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,465,949 | 1,413,636 | 2,129,072 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,465,949 | 1,413,636 | 2,129,072 | |||||||||
Other cash expenditures expensed |
23,830 | 25,252 | 19,547 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,489,779 | $ | 1,438,888 | $ | 2,148,619 | ||||||
|
|
|
|
|
|
II-123
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust IV, Inc. |
Cole Credit Property Trust IV, Inc. |
Cole Credit Property Trust IV, Inc. |
|||||||||
Name, location, type of property | Tractor Supply Canon City, CO Home and Garden |
Hobby Lobby Mooresville, NC Sports and Hobby |
Canarsie Plaza Brooklyn, NY Shopping Center |
|||||||||
Gross leasable square footage |
21,924 | 55,000 | 273,878 | |||||||||
Date of purchase |
11/30/2012 | 11/30/2012 | 12/5/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | 75,000,000 | ||||||
Cash down payment |
3,791,530 | 5,610,000 | 51,480,000 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
3,791,530 | 5,610,000 | 126,480,000 | |||||||||
Other cash expenditures expensed |
24,274 | 24,719 | 520,414 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 3,815,804 | $ | 5,634,719 | $ | 127,000,414 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust IV, Inc. |
Cole Credit Property Trust IV, Inc. |
Cole Credit Property Trust IV, Inc. |
|||||||||
Name, location, type of property | Kohls CedarFalls, IA |
BigLots Waco, TX |
Costco Tallahassee, FL Warehouse Club |
|||||||||
Gross leasable square footage |
86,584 | 28,526 | 150,896 | (2) | ||||||||
Date of purchase |
12/7/2012 | 12/10/2012 | 12/11/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
8,211,000 | 2,652,000 | 9,904,200 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
8,211,000 | 2,652,000 | 9,904,200 | |||||||||
Other cash expenditures expensed |
139,921 | 31,754 | 29,284 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 8,350,921 | $ | 2,683,754 | $ | 9,933,484 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust IV, Inc. |
Cole Credit Property Trust IV, Inc. |
Cole Credit Property Trust IV, Inc. |
|||||||||
Name, location, type of property | Wal-Mart Tallahassee, FL Discount Store |
Golden Corral Houston, TX Restaurant |
Old Navy & PetSmart Reynoldsburg, OH Apparel/Pet Supply |
|||||||||
Gross leasable square footage |
196,812 | (2) | 14,284 | 28,970 | ||||||||
Date of purchase |
12/11/2012 | 12/12/2012 | 12/14/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
15,697,800 | 4,022,880 | 6,171,292 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
15,697,800 | 4,022,880 | 6,171,292 | |||||||||
Other cash expenditures expensed |
30,241 | 20,393 | 46,854 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 15,728,041 | $ | 4,043,273 | $ | 6,218,146 | ||||||
|
|
|
|
|
|
II-124
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust IV, Inc. |
Cole Credit Property Trust IV, Inc. |
Cole Credit Property Trust IV, Inc. |
|||||||||
Name, location, type of property | National Tire & Cedar Hill, TX |
Hickory Flat Commons Various |
Dollar General Independence, MO Discount Store |
|||||||||
Gross leasable square footage |
6,912 | 114,751 | 9,100 | |||||||||
Date of purchase |
12/18/2012 | 12/18/2012 | 12/18/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
2,676,480 | 19,380,000 | 1,395,514 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
2,676,480 | 19,380,000 | 1,395,514 | |||||||||
Other cash expenditures expensed |
15,665 | 33,544 | 85,930 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 2,692,145 | $ | 19,413,544 | $ | 1,481,444 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust IV, Inc. |
Cole Credit Property Trust IV, Inc. |
Cole Credit Property Trust IV, Inc. |
|||||||||
Name, location, type of property | Dollar General Rayne, LA Discount Store |
Dollar General Conroe, TX Discount Store |
Dollar General Houston, TX Discount Store |
|||||||||
Gross leasable square footage |
9,026 | 9,026 | 9,026 | |||||||||
Date of purchase |
12/18/2012 | 12/18/2012 | 12/18/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,180,741 | 1,274,972 | 1,632,782 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,180,741 | 1,274,972 | 1,632,782 | |||||||||
Other cash expenditures expensed |
17,521 | 12,503 | 12,871 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,198,262 | $ | 1,287,475 | $ | 1,645,653 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust IV, Inc. |
Cole Credit Property Trust IV, Inc. |
Cole Credit Property Trust IV, Inc. |
|||||||||
Name, location, type of property | Dollar General Lubbock, TX Discount Store |
Big Lots San Angelo, TX Discount Store |
Home Depot North Canton, OH Home and Garden |
|||||||||
Gross leasable square footage |
9,026 | 35,584 | 111,803 | |||||||||
Date of purchase |
12/18/2012 | 12/19/2012 | 12/20/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,254,460 | 3,315,000 | 14,739,000 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,254,460 | 3,315,000 | 14,739,000 | |||||||||
Other cash expenditures expensed |
20,870 | 35,693 | 43,368 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,275,330 | $ | 3,350,693 | $ | 14,782,368 | ||||||
|
|
|
|
|
|
II-125
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust IV, Inc. |
Cole Credit Property Trust IV, Inc. |
Cole Credit Property Trust IV, Inc. |
|||||||||
Name, location, type of property | Walgreens Danville, VA Drugstore |
Dollar General Ashville, AL Discount Store |
Dollar General Geneva, AL Discount Store |
|||||||||
Gross leasable square footage |
14,820 | 9,026 | 9,026 | |||||||||
Date of purchase |
12/21/2012 | 12/21/2012 | 12/21/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
6,008,438 | 1,145,197 | 1,274,366 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
6,008,438 | 1,145,197 | 1,274,366 | |||||||||
Other cash expenditures expensed |
64,268 | 14,248 | 7,667 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 6,072,706 | $ | 1,159,445 | $ | 1,282,033 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust IV, Inc. |
Cole Credit Property Trust IV, Inc. |
Cole Credit Property Trust IV, Inc. |
|||||||||
Name, location, type of property | Dollar General Harvest, AL Discount Store |
Dollar General Huntsville, AL Discount Store |
Dollar General Kinston, AL Discount Store |
|||||||||
Gross leasable square footage |
9,002 | 9,026 | 9,026 | (2) | ||||||||
Date of purchase |
12/21/2012 | 12/21/2012 | 12/21/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
1,174,103 | 1,278,984 | 1,102,830 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
1,174,103 | 1,278,984 | 1,102,830 | |||||||||
Other cash expenditures expensed |
12,928 | 7,678 | 81,895 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 1,187,031 | $ | 1,286,662 | $ | 1,184,725 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Credit Property Trust IV, Inc. |
Cole Credit Property Trust IV, Inc. |
Cole Credit Property Trust IV, Inc. |
|||||||||
Name, location, type of property | Fairview Village Cary, NC |
Dicks Oklahoma City |
Wallace Commons Salisbury, NC Shopping Center |
|||||||||
Gross leasable square footage |
50,643 | (2) | 50,018 | 98,509 | (2) | |||||||
Date of purchase |
12/21/2012 | 12/21/2012 | 12/31/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
6,758,565 | 9,151,752 | 12,240,000 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
6,758,565 | 9,151,752 | 12,240,000 | |||||||||
Other cash expenditures expensed |
82,757 | 12,918 | 59,295 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 6,841,322 | $ | 9,164,670 | $ | 12,299,295 | ||||||
|
|
|
|
|
|
II-126
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Credit Property Trust IV, Inc. |
|||
Name, location, type of property | Dicks Oklahoma City, OK |
|||
Gross leasable square footage |
60,500 | |||
Date of purchase |
12/31/2012 | |||
Mortgage financing at date of purchase |
$ | | ||
Cash down payment |
12,342,000 | |||
|
|
|||
Contract purchase price plus acquisition fee |
12,342,000 | |||
Other cash expenditures expensed |
96,880 | |||
Other cash expenditures capitalized |
| |||
|
|
|||
Total acquisition cost |
$ | 12,438,880 | ||
|
|
Program: |
Cole Real Estate Income Strategy (Daily NAV), Inc. |
Cole Real Estate Income Strategy (Daily NAV), Inc. |
Cole Real Estate Income Strategy (Daily NAV), Inc. |
|||||||||
Name, location, type of property | Walgreens Albuquerque (3400 Coors), NM Drugstore |
Tractor Supply(1) Lockhart, TX Specialty Retail |
Walgreens(1) Reidsville, NC Drugstore |
|||||||||
Gross leasable square footage |
15,525 | 18,800 | 14,550 | |||||||||
Date of purchase |
12/7/2011 | 12/8/2011 | 12/8/2011 | |||||||||
Mortgage financing at date of purchase |
$ | 1,732,500 | $ | 2,087,400 | $ | 3,570,000 | ||||||
Cash down payment |
742,500 | 832,600 | 1,555,000 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
2,475,000 | 2,920,000 | 5,125,000 | |||||||||
Other cash expenditures expensed |
33,726 | 35,588 | 48,632 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 2,508,726 | $ | 2,955,588 | $ | 5,173,632 | ||||||
|
|
|
|
|
|
Program: |
Cole Real Estate Income Strategy (Daily NAV), Inc. |
Cole Real Estate Income Strategy (Daily NAV), Inc. |
Cole Real Estate Income Strategy (Daily NAV), Inc. |
|||||||||
Name, location, type of property | CVS(1) Austin, TX |
CVS Mansfield, OH Drugstore |
Tractor Supply Brunswick, GA Specialty Retail |
|||||||||
Gross leasable square footage |
10,906 | 10,722 | 19,097 | |||||||||
Date of purchase |
12/8/2011 | 12/9/2011 | 12/9/2011 | |||||||||
Mortgage financing at date of purchase |
$ | 2,030,000 | $ | 1,522,500 | $ | 2,377,900 | ||||||
Cash down payment |
1,024,150 | 776,500 | 1,019,100 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
3,054,150 | 2,299,000 | 3,397,000 | |||||||||
Other cash expenditures expensed |
47,581 | 52,669 | 23,137 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 3,101,731 | $ | 2,351,669 | $ | 3,420,137 | ||||||
|
|
|
|
|
|
II-127
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Real Estate Income Strategy (Daily NAV), Inc. |
Cole Real Estate Income Strategy (Daily NAV), Inc. |
Cole Real Estate Income Strategy (Daily NAV), Inc. |
|||||||||
Name, location, type of property | The Parke San Antonio, TX Shopping Center |
CVS Erie, PA Drugstore |
Advance Auto Macomb Township, MI Automotive Parts |
|||||||||
Gross leasable square footage |
105,743 | (2) | 10,125 | 7,000 | ||||||||
Date of purchase |
12/9/2011 | 12/9/2011 | 12/20/2011 | |||||||||
Mortgage financing at date of purchase |
$ | 5,075,000 | $ | 1,592,500 | $ | 1,452,500 | ||||||
Cash down payment |
2,175,000 | 707,500 | 646,500 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
7,250,000 | 2,300,000 | 2,099,000 | |||||||||
Other cash expenditures expensed |
91,589 | 34,129 | 50,022 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 7,341,589 | $ | 2,334,129 | $ | 2,149,022 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Real Estate Income Strategy (Daily NAV), Inc. |
Cole Corporate Income Trust, Inc. |
||||||||||
Name, location, type of property | Dollar General Berwick, LA Discount store |
Medtronic(1) San Antonio, TX Healthcare |
||||||||||
Gross leasable square footage |
12,466 | 145,025 | ||||||||||
Date of purchase |
11/30/2012 | 6/30/2011 | ||||||||||
Mortgage financing at date of purchase |
$ | | $ | 23,000,000 | ||||||||
Cash down payment |
1,780,767 | 10,507,000 | ||||||||||
|
|
|
|
|||||||||
Contract purchase price plus acquisition fee |
1,780,767 | 33,507,000 | ||||||||||
Other cash expenditures expensed |
20,076 | 61,839 | ||||||||||
Other cash expenditures capitalized |
| | ||||||||||
|
|
|
|
|||||||||
Total acquisition cost |
$ | 1,800,843 | $ | 33,568,839 | ||||||||
|
|
|
|
|||||||||
Program: |
Cole Corporate Income Trust, Inc. |
Cole Corporate Income Trust, Inc. |
||||||||||
Name, location, type of property | Dr. Pepper Harvey, IL Distribution |
Safelite Columbus, OH |
||||||||||
Gross leasable square footage |
40,410 | 41,792 | ||||||||||
Date of purchase |
4/5/2012 | 4/30/2012 | ||||||||||
Mortgage financing at date of purchase |
$ | | $ | | ||||||||
Cash down payment |
3,974,003 | 4,794,000 | ||||||||||
|
|
|
|
|||||||||
Contract purchase price plus acquisition fee |
3,974,003 | 4,794,000 | ||||||||||
Other cash expenditures expensed |
40,965 | 42,242 | ||||||||||
Other cash expenditures capitalized |
| | ||||||||||
|
|
|
|
|||||||||
Total acquisition cost |
$ | 4,014,968 | $ | 4,836,242 | ||||||||
|
|
|
|
II-128
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Corporate Income Trust, Inc. |
Cole Corporate Income Trust, Inc. |
Cole Corporate Income Trust, Inc. |
|||||||||
Name, location, type of property | United Launch Alliance Centennial, CO Manufacturing |
HCA, Inc. Irving , TX |
American Tire Colorado Springs, CO Automotive |
|||||||||
Gross leasable square footage |
167,917 | 94,137 | 125,060 | |||||||||
Date of purchase |
7/31/2012 | 9/27/2012 | 9/28/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
33,201,000 | 15,792,660 | 8,477,220 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
33,201,000 | 15,792,660 | 8,477,220 | |||||||||
Other cash expenditures expensed |
70,865 | 86,532 | 43,036 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 33,271,865 | $ | 15,879,192 | $ | 8,520,256 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Corporate Income Trust, Inc. |
Cole Corporate Income Trust, Inc. |
Cole Corporate Income Trust, Inc. |
|||||||||
Name, location, type of property | Elizabeth Arden Roanoke, VA Manufacturing |
Honeywell Fort Mill, SC |
Amazon Spartanburg, SC Wholesale |
|||||||||
Gross leasable square footage |
399,182 | 60,044 | 1,016,110 | |||||||||
Date of purchase |
11/9/2012 | 11/30/2012 | 12/17/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
23,970,000 | 10,608,000 | 64,518,273 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
23,970,000 | 10,608,000 | 64,518,273 | |||||||||
Other cash expenditures expensed |
166,363 | 81,800 | 80,425 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 24,136,363 | $ | 10,689,800 | $ | 64,598,698 | ||||||
|
|
|
|
|
|
|||||||
Program: |
Cole Corporate Income Trust, Inc. |
Cole Corporate Income Trust, Inc. |
Cole Corporate Income Trust, Inc. |
|||||||||
Name, location, type of property | Toro Ankeny, IA Wholesale |
Compass Group Charlotte, NC Other Professional Services |
Aon Lincolnshire, IL |
|||||||||
Gross leasable square footage |
450,139 | 284,039 | 222,717 | |||||||||
Date of purchase |
12/17/2012 | 12/19/2012 | 12/21/2012 | |||||||||
Mortgage financing at date of purchase |
$ | | $ | | $ | | ||||||
Cash down payment |
22,919,648 | 43,014,420 | 23,023,440 | |||||||||
|
|
|
|
|
|
|||||||
Contract purchase price plus acquisition fee |
22,919,648 | 43,014,420 | 23,023,440 | |||||||||
Other cash expenditures expensed |
36,224 | 126,503 | 48,138 | |||||||||
Other cash expenditures capitalized |
| | | |||||||||
|
|
|
|
|
|
|||||||
Total acquisition cost |
$ | 22,955,871 | $ | 43,140,923 | $ | 23,071,578 | ||||||
|
|
|
|
|
|
II-129
TABLE VI
ACQUISITION OF PROPERTIES BY PROGRAMS (UNAUDITED) (Continued)
Program: |
Cole Corporate Income Trust, Inc. |
|||||||
Name, location, type of property | FedEx Salt Lake City, UT |
|||||||
Gross leasable square footage |
150,300 | |||||||
Date of purchase |
12/27/2012 | |||||||
Mortgage financing at date of purchase |
$ | | ||||||
Cash down payment |
13,005,000 | |||||||
|
|
|||||||
Contract purchase price plus acquisition fee |
13,005,000 | |||||||
Other cash expenditures expensed |
52,685 | |||||||
Other cash expenditures capitalized |
| |||||||
|
|
|||||||
Total acquisition cost |
$ | 13,057,685 | ||||||
|
|
(1) | These properties were acquired at their original cost from an affiliate. |
(2) | Includes square feet of buildings which are on land subject to ground leases. |
(3) | Represents development property under construction as of December 31, 2012. |
II-130
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all the requirements for filing on Form S-11 and has duly caused this amended Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Phoenix, State of Arizona, on the 10th day of April, 2013.
