10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2012

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to __________

Commission file number: 333-169355

AMERICAN REALTY CAPITAL – RETAIL CENTERS OF AMERICA, INC.

(Exact name of registrant as specified in its charter) 

Maryland	27-3279039
(State or other  jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
405 Park Ave., 15th Floor New York, NY	10022
(Address of principal executive offices)	(Zip Code)

(212) 415-6500

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant submitted electronically and posted on its corporate Web Site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

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 definition of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o		Accelerated filer o
Non-accelerated filer x	(Do not check if a smaller reporting company)	Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   o Yes x No

The number of outstanding shares of the registrant’s common stock on October 31, 2012 was 623,129 shares.

AMERICAN REALTY CAPITAL — RETAIL CENTERS OF AMERICA, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	Page
PART I — FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets as of September 30, 2012 (Unaudited) and December 31, 2011	2
Consolidated Statements of Operations and Comprehensive Loss for the Three and Nine Months Ended September 30, 2012 and 2011 (Unaudited)	3
Consolidated Statement of Changes in Stockholders' Deficit for the Nine Months Ended September 30, 2012 (Unaudited)	4
Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2012 and 2011 (Unaudited)	5
Notes to Consolidated Financial Statements	6
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3. Quantitative and Qualitative Disclosure About Market Risk	34
Item 4. Controls and Procedures	34
PART II — OTHER INFORMATION
Item 1. Legal Proceedings	35
Item 1A. Risk Factors	35
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	35
Item 3. Defaults Upon Senior Securities	36
Item 4. Mine Safety Disclosures	36
Item 5. Other Information	36
Item 6. Exhibits	36
Signatures	37

1

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements.

AMERICAN REALTY CAPITAL — RETAIL CENTERS OF AMERICA, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except for share and per share data)

	September 30,			December 31,
	2012			2011
	(Unaudited)
ASSETS
Real estate investments, at cost:
Land	$	2,887		$	—
Buildings, fixtures and improvements	17,084			—
Acquired intangible lease assets	2,115			—
Total real estate investments, at cost	22,086			—
Less: accumulated depreciation and amortization	(653		)	—
Total real estate investments, net	21,433			—
Cash	1,023			—
Restricted cash	176			—
Prepaid expenses and other assets	276			36
Deferred costs, net	269			—
Total assets	$	23,177		$	36
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Mortgage note payable	$	16,200		$	—
Note payable	3,000			—
Below-market lease liabilities, net	494			—
Accounts payable and accrued expenses	6,186			3,755
Deferred rent and other liabilities	42			—
Distributions payable	25			—
Total liabilities	25,947			3,755
Preferred stock, $0.01 par value, 50,0000,000 authorized, none issued and outstanding	—			—
Common stock, $0.01 par value, 300,000,000 shares authorized, 476,750 and 33,056 shares issued and outstanding at September 30, 2012 and December 31, 2011, respectively	5			—
Additional paid-in capital	(1,185		)	(3,406		)
Accumulated deficit	(1,590		)	(313		)
Total stockholders’ deficit	(2,770		)	(3,719		)
Total liabilities and stockholders’ deficit	$	23,177		$	36

The accompanying notes are an integral part of these statements.

2

AMERICAN REALTY CAPITAL – RETAIL CENTERS OF AMERICA, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(In thousands, except share and per share data)

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Revenues:
Rental income	$	409		$	—		$	499		$	—
Operating expense reimbursements	109			—			131			—
Total revenue	518			—			630			—
Operating expenses:
Property operating	115			—			142			—
Operating fees to affiliate	—			—			—			—
Acquisition and transaction related	16			—			387			—
General and administrative	14			89			232			204
Depreciation and amortization	455			—			633			—
Total operating expenses	600			89			1,394			204
Operating loss	(82		)	(89		)	(764		)	(204		)
Interest expense	(349		)	—			(438		)	—
Net loss	$	(431	)	$	(89	)	$	(1,202	)	$	(204	)
Comprehensive loss	$	(431	)	$	(89	)	$	(1,202	)	$	(204	)
Basic and diluted weighted average shares outstanding	369,628			20,000			248,967			20,000
Basic and diluted net loss per share	$	(1.17	)	NM			$	(4.83	)	NM

______________________

NM - not meaningful

The accompanying notes are an integral part of these statements.

3

AMERICAN REALTY CAPITAL – RETAIL CENTERS OF AMERICA, INC.

CONSOLIDATED STATEMENT CHANGES IN STOCKHOLDERS' DEFICIT

For the Nine Months Ended September 30, 2012

(In thousands, except for share data)

(Unaudited)

	Common Stock
	Number of Shares	Par Value		Additional Paid-in Capital			Accumulated Deficit			Total Stockholders' Deficit
Balance, December 31, 2011	33,056	$	—	$	(3,406	)	$	(313	)	$	(3,719	)
Issuance of common stock	434,234	5		4,096			—			4,101
Common stock offering costs, commissions and dealer manager fees	—	—		(1,892		)	—			(1,892		)
Common stock issued through distribution reinvestment plan	460	—		4			—			4
Share-based compensation, net of forfeitures	9,000	—		—			—			—
Amortization of restricted stock	—	—		13			—			13
Distributions declared	—	—		—			(75		)	(75		)
Net loss	—	—		—			(1,202		)	(1,202		)
Balance, September 30, 2012	476,750	$	5	$	(1,185	)	$	(1,590	)	$	(2,770	)

The accompanying notes are an integral part of this statement.