COLE CREDIT PROPERTY TRUST IV, INC. | ||
By: | /s/ D. Kirk McAllaster, Jr. | |
D. Kirk McAllaster, Jr. | ||
Executive Vice President, Chief Financial Officer and Treasurer |
Pursuant to the requirements of the Securities Act of 1933, this amended Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
Name |
Title |
Date | ||
* Christopher H. Cole |
Chairman of the Board, Chief Executive Officer and President (Principal Executive Officer) | April 10, 2013 | ||
/s/ D. Kirk McAllaster, Jr. D. Kirk McAllaster, Jr. |
Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer) | April 10, 2013 | ||
/s/ Simon J. Misselbrook Simon J. Misselbrook |
Senior Vice President of Accounting (Principal Accounting Officer) | April 10, 2013 | ||
* Lawrence S. Jones |
Director |
April 10, 2013 | ||
* J. Marc Myers |
Director |
April 10, 2013 |
*By: |
/s/ D. Kirk McAllaster, Jr. | |
D. Kirk McAllaster, Jr. | ||
Attorney-in-Fact |
EXHIBIT INDEX
1.1 | Dealer Manager Agreement between Cole Credit Property Trust IV, Inc. and Cole Capital Corporation dated January 26, 2012. (Incorporated by reference to Exhibit 1.1 to the Companys post-effective amendment to Form S-11 (File No. 333-169533), filed July 13, 2012.) | |
3.1 | First Articles of Amendment and Restatement of Cole Credit Property Trust IV, Inc. (Incorporated by reference to Exhibit 3.4 to the Companys pre-effective amendment to Form S-11 (File No. 333-169533), filed January 24, 2012). | |
3.2 | Bylaws of Cole Credit Property Trust IV, Inc. (Incorporated by reference to Exhibit 3.5 to the Companys pre-effective amendment to Form S-11 (File No. 333-169533), filed January 24, 2012). | |
3.3 | Certificate of Correction to the First Articles of Amendment and Restatement of Cole Credit Property Trust IV, Inc. (Incorporated by reference to Exhibit 3.6 to the Companys pre-effective amendment to Form S-11 (File No. 333-169533), filed January 24, 2012). | |
3.4 | Articles of Amendment of First Article of Amendment and Restatement of Cole Credit Property Trust IV, Inc. (Incorporated by reference to Exhibit 3.1 to the Companys current report on Form 8-K (File No. 333-169533), filed February 27, 2012). | |
3.5 | First Amendment to the Bylaws of Cole Credit Property Trust IV, Inc. (Incorporated by reference to Exhibit 3.1 to the Companys Current Report on Form 8-K (File No. 333-169533), filed June 27, 2012). | |
3.6 | Certificate of Correction to First Articles of Amendment and Restatement, dated January 25, 2013 (Incorporated by reference to Exhibit 3.6 to the Companys Annual Report on Form 10-K (File No. 333-169533), filed March 29, 2013). | |
4.1* | Form of Initial Subscription Agreement (Included as Appendix B to the Prospectus). | |
4.2* | Form of Additional Subscription Agreement (Included as Appendix C to the Prospectus). | |
4.3* | Alternative Form of Initial Subscription Agreement (Included as Appendix D to the Prospectus). | |
4.4* | Form of Initial Subscription Agreement (Alabama Investors) (Included as Appendix E to the Prospectus). | |
4.5* | Form of Additional Subscription Agreement (Alabama Investors) (Included as Appendix F to the Prospectus). | |
4.6* | Alternative Form of Additional Subscription Agreement (Included as Appendix G to the Prospectus). | |
5.1 | Opinion of Venable LLP as to legality of securities (Incorporated by reference to Exhibit 5.1 to the Companys pre-effective amendment to Form S-11 (File No. 333-169533), filed on January 24, 2012). | |
8.1 | Opinion of Morris, Manning & Martin, LLP as to tax matters (Incorporated by reference to Exhibit 8.1 to the Companys pre-effective amendment to Form S-11 (File No. 333-169533), filed on January 24, 2012). | |
10.1 | Advisory Agreement by and between Cole Credit Property Trust IV, Inc. and Cole REIT Advisors IV, LLC, dated January 20, 2012 (Incorporated by reference to Exhibit 10.1 to the Companys pre-effective amendment to Form S-11 (File No. 333-169533), filed on January 24, 2012). | |
10.2 | Amended and Restated Agreement of Limited Partnership of Cole Operating Partnership IV, LP, by and between Cole Credit Property Trust IV, Inc. and the limited partners thereto (Incorporated by reference to Exhibit 10.2 to the Companys pre-effective amendment to Form S-11 (File No. 333-169533), filed on January 24, 2012). | |
10.3* | Distribution Reinvestment Plan (Included as Appendix H to the Prospectus). | |
10.4 | Escrow Agreement by and among Cole Credit Property Trust IV, Inc., Cole Capital Corporation and UMB Bank, N.A. dated January 20, 2012 (Incorporated by reference to Exhibit 10.4 to the Companys pre-effective amendment to Form S-11 (File No. 333-169533), filed on January 24, 2012). | |
10.5 | Purchase and Sale Agreement, dated April 13, 2012, between Cole Operating Partnership IV, LP and Series C, LLC to purchase 100% of the membership interests in Cole AA North Ridgeville OH, LLC (Incorporated by reference to Exhibit 10.5 to the Companys Quarterly Report on Form 10-Q (File No. 333-169533), filed effective May 15, 2012). |
10.6 | Purchase and Sale Agreement, dated April 13, 2012, between Cole Operating Partnership IV, LP and Series C, LLC to purchase 100% of the membership interests in Cole PM Wilkesboro NC, LLC (Incorporated by reference to Exhibit 10.6 to the Companys Quarterly Report on Form 10-Q (File No. 333-169533), filed effective May 15, 2012). | |
10.7 | Borrowing Base Revolving Line of Credit Agreement dated April 13, 2012 by and among Cole Operating Partnership IV, LP as borrower, and JPMorgan Chase Bank, N.A., as administrative agent, and the lenders referenced therein, and J.P. Morgan Securities LLC, as sole lead arranger and sole bookrunner (Incorporated by reference to Exhibit 10.7 to the Companys Quarterly Report on Form 10-Q (File No. 333-169533), filed effective May 15, 2012). | |
10.8 | Subordinate Promissory Note, dated April 13, 2012, by Cole Credit Property Trust IV, Inc. payable to Series C, LLC (Incorporated by reference to Exhibit 10.8 to the Companys Quarterly Report on Form 10-Q (File No. 333-169533), filed effective May 15, 2012). | |
10.9 | Purchase and Sale Agreement by and between Cole NR Tampa FL, LLC, and VNO TRU Dale Mabry LLC, pursuant to an Assignment of Purchase and Sale Agreement dated April 16, 2012 (Incorporated by reference to Exhibit 10.9 to the Companys Quarterly Report on Form 10-Q (File No. 333-169533), filed effective May 15, 2012). | |
10.10 | Purchase Agreement and Escrow Instructions by and between Cole WG Blair NE, LLC, and Village Development Blair, LLC, pursuant to an Assignment of Purchase and Sale Agreement dated April 18, 2012 (Incorporated by reference to Exhibit 10.10 to the Companys Quarterly Report on Form 10-Q (File No. 333-169533), filed effective May 15, 2012). | |
10.11 | Purchase Agreement and Escrow Instructions by and between Cole CV Corpus Christi TX, LLC, and Deborah May-Buffum, Trustee of the Betty Upham Gouraud Trust, pursuant to an Assignment of Purchase and Sale Agreement dated April 19, 2012 (Incorporated by reference to Exhibit 10.11 to the Companys Quarterly Report on Form 10-Q (File No. 333-169533), filed effective May 15, 2012). | |
10.12 | Master Purchase Agreement and Escrow Instructions between Cole CV Charleston SC, LLC, Cole CV Asheville NC, LLC, SC Charleston Investors I, LLC, and NC Asheville Investors I, LLC, pursuant to an Assignment of Purchase and Sale Agreement dated April 26, 2012 (Incorporated by reference to Exhibit 10.12 to the Companys Quarterly Report on Form 10-Q (File No. 333-169533), filed effective May 15, 2012). | |
10.13 | First Amendment of Advisory Agreement by and between Cole Credit Property Trust IV, Inc. and Cole REIT Advisors IV, LLC, dated February 23, 2012 (Incorporated by reference to Exhibit 10.13 to the Companys Quarterly Report on Form 10-Q (File No. 333-169533), filed effective May 15, 2012). | |
10.14 | Amended and Restated Escrow Agreement by and among Cole Credit Property Trust IV, Inc., Cole Capital Corporation and UMB Bank N.A., dated February 2, 2012 (Incorporated by reference to Exhibit 10.14 to the Companys Quarterly Report on Form 10-Q (File No. 333-169533), filed effective May 15, 2012). | |
10.15 | Master Purchase Agreement and Escrow Instructions by and between Cole WG Montgomery AL, LLC, Cole WG Springfield IL, LLC, Cole WG Suffolk VA, LLC, and MGH ACQ LLC, pursuant to an Assignment of Purchase and Sale Agreement dated May 11, 2012 (Incorporated by reference to Exhibit 10.15 to the Companys post-effective amendment to Form S-11 (File No. 333-169533), filed July 13, 2012). | |
10.16 | Purchase and Sale Agreement by and between Cole MT Waxahachie TX, LLC and Lincoln Waxahachie, Ltd., pursuant to an Assignment of Purchase and Sale Agreement dated June 27, 2012 (Incorporated by reference to Exhibit 10.16 to the Companys post-effective amendment to Form S-11 (File No. 333-169533), filed July 13, 2012). |
10.17 | Amended and Restated Borrowing Base Revolving Line of Credit Agreement dated as of July 13, 2012 by and among Cole Operating Partnership IV, LP and JPMorgan Chase Bank, N.A. as administrative agent and any lenders that may become a party to the Amended and Restated Credit Agreement pursuant to its terms, and Bank of America, N.A. as syndication agent and U.S. National Bank Association, as documentation agent, and J.P. Morgan Securities LLC, and Merrill Lynch, Pierce, Fenner & Smith, Incorporated as joint bookrunners and joint lead arrangers (Incorporated by reference to Exhibit 10.11 to the Companys Quarterly Report on Form 10-Q (File No. 333-169533), filed August 13, 2012). | |
10.18 | Agreement for Sale and Purchase by and between Cole BN Golden Valley MN, LLC, Cole BN Lauderdale FL, LLC, Cole BN Lombard IL, LLC, Cole BN Woodlands TX, LLC, The Samurai, Inc., Benihana National of Florida Corp., Benihana Lombard Corp. and Benihana Woodlands Corp., dated August 3, 2012 (Incorporated by reference to Exhibit 10.18 to the Companys post-effective amendment to Form S-11 (File No. 333-169533), filed October 10, 2012). | |
10.19 | Master Purchase Agreement and Escrow Instructions by and between Cole WW Cape May NJ, LLC, Cole WW Galloway NJ, LLC, Cape May CS Associates, LLC and Galloway CS Associates, LLC, pursuant to two separate Partial Assignment of Master Agreement and Escrow Instructions each dated August 29, 2012 (Incorporated by reference to Exhibit 10.19 to the Companys post-effective amendment to Form S-11 (File No. 333-169533), filed October 10, 2012). | |
10.20 | Master Purchase Agreement and Escrow Instructions by and between Cole VS Brownsville TX, LLC, Cole VS Mission TX, LLC, Cole VS McAllen TX, LLC, Cole VS Odessa (42nd) TX, LLC, Cole VS Midland TX, LLC, Cole VS Brownwood TX, LLC, NNN Retail Properties Fund Sub I LLC and NNN Retail Properties Fund Sub II LLC, pursuant to six separate Partial Assignment of Master Agreement and Escrow Instructions each dated August 30, 2012 (Incorporated by reference to Exhibit 10.20 to the Companys post-effective amendment to Form S-11 (File No. 333-169533), filed October 10, 2012). | |
10.21 | Purchase and Sale Agreement by and between Cole MT Brooklyn NY, LLC and Canarsie Plaza, LLC, pursuant to an Assignment of Purchase and Sale Agreement dated November 26, 2012 (Incorporated by reference to Exhibit 10.21 to the Companys post-effective amendment to Form S-11 (File No. 333-169533), filed on January 10, 2013). | |
10.22 | Loan Agreement by and between Cole MT Brooklyn NY, LLC, as borrower and PNC Bank, National Association, as lender dated December 5, 2012 (Incorporated by reference to Exhibit 10.22 to the Companys post-effective amendment to Form S-11 (File No. 333-169533), filed on January 10, 2013). | |
10.23 | Credit Agreement dated as of December 14, 2012 by and among Cole Operating Partnership IV, LP, as borrower, JPMorgan Chase Bank, N.A., as administrative agent, JPMorgan Chase Bank, N.A., as syndication agent, any other lenders that may become a party to the Credit Agreement pursuant to its terms and J.P. Morgan Securities LLC, as lead arranger and book manager (Incorporated by reference to Exhibit 10.23 to the Companys post-effective amendment to Form S-11 (File No. 333-169533), filed on January 10, 2013). | |
10.24* | Purchase Agreement by and between Cole CCPT IV Acquisitions, LLC and WPV San Jose, LLC, dated January 18, 2013. | |
10.25* | Fourth Amendment to Purchase Agreement by and between Cole CCPT IV Acquisitions, LLC and WPV San Jose, LLC, dated February 12, 2013. | |
10.26* | First Modification and Lender Joinder Agreement, dated March 8, 2013 by and among Cole Operating Partnership IV, LP, JPMorgan Chase Bank N.A. and Bank of America, N.A. | |
21.1* | Subsidiaries of the Registrant. | |
23.1* | Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm. | |
23.2 | Consent of Venable LLP (included in Exhibit 5.1). |
23.3 | Consent of Morris, Manning & Martin, LLP (included in Exhibit 8.1). | |
23.4* | Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm. | |
24.1 | Power of Attorney for Christopher H. Cole, D. Kirk McAllaster, Jr. and Simon J. Misselbrook (Incorporated by reference to Exhibit 24.1 to the Companys pre-effective amendment to Form S-11 (File No. 333-169533), filed on May 26, 2011). | |
24.2 | Power of Attorney for J. Marc Myers (Incorporated by reference to Exhibit 24.1 to the Companys pre-effective amendment to Form S-11 (File No. 333-169533), filed on January 24, 2012). | |
24.3 | Power of Attorney for Lawrence S. Jones (Incorporated by reference to Exhibit 24.4 to the Companys post-effective amendment to Form S-11 (File No. 333-169533), filed July 13, 2012). |
Exhibit 10.24
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (this Agreement) is made and entered into as of January 18, 2013 (the Effective Date), by and between WPV SAN JOSE, LLC, a Delaware limited liability company (Seller) and COLE CCPT IV ACQUISITIONS, LLC, a Delaware limited liability company (Buyer).
R E C I T A L S
A. Seller is the owner of the Property (as that term is defined in Section 2).
B. Seller desires to sell, and Buyer desires to purchase, the Property on the terms and conditions hereinafter documented.
NOW, THEREFORE, in consideration of the mutual undertakings of the parties hereto, it is hereby agreed as follows:
1. Certain Defined Terms. As used herein:
1.1 Purchase Price shall mean Two Hundred Five Million and 00/100 Dollars ($205,000,000.00).
1.2 Initial Deposit shall mean Ten Million and 00/100 Dollars ($10,000,000.00), together with any interest earned thereon when in the possession of Title Company.
1.3 Extension Deposit shall mean One Million and 00/100 Dollars ($1,000,000.00), together with any interest earned thereon when in the possession of Title Company.
1.4 Deposit shall mean the Initial Deposit and the Extension Deposit.
2. Purchase and Sale. Upon the terms and conditions hereinafter set forth, Seller shall sell to Buyer, and Buyer shall purchase from Seller, certain real property located at 175 Curtner Avenue, at the northwest corner of Curtner Avenue and Monterey Highway, in San Jose, California and commonly known as The Plant, which is improved primarily with a retail shopping center consisting of approximately 509,614 square feet. As used herein, the term Property means collectively all right, title and interest of Seller in and to: (a) the land (the Land) described in Exhibit A hereto and all rights and appurtenances pertaining thereto, including rights in and to adjacent streets, alleys or rights-of-way and easements, licenses or interests relating thereto; (b) the easements, interests in roadways, strips and other rights appurtenant to the Land; (c) the building, improvements, structures and fixtures located upon the Land and their related elevators, utility facilities and life safety systems (if any) (collectively, the Improvements); (d) all tangible personal property now or on the Closing Date (as hereinafter defined) located on or about the Land or Improvements, subject to depletions, replacements and additions in the ordinary course of operating the Improvements owned by Seller and currently used solely in the operation, repair, and maintenance of the Land and Improvements, but excluding (i) tangible personal property owned by tenants under Leases (as hereinafter defined) of the Land or Improvements, in their capacity as a tenants, (ii) tangible personal property leased to Seller as a lessee, and (iii) the tangible personal property listed on Exhibit B, the ownership and possession of which will be retained by Seller; (all such personal property described in this Section 2(d) excluding Sections 2(d)(i) - 2(d)(iii) shall be collectively referred to herein as the Personal Property); (e) to the extent assignable, any copyrights, logos, slogans, trademarks, trade names and service marks used and needed solely in the operation of the Improvements, but excluding, without limitation, the names VNO and Vornado; (f) all leases, tenancy and occupancy agreements and related agreements (including by way of example but without limitation, any separate agreement relating to tenant improvements or tenant allowances) with respect to the Land and/or the Improvements (the Leases), all guaranties thereof, and all security deposits, if any, under the Leases (to the extent made by tenants under the Leases (Tenants) and not applied or forfeited, in accordance with the terms of the applicable Leases, prior to the Closing, as such term is hereinafter defined), (g) Service Contracts (as hereinafter
defined) other than such Service Contracts which Buyer elects not to assume during the Due Diligence Period pursuant to Section 7.3.2 hereof, consents, authorizations, government approvals, governmental permits, licenses and approvals, warranties and guarantees that are assignable and that Seller has received in connection with any work or services performed with respect to, or equipment installed in, the Improvements, and, to the extent in Sellers possession, plans, specifications, as-built architectural drawings and engineering, electrical and mechanical plans; (h) the right, on a nonexclusive basis with Seller and Seller Related Parties (as defined below), to seek the specific performance by General Electric Company, a New York corporation (GE) of its obligation to obtain the Groundwater NFA (as defined in Exhibit S), and (i) Sellers interest in and under all operating and reciprocal easement agreements affecting the Land (REAs) (the property described in the foregoing subsection (e), (g), (h) and (i) being referred to hereinafter, collectively, as the Intangible Property). Notwithstanding anything to the contrary contained herein, the Property shall exclude any claims by Seller against third parties with respect to the period prior to Closing. Additionally, notwithstanding anything to the contrary contained herein, Seller reserves to right to retain at least one (1) copy of all digital information and paper copies of all information provided by Seller to Buyer related to, or associated with the Property. The Property shall not include any payroll or other accounts of Seller.
3. Payment of Purchase Price. The Purchase Price shall be paid to Seller by Buyer as follows:
3.1 Deposit. Within two (2) business days of the execution and delivery of this Agreement, Buyer shall deliver the Initial Deposit to First American Title Insurance Company (the Title Company or Escrow Holder), at its offices at 633 Third Avenue, New York, NY 10017, Attention: Jen Panciera. The Deposit shall be delivered to the Title Company by wire transfer of immediately available federal funds or by bank or cashiers check drawn on a national bank reasonably satisfactory to Seller. The amounts deposited hereunder shall be held by the Title Company as a deposit against the Purchase Price in accordance with the terms and provisions of the Earnest Money Escrow Agreement attached hereto as Exhibit G. The parties shall execute the Earnest Money Escrow Agreement contemporaneously with the execution of this Agreement. At all times that the Deposit is being held by the Title Company, the Deposit shall be invested by the Title Company in the following investments (Approved Investments): (i) United States Treasury obligations, (ii) United States Treasury-backed repurchase agreements issued by a major money center banking institution reasonably acceptable to Seller and Buyer, or (iii) such other manner as may be reasonably agreed to by Seller and Buyer. Subject to the terms of this Agreement, any interest accrued on the Deposit shall accrue for the benefit of Buyer, and Buyer shall provide to Title Company customary forms relating to the reporting of any associated income.
3.2 Closing Payment. The Purchase Price, as adjusted by the application of the Deposit and by the prorations and credits specified herein, shall be paid by wire transfer of immediately available federal funds (through the escrow described in Section 5) on the Closing Date, as hereinafter defined (the amount to be paid under this Section 3.2 being herein called the Closing Payment).
4. Conditions Precedent. The obligation of Buyer to acquire, and Seller to transfer, the Property as contemplated by this Agreement is subject to satisfaction of each of the following conditions precedent (any of which may be waived in writing by the party in whose favor such condition exists) on or before the applicable date specified for satisfaction of the applicable condition. If any of such conditions is not fulfilled (or waived) pursuant to the terms of this Agreement, then this Agreement shall, at the option of the party for whose benefit the condition exists, terminate and, in connection with any such termination made in accordance with this Section 4, Seller and Buyer shall, except as otherwise provided herein, be released from further obligation or liability hereunder (except for those obligations and liabilities which expressly survive such termination), and the Deposit shall be returned to Buyer; provided, however, if Buyer or Seller is in default hereunder, the Deposit shall be disposed of in accordance with Section 9 and the parties shall have the additional rights and liabilities set forth therein. The Closing shall constitute approval by each party of all matters to which such party has a right of approval and a waiver of all conditions precedent.
4.1 Title Matters.
4.1.1 Title Report; Survey. Prior to the Effective Date Seller has delivered to Buyer a copy of the preliminary title report from Title Company dated December 28, 2012 (the Preliminary Title Report)
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covering the Property. In addition, Seller has delivered to Buyer a preliminary survey of the Property prepared by PSOMAS and dated August, 2010 (the Preliminary Survey). If Buyer shall fail to deliver the Termination Notice (as hereinafter defined) prior to the expiration of the Due Diligence Period (the Title/Survey Review Period), Buyer shall be deemed to have approved the exceptions to title shown on the Preliminary Title Report, the matters disclosed on the Preliminary Survey and such other title or survey matters as are disclosed to Buyer prior to the expiration of the Due Diligence Period. Notwithstanding the foregoing, Seller agrees that (i) it shall remove at its cost the lien of any existing financing on the Property obtained or assumed by Seller and any other monetary liens on the Property created or assumed by Seller, arising out of the acts of Seller or from the performance of labor at, or the provisions of materials or supplies for, the Property performed or provided at the written request of Seller, or arising under any REA with respect to obligations of Seller thereunder (hereinafter referred to, collectively, as Seller Liens), but not including non-delinquent taxes, and (ii) it shall provide to the Title Company at Closing a certificate in the form of Exhibit C. In addition, in the event any lien is filed against the Property by a party providing labor, materials or supplies to a Tenant and for which such Tenant is responsible under the terms of its Lease, Seller will use good faith efforts to cause the Tenant promptly to remove such lien.
4.1.2 Additional Title Matters. Approval by Buyer of any additional exceptions to title or survey matters first disclosed in any update to the Preliminary Title Report or Preliminary Survey (Additional Title Matters) shall be a condition precedent to Buyers obligations to purchase the Property; provided, however, that Buyer shall not have the right to object to matters which would be disclosed by an update of the Preliminary Survey if Buyer fails to obtain an update of the Preliminary Survey prior to the expiration of the Due Diligence Period. Except in the case of Seller Liens, unless Buyer gives written notice (Title Disapproval Notice) that it disapproves any Additional Title Matters, stating the Additional Title Matters so disapproved, before the sooner to occur of the Closing or five (5) business days after Buyers receipt of written notice from any source of such Additional Title Matters, Buyer shall be deemed to have approved such Additional Title Matters. Seller shall have up to a fifteen (15) day period after its receipt of any Title Disapproval Notice within which to remove the disapproved Additional Title Matters set forth therein from title or obtain from Title Company a commitment to issue an endorsement affirmatively insuring against such items in a form reasonably acceptable to Buyer at no cost or expense to Buyer (Seller having the right but not the obligation to do so, except as provided in the last sentence of Section 4.1.1), and the Closing Date shall be extended, at Sellers option, in Sellers sole and absolute discretion, to allow for such fifteen (15) day period. In the event Seller determines at any time that it is unable or unwilling to remove any one or more of such disapproved Additional Title Matters, in Sellers sole and absolute discretion, Seller may give written notice to Buyer to such effect; in such event, Buyer may, at its option, terminate this Agreement upon written notice to Seller but only if given prior to the later to occur of the Closing or five (5) business days after Buyer receives Sellers notice. If Buyer fails to give such termination notice by such date, Buyer shall be deemed to have waived its objection to, and approved, the matters set forth in Sellers notice. Notwithstanding the foregoing, Seller agrees that it shall remove at its cost prior to Closing any Additional Title Matter which is a Seller Lien.
4.1.3 Exceptions to Title. Notwithstanding anything to the contrary provided in Section 4.1.2 above, Buyer shall have no right to object to the following exceptions to title (the Permitted Exceptions):
(a) Real estate taxes and assessments not yet due and payable;
(b) The printed exceptions which appear in the standard form owners policy of title insurance issued by Title Company in the State of California;
(c) Exceptions relating to the rights of tenants under the Leases, limited to the possessory rights of such tenants, as tenants only, with no options to purchase or rights of first refusal to purchase the Property; and
(d) Such other exceptions to title or survey exceptions as may be approved or deemed approved by Buyer pursuant to the above provisions of this Section 4.1 or otherwise expressly permitted under this Agreement.
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4.1.4 Title Policy. On the Close of Escrow, it shall be a condition to Buyers obligation to proceed to Closing that the Title Company shall have issued, or shall have irrevocably committed to issue to Buyer a 2006 ALTA Extended Coverage Form owners title insurance policy (Owners Policy) in the face amount of the Purchase Price, which policy shall show (i) title to the Land and Improvements to be vested of record in Buyer, and (ii) the Permitted Exceptions to be the only exceptions to title; provided, however, if Buyer has not provided to Title Company an updated ALTA survey satisfactory to Title Company prior to the Closing Date, the Owners Policy shall be a CLTA Standard Coverage policy.
4.1.5 Revisions to Preliminary Title Report and Endorsements to Owners Policy. It is understood that, in addition to its rights with respect to Additional Title Matters, Buyer may request that the Title Company make a number of revisions to the Preliminary Title Report and issue a number of endorsements to the Owners Policy. It is further understood that all such requests by Buyer will be addressed to, and negotiated with, the Phoenix, Arizona national office of the Title Company. Buyer shall satisfy itself prior to the expiration of the Due Diligence Period that the Title Company will be willing to make such revisions and issue such endorsements in connection with Owners Policy at Closing. However, the making of such revisions and the issuance of such endorsements shall not be a condition to Closing, whether or not the Title Company had previously indicated a willingness to issue such endorsements, and in no event shall Seller be obligated to provide any indemnity or other document in order to issue the same, other than a certificate in the form of Exhibit C.
4.2 Due Diligence Reviews. Except for title and survey matters (which shall be governed by the provisions of Section 4.1 above), and subject to the provisions hereinafter set forth, Buyer shall have until 5:00 p.m. (Pacific time) on February 1, 2013 (such period being herein called the Due Diligence Period) within which to perform and complete all of Buyers due diligence examinations, reviews and inspections of all matters pertaining to the purchase of the Property, including all Leases and Service Contracts, and all physical, environmental and compliance matters and conditions respecting the Property. Within five (5) business days after the date of this Agreement, Seller shall deliver to Buyer and/or post on a website to which Buyer shall have access the information and documents listed in Exhibit D attached hereto, to the extent not previously delivered and to the extent the same exist and are in Sellers possession or control. In addition, Subject to Section 4.2.1, during the term of this Agreement, Seller shall provide Buyer with reasonable access to the Property upon reasonable advance written notice (including execution of Sellers standard inspection request form), and shall also make available to Buyer (to the extent in Sellers possession) such additional documents relating to the operation of the Property as Buyer shall reasonably request, all upon reasonable advance notice. In no event, however, shall Seller be obligated to make available any proprietary or confidential documents, including, without limitation, any financial analyses, appraisals, organizational documents and tax returns belonging to, prepared by, or in any way associated with Seller. Buyer shall promptly commence, and shall diligently and in good faith pursue, its due diligence review hereunder. If Buyer is not satisfied, in Buyers sole discretion, with the results of its due diligence review of the Property prior to the end of the Due Diligence Period, Buyer may terminate this Agreement by written notice to Seller (a Termination Notice) given in accordance with the provisions of Section 10.8 hereof at any time prior to the expiration of the Due Diligence Period, and, in the event of such termination by Buyer, the Deposit shall be returned to Buyer by the Escrow Agent and neither Seller nor Buyer shall have any liability hereunder except for those obligations which expressly survive the termination of this Agreement.
4.2.1 Review Standards. Buyer shall at all times conduct its due diligence review, inspections and examinations in a manner so as to not cause liability, damage, lien, loss, cost or expense to Seller or the Property and so as to not interfere with or disturb any tenant at the Property, and Buyer will indemnify, defend, and hold Seller and the Property harmless from and against any such liability, damage, lien, loss, cost or expense; provided, however, Buyers indemnification, defense and hold harmless obligations shall not apply with respect to Buyers mere discovery of any adverse condition or fact related to the Property nor with respect to any diminution in value as a result of the mere discovery of such adverse facts. Buyers obligations set forth in the immediately preceding sentence shall survive the Closing or the termination of this Agreement. Prior to entry upon the Property by Seller or its Agents, Buyer shall provide Seller with copies of certificates of insurance evidencing commercial general liability insurance policies (naming Seller as an additional insured) which shall be maintained by Buyer in connection with its investigations upon the Property prior to the date of entry upon the Property, with terms, limits (which shall be at least $2,000,000 per occurrence and $5,000,000 in the aggregate), coverages and the issuer to be approved by Seller. Notwithstanding the foregoing, in no event shall Buyer: (a) conduct any physical invasive
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testing (environmental, structural or otherwise) at the Property (such as soil borings, water samplings, testing for mold or bacterial growth, air quality testing, or the like) without Sellers express written consent which consent, as to invasive physical testing, may be given or withheld in Sellers sole and absolute discretion (and Buyer shall in all events promptly return the Property to its prior condition and repair thereafter) and which may be further conditioned upon, among other things, Sellers approval, in Sellers sole and absolute discretion of the following: (i) the insurance coverage of the contractor who will be conducting such testing; (ii) the scope and nature of the testing to be performed by such contractor; and (iii) a written confidentiality agreement by such contractor and Buyer in form reasonably satisfactory to Seller); (b) contact any consultant or other professional engaged by Seller or any tenant of the Property (or its representatives) without Sellers express written consent, which shall not be unreasonably withheld but may be conditioned upon Seller having a representative present during such contact (by telephone or in person); or (c) contact any governmental authority having jurisdiction over the Property without Sellers express written consent in its sole and absolute discretion, other than reviewing governmental records without engaging in any discussions with governmental officials (except to the extent necessary to request records). For the avoidance of doubt, the removal of tile or insulation shall deemed to be invasive testing. Seller shall have the right, at its option, to cause a representative of Seller to be present at all inspections, reviews and examinations conducted hereunder. Buyer shall schedule any entry (by it or its designees) onto the Property in advance with Seller. In the event of any termination of this Agreement, Buyer shall return all documents and other materials furnished by Seller hereunder, including, without limitation, any studies, summaries or analyses furnished by Seller (and destroy any copies thereof made by Buyer or its agents or representatives). In addition, at Sellers written request, Buyer shall promptly deliver to Seller true, accurate and complete copies of any written reports relating to the Property prepared for or on behalf of Buyer by any third party, without charge unless Buyer has terminated this Agreement due to a default on the part of Seller, in which event Seller shall be required to reimburse Buyer for the costs of such reports.
4.2.2 Confidentiality. Buyer has been or will be provided with (or has been provided or will be provided with access to) certain information concerning the Property which may include, without limitation, financial data and/or statements, forecasts, projections of income and cash flow, analyses, studies, reports, leases, updated physical, structural, environmental or other property condition reports, any marketing materials (along with any photographs, maps and artwork contained therein) as well as other materials pertaining to the Property both in written or electronic form, whether transmitted orally, visually or any other means by Seller, or any of its employees, agents, representatives or partners, or obtained or developed by or at the request of Buyer from any source (including all reports, studies, surveys, or other materials prepared or caused to be prepared by Buyer with respect to the Property) (collectively, Information Materials). Prior to Closing Buyer shall use such Information Materials only for the limited purposes of deciding whether or not Buyer is interested in purchasing the Property, shall not disclose such Information Materials to any third party, except as may be required by law or regulation or except to its employees, agents, attorneys, contractors, insurers, consultants, prospective tenants, and lenders (and Buyer shall be responsible for any failure of any of them to comply with Buyers obligation to keep such Information Materials confidential in accordance with this Section) with respect to the Property, and the leasing, financing and/or purchase thereof, on a need to know basis only. Buyer shall advise any person or entity to whom Buyer desires to disclose such Information Materials prior to Closing of the restrictions on disclosure contained in this Section 4.2.2 and shall obtain the agreement of such parties to be bound by the terms hereof. The provisions of this Section shall not apply to the parties in the event of litigation between the parties, and shall not apply to any Information Materials which are in the public domain at the time they are obtained by Buyer, or which subsequently becomes part of the public domain through no action or omission of Buyer or the persons or entities with whom it discloses such Information Materials, or to Buyers use of such information after Closing. Upon termination of this Agreement, the originals and all copies of the Information Materials shall be promptly returned to Seller. The breach of the provisions of this Section 4.2.2 or Section 4.2.3 is not subject to the liquidated damages provisions of Section 9.2, and Seller shall be entitled to seek actual damages, specific performance, injunctive relief and/or any other remedy available at law or in equity (not including consequential damages) in connection with any such breach. The provisions of this Section 4.2.2 and Section 4.2.3 shall survive termination of this Agreement. Except as otherwise provided in Section 7 hereof, the Information Materials supplied by Seller or its employees or agents have been or shall be provided to Buyer without any representation or warranty on the part of Seller, and Seller has no responsibility for the accuracy, truth or completeness of the Information Materials.
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4.2.3 Legally Obligated Disclosures. Notwithstanding anything to the contrary contained herein, if Buyer becomes legally obligated by subpoena or similar process, or is otherwise compelled by law, to disclose either the Information Materials or any other information pertaining to the Property prior to Closing, Buyer may comply with such legal obligations provided that (a) Buyer provides Seller with prompt written notice at least three (3) business days prior to such intended disclosure so that Seller may seek to protect such Information Materials or other information from disclosure and (b) Buyer shall only disclose that portion of the Information Materials or other information that is legally required as determined by independent legal counsel. The obligations set forth in this Section 4.2.3 shall survive the termination of this Agreement.
4.3 Tenant Estoppel Certificates.
4.3.1 The receipt, not later than three (3) days prior to the Closing Date, of an acceptable estoppel certificate (Tenant Estoppel Certificate) from Tenants collectively occupying a minimum of eighty percent (80%) of the rentable square feet in the Property occupied by Tenants, including each of those Tenants identified on Exhibit E attached hereto (the Key Tenants), shall be a condition precedent to Buyers obligation to acquire the Property hereunder (the Estoppel Requirement). Seller shall request a Tenant Estoppel Certificate in the form set forth in Exhibit F from all Tenants within five (5) business days after expiration of the Due Diligence Period. In order to be acceptable for purposes of this Agreement, a Tenant Estoppel Certificate shall be addressed to Buyer and shall be substantially in the form attached hereto as Exhibit F, although any provisions of the applicable estoppel certificate respecting defaults, defenses, disputes, environmental matters, claims, offsets, credits, abatements, concessions and recaptures against rent and other charges may be limited to the actual knowledge of tenants, and to the extent that a particular Lease prescribes a form or content of the Tenant Estoppel Certificate, Buyer will be obligated to accept the form prescribed by such Lease. In addition, for purposes of this Agreement a Tenant Estoppel Certificate will not be acceptable to the extent such certificate (i) is dated earlier than the expiration of the Due Diligence Period, (ii) discloses, in the case of the Lease of any Key Tenant, that there is a default or dispute under the applicable Tenants Lease, or, in the case of any non-Key Tenant, that there is a material default or dispute under such Tenants Lease, (iii) references any material unperformed obligations on the part of Seller under such Tenants Lease (including tenant improvement work) that were otherwise required to be performed prior to the date of such estoppel certificate, the cost of which are not credited to Buyer pursuant to this Agreement, or (iv) contains any information which is not consistent in all material respects with the representations of Seller contained in this Agreement, the Rent Roll attached hereto as Exhibit Q, or the terms of the Leases provided by Seller to Buyer pursuant to this Agreement. Sellers sole obligation hereunder shall be to utilize good faith efforts to obtain the Tenant Estoppel Certificates from the Tenants (and, as used in this Agreement, good faith efforts shall not include any obligation to institute legal proceedings, declare a default or to expend any monies). Either Seller or Buyer shall have the right, but not obligation, to extend the Closing Date for up to an additional fifteen (15) days to cause this condition to be satisfied. Seller agrees to forward any Tenant Estoppel Certificates received by Seller from a Tenant to Buyer promptly after Sellers receipt of same.
4.3.2 If, prior to the third (3rd) day immediately before the Closing Date, Seller has not received Tenant Estoppel Certificates sufficient to meet the Estoppel Requirement, Seller shall have the right, but not the obligation, to deliver to Purchaser a Seller estoppel or estoppels in substantially the same form as the Tenant Estoppel Certificate set forth on Exhibit F (except that Seller shall be the signatory) with respect to any applicable tenants leasing up to fifteen percent (15%) of the leased rentable square footage at the Property (each, a Seller Estoppel) which shall be counted toward the Estoppel Requirement with the same effect as if the same had been executed and delivered by the applicable Tenant; provided, however, that a Seller Estoppel may not be delivered with respect to a Key Tenant. The representations and warranties of Seller contained in any Seller Estoppel shall survive the Closing and the delivery of such Seller Estoppel until December 31, 2013, at which time, unless a claim of breach thereof has been made by Buyer, such representations and warranties (and any cause of action resulting from a breach thereof not yet asserted) shall terminate, and shall be subject to the limitations upon liability set forth elsewhere in this Agreement. If Seller delivers a Seller Estoppel, then Seller shall have the right at any time to substitute a Tenant Estoppel Certificate subsequently obtained from the tenant for the corresponding Seller Estoppel previously delivered by Seller and such Seller Estoppel being substituted shall thereafter be of no force or effect; provided, that, if any such substitute Tenant Estoppel Certificate contradicts the corresponding Seller Estoppel in any material respect or omits any material certification contained in the corresponding Seller Estoppel, then such Seller Estoppel shall continue in effect for the above referenced period solely with respect to such material contradiction or omission.
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4.4 Performance by Seller. The performance and observance, in all material respects, by Seller of all covenants and agreements of this Agreement to be performed or observed by Seller prior to or on the Closing Date shall be a condition precedent to Buyers obligation to purchase the Property. In addition, the truth and accuracy of the representations and warranties of Seller contained in Section 7.1 in all material respects, subject only to such changes as are permitted or contemplated by the terms of this Agreement or known to Buyer prior to the expiration of the Due Diligence Period, shall be a condition precedent to Buyers obligation to purchase the Property. In the event of the occurrence of any such unapproved material adverse changes in the representations and warranties of Seller, then (notwithstanding that such material adverse changes may not constitute a breach by Seller), Buyer shall have the right to terminate this Agreement and receive a return of the Deposit (and if such material adverse changes are the result of a breach by Seller under this Agreement, also to exercise Buyers rights under Section 9.1). If Buyer does not elect to terminate this Agreement pursuant to this Section 4.4 and the Closing occurs, then Buyer shall be deemed to have waived any rights arising out of any breach by Seller prior to Closing which are actually known to Buyer as of the Closing.
4.5 Performance by Buyer. The performance and observance, in all material respects, by Buyer of all covenants and agreements of this Agreement to be performed or observed by it prior to or on the Closing Date, and the truth and accuracy of the representations and warranties of Buyer contained in Section 7.2, shall be a condition precedent to Sellers obligation to sell the Property. Without limitation on the foregoing, in the event that the Buyer Closing Certificate (as hereinafter defined) shall disclose any material adverse changes in the representations and warranties of Buyer contained in Section 7.2 which are not permitted or contemplated by the terms of this Agreement, then Seller shall have the right to terminate this Agreement. If Seller does not terminate this Agreement pursuant to the immediately preceding sentence and the Closing occurs, then Seller shall be deemed to have waived any rights arising out of disclosures contained in the Buyer Closing Certificate.
4.6 Environmental Insurance. Endorsement of the Environmental Policy (as defined in Section 7.3.8) to add Buyer as First Named Insured and to amend the coverage thereof in accordance with Section 7.3.8 at Closing shall be a condition precedent to Buyers obligation to acquire the Property hereunder; subject, however, to Buyers cooperation in good faith and delivery of any information requested in connection with the foregoing or any underwriting requirements in connection therewith.
5. Closing Procedure. The closing (the Closing) of the sale and purchase herein provided shall occur on the Closing Date. As used herein, Closing Date means the date which is thirty (30) days after expiration of the Due Diligence Period, subject to (i) Sellers rights to extend the Closing Date set forth elsewhere in this Agreement, (ii) Sellers option in its sole and absolute discretion to extend the Closing Date up to an additional thirty (30) days for purposes of consummating a 1031 Exchange (as defined below) upon prior written notice to Buyer no later than fifteen (15) days prior to the then existing Closing Date, (iii) Seller or Buyers right to extend the Closing Date set forth in Section 4.3 above, and (iv) Buyers option in its sole and absolute discretion to extend the Closing Date up to an additional thirty (30) days upon prior written notice to Seller no later than five (5) days prior to the then scheduled Closing Date and upon deposit of the Extension Deposit with Title Company. Additionally, if the Closing Payment is received on the Closing Date but after 11:00 a.m. (Pacific Time) and all conditions to Closing are satisfied or waived in writing, then at Sellers election (in Sellers sole and absolute discretion) the Closing Date may be changed to the next business day.
5.1 Escrow. The Closing shall be accomplished pursuant to the terms of this Agreement through an escrow administered by the New York office of the Title Company, and Buyer and Seller may submit separate escrow instructions to said office of Escrow Holder to the extent consistent with the terms of this Agreement.
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5.2 Closing Deliveries. One (1) business day prior to the Closing Date (unless a different time is indicated below), the parties shall deliver to the Escrow Holder the following:
5.2.1 Seller Deliveries. Seller shall deliver to Escrow Holder the following (the Seller Closing Documents):
(a) A duly executed and acknowledged grant deed (the Deed) in the form of Exhibit H;
(b) A duly executed original Assignment of Leases (the Assignment of Leases) in the form of Exhibit I;
(c) A duly executed original bill of sale, assignment and assumption agreement (the Bill of Sale, Assignment and Assumption) in the form of Exhibit J;
(d) A duly executed original certificate (the Seller Closing Certificate) in the form of Exhibit K updating the representations and warranties contained in Section 7.1 to the Closing Date and noting any material changes thereto;
(e) An updated (but not certified) Rent Roll for the Property;
(f) A duly executed original certificate of non-foreign status in the form of Exhibit L and any required state certificate that is sufficient to exempt Seller from any state withholding requirement with respect to the sale contemplated by this Agreement (collectively Certificates of Non-Foreign Status);
(g) A duly executed notice to each Tenant (the Tenant Notice), in the form of Exhibit M, prepared by Seller, which notice Buyer shall, at Buyers sole cost and expense, either mail to Tenants by certified mail, return receipt requested or hand-deliver to Tenants;
(h) Evidence reasonably satisfactory to the Title Company respecting the due organization of Seller and the due authorization and execution by Seller of this Agreement and the documents required to be delivered hereunder, together with the certificate described in Exhibit C;
(i) A duly executed and acknowledged original of the environmental covenant (Environmental Covenant) in the form of Exhibit S;
(j) The endorsements to Sellers Environmental Policy described in Section 7.3.8;
(k) To the extent they are then in Sellers possession, and have not theretofore been delivered to Buyer, Seller shall make available to Buyer outside escrow: (i) any plans and specifications for the Improvements; (ii) all unexpired warranties and guarantees which Seller has received in connection with any work or services performed with respect to, or equipment installed in, the Improvements; (iii) all keys for the Improvements; (iv) originals of all Leases, all correspondence to or from any tenants relating to the Leases; and (v) originals of all Service Contracts that will remain in effect after the Closing and all correspondence relating to the ongoing operations and maintenance of the Property (which materials under this clause (k) may be either delivered at Closing or left at the Property); and
(l) With respect to any security deposits which are letters of credit, Seller shall (i) deliver to the Buyer at the Closing such original letters of credit, (ii) execute and deliver such other instruments as the issuers of such letters of credit shall reasonably require in order to transfer such letters of credit to Buyer, and (iii) cooperate with Buyer to change the named beneficiary under such letters of credit to Buyer, provided that Buyer shall pay any expenses charged by the issuers of such letters of credit in connection therewith.
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(m) Such additional documents as may be reasonably required by Title Company in order to consummate the transaction hereunder (provided the same do not increase in any material respect the costs to, or liability or obligations of, Seller in a manner not otherwise provided for herein).
Notwithstanding anything to the contrary contained in this Agreement, Seller shall be entitled to, and Buyer shall reasonably cooperate in providing to Seller, access to all of the items described in Section 5.2.1(k)(iv) and (v) until six months after the Closing, and, with such access, Seller shall be entitled to make paper or digital copies of the items described in Section 5.2.1(k)(iv) and (v).
5.2.2 Buyer Deliveries. Buyer shall deliver to Escrow Holder the following:
(a) On or prior to 11:00 a.m., Pacific Time, on the Closing Date, the Closing Payment by wire transfer of immediately available federal funds;
(b) A duly executed Assignment of Leases;
(c) A duly executed original of the Bill of Sale, Assignment and Assumption;
(d) A duly executed and acknowledged original of the Environmental Covenant;
(e) A duly executed original certificate of Buyer (Buyer Closing Certificate) in the form of Exhibit N updating the representations and warranties contained in Section 7.2 to the Closing Date and noting any material changes thereto and confirming the release and other provisions therein contained;
(f) A duly executed Tenant Notice for each Tenant;
(g) Evidence reasonably satisfactory to Seller and Title Company respecting the due organization of Buyer and the due authorization and execution by Buyer of this Agreement and the documents required to be delivered hereunder; and
(h) Such additional documents as may be reasonably required by Seller and Title Company in order to consummate the transactions hereunder (provided the same do not increase in any material respect the costs to, or liability or obligations of, Buyer in a manner not otherwise provided for herein).
5.2.3 Mutual Deliveries. Buyer and Seller shall mutually execute and deliver to the Escrow Holder, the following:
(a) A Closing Statement reflecting the Purchase Price, and the adjustments and prorations required hereunder and the allocation of income and expenses required hereby; and
(b) Such transfer tax forms as required by state and local authorities.
5.3 Closing Costs.
5.3.1 Seller Closing Costs. Seller shall pay 100% of the county transfer tax and 50% of the city transfer taxes payable in connection with the sale contemplated herein, the premium for a CLTA standard coverage owners title policy on the Property in the amount of the Purchase Price, 50% of the escrow costs, and 100% of all amounts payable to Broker.
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5.3.2 Buyer Closing Costs. Buyer shall pay:
(a) The incremental premium, if any, of an Owners Policy with ALTA extended coverage, and the cost of all endorsements requested by Buyer or its lender.
(b) If requested by Buyer, the costs to update the Preliminary Survey and any environmental study or report, any structural or other Property condition report obtained by Seller, and to reimburse Seller for all such costs, and all such costs for any further updates of the Preliminary Survey and any such reports,
(c) 50% of each of the city transfer tax and escrow charges; and
(d) All fees, costs or expenses in connection with Buyers due diligence reviews hereunder or any financing obtained by Buyer (and in no event shall the close of any financing be a condition to Buyers obligations under this Agreement).
5.3.3 Other Costs. Any other closing costs shall be allocated in accordance with local custom. Seller and Buyer shall pay their respective shares of prorations as hereinafter provided.
5.4 Prorations.
5.4.1 Items to be Prorated. The following shall be prorated between Seller and Buyer as of the Closing Date (on the basis of the actual number of days elapsed over the applicable period):
(a) All real estate and personal property taxes and assessments on the Property for the current fiscal year of the applicable taxing authorities in which the Closing occurs. In no event shall Seller be charged with or be responsible for any increase in the taxes on the Property resulting from the sale of the Property or from any improvements made or leases entered into on or after the Closing Date. If any assessments on the Property are payable in installments, then the installment for the current period shall be prorated (with Buyer assuming the obligation to pay any installments due after the Closing Date). Seller shall be responsible for and shall pay, prior to Closing, all real estate and personal property taxes and assessments which are delinquent or which are for fiscal years of the applicable taxing authority prior to such current fiscal year. To the extent that any property tax bill or statement is received after the Closing, Seller shall be responsible for and shall pay its share of such tax bill or statement which relates to the period of time prior to the Closing.
(b) All fixed, additional rentals and percentage rents under the Leases and other tenant charges actually received with respect to the month in which the Closing occurs (the Current Month). Seller shall deliver or provide a credit in an amount equal to all prepaid rentals for periods after the Current Month. Rents (or other tenant charges) which are delinquent as of the Closing Date shall not be prorated on the Closing Date. Buyer shall include such delinquencies in its normal billing and shall diligently pursue the collection thereof in good faith for a period of six (6) months after the Closing Date (but Buyer shall not be required to litigate or declare a default in any the Leases or otherwise incur any cost or expense related thereto). To the extent Buyer receives rents (or income in connection with other tenant charges, including, without limitation, any CAM Charges, as defined below) on or after the Closing Date but during the month in which Closing occurs, such payments shall be applied first toward the rent (or other tenant charges) owed for the month in which the Closing occurs, and then to any delinquent rents (or other tenant charges) owed to Seller, with Sellers share thereof being promptly delivered to Seller. To the extent Buyer receives rents (or income in connection with CAM Charges or other tenant charges) after the month in which Closing occurs, such payments shall be applied first toward the rent (and other tenant charges) owed to Buyer for the month in which such payments are received, then to delinquent rents owed to the Buyer for months after the month in which Closing occurred, if any, then to delinquent rents owed for the month in which Closing occurred, if any, and finally to rent (or other tenant charges) owed to Seller for periods prior to the month in which the Closing occurs, with Sellers share thereof being promptly delivered to Seller; provided, however, that any year-end or similar reconciliation payment shall be allocated in accordance with the charges (and in the case of tenant reimbursements, the underlying expenses) during Sellers and Buyers
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respective periods of ownership. For a period of six (6) months after the Closing Date Buyer may not waive any delinquent rents nor modify a Lease so as to reduce or otherwise affect amounts owed thereunder for any period in which Seller is entitled to receive a share of charges or amounts without first obtaining Sellers written consent. Seller hereby reserves the right to pursue any remedy against any Tenant owing delinquent rents and any other amounts to Seller for a period of six (6) months after the Closing Date (but shall not be entitled to terminate the Lease of any such Tenant or any such Tenants right to possession), but thereafter shall discontinue any such collection efforts. Buyer shall, at no cost or expense to Buyer, reasonably cooperate with Seller in any collection efforts against any Tenant (but shall not be required to litigate or declare a default under any Lease). With respect to delinquent rents and any other amounts or other rights of any kind respecting Tenants who are no longer tenants of the Property as of the Closing Date, Seller shall retain all rights relating thereto.
Additional rents, constituting reimbursement to Seller for maintenance charges, property taxes and assessments and insurance, if any (collectively, the CAM Charges) from Tenants and Target and Home Depot will be prorated as of the Closing based upon estimated payments actually collected by Seller from Tenants and Target and Home Depot for the Current Month. Seller shall prepare and deliver to Buyer at least five (5) business days prior to the Closing a reconciliation (the CAM Reconciliation) with Tenants, Target and Home Depot of CAM Charges for the period commencing on January 1, 2013 and ending on the Closing Date (the CAM Reconciliation Period). If the CAM Reconciliation shows that any Tenant, Target or Home Depot owes CAM Charges for the CAM Reconciliation Period in excess of its estimated payments for the CAM Reconciliation Period, then Buyer shall credit Seller such excess at the Closing; provided, however, that no credit shall be given for amounts owed by Tenants which are more than thirty (30) days delinquent in the payment of base rent or CAM Charges as of the Closing (such amounts to be remitted by Buyer to Seller within ten (10) days after collection of the same). If the CAM Reconciliation shows that any Tenant, Target or Home Depot paid estimated CAM Charges for the CAM Reconciliation Period in excess of its actual obligation, Seller shall credit Buyer such excess at Closing.
Seller shall be responsible for any and all audits of any CAM Charges for any years prior to the year in which the Closing occurs. Seller shall be entitled to receive and retain all reconciliation payments made by Tenants, Target and Home Depot with respect to CAM Charges for calendar years preceding the calendar year of Closing, and shall be responsible for any amounts owed to Tenants, Target and Home Depot in connection with the final reconciliation of CAM Charges for such prior calendar years. If any such reconciliation payment with respect to CAM Charges for a calendar year preceding the year in which the Closing occurs is received by Buyer after the Closing, Buyer shall remit such payment to Seller within ten (10) business days after receipt. If any Tenant, Target or Home Depot which is owed a refund with respect to CAM Charges for a calendar year preceding the calendar year of Closing deducts or sets off such amount against rents or other charges owed by such Tenant after the Closing, Seller shall remit such amount to Buyer promptly following the occurrence of such set off or deduction.
Notwithstanding the foregoing, percentage rents shall be prorated for the current fiscal year in which the Closing occurs under the applicable Lease, with Seller being entitled to receive the portion thereof equal to a fraction, the numerator of which is the number of days within such fiscal year which are prior to the Closing Date and the denominator of which is 365; with Buyer obligated to remit to Seller its portion thereof within ten (10) days after the final determination and payment thereof pursuant to the terms of the applicable Lease (which shall be in addition to, but will take into account, proration of any percentage rent received for the Current Month).
(c) All operating expenses which are not paid directly by Tenants pursuant to the Leases, including charges under Service Contracts which Buyer assumes at Closing. To the extent that invoices or statements for operating expenses are received after the Close of Escrow, Seller shall pay its share of such operating expenses which relates to the period of time prior to the Closing.
(d) To the extent that utilities are not payable directly by Tenants under the Leases, Buyer shall take all steps necessary to effectuate the transfer of all utilities to its name as of the Closing Date, and where necessary, post deposits with the utility companies, and Seller shall use commercially reasonable efforts to cause all utility meters to be read as of the Closing Date. Seller shall be entitled to recover any and all deposits made by Seller held by any utility company as of the Closing Date.
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5.4.2 Calculation; Survival. The prorations and payments provided for in this Section 5.4 shall be made on the basis of a written statement submitted to Buyer and Seller by Escrow Holder prior to the Closing and reasonably approved by Buyer and Seller. In the event any prorations or apportionments made under this Section 5.4 shall prove to be incorrect for any reason, then any party shall be entitled to an adjustment to correct the same. Any item which cannot be finally prorated at Closing because of the unavailability of information shall be tentatively prorated on the basis of the best data then available and reprorated when the information is available. The obligations of Seller and Buyer under Section 5.4 shall survive until December 31, 2013; provided, however, that (i) Seller and Buyers obligations under Section 5.4.1(a) shall survive until thirty (30) days after the final real property tax and assessment liability for the fiscal year in which the Closing occurs is determined, and (ii) Buyers and Sellers obligations under Section 5.4.1(b) with respect to CAM Charges for calendar years preceding the calendar year of Closing in connection with any claims from any Tenants under the Leases shall survive until expiration of the rights of Tenants under the Leases relating to such CAM Charges.
5.5 Prepaid Rents and Cash Security Deposits. At Closing, Seller shall give Buyer a credit against the Purchase Price in the aggregate amount of any prepaid rents and any cash security deposits made by Tenants under the Leases, except to the extent that the same have been applied by Seller in accordance with such Leases, including all accrued interest thereon to the extent the Tenants may be entitled to receive such amounts in connection with the refund of any such security deposit.
5.6 Leasing Commissions and Leasing Costs. Seller shall be responsible for leasing commissions and tenant improvement obligations for the current term of all Leases in place as of the Effective Date, including, but not limited to those identified on Exhibit O (Seller TI/LC Obligations), and in the event that the same are not fully paid by the Closing Date, Seller shall provide Buyer with a credit for the unpaid amount of the same. In addition, Buyer shall be entitled to a credit against the Purchase Price at Closing in an amount equal to any unexpired rental abatements, concessions, or free rent provided for pursuant to the terms of any Leases executed prior to the Effective Date, to the extent that such unexpired rental abatements, concessions, or free rent were not reflected in the Argus model for the Property provided by Seller or Sellers agents to Cole Capital Partners, LLC in connection with the December 13, 2012 letter of intent between seller and Cole Capital Partners, LLC, relating to the transaction described in this Agreement. Notwithstanding anything herein to the contrary, if the Closing occurs, Buyer shall bear all costs and expenses related to any new Leases or Lease modifications entered into after the Effective Date with the approval of Buyer pursuant to the terms of Section 7.3.3 (including tenant inducements, allowances, tenant improvement costs, architects fees, free rent, attorneys fees, moving allowances and leasing commissions, but excluding free rent allocable to any period prior to the Closing Date) (collectively, the Assumed TI/LC Obligations), as well as all costs and expenses related to any extensions, expansions, options, or renewals exercised by any Tenant after the Effective Date. Without limitation of the foregoing, Seller shall be provided with a credit by Buyer at Closing for any portion of the Assumed TI/LC Obligations which Seller shall have paid prior to the Closing. Notwithstanding the foregoing, Seller shall not be obligated to credit Buyer for any free rent or rent credits under the Leases to the extent that the same is applicable to the period from and after Closing and to the extent that such free rent or rent credits were reflected in the Argus model referred to above.
6. Condemnation or Destruction of Property. In the event that, after the date hereof but prior to the Closing Date, either any portion of the Property is taken pursuant to eminent domain proceedings or any of the improvements on the Property are damaged or destroyed by any casualty, Seller shall have no obligation to repair or replace any such damage, destruction or taken property. Seller shall, upon consummation of the transaction herein provided, assign to Buyer (except to the extent any condemnation proceeds or insurance proceeds are attributable to lost rents or other items applicable to any period prior to the Closing) all claims of Seller respecting any condemnation or property insurance coverage, as applicable, and all condemnation proceeds or proceeds from any such property insurance received by Seller on account of any casualty (except to the extent required for collection costs or repairs by Seller or applicable to lost rents or other items applicable to any periods prior to the Closing Date), as applicable and Seller shall provide a credit to Buyer at Closing for the applicable amount of the deductible under Sellers insurance policy, if the casualty is insured, or if the casualty is uninsured, the amount necessary to repair and restore the Property as reasonably determined by the parties; provided, however, that Seller shall have no obligation to provide a credit under this sentence for more than $250,000 (but if the cost to repair such uninsured casualty is more than such amount and Seller determines not to provide a full credit for the same, then Buyer may elect not to proceed with the purchase of the Property). In addition, Buyer may elect, at its option, not to proceed
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with the purchase of the Property under this Agreement, and shall provide notice to Seller of such election within ten (10) days of Buyer obtaining knowledge of such event, in the event that (i) the condemnation award or the cost of repair of damage to the Property on account of a casualty, as applicable, is in excess of $5,000,000, (ii) any such condemnation or casualty entitles Ulta, AutoZone, or any Key Tenant to terminate its Lease (unless such right is waived) or to permanently abate its rent in whole or in part (unless such rental abatement is covered by rental abatement insurance which will benefit Buyer after Closing), or (iii) any such condemnation results in a permanent material adverse change in access to the Property or in the permanent loss of parking spaces within the Property if such loss results in the Property having fewer parking spaces than required by law or by any Lease. In the event that Buyer timely elects not to proceed with the purchase of the Property then this Agreement shall terminate, whereupon Buyer shall receive a refund of the Deposit (and no party hereto shall have any further obligation in connection herewith except under those provisions that expressly survive a termination of this Agreement).
7. Representations, Warranties and Covenants.
7.1 Representations, Warranties and Covenants of Seller.
7.1.1 Limited Representations and Warranties of Seller. Notwithstanding the provisions of Section 7.1.1, Seller hereby represents and warrants to Buyer that, except as set forth in Exhibit P, to Sellers knowledge, none of the following statements is untrue in any material respect (and, for purposes of this Agreement, Sellers knowledge shall mean the present actual knowledge, with no duty of inquiry of any party, and without taking into account any constructive or imputed knowledge, of Farouk Lalji, who Seller represents is the asset manager with primary responsibility for the Property, and Sellers receipt of written notice shall mean receipt or review of written notice by Farouk Lalji, provided that such individual shall not have any personal liability in connection herewith):
(a) Leases. There are no leases of space in the Property which will be in force after the Closing and under which Seller is the landlord (whether by entering into the leases or acquiring the Property subject to the leases) other than the Leases identified in the rent roll attached hereto as Exhibit Q (the Rent Roll) or any new Leases entered into in accordance with Section 7.3. Further, to Sellers knowledge the copies of the Leases and the related Guaranties delivered or to be delivered by Seller to Buyer in connection with this Agreement are complete and accurate copies of all such Leases and Guaranties in all material respects. The Seller TI/LC Obligations have either been fully paid, completed and paid for or will be credited to Buyer pursuant to this Agreement.
(b) Litigation. There is no pending (nor has Seller received any written notice of any threatened) action, litigation, condemnation or other proceeding against the Property or against Seller with respect to the Property, except as provided in Exhibit P.
(c) Compliance. Except as described on Exhibit P, Seller has received no written notice from any governmental authority having jurisdiction over the Property to the effect that the Property, Seller or any Tenants operations and improvements at the Property, is not in compliance with applicable laws and ordinances.
(d) Service Contracts. Seller has not entered into any service or equipment leasing contracts relating to the Property which will be in force after the Closing, except for the Service Contracts and Excluded Contracts (as hereinafter defined). As used herein, the Service Contracts means, collectively, (a) the contracts described in Exhibit R; and (b) contracts (other than leases) entered into in accordance with this Agreement. As used herein, Excluded Contracts means Sellers contracts for (i) insurance and (ii) existing property management and listing agreement. The Excluded Contracts are not being assigned to or assumed by Buyer hereunder and, in the case of the existing property management and listing agreement, shall be terminated by Seller at or prior to Closing. To Sellers knowledge, the copies of the Service Contracts delivered or to be delivered or made available to Buyer in connection with this Agreement are complete and accurate copies of such Service Contracts.
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(e) Leasing Commissions and Tenant Allowances. Except as set forth on Exhibit O hereto or in the Leases or in any listing agreement furnished by Seller to Buyer during the Due Diligence Period, no leasing commissions, tenant improvement allowances or other tenant inducements are payable by the landlord in connection with any option to renew, extend or expand under any Lease in effect as of the date hereof or entered into by Seller in accordance with Section 7.3.
(f) Notices from Third Parties. Seller has not received from any third party written notice of any material violations of any REAs or any other covenants, restrictions, or easements benefiting, burdening, or otherwise encumbering the Property which have not been cured as of the Effective Date.
(g) Hazardous Materials. Seller has received no written notice from, (i) any governmental authority or (ii) any owner of land which is contiguous with the Land, that the Property contains any Hazardous Materials (as defined in Exhibit S), the removal of which is required, or the maintenance of which is prohibited or penalized by any Environmental Laws (as defined in Exhibit S), or that there are any underground storage tanks on the Property. Seller has not received any written notice or claim of any violation of the terms of the RRMP, the Environmental Restriction, the Easement or any Environmental Laws from GE, from the Board, or from any governmental authority (as such terms are defined in Exhibit P). Neither Seller nor any other party has made any claim on the Environmental Policy (as defined in Section 7.3.8). Seller has not received any notice of default or cancellation of the Environmental Policy.
(h) No Notice of Condemnation. Seller has no knowledge of any no pending condemnation proceeding for the taking of all or any portion of the Property.
(i) Due Authority. This Agreement and all agreements, instruments and documents herein provided to be executed or to be caused to be executed by Seller are and on the Closing Date will be duly authorized, executed and delivered by and are binding upon Seller. Seller is a limited liability company, duly organized and validly existing and in good standing under the laws of the State of Delaware, and is duly authorized and qualified to do all things required of it under this Agreement. Seller has the capacity and authority to enter into this Agreement and consummate the transactions herein provided without the consent or joinder of any other party (except as otherwise may be set forth in this Agreement).
7.1.2 Survival. The foregoing representations and warranties and all additional representations and warranties and covenants in this Agreement or contained in the Seller Closing Documents and any other certificate delivered at Closing pursuant to the express terms of this Agreement (including any cause of action by reason of a breach thereof) shall, except to the extent otherwise expressly provided in this Agreement or such Seller Closing Documents, survive until the date that is six (6) months after the Closing Date (the period beginning on the date hereof and ending on such date being herein called the Survival Period), at which time, unless a claim of breach thereof has been made by Buyer, such representations and warranties and covenants (and any cause of action resulting from a breach thereof not yet asserted) shall terminate. Without limitation of the foregoing, Seller shall have no liability, and Buyer shall make no claim against Seller, for (and Buyer shall be deemed to have waived any failure of any condition hereunder by reason of) a breach of any representation or warranty of Seller under this Agreement or any certificate executed by Seller in connection with the Closing (including for this purpose any matter that would have constituted a breach of Sellers representations and warranties had they been made on the Closing Date): (a) if the breach in question constitutes or results from a condition, state of facts or other matter that was actually known to Buyer as of the Closing (Buyer deemed to have knowledge of the contents of the Informational Materials delivered to Buyer or made available on Sellers website that Buyer is given access to during the Due Diligence Period), or (b) if the breach in question constitutes or results from a condition, state of facts or other matter that was actually known to Buyer prior to Closing and Buyer proceeds with the Closing (Buyers sole alternative to waiving such condition, state of facts or other matter and proceeding with the Closing being the right to terminate this Agreement and exercise its remedies under Section 9.1(a)). Subject to the foregoing limitations, following the Closing the Seller shall indemnify and hold Buyer harmless from and against any and all costs, fees, expenses, damages, and losses suffered or incurred by Buyer arising out of, or in any way relating to, the breach of any representation or warranty contained in Section 7.1.1, provided that a written claim thereof is made prior to expiration of the Survival Period.
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7.2 Representations and Warranties of Buyer. Buyer hereby represents and warrants to Seller that this Agreement and all agreements, instruments and documents herein provided to be executed or to be caused to be executed by Buyer are and on the Closing Date will be duly authorized, executed and delivered by and are binding upon Buyer; Buyer is a limited liability company, duly organized and validly existing and in good standing under the laws of its State of organization, and is duly authorized and qualified to do all things required of it under this Agreement; and Buyer has the capacity and authority to enter into this Agreement and consummate the transactions herein provided without the consent or joinder of any other party (except as otherwise may be set forth in this Agreement).
7.3 Interim Covenants of Seller. Until the Closing Date or the sooner termination of this Agreement:
7.3.1 Maintenance/Operation. Seller shall maintain and operate the Property pursuant to its normal course of business in the same manner as prior to the date of this Agreement. Notwithstanding the foregoing, Seller shall have no obligation after the date of this Agreement to make or enter into contracts for capital improvements. Sellers maintenance and operation of the Property shall be subject to reasonable wear and tear and further subject to destruction by casualty or other events beyond the reasonable control of Seller.
7.3.2 Service Contracts. Seller shall not enter into any additional service contracts or other similar agreements which are not terminable without penalty upon thirty (30) days prior notice, or material modifications of any existing or additional service contract, which will affect the Property after the Closing, without the prior consent of Buyer, which consent may be withheld in Buyers reasonable discretion during the Due Diligence Period and Buyers sole discretion thereafter. The foregoing shall not be deemed to restrict contracts entered into by Tenants directly with third parties. Prior to the expiration of the Due Diligence Period, Buyer will advise Seller in writing which Service Contracts Buyer will assume at Closing. Seller shall deliver to Closing notices of termination of all Service Contracts which Buyer does not agree to assume; provided, however, that if any Service Contract (other than a management agreement or listing agreement) is not terminable by Seller upon thirty days notice without a penalty, then Seller shall not be obligated to terminate the same unless Buyer pays all termination costs.
7.3.3 Leases.
(a) During the term of this Agreement Seller shall not enter into, modify or terminate any Lease without the prior written consent of Buyer, which consent shall not be unreasonably withheld prior to the expiration of the Due Diligence Period but may be withheld in Buyers sole discretion thereafter. In addition, during the term of this Agreement, without the written consent of Buyer, which consent shall not be unreasonably withheld, Seller shall not apply the security deposit under any Lease, or consent to the surrender or release thereof or to any assignment or sublease under any Lease to the extent the consent of Seller is required to be obtained thereunder.
(b) Seller shall, from and after the Effective Date of this Agreement to the date of Closing, provide Buyer with a copy of any written notice received by Seller from any Tenant of such Tenants election to cease operations or vacate its premises, as well as any written default or termination notices delivered to or received from Tenants under the Leases.
7.3.4 No New Encumbrances. During the term of this Agreement, except for permitted leasing as described in Section 7.3.3 above, Seller shall not convey or encumber any portion of the Property.
7.3.5 REA Estoppel. Seller shall use utilize good faith efforts (and, as used in this Agreement, good faith efforts shall not include any obligation to institute legal proceedings, declare a default or to expend any monies) to obtain and deliver to Buyer three (3) days prior to Closing an executed estoppel certificate from Target Corporation and Home Depot U.S.A. with respect to that certain Operating and Easement Agreement by and among Target Corporation, Home Depot U.S.A., Inc., and Seller (the REA) in the form required by the REA; provided, however, that receipt of such estoppel certification shall not be a condition to Closing.
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7.3.6 SNDAs. If requested by Buyer and to the extent required by Buyers lender, Seller shall endeavor and assist with Buyers request to obtain prior to Closing subordination, non-disturbance and attornment agreements (SNDAs) from the Tenants pursuant to the Leases in the form provided by Buyer or on the controlling form under such Leases, and any out of pocket costs incurred in connection therewith shall be reimbursed by Buyer; provided, however, the receipt of the SNDAs shall not be a condition to Closing.
7.3.7 Warranties. After the Due Diligence Period, Seller shall (at its own expense) take any steps which are prerequisite to the assignment and transfer to Buyer at Closing of any roof, structural, HVAC, equipment, appliance, and other warranties or guaranties relating to the Property as of the Closing, to the extent that the same are assignable (and in no event shall Seller be in breach of this Agreement if it fails to obtain any required consents thereto); provided that any transfer fees payable in connection with any such assignments shall be paid by Buyer. Sellers obligations under this Section shall survive the Closing for a period of six (6) months, but the success of such efforts shall not be a condition to Buyers obligation to Close.
7.3.8 Environmental Insurance.
(a) Prior to the Closing Date, Seller shall take any steps which shall be prerequisite in order to add Buyer at Closing as the First Named Insured to the American International Specialty Lines Insurance Company Pollution Legal Liability Select Policy dated August 31, 2005 with Policy Number 1468076 (the Environmental Policy). Seller shall also use good faith efforts to obtain, at Buyers expense, a new endorsement which modifies Endorsement No. 22 of the Environmental Policy such that the Environmental Covenant (and the indemnification obligations assumed by Buyer therein) is an Insured Contract under the Environmental Policy. Buyer shall cooperate in good faith and provide any information requested in connection with the foregoing or any underwriting requirements in connection therewith.
(b) Concurrently with the conveyance of the Property, Buyer shall be included as the First Named Insured on the Environmental Policy, and Seller and Seller Related Parties (as defined in Exhibit S) shall continue to be Named Insureds on the Environmental Policy. In the event of any claims for coverage after the Closing, Buyer shall be required to satisfy the deductible or self-insured retention on the Environmental Policy. Buyer shall not amend, modify or cancel the Environmental Policy without the prior written consent of Vornado Realty Trust in its sole and absolute discretion.
(c) At least thirty (30) days prior to the expiration of the current term of the Environmental Policy, Buyer at its expense will either renew the Environmental Policy for an additional ten (10) years or, alternatively, obtain a new environmental insurance policy for an additional ten (10) years. If a ten (10) year policy is not available, Buyer shall obtain and maintain such coverage for a period of ten (10) years following the expiration of the Environmental Policy. In either case, Seller and Seller Related Parties shall be named as Named Insureds thereunder and be on substantially the same terms, conditions, and coverage as the Environmental Policy, with the exception that (i) there shall be no requirement that GE be included as a Named Insured thereunder, and (ii) the limits of such renewal or replacement policy shall be at least $25 million per occurrence and in the policy aggregate. If a new environmental insurance policy is obtained, Vornado Realty Trust shall have the right to approve the form and the issuer of such policy in its sole and absolute discretion; provided that Vornado Realty Trust shall not unreasonably withhold its consent so long as the terms, conditions, and coverage are substantially the same as the Environmental Policy (with the exceptions described above) and the insurer thereof has a minimum AM Best rating of at least A (Excellent) X ($500 million to $750 million). If for any reason Buyer fails to comply with this Section 7.3.8(c) and provide extended (or new) coverage in compliance with this Section 7.3.8(c) and deliver evidence thereof to Vornado Realty Trust, then Vornado Realty Trust may (but shall not be obligated to) purchase such insurance for Buyers account and Buyer shall reimburse Vornado Realty Trust for the cost of the same (and Vornado Realty Trust shall constitute a third party beneficiary with respect to this Agreement).
(d) The obligations of Buyer under this Section 7.3.8 shall survive the Closing.
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7.4 Natural Hazard Disclosure Requirement Compliance. Buyer and Seller acknowledge that Seller is required to disclose whether the Property lies within the following natural hazard areas or zones: (1) a special flood hazard area (any type Zone A or V) designated by the Federal Emergency Management Agency (Cal. Gov. Code § 8589.3); (2) an area of potential flooding shown on a dam failure inundation map designated pursuant to Cal. Gov. Code § 8589.5 (Cal. Gov. Code § 8589.4); (3) a very high fire hazard severity zone designated pursuant to Cal. Gov. Code § 51178 or 51179 (in which event the owner maintenance obligations of Cal. Gov. Code § 51182 would apply) (Cal. Gov. Code § 51183.5); (4) a wildland area that may contain substantial forest fire risks and hazards designated pursuant to Cal. Pub. Resources Code § 4125 (in which event [i] the property owner would be subject to the maintenance requirements of Cal. Pub. Resources Code § 4291 and [ii] it would not be the states responsibility to provide fire protection services to any building or structure located within the wildland area except, if applicable, pursuant to Cal. Pub. Resources Code § 4129 or pursuant to a cooperative agreement with a local agency for those purposes pursuant to Cal. Pub. Resources Code § 4142) (Pub. Resources Code § 4136); (5) an earthquake fault zone (Pub. Resources Code § 2621.9); or (6) a seismic hazard zone (and, if applicable, whether a landslide zone or liquefaction zone) (Pub. Resources Code § 2694). Buyer and Seller acknowledge that they have employed the services of JCP Geologists, Inc., 321 Warren Avenue, Fremont, California 94539, (800) 748-5233, reports@JCP-Inc.com/other (which, in such capacity is herein called Natural Hazard Expert) to examine the maps and other information specifically made available to the public by government agencies for the purpose of enabling Seller to fulfill its disclosure obligations with respect to the natural hazards referred to in California Civil Code Section 1103(c) and to report the result of its examination to Buyer and Seller in writing. As contemplated in California Civil Code Section 1103.2(b), if an earthquake fault zone, seismic hazard zone, very high fire hazard severity zone or wildland fire area map or accompanying information is not of sufficient accuracy or scale for the Natural Hazard Expert to determine if the Property is within the respective natural hazard zone, then for purposes of the disclosure the Property shall be considered to lie within such natural hazard zone. The written report prepared by the Natural Hazard Expert regarding the results of its examination fully and completely discharges Seller from its disclosure obligations referred to herein, and, for the purpose of this Agreement, the provisions of Civil Code Section 1102.4 regarding the non-liability of Seller for errors or omissions not within in its personal knowledge shall be deemed to apply and the Natural Hazard Expert shall be deemed to be an expert, dealing with matters within the scope of its expertise with respect to the examination and written report regarding the natural hazards referred to above. The obligations of Seller are several (and not joint and not joint and several) and, without limitation, in no event shall Seller have any responsibility for matters not actually known to Seller, without any duty of inquiry on the part of Seller or any constructive or imputation of knowledge to Seller. The matters described herein shall be strictly limited to Sellers knowledge. THESE HAZARDS MAY LIMIT BUYERS ABILITY TO DEVELOP THE PROPERTY, TO OBTAIN INSURANCE, OR TO RECEIVE ASSISTANCE AFTER A DISASTER. THE MAPS ON WHICH THESE DISCLOSURES ARE BASED ONLY ESTIMATE WHERE NATURAL HAZARDS EXIST. THEY ARE NOT DEFINITIVE INDICATORS OF WHETHER OR NOT A PROPERTY WILL BE AFFECTED BY A NATURAL DISASTER. BUYER MAY WISH TO OBTAIN PROFESSIONAL ADVICE REGARDING THOSE HAZARDS AND OTHER HAZARDS THAT MAY AFFECT THE PROPERTY.
8. DISCLAIMER AND RELEASE. AS AN ESSENTIAL INDUCEMENT TO SELLER TO ENTER INTO THIS AGREEMENT, AND AS PART OF THE DETERMINATION OF THE PURCHASE PRICE, BUYER ACKNOWLEDGES, UNDERSTANDS AND AGREES AS OF THE DATE HEREOF AND AS OF THE CLOSING DATE AS FOLLOWS:
8.1 DISCLAIMER.
8.1.1 AS-IS, WHERE-IS. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN SECTION 7.1 OR IN THE SELLER CLOSING DOCUMENTS, (A) THE SALE OF THE PROPERTY HEREUNDER IS AND WILL BE MADE ON AN AS IS, WHERE IS BASIS, AND (B) SELLER HAS NOT MADE, DOES NOT MAKE AND SPECIFICALLY NEGATES AND DISCLAIMS ANY REPRESENTATIONS, WARRANTIES OR GUARANTIES OF ANY KIND OR CHARACTER WHATSOEVER, WHETHER EXPRESS OR IMPLIED, ORAL OR WRITTEN, PAST, PRESENT OR FUTURE OF, AS TO, CONCERNING OR WITH RESPECT TO THE PROPERTY OR ANY OTHER MATTER WHATSOEVER, INCLUDING ANY REPRESENTATION OR WARRANTY CONCERNING TITLE TO THE PROPERTY, THE PHYSICAL CONDITION OF THE PROPERTY (INCLUDING THE
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CONDITION OF THE SOIL OR THE IMPROVEMENTS), THE ENVIRONMENTAL CONDITION OF THE PROPERTY (INCLUDING THE PRESENCE OR ABSENCE OF HAZARDOUS SUBSTANCES ON OR RESPECTING THE PROPERTY), THE COMPLIANCE OF THE PROPERTY WITH APPLICABLE LAWS AND REGULATIONS (INCLUDING ZONING AND BUILDING CODES OR THE STATUS OF DEVELOPMENT OR USE RIGHTS RESPECTING THE PROPERTY), THE FINANCIAL CONDITION OF THE PROPERTY OR ANY OTHER REPRESENTATION OR WARRANTY RESPECTING ANY INCOME, EXPENSES, CHARGES, LIENS OR ENCUMBRANCES, RIGHTS OR CLAIMS ON, AFFECTING OR PERTAINING TO THE PROPERTY OR ANY PART THEREOF.
8.1.2 SOPHISTICATION OF BUYER. BUYER IS A SOPHISTICATED BUYER WHO IS FAMILIAR WITH THE OWNERSHIP AND OPERATION OF REAL ESTATE PROJECTS SIMILAR TO THE PROPERTY AND, DURING THE DUE DILIGENCE PERIOD, BUYER SHALL HAVE ADEQUATE OPPORTUNITY TO COMPLETE ALL PHYSICAL AND FINANCIAL EXAMINATIONS (INCLUDING ALL OF THE EXAMINATIONS, REVIEWS, AND INVESTIGATIONS REFERRED TO IN SECTION 4.2 OF THIS AGREEMENT) RELATING TO THE ACQUISITION OF THE PROPERTY HEREUNDER IT DEEMS NECESSARY, AND WILL ACQUIRE THE SAME SOLELY ON THE BASIS OF AND IN RELIANCE UPON SUCH EXAMINATIONS AND THE TITLE INSURANCE PROTECTION AFFORDED BY THE OWNERS POLICY AND NOT ON ANY INFORMATION PROVIDED OR TO BE PROVIDED BY SELLER (OTHER THAN AS EXPRESSLY PROVIDED IN SECTION 7.1 OR IN THE SELLER CLOSING DOCUMENTS).
8.1.3 DUE DILIGENCE MATERIALS. ANY INFORMATION PROVIDED OR TO BE PROVIDED BY SELLER OR IS AGENTS WITH RESPECT TO THE PROPERTY IS SOLELY FOR BUYERS CONVENIENCE AND WAS OR WILL BE OBTAINED FROM A VARIETY OF SOURCES. SELLER HAS NOT MADE ANY INDEPENDENT INVESTIGATION OR VERIFICATION OF SUCH INFORMATION AND MAKES NO (AND EXPRESSLY DISCLAIMS ALL) REPRESENTATIONS AS TO THE ACCURACY OR COMPLETENESS OF SUCH INFORMATION (EXCEPT TO THE EXTENT PROVIDED IN SECTION 7.1). EXCEPT AS MAY BE EXPRESSLY SET FORTH IN SECTION 7.1, SELLER SHALL NOT BE LIABLE FOR ANY MISTAKES, OMISSIONS, MISREPRESENTATION CONTAINED IN ANY VERBAL OR WRITTEN STATEMENTS, REPRESENTATIONS, APPRAISALS, ENVIRONMENTAL ASSESSMENT REPORTS, OR OTHER INFORMATION PERTAINING TO THE PROPERTY OR THE OPERATION THEREOF FURNISHED BY (A) SELLER OR ANY PARTNERSHIP, LIMITED LIABILITY COMPANY, CORPORATION, TRUST OR OTHER ENTITY THAT HAS OR ACQUIRES A DIRECT OR INDIRECT INTEREST IN SELLER, (B) ANY DIRECT OR INDIRECT MEMBER, MANAGER, PARTNER, ADVISOR, TRUSTEE, BENEFICIARY, DIRECTOR, SHAREHOLDER, EMPLOYEE, PARTICIPANT, REPRESENTATIVE OR AGENT IN OR OF SELLER OR OF ANY ENTITY THAT HAS OR ACQUIRES A DIRECT OR INDIRECT INTEREST IN SELLER, OR (C) ANY REAL ESTATE BROKER, AGENT, OR OTHER PERSON OR ENTITY ACTING ON SELLERS BEHALF (COLLECTIVELY, SELLER RELATED PARTIES). EXCEPT AS TO MATTERS SPECIFICALLY SET FORTH IN SUBSECTION 7.1.1, IN SECTION 7.3, AND IN THE SELLER CLOSING DOCUMENTS, BUYER WILL ACQUIRE THE PROPERTY SOLELY ON THE BASIS OF ITS OWN PHYSICAL AND FINANCIAL EXAMINATIONS, REVIEWS AND INSPECTIONS AND THE TITLE INSURANCE PROTECTION AFFORDED BY THE OWNERS POLICY.
8.2 RELEASE. BUYER AGREES THAT THE ENVIRONMENTAL COVENANT CONTAINS CERTAIN RELEASES OF SELLER AND SELLER RELATED PARTIES (AS DEFINED THEREIN), WHICH SHALL BE EFFECTIVE AS OF THE CLOSING.
8.3 SURVIVAL. THIS SECTION 8 SHALL SURVIVE ANY TERMINATION OF THIS AGREEMENT AND THE CLOSING.
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9. DISPOSITION OF DEPOSIT.
9.1 DEFAULT BY SELLER. IF THE TRANSACTION HEREIN PROVIDED SHALL NOT BE CLOSED SOLELY BY REASON OF SELLERS DEFAULT UNDER THIS AGREEMENT, THEN BUYER SHALL BE ENTITLED ELECT EITHER ONE OF THE FOLLOWING ALTERNATIVES, AS ITS SOLE REMEDY IN CONNECTION WITH SUCH DEFAULT: (A) RECEIVE A RETURN OF THE DEPOSIT AND BE REIMBURSED BY SELLER FOR BUYERS OUT-OF-POCKET EXPENSES INCURRED IN CONNECTION WITH THIS TRANSACTION, NOT TO EXCEED $200,000.00, AND NEITHER PARTY SHALL HAVE ANY FURTHER OBLIGATION OR LIABILITY TO THE OTHER (OTHER THAN THOSE OBLIGATIONS THAT EXPRESSLY SURVIVE A TERMINATION OF THIS AGREEMENT); (B) IF BUYER SHALL HAVE FULLY PERFORMED ITS OBLIGATIONS HEREUNDER AND SHALL BE READY, WILLING AND ABLE TO CLOSE (BUT WITHOUT THE REQUIREMENT OF DELIVERING THE ENTIRE PURCHASE PRICE INTO ESCROW BUT WITH A SHOWING THAT BUYER HAS THE RESOURCES TO DO SO), THEN BUYER SHALL BE ENTITLED TO SPECIFICALLY ENFORCE THIS AGREEMENT AS ITS SOLE AND EXCLUSIVE REMEDY (AND BUYER SHALL NOT BE ENTITLED TO BRING ANY OTHER ACTION, FOR DAMAGES OR OTHERWISE, BY REASON OF A DEFAULT BY SELLER PRIOR TO CLOSING), BUT SPECIFIC PERFORMANCE MAY NOT BE GRANTED OR AWARDED UNLESS BUYER HAS INSTITUTED AN ACTION FOR THE SAME WITHIN FORTY FIVE (45) DAYS AFTER THE CLOSING DATE (AS THE SAME MAY BE EXTENDED PURSUANT TO THE TERMS OF THIS AGREEMENT). NOTWITHSTANDING THE FOREGOING, IF SPECIFIC PERFORMANCE IS UNAVAILABLE AS A REMEDY TO BUYER BECAUSE OF SELLERS AFFIRMATIVE INTENTIONAL ACT IN BREACH OF THIS AGREEMENT FOR THE PURPOSE OF AVOIDING THE TRANSACTION DESCRIBED IN THIS AGREEMENT, BUYER SHALL HAVE THE RIGHT TO RECEIVE A RETURN OF THE DEPOSIT AND, IN ADDITION, ANY CONSIDERATION IN EXCESS OF THE PURCHASE PRICE RECEIVED BY SELLER IN THE SALE OF THE PROPERTY TO A THIRD PARTY.
9.2 DEFAULT BY BUYER. IN THE EVENT THE TRANSACTION HEREIN PROVIDED SHALL NOT CLOSE SOLELY BY REASON OF BUYERS DEFAULT UNDER THIS AGREEMENT, THEN THE DEPOSIT SHALL BE DELIVERED TO SELLER AS FULL COMPENSATION AND LIQUIDATED DAMAGES UNDER THIS AGREEMENT FOR SUCH FAILURE TO CLOSE. IN CONNECTION WITH THE FOREGOING, THE PARTIES RECOGNIZE THAT SELLER WILL INCUR EXPENSE IN CONNECTION WITH THE TRANSACTION CONTEMPLATED BY THIS AGREEMENT, THAT THE PROPERTY WILL BE REMOVED FROM THE MARKET AND, FURTHER, THAT IT IS EXTREMELY DIFFICULT AND IMPRACTICABLE TO ASCERTAIN THE EXTENT OF DETRIMENT TO SELLER CAUSED BY THE BREACH BY BUYER UNDER THIS AGREEMENT AND THE FAILURE OF THE CONSUMMATION OF THE TRANSACTION CONTEMPLATED BY THIS AGREEMENT OR THE AMOUNT OF COMPENSATION SELLER SHOULD RECEIVE AS A RESULT OF BUYERS BREACH OR DEFAULT. IN THE EVENT THE SALE OF THE PROPERTY SHALL NOT BE CONSUMMATED ON ACCOUNT OF BUYERS DEFAULT, THEN THE RETENTION OF THE DEPOSIT SHALL BE SELLERS SOLE AND EXCLUSIVE REMEDY UNDER THIS AGREEMENT BY REASON OF SUCH DEFAULT, SUBJECT TO THE PROVISIONS OF THIS AGREEMENT (INCLUDING THIS SECTION 9.2) THAT EXPRESSLY SURVIVE A TERMINATION OF THIS AGREEMENT.
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9.3 Closing. In the event the transaction herein provided shall close, the Deposit shall be applied as a partial payment of the Purchase Price.
9.4 Other Remedies. Nothing in Section 9.1 or 9.2 above shall limit Sellers and Buyers respective rights and remedies against the other with respect to the parties respective obligations to indemnify and hold the other party harmless pursuant to any provision contained in this Agreement, or with respect to any other obligations which survive the Closing under the terms of this Agreement, subject to the terms and limitations set forth in this Agreement.
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9.5 Survival. The terms of this Section 9 shall survive any termination of this Agreement.
10. Miscellaneous.
10.1 Brokers.
10.1.1 Except as provided in Section 10.1.2 below, Seller represents and warrants to Buyer, and Buyer represents and warrants to Seller, that no broker or finder has been engaged by it, respectively, in connection with the sale contemplated by this Agreement. In the event of a claim for brokers or finders fee or commissions in connection with the sale contemplated by this Agreement, then Seller shall indemnify, defend and hold harmless Buyer from the same if it shall be based upon any statement or agreement alleged to have been made by Seller, and Buyer shall indemnify, defend and hold harmless Seller from the same if it shall be based upon any statement or agreement alleged to have been made by Buyer.
10.1.2 Seller shall pay all broker commissions, fees or other charges to Eastdil Secured (Broker) or other broker that may claim brokerage commissions, fees or other compensation associated with this Agreement. Seller and Buyer hereby respectively represent and warrant to each other that, other than Broker, no broker or finder has been engaged by such party in connection with the transaction contemplated by this Agreement, and no outstanding fee or commission is due to any broker engaged by such party other than Broker. Broker shall have no rights by reason of this Agreement.
10.1.3 The obligations and agreements of Seller and Buyer under this Section 10.1 shall survive the Closing until December 31, 2013, or any termination of this Agreement.
10.2 Limitation of Liability.
10.2.1 Notwithstanding anything to the contrary contained in this Agreement or in the Seller Closing Documents, if the Closing of the transaction hereunder shall have occurred:
(a) Seller shall have no liability in connection with this Agreement or the Seller Closing Documents unless Buyers valid claims against Seller for breaches and/or indemnifications under this Agreement and under the Seller Closing Documents collectively total more than $100,000.00 (after which, Sellers liability for valid claims shall begin from zero); provided, however, the foregoing limitation shall not apply to Sellers obligations with respect to prorations and payments under Section 5.4.
(b) The entire liability of Seller under this Agreement and under the Seller Closing Documents, excluding Sellers obligations with respect to prorations and payments under Section 5.4, shall not exceed $3,000,000.00 (the CAP Amount).
(c) The entire liability of Buyer under this Agreement and under the Seller Closing Documents, excluding Buyers obligations under the Environmental Covenant, shall not exceed the CAP Amount; provided, however, nothing in this Section 10.2 shall limit Sellers remedies under Section 9.2 of this Agreement, and provided, further, the foregoing limitation shall not apply to Buyers obligations with respect to prorations and payments under Section 5.4.
(d) Notwithstanding anything to the contrary in this Agreement or any other document, in no event shall Seller or Buyer be liable for any consequential, punitive or speculative damages.
(e) Except as otherwise provided in Section 10.10.2 below, no constituent member or partner in or agent of Seller, nor any advisor, trustee, director, officer, employee, beneficiary, shareholder, member, partner, participant, representative or agent of any partnership, limited liability company, corporation, trust or other entity that has or acquires a direct or indirect interest in Seller, shall have any personal liability, directly or indirectly, under or in connection with this Agreement or any agreement made or entered into
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under or pursuant to the provisions of this Agreement, or any amendment or amendments to any of the foregoing made at any time or times, heretofore or hereafter, and Buyer and its successors and assigns and, without limitation, all other persons and entities, shall look solely to Sellers assets for the payment of any claim or for any performance, and Buyer, on behalf of itself and its successors and assigns, hereby waives any and all such personal liability. Notwithstanding anything to the contrary contained in this Agreement, neither the negative capital account of any constituent member or partner in Seller (or in any other constituent member or partner of Seller), nor any obligation of any constituent member or partner in Seller (or in any other constituent member or partner of Seller) to restore a negative capital account or to contribute capital to Seller (or to any other constituent member or partner of Seller), shall at any time be deemed to be the property or an asset of Seller or any such other constituent member or partner (and neither Buyer nor any of its successors or assigns shall have any right to (or any right to require Seller to) collect, enforce or proceed against or with respect to any such negative capital account or a members or partners obligation to restore or contribute).
10.2.2 The foregoing shall be in addition to, and not in limitation of, any further limitation of liability that might otherwise apply (whether by reason of Buyers waiver, relinquishment or release of any applicable rights or otherwise).
10.3 Exhibits; Entire Agreement; Modification. All exhibits attached and referred to in this Agreement are hereby incorporated herein as if fully set forth in (and shall be deemed to be a part of) this Agreement. This Agreement contains the entire agreement between the parties respecting the matters herein set forth and supersedes all prior agreements between the parties hereto respecting such matters. This Agreement may not be modified or amended except by written agreement signed by both parties.
10.4 Time of the Essence. Time is of the essence of this Agreement. However, whenever action must be taken (including the giving of notice or the delivery of documents) under this Agreement during a certain period of time (or by a particular date) that ends (or occurs) on a non-business day, then such period (or date) shall be extended until the immediately following business day. As used herein, business day means any day other than a Saturday, Sunday or federal or California state holiday.
10.5 Interpretation. Section headings shall not be used in construing this Agreement. Each party acknowledges that such party and its counsel, after negotiation and consultation, have reviewed and revised this Agreement. As such, the terms of this Agreement shall be fairly construed and the usual rule of construction, to the effect that any ambiguities herein should be resolved against the drafting party, shall not be employed in the interpretation of this Agreement or any amendments, modifications or exhibits hereto or thereto. The words herein, hereof, hereunder, hereby, this Agreement and other similar references shall be construed to mean and include this Agreement and all amendments and supplements hereto unless the context shall clearly indicate or require otherwise. Whenever the words including, include or includes are used in this Agreement, they shall be interpreted in a non-exclusive manner. As used herein, the word and shall mean and/or. Except as otherwise indicated, all Exhibit and Section references in this Agreement shall be deemed to refer to the Exhibits and Sections in this Agreement. As used herein, good faith has the meaning set forth for the same in Section 1-201(19) of the Uniform Commercial Code, as adopted in the State of California as of the date of this Agreement.
10.6 Governing Law. This Agreement shall be construed and enforced in accordance with the laws of the State of California, without regard to any issues concerning conflicts of law.
10.7 Successors and Assigns. This Agreement may be assigned by Buyer in whole (but not in part) to an affiliate of Buyer which Buyer controls or which is under common control with Buyer, without the prior written consent of Seller, provided that Buyer, not less than three (3) business days prior to Closing, shall have delivered to Seller written notice of such assignment together with an executed copy of an assignment instrument which shall contain an assumption by the assignee of all of Buyers obligations under this Agreement in a form reasonably approved by Seller. Except as described in the preceding sentence, Buyer may not assign or transfer its rights or obligations under this Agreement either directly or indirectly (whether by outright transfer, transfer of ownership interests or otherwise) without the prior written consent of Seller in Sellers sole and absolute discretion.
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In the event of an assignment, the assignee shall assume in writing all of the assignors obligations hereunder, but such assignor shall not be released from its obligations hereunder until the Closing. No consent given by Seller to any transfer or assignment of Buyers rights or obligations hereunder shall be construed as a consent to any other transfer or assignment of Buyers rights or obligations hereunder. No transfer or assignment in violation of the provisions hereof shall be valid or enforceable. Subject to the foregoing, this Agreement and the terms and provisions hereof shall inure to the benefit of and be binding upon the successors and assigns of the parties.
10.8 Notices. Any notice which a party is required or may desire to give the other shall be in writing and may be sent by personal delivery, by mail (either [i] by United States certified mail, return receipt requested, postage prepaid, or [ii] by Federal Express or similar generally recognized overnight carrier regularly providing proof of delivery or [iii] by electronic or facsimile transmission, with a copy thereof to be sent simultaneously in the manner described in either [i] or [ii] above, addressed as follows (subject to the right of a party to designate a different address for itself by notice similarly given):
To Buyer:
Cole Real Estate Investments
2325 E. Camelback Road
Suite 1100
Phoenix, Arizona 85016
Attention: Legal Department Real Estate
Telecopier: (480) 449-7012
Email: Jpons@Colecapital.com
With Copy To:
Morris, Manning & Martin, LLP
1600 Atlanta Financial Center
3343 Peachtree Road NE
Atlanta, Georgia 30326
Attention: Andrew C. Williams
Telecopier: (404) 365-9532
Email: awilliams@mmmlaw.com
To Seller:
c/o Vornado Realty Trust
888 7th Avenue
New York, New York 10019
Attention: Michael Schnitt
Telecopier: (212) 894-7071
Email: mschnitt@VNO.com
With Copy To:
Greenberg Traurig LLP
1900 University Avenue, Fifth Floor
East Palo Alto, California 94303
Attention: Real Estate Notices (RCS)
Telecopier: (650) 462-7870
Email: singler@gtlaw.com
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If to Escrow Agent:
First American Title Insurance Company
Escrow Agent
633 Third Avenue, 16th Floor
New York, New York 10017
Attention: Hilary A. Kruce
Telecopier: (212) 331-1433
Email: HKruce@firstam.com
File Reference: NCS-583615-CA
Any notice given via overnight mail shall be deemed delivered the next business day. Any notice given via facsimile or electronic mail shall be deemed delivered upon completion of the facsimile or electronic transmission the same day if the completion of such transmission is completed on or before 5:00 PM, California time, or the next business day, if such transmission is completed after 5:00 PM, California time. Any notice given by mail shall be deemed to have been delivered three (3) days after being deposited into the mail.
10.9 Third Parties. Nothing in this Agreement (except Sections 8.2 and 10.2), whether expressed or implied, is intended to confer any rights or remedies under or by reason of this Agreement on any person other than the parties hereto and their respective successors and assigns, nor, except for Sections 8.2 and 10.2, is anything in this Agreement intended to relieve or discharge the obligation or liability of any third persons to any party to this Agreement, nor shall any provision give any third parties any right of subrogation or action over or against any party to this Agreement. This Agreement is not intended to and does not create any third party beneficiary rights whatsoever.
10.10 Certain Obligations.
10.10.1 Cole Credit Property Trust IV, Inc., a Maryland corporation (Buyer Principal), hereby executes this Agreement for the sole purpose of agreeing that, if the Closing occurs, Buyer Principal shall be primarily and jointly and severally liable with Buyer and its successors and assigns for the obligations of Buyer under the Environmental Covenant and under Section 7.3.8 of this Agreement. In addition, Buyer Principal shall be responsible for the obligations of Buyer under Sections 4.2.2 and 4.2.3 of this Agreement insofar as such obligations relate to Information Materials relating to environmental matters regardless of whether the Closing occurs. The obligations of Buyer Principal are primary (as if Buyer Principal had signed the Environmental Covenant directly), and not as a guarantor or surety, and Seller and Seller Related Parties may enforce the same directly against Buyer Principal without proceeding against Buyer or its successors and assigns, and Buyer Principals obligations under this Section 10.10 shall survive the Closing under this Agreement indefinitely, and any subsequent conveyance of all or any portion of the Property by Buyer. Buyer Principal represents and warrants to Seller and Seller Principal that as of the Closing Date, Buyer Principal will have a net worth calculated in accordance with GAAP of at least $300,000,000 (Minimum Net Worth), and Buyer Principal (or a Permitted Successor, as defined below) shall continue to maintain such Minimum Net Worth for a period of at least two years beyond the date the Groundwater NFA (as defined in the Environmental Covenant) is obtained, or if the Groundwater NFA contains any monitoring or other ongoing requirements, such Minimum Net Worth shall be maintained until two years after the expiration of such monitoring and other ongoing requirements. As used herein, a Permitted Successor shall mean an entity which: (i) is an Affiliate of any successor owner of the Property which becomes subject to the Environmental Covenant (Successor Owner), (ii) assumes, pursuant to an instrument satisfactory to Seller Principal, on a joint and several and primary basis, all of Successor Owners obligations under the Environmental Covenant, and (iii) meets, as of the date of such assumption, the Minimum Net Worth as verified by Seller Principal.
10.10.2 Vornado Realty L.P., a Delaware limited partnership (Seller Principal), hereby executes this Agreement for the sole purpose of agreeing that, if the Closing occurs, and subject to the limitations on liability and survival limitations contained herein and therein, Seller Principal shall be primarily and jointly and severally liable with Seller for the obligations of Seller which survive the Closing under Sections 4.3.2, 5.4, 7.1, and 10.1 of this Agreement and under the Assignment of Leases, the Bill of Sale, Assignment and Assumption, and the Seller Closing Certificate. The obligations of Seller Principal shall be primary, and not as a guarantor or surety, and Buyer may enforce the same directly against Seller Principal without proceeding against Seller.
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10.11 WAIVER OF JURY TRIAL.
10.11.1 TO THE MAXIMUM EXTENT PERMITTED BY LAW, THE PARTIES HERETO KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVE ANY AND ALL RIGHTS TO A TRIAL BY JURY IN RESPECT OF ANY FORM OF CAUSE OF ACTION, CONTROVERSY, DISPUTE OR CLAIM (WHETHER BY WAY OF COMPLAINT, CROSS-COMPLAINT OR COUNTERCLAIM, OR OTHERWISE, AND WHETHER ARISING AT LAW OR IN EQUITY) RELATING TO OR ARISING OUT OF THIS AGREEMENT OR THE TRANSACTION TO WHICH IT RELATES. THIS WAIVER IS A MATERIAL INDUCEMENT FOR THE PARTIES TO ENTER INTO THIS AGREEMENT AND THE TRANSACTION TO WHICH THIS AGREEMENT RELATES.
10.11.2 If the waiver of jury trial set forth in Section 10.11.1 above is not enforceable for any reason, then the parties hereby agree that, to the extent allowed by law, any dispute, controversy or other claim arising out of or relating to this Agreement for the breach or interpretation hereof shall, at the written request of either party, be resolved by general Judicial Reference pursuant to California Code of Civil Procedure Sections 638 and 641 through 645 or any successor statutes hereto. The parties shall select a single neutral referee, who shall be a retired state or federal judge. In the event the parties cannot agree upon a referee, the referee shall be appointed by the court. The referee shall determine all issues relating to the dispute, controversy or claim, and shall report a statement of decision to the court. The parties shall equally bear the fees and expenses of the referee, unless the referee otherwise provides in the statement of decision. However, the prevailing party shall be entitled to reimbursement of attorney fees, costs, and expenses incurred in connection with the reference. The parties agree that each party shall have the right to cause an appeal to be taken from the referees decision to a court of competent jurisdiction in the same manner as a judicial appeal arising out of an order or judgment from a California superior court in a civil action and all of the same rules, rights and remedies shall be applied to both parties with respect to any such appeal including matters of fact, matters of law, standards for review and substantive and procedural laws. Judgment may be entered upon any such final decision in accordance with applicable law in any court having jurisdiction thereof. The referee (if permitted under applicable law) or such court may issue a writ of execution to enforce the referees decision.
10.12 Legal Costs. The parties hereto agree that they shall pay directly any and all legal costs which they have incurred on their own behalf in the preparation of this Agreement, all deeds and other agreements pertaining to this transaction and that such legal costs shall not be part of the closing costs. In addition, if either Buyer or Seller brings any suit or other proceeding, including an arbitration proceeding, with respect to the subject matter or the enforcement of this Agreement, the prevailing party (as determined by the court, agency, arbitrator or other authority before which such suit or proceeding is commenced), in addition to such other relief as may be awarded, shall be entitled to recover reasonable attorneys fees, expenses and costs of investigation actually incurred. The foregoing includes attorneys fees, expenses and costs of investigation (including those incurred in appellate proceedings), costs incurred in establishing the right to indemnification, or in any action or participation in, or in connection with, any case or proceeding under Chapter 7, 11 or 13 of the Bankruptcy Code (11 United States Code Sections 101 et seq.), or any successor statutes. The provisions of this Section 10.12 shall survive at Closing or any termination of this Agreement.
10.13 No Recordation. In no event shall this Agreement or any document or other memorandum related to the subject matter of this Agreement be recorded without the consent of Seller.
10.14 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same document. A signature via facsimile transmission (or an email with a pdf attachment with a signature) shall have the same force and effect as an original signature hereto.
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10.15 Effectiveness. In no event shall any draft of this Agreement create any obligation or liability, it being understood that this Agreement shall be effective and binding only when a counterpart hereof has been executed and delivered by each party hereto. The act of Seller or any Seller representative providing this Agreement to any party shall not be construed or considered to be an offer of any kind.
10.16 Press Releases. After the Closing, any press release or other public disclosure regarding this Agreement or the transaction contemplated hereby shall not be made without Sellers and Buyers prior written consent, not to be unreasonably withheld. Prior to the Closing, neither Seller nor Buyer shall issue any press release or public statement with respect to the transaction contemplated by this Agreement without the prior written consent of the other, except to the extent provided in Section 4.2.3.
10.17 No Waiver. No waiver by a party of any breach of this Agreement or of any warranty or representation hereunder by the other party shall be deemed to be a waiver of any other breach by such other party (whether preceding or succeeding and whether or not of the same or similar nature), and no acceptance of payment or performance by a party after any breach by the other party shall be deemed to be a waiver of any breach of this Agreement or of any representation or warranty hereunder by such other party, whether or not the first party knows of such breach at the time it accepts such payment or performance. No failure or delay by a party to exercise any right it may have by reason of the default of the other party shall operate as a waiver of default or modification of this Agreement or shall prevent the exercise of any right by the first party while the other party continues to be so in default.
10.18 Tax Deferred Exchange. Buyer and Seller acknowledge and agree that either party hereto (the Exchange Party) may assign its interest in this Purchase Agreement to an qualified intermediary or exchange accommodation title holder as defined in the Internal Revenue Code of 1986, as amended or its related United States Treasury Regulations (the Code), or in the case of Seller, to the owner of a property identified by Seller as the exchange property) for the purpose of completing an exchange of the Property in a transaction which will qualify for treatment as a tax deferred exchange pursuant to the provisions of Section 1031 of the Code and applicable state revenue and taxation code sections (a 1031 Exchange). The other party thereto (the Non-Exchange Party) agrees to provide reasonable cooperation requested by the Exchange Party in implementing any such assignment and 1031 Exchange, including the execution of any necessary documentation in connection therewith and, an in the case of the Buyer, payment of the Purchase Price to a facilitator identified by the Exchange Party, provided that such cooperation shall not entail any additional expense or liability to the Non-Exchange Party beyond its existing obligations under the Purchase Agreement and the Exchange Party shall reimburse the Non-Exchange Party, upon demand, for any expense incurred by the Non-Exchange Party relating to such 1031 Exchange (other than its attorneys fees in reviewing the documentation for the 1031 Exchange), and further, that the Non-Exchange Party shall not be obligated to take title to any property, other than the Property, in the case of Buyer, and no such exchange shall delay the Closing (subject to Sellers rights to extend the Closing under Section 5). The accomplishment of a like-kind exchange shall not be a condition to the Exchanging Partys obligations or to Closing, and the Exchanging Partys failure to locate an exchange property or to consummate a like-kind exchange for any reason or for no reason at all shall in no way relieve the Exchange Party of its obligations under this Purchase Agreement.
10.19 Rights of First Refusal. If any of the Leases contain tenant rights of first refusal or rights of first offer to purchase the Property (either such right, a ROFR), Seller shall deliver a written right of first refusal or offer notice to the applicable Tenant in accordance with the requirements of the applicable ROFR within five (5) days after the Effective Date. Seller agrees that if any Tenant gives notice of its intent to exercise its ROFR under its Lease or does actually exercise such ROFR, this Agreement shall be deemed to terminate, provided that Buyer shall receive a full return of the Deposit and Seller shall promptly reimburse to Buyer all reasonable out-of-pocket and third party property diligence expenses incurred by Buyer, including, without limitation, reasonable attorneys fees and costs, not to exceed $200,000.00.
10.20 SEC S-X 3-14 Audit. In order to enable Buyer to comply with reporting requirements, Seller agrees to provide Buyer and its representatives information sufficient for Buyer to comply with SEC Rule 3-14 of Regulation S-X, including Sellers most current financial statements relating to the financial operation of the Property for the current fiscal year and the most recent pre-acquisition fiscal year, and upon request, support for
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certain operating revenues and expenses specific to the Property. Seller understands that certain of such financial information may be included in filings required to be made by Buyer with the U.S. Securities and Exchange Commission. This Section 10.20 shall survive Closing for a period of one (1) year. In no event shall any information furnished by Seller under this Section 10.20 constitute any express or implied representation whatsoever of such financial statements or other information provided in this Section 10.20.
10.21 Survival. The agreements of Buyer and Seller contained in this Section 10 shall survive the Closing or any termination of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.
SELLER: | ||||||||
WPV SAN JOSE, LLC, a Delaware limited liability company | ||||||||
By: | Vornado San Jose, L.L.C., | |||||||
a Delaware limited liability company | ||||||||
Its Member | ||||||||
By: | Vornado Realty L.P., | |||||||
a Delaware limited partnership, its sole member | ||||||||
By: | Vornado Realty Trust, | |||||||
a Maryland corporation, its general partner | ||||||||
By: | /s/ Michael Fascitelli | |||||||
Name: | Michael Fascitelli | |||||||
Title: | President and CEO |
BUYER: | ||||
COLE CCPT IV ACQUISITIONS, LLC, a | ||||
Delaware limited liability company | ||||
By: | Cole REIT Advisors IV, LLC, a Delaware | |||
limited liability company, is Manager | ||||
By: | /s/ John M. Pons | |||
Name: | John M. Pons | |||
Title: | Executive Vice President |
BUYER PRINCIPAL: | ||
COLE CREDIT PROPERTY TRUST IV, INC., a Maryland corporation | ||
By: | /s/ John M. Pons | |
Name: | John M. Pons | |
Title: | Authorized Officer |
SELLER PRINCIPAL: | ||||
VORNADO REALTY L.P., a Delaware limited partnership, its sole member | ||||
By: | Vornado Realty Trust, | |||
a Maryland corporation, | ||||
its general partner | ||||
By: | /s/ Michael Fascitelli | |||
Name: | Michael Fascitelli | |||
Title: | President and CEO |
Exhibit 10.25
FOURTH AMENDMENT TO PURCHASE AGREEMENT
This FOURTH AMENDMENT TO PURCHASE AGREEMENT (this Amendment), dated as of February 12, 2013, is made and entered into by and between WPV SAN JOSE, LLC, a Delaware limited liability company (Seller), and COLE CCPT IV ACQUISITIONS, LLC, a Delaware limited liability company (Buyer).
WITNESSETH:
WHEREAS, Seller and Buyer entered into that certain Purchase Agreement dated January 18, 2013, as amended by that certain First Amendment to Purchase Agreement dated February 1, 2013, as further amended by that certain Second Amendment to Purchase Agreement dated February 6, 2013, and as further amended by that certain Third Amendment to Purchase Agreement dated February 11, 2013 (collectively, the Purchase Agreement), for the sale and purchase of real property located in San Jose, California, commonly known as The Plant;
WHEREAS, Seller and Buyer desire to amend the Purchase Agreement pursuant to the terms of this Amendment;
NOW, THEREFORE, in consideration of the agreements hereinafter set forth and for Ten Dollars ($10.00) and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Seller and Buyer agree as follows:
1. Defined Terms. All capitalized terms used herein and not expressly defined shall have the meaning given to them in the Agreement.
2. Waiver of Due Diligence. Buyer hereby waives its right to terminate the Purchase Agreement pursuant to Section 4.2 of the Purchase Agreement.
3. Adjustment of Purchase Price. The definition of Purchase Price set forth in Section 1.1 of the Section 1.1 of the Purchase Agreement is amended and restated in its entirety with the following:
Purchase Price shall mean Two Hundred Three Million One Hundred Thousand and 00/100 Dollars ($203,100,000.00).
4. No Free Rent Credits. Seller acknowledges that the Argus model for the Property dated September 26, 2012, which was provided by Seller or its agents to Cole Capital Partners, LLC in connection with the December 13, 2012 letter of intent between Seller and Cole Capital Partners, LLC, disclosed all rental abatements, concessions, and free rent provided for in the Leases. Accordingly, Buyer shall not be entitled to a credit against the Purchase Price at Closing for any unexpired rental abatements, concessions, or free rent provided for under the Leases in place on the Effective Date.
5. Seller Title Certificate. The form of Seller Title Certificate attached as Exhibit C to the Purchase Agreement is hereby deleted in its entirety, and the form of Seller Title Certificate attached hereto as Exhibit C-1 is substituted in the place thereof.
6. Additional Closing Documents. In addition to the Seller Closing Documents listed in Section 5.2.1 of the Purchase Agreement, Seller and Buyer shall each execute and deliver at Closing the following additional documents:
(a) An assignment of Sellers rights under the REA in the form attached hereto as Exhibit J-1; and
(b) A non-exclusive assignment of Sellers environmental rights under the Purchase and Sale Agreement for the Property between Seller and GE dated April 21, 2005, in the form attached hereto as Exhibit J-2.
7. Parcel Map and REA Amendment. Seller shall use its good faith diligent efforts at its expense to cause the Parcel Map No. 9999 for the Property prepared by PSOMAS and dated August, 2010 to be finalized and recorded prior to Closing (as finalized, the Parcel Map), provided that any changes to such Parcel Map from the markup by the City of San Jose previously provided to Buyer prior to the recording thereof shall be subject to the prior written approval of Buyer, such approval not to be unreasonably withheld. Seller shall record that certain First Amendment to Operating and Easement Agreement previously executed by Seller, Target Corporation, and Home Depot U.S.A., Inc., and dated , 2008 (the REA Amendment), as soon as the Parcel Map has been recorded and the recording information of Parcel Map can be filled in the blank space within the REA Amendment. In the event that the Parcel Map and REA Amendment are recorded prior to the Closing, Buyer and Seller shall reasonably agree upon a revised legal description for the Deed (and a further amendment to Purchase Agreement incorporating such revised legal description). Seller shall submit the Parcel Map to the City for approval within seven (7) business days after the date hereof. If for any reason the Parcel Map and REA Amendment are not recorded prior to Closing, Buyer shall nevertheless be obligated to proceed to Closing (subject to satisfaction of the other terms and conditions set forth in the Purchase Agreement), and Seller shall remain responsible at its expense to diligently prosecute the recordation of the Parcel Map and REA Amendment as soon as possible after Closing. If for any reason Seller is unable or unwilling to cause the Parcel Map and REA Amendment to be recorded prior to 90 days after the Closing Date, then Buyer shall have the right, but not the obligation, to cause the same to occur, and all out of pocket third party expense incurred by Buyer in connection with the same shall be reimbursed by Seller. Notwithstanding the foregoing, if the City of San Jose indicates prior to Closing that a discretionary approval is needed for the Parcel Map and Seller does not obtain such discretionary approval prior to the Closing, then it shall be a condition to Closing that Seller shall have obtained such discretionary approval prior to the Closing (and Seller shall have the right to further extend closing for up to a period of seventy five (75) days in order to obtain such discretionary approval). This Section 7 shall survive the Closing and Sellers obligations hereunder shall not be subject to the limitation set forth in Section 10.2.1(a) of the Purchase Agreement.
8. OfficeMax Agreement.
(a) Seller has entered into a non-binding term sheet with Office Max in the form attached as Schedule 1 hereto. Buyer hereby consents to the entry by Seller and Office Max of an amendment to its Lease incorporating the terms of Schedule 1; provided that Buyers reasonable approval of the form of amendment shall be required.
(b) Prior to Closing, Seller shall obtain an acknowledgement from Office Max pursuant to which such Tenant confirms, without qualification, that such Tenants share of common area costs for calendar years 2011 and 2012 are acceptable and that such Tenant does not intend to contest such charges.
9. Late Delivery Charges - Space 32-80. Seller agrees to indemnify and hold harmless Buyer from and against any claims, actions and liabilities relating to late delivery charges owed to the tenant of Space 32-80 under the terms of such Tenants Lease. Such indemnity shall survive the Closing and shall not be subject to the limitations set forth in Section 10.2.1(a) of the Purchase Agreement, but Sellers liability for such indemnity shall not exceed $112,000.00. Notwithstanding the foregoing, if Seller obtains a Tenant Estoppel Certificate from such Tenant which does not assert a claim for such late delivery charges, Seller shall have no further obligation or liability under this paragraph 9.
10. Environmental Provisions. Section 7.3.8(c) of the Purchase Agreement is hereby amended in the following respects:
(a) Seller understands and agrees that Buyer may either extend the Environmental Policy for an additional ten (10) years or, alternatively, obtain a new environmental insurance policy with a term of ten (10) years, at any time prior to the expiration of the current term of the Environmental Policy. In the event that such extension or replacement occurs more than twelve (12) months prior to the current expiration of the Environmental Policy, Buyer shall be obligated to either further extend such Environmental Policy, extend such replacement environmental insurance policy, or, alternatively, obtain a new environmental insurance policy (in each case meeting all requirements of Section 7.3.8) which will extend the coverage required under Section 7.3.8 until at least February 29, 2026.
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(b) Notwithstanding anything to the contrary provided in Section 7.3.8(c) of the Purchase Agreement, the limits of the renewal or replacement policies required therein shall not be required to take into account any of the sub-limits contained within the Environmental Policy (including those in favor of GE) or name Target as an additional insured thereunder. Nothing in this Section 7.3.8(c) shall permit any amendment to any of the terms, conditions or provisions of the existing Environmental Policy (other than as expressly provided in Section 7.3.8(a)) without the consent of Vornado Realty Trust in its sole and absolute discretion.
11. Controlling Agreement. To the extent any provisions contained herein conflict with the Agreement, the provisions contained herein shall supersede such conflicting provisions contained in the Agreement. Except as modified herein, Seller and Buyer hereby represent and warrant that the Agreement remains in full force and effect and is hereby reaffirmed and ratified by both Seller and Buyer.
12. Counterparts, Facsimiles. This Amendment may be executed in one or more counterparts, each of which shall be deemed an original, and all of which constitute collectively one agreement. Signatures to this Amendment may be transmitted via facsimile or scanned and emailed, and delivery thereby shall be deemed sufficient for all purposes to the same extent as would be delivery of an original signature.
[Signatures on following pages]
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IN WITNESS WHEREOF, Seller has executed this Agreement as of the day and year first above written.
SELLER: | ||||||||
WPV SAN JOSE, LLC, | ||||||||
a Delaware limited liability company | ||||||||
By: | Vornado San Jose, L.L.C., a Delaware limited | |||||||
liability company, its sole member | ||||||||
By: | Vornado Realty L.P., | |||||||
a Delaware limited partnership, | ||||||||
its sole member | ||||||||
By: | Vornado Realty Trust, a Maryland | |||||||
corporation, its general partner | ||||||||
By: | /s/ Michael DeMarco | |||||||
Name: | Michael DeMarco | |||||||
Title: | Executive Vice President |
IN WITNESS WHEREOF, Buyer has executed this Agreement as of the day and year first above written.
BUYER: | ||||
COLE CCPT IV ACQUISITIONS, LLC, a Delaware limited liability company | ||||
By: | Cole REIT Advisors IV, LLC, a Delaware | |||
limited liability company, its Manager | ||||
By: | /s/ John M. Pons | |||
Name: | John M. Pons | |||
Title: | Executive Vice President |
Exhibit 10.26
FIRST MODIFICATION AND LENDER JOINDER AGREEMENT
DATE: | March 8, 2013 | |||
PARTIES: | Borrower: | COLE OPERATING PARTNERSHIP IV, LP, a Delaware limited partnership | ||
Administrative Agent | JPMORGAN CHASE BANK, N.A., a national | |||
for the Lenders: | banking association | |||
Lenders: | ||||
Existing Lender: |
JPMORGAN CHASE BANK, N.A., a national banking association | |||
New Lender: |
BANK OF AMERICA, N.A., a national banking association |
RECITALS
A. Existing Lender has extended to Borrower a revolving line of credit (Loan) in a maximum principal amount not to exceed $75,000,000.00 at any time pursuant to that Credit Agreement dated December 14, 2012, among Borrower, Administrative Agent and the Lenders defined therein (the Loan Agreement). The unpaid principal of the Loan as of March 6, 2013 was $37,026,066.00. All undefined capitalized terms used herein shall have the meaning given them in the Loan Agreement.
B. The Loan is unsecured.
C. The following Continuing Guaranty and Counterpart Agreements (severally and collectively, the Guaranty) were executed and delivered by the Guarantors a party thereto to Administrative Agent for the benefit of the Lenders: (i) Continuing Guaranty dated as of December 14, 2012; (ii) Counterpart Agreement Re: Continuing Guaranty dated December 20, 2012; (iii) Counterpart Agreement Re: Continuing Guaranty dated December 21, 2012; (iv) Counterpart Agreement Re: Continuing Guaranty dated January 11, 2013; (v) Counterpart Agreement Re: Continuing Guaranty dated January 18, 2013; (vi) Counterpart Agreement Re: Continuing Guaranty dated February 6, 2013; and (vii) Counterpart Agreement Re: Continuing Guaranty dated March 8, 2013.
D. Borrower has requested that Administrative Agent and the Lenders modify the Loan and the Loan Documents, as provided herein. New Lender has agreed to provide a Revolving Commitment under the Loan Agreement, as provided herein. Administrative Agent and the Lenders are willing to so modify the Loan and the Loan Documents, subject to the terms and conditions herein.
AGREEMENT
For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Borrower, Administrative Agent and Lenders agree as follows:
SECTION 1. ACCURACY OF RECITALS.
Borrower acknowledges the accuracy of the Recitals.
SECTION 2. MODIFICATION OF LOAN DOCUMENTS.
2.1 The following definition set forth in Section 1.01 of the Loan Agreement is hereby amended in its entirety to read as follows:
Aggregate Revolving Commitments means the Revolving Commitments of all the Revolving Lenders. The aggregate principal amount of the Aggregate Revolving Commitments in effect on March 8, 2013 is ONE HUNDRED FIFTY MILLION AND NO/100 DOLLARS ($150,000,000.00).
2.2 Schedule 2.01 attached to the Loan Agreement is hereby amended and replaced in its entirety with Schedule 2.01 attached hereto as Exhibit A (Revised Schedule 2.01) and by this reference incorporated herein and therein.
2.3 This First Modification and Lender Joinder Agreement (this Agreement) shall constitute one of the Loan Documents as that term is defined in the Loan Agreement.
2.4 Each reference in the Loan Documents to any of the Loan Documents is hereby amended to be a reference to such document as modified herein.
SECTION 3. JOINDER OF NEW LENDER.
3.1 New Lender agrees that as of the date hereof, New Lender will have a Revolving Commitment in the amount set forth opposite its name on Revised Schedule 2.01. The parties acknowledge, agree and confirm that New Lender shall from and after the date hereof be deemed to be a party to the Loan Agreement and a Lender for all purposes under the Loan Agreement and the other Loan Documents, and shall have all the rights and obligations of a Lender under the Loan Agreement and the other Loan Documents as if New Lender had executed the Loan Agreement.
SECTION 4. RATIFICATION OF LOAN DOCUMENTS.
The Loan Documents are ratified and affirmed by Borrower and shall remain in full force and effect as modified herein.
SECTION 5. BORROWER REPRESENTATIONS AND WARRANTIES.
Borrower represents and warrants to Administrative Agent and the Lenders:
5.1 No Default or Event of Default has occurred and is continuing.
5.2 There has been no material adverse change in the financial condition of Borrower or any other person whose financial statement has been delivered to Administrative Agent in connection with the Loan from the most recent financial statement received by Administrative Agent.
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5.3 All representations and warranties made by Borrower and set forth in the Loan Documents are true and correct in all material respects on the date hereof, except to the extent such representations and warranties refer to an earlier date, in which case they shall be true and correct, in all material respects, as of such earlier date.
5.4 As of the date hereof, Borrower knows of no claims, counterclaims, defenses, or set-offs with respect to the Loan or the Loan Documents as modified herein.
5.5 The Loan Documents as modified herein are the legal, valid, and binding obligation of Borrower, enforceable against Borrower in accordance with their terms, subject to or limited by bankruptcy, insolvency, reorganization, arrangement, moratorium, or other similar laws relating to or affecting the rights of creditors generally and by equitable principles of general application.
5.6 Borrower is validly existing under the laws of the State of its formation or organization and has the requisite power and authority to execute and deliver this Agreement and to perform the Loan Documents as modified herein. The execution and delivery of this Agreement and the performance of the Loan Documents as modified herein have been duly authorized by all requisite action by or on behalf of Borrower. This Agreement has been duly executed and delivered on behalf of Borrower.
SECTION 6. CONDITIONS PRECEDENT.
The agreements of Administrative Agent and the Lenders and the modifications contained herein shall not be binding upon Administrative Agent or the Lenders until Administrative Agent and Lenders have executed and delivered this Agreement, and Administrative Agent (or New Lender, where applicable), has received, at Borrowers expense (except with respect to sections 6.4 and 6.8 below), all of the following, all of which shall be in form and content satisfactory to the Administrative Agent and shall be subject to approval by the Administrative Agent (whose signature hereto shall be conclusive approval thereof):
6.1 An original of this Agreement fully executed by Borrower;
6.2 An original of the attached Consent and Agreement of Guarantor fully executed by Guarantors;
6.3 An original of the attached Consent and Agreement of Subordinated Creditor fully executed by Advisor (defined in the Advisor Fee Subordination Agreement) and by Subordinated Creditor (defined in the Subordination Agreement);
6.4 An original of the Administrative Questionnaire fully executed by New Lender;
6.5 An opinion of counsel to the Loan Parties acceptable to Administrative Agent;
6.6 Such certificates of resolutions or other action, incumbency certificates and/or other certificates of Responsible Officers of each Loan Party as the Administrative Agent may require evidencing the identity, authority and capacity of each Responsible Officer thereof authorized to act as a Responsible Officer in connection with this Agreement and the other Loan Documents to which such Loan Party is a party;
6.7 Payment by Borrower of any fees due New Lender in accordance with any separate agreement between New Lender and Borrower;
6.8 Payment by New Lender to Administrative Agent for the benefit of Existing Lender fifty percent (50%) of the outstanding principal amount of the Committed Revolving Loans;
6.9 Payment by Borrower of all reasonable out-of-pocket external costs and expenses incurred by the Administrative Agent in connection with this Agreement (including, without limitation, outside attorneys costs, expenses, and fees).
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SECTION 7. INTEGRATION, ENTIRE AGREEMENT, CHANGE, DISCHARGE, TERMINATION, OR WAIVER.
The Loan Documents as modified herein contain the complete understanding and agreement of Borrower, Administrative Agent and the Lenders in respect of the Loan and supersede all prior representations, warranties, agreements, arrangements, understandings, and negotiations. No provision of the Loan Documents as modified herein may be changed, discharged, supplemented, terminated, or waived except as provided in the Loan Agreement. The terms of this Agreement shall control with respect to any inconsistencies, conflicts or ambiguities between or among the Agreement and the other Loan Documents.
SECTION 8. BINDING EFFECT.
The Loan Documents as modified herein shall be binding upon and shall inure to the benefit of Borrower, Administrative Agent and the Lenders and their permitted successors and assigns.
SECTION 9. CHOICE OF LAW.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 10. COUNTERPART EXECUTION.
This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same document. Signature pages may be detached from the counterparts and attached to a single copy of this Agreement to physically form one document.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
4
DATED as of the date first above stated.
BORROWER: | ||||
COLE OPERATING PARTNERSHIP IV, LP, a Delaware limited partnership | ||||
By: | Cole Credit Property Trust IV, Inc., a Maryland corporation, its general partner | |||
By: | /s/ D. Kirk McAllaster, Jr. | |||
Name: | D. Kirk McAllaster, Jr. | |||
Title: | Executive Vice President |
ADMINISTRATIVE AGENT: | ||
JPMORGAN CHASE BANK, N.A., a national banking association | ||
By: | /s/ Ryan M. Dempsey | |
Name: | Ryan M. Dempsey | |
Title: | Authorized Officer | |
EXISTING LENDER: | ||
JPMORGAN CHASE BANK, N.A., a national banking association | ||
By: | /s/ Ryan M. Dempsey | |
Name: | Ryan M. Dempsey | |
Title: | Authorized Officer | |
NEW LENDER: | ||
BANK OF AMERICA, N.A., a national banking association | ||
By: | /s/ James P. Johnson | |
Name: | James P. Johnson | |
Title: | Senior Vice President |
5
Exhibit 21.1
List of Subsidiaries*
Cole Operating Partnership IV, LP, a Delaware limited partnership
CRI REIT IV, LLC, a Delaware limited liability company
*Does | not include subsidiaries of Cole Operating Partnership IV, LP that hold investment assets. |
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in this Post-Effective Amendment No. 5 to Registration Statement No. 333-169533 on Form S-11 of our report dated March 28, 2013, relating to the consolidated financial statements and financial statement schedule of Cole Credit Property Trust IV, Inc. and subsidiaries appearing in the Annual Report on Form 10-K of Cole Credit Property Trust IV, Inc. for the year ended December 31, 2012, and to the reference to us under the heading Experts in the Prospectus, which is part of such Registration Statement.
/s/ DELOITTE & TOUCHE LLP
Phoenix, Arizona
April 10, 2013
Exhibit 23.4
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in this Post-Effective Amendment No. 5 to Registration Statement No. 333-169533 on Form S-11 of our report dated February 19, 2013 related to the Statement of Revenues and Certain Operating Expenses of MT Brooklyn NY for the year ended December 31, 2011 (which report expresses an unqualified opinion and includes an explanatory paragraph referring to the purpose and basis of presentation of the Statement) appearing in the Current Report on Form 8-K/A of Cole Credit Property Trust IV, Inc. filed with the U.S. Securities and Exchange Commission on February 20, 2013, and to the reference to us under the heading Experts in the Prospectus, which is part of such Registration Statement.
/s/ DELOITTE & TOUCHE LLP
Phoenix, Arizona
April 10, 2013
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