4

AMERICAN REALTY CAPITAL – RETAIL CENTERS OF AMERICA, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Nine Months Ended September 30,
	2012			2011
Cash flows from operating activities:
Net loss	$	(1,202	)	$	(204	)
Adjustment to reconcile net loss to net cash used in operating activities:
Depreciation	375			—
Amortization of intangibles	258			—
Amortization of deferred financing costs	75			—
Accretion of below-market lease liabilities and amortization of above-market lease assets, net	10			—
Share based compensation	13			10
Changes in assets and liabilities:
Prepaid expenses and other assets	(240		)	(20		)
Accounts payable and accrued expenses	252			80
Deferred rent and other liabilities	42			—
Net cash used in operating activities	(417		)	(134		)
Cash flows from investing activities:
Investment in real estate and other assets	(5,198		)	—
Net cash used in investing activities	(5,198		)	—
Cash flows from financing activities:
Proceeds from note payable	3,000			—
Payments of deferred financing costs	(314		)	—
Proceeds from issuance of common stock	4,101			—
Payments of offering costs and fees related to stock issuances	(643		)	(1,005		)
Distributions paid	(46		)	—
Advances from affiliate, net	716			1,138
Restricted cash	(176		)	—
Net cash provided by financing activities	6,638			133
Net change in cash	1,023			(1		)
Cash, beginning of period	—			1
Cash, end of period	$	1,023		$	—

Supplemental Disclosures:
Cash paid for interest	$	273	$	—
Non-Cash Investing and Financing Activities:
Mortgage notes payable used to acquire investments in real estate	16,200		—
Common stock issued through distribution reinvestment plan	4		—
Accrued offering costs	3,331		1,556

The accompanying notes are an integral part of these statements.

5

AMERICAN REALTY CAPITAL – RETAIL CENTERS OF AMERICA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2012

(Unaudited)

Note 1 — Organization

American Realty Capital — Retail Centers of America, Inc. (the “Company”), incorporated on July 29, 2010, is a Maryland corporation that intends to qualify as a real estate investment trust (“REIT”) for U.S. federal income tax purposes for the taxable year ending December 31, 2012.  On March 17, 2011, the Company commenced its initial public offering (the “IPO”) on a “reasonable best efforts” basis of up to 150.0 million shares of common stock, $0.01 par value per share, at a price of $10.00 per share, subject to certain volume and other discounts, pursuant to a registration statement on Form S-11 (File No. 333-169355) (the “Registration Statement”) filed with the U.S. Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended. The Registration Statement also covers up to 25.0 million shares available pursuant to a distribution reinvestment plan (the “DRIP”) under which the Company's common stockholders may elect to have their distributions reinvested in additional shares of our common stock at a price initially equal to $9.50 per share, which is 95% of the offering price of the IPO.

On March 5, 2012, the Company raised proceeds sufficient to break escrow in connection with its IPO. At September 30, 2012, the Company had 0.5 million shares of common stock outstanding, including unvested restricted shares and shares issued pursuant to the DRIP, and had received total proceeds from these issuances of $4.4 million. As of September 30, 2012, the aggregate value of all issuances and subscriptions of common stock outstanding was $4.6 million based on a per share value of $10.00 (or $9.50 for shares issued under the DRIP).

The Company was formed to primarily acquire existing anchored, stabilized core retail properties, including power centers, lifestyle centers, large formatted centers with a grocery store component (with a purchase price in excess of $20.0 million) and other need-based shopping centers which are located in the United States and at least 80% leased at the time of acquisition. All such properties may be acquired and operated by the Company alone or jointly with another party. The Company may also originate or acquire first mortgage loans secured by real estate. The Company purchased its first property and commenced active operations in June 2012. As of September 30, 2012, the Company owned one property with a purchase price of $21.6 million, comprising 105,970 square feet which was 94.7% leased.

Substantially all of the Company’s business is conducted through American Realty Capital Retail Operating Partnership, L.P. (the “OP”), a Delaware limited partnership. American Realty Capital Retail Advisor, LLC (the “Advisor”) is the Company’s affiliated advisor. The Company is the sole general partner and holds substantially all the units of limited partner interests in the OP ("OP units"). The Advisor holds 202 units of limited partner interest in the OP, which represents a nominal percentage of the aggregate OP ownership. The holder of OP units has the right to convert OP units for the cash value of a corresponding number of shares of common stock or, at the option of the OP, a corresponding number of shares of common stock of the Company, as allowed by the limited partnership agreement of the OP. The remaining rights of the holders of the OP units are limited, however, and do not include the ability to replace the general partner or to approve the sale, purchase or refinancing of the OP’s assets.

The Company does not have any paid employees. The Company has retained the Advisor to manage its affairs on a day-to-day basis. The Advisor has entered into a service agreement with an independent third party, Lincoln Retail REIT Services, LLC, a Delaware limited liability company (the “Service Provider”), pursuant to which the Service Provider has agreed to provide, subject to the Advisor’s oversight, real estate-related services, including locating investments, negotiating financing, and providing property-level asset management services, property management services, leasing and construction oversight services, as needed, and disposition services. Realty Capital Securities, LLC (the “Dealer Manager”), an affiliate of the Company's sponsor, American Realty Capital IV, LLC (the "Sponsor"), serves as the dealer manager of the IPO. The Advisor and Dealer Manager are related parties and will receive compensation and fees for services related to the IPO and for the investment and management of the Company’s assets. The Advisor and Dealer Manager will receive compensation and fees during the offering, acquisition, operational and liquidation stages. The Advisor will pay to the Service Provider a substantial portion of the fees payable to the Advisor for the performance of these real estate-related services.

6

AMERICAN REALTY CAPITAL – RETAIL CENTERS OF AMERICA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2012

(Unaudited)

Note 2 — Summary of Significant Accounting Policies

The accompanying consolidated financial statements of the Company included herein were prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and with the instructions to this Quarterly Report on Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The information furnished includes all adjustments and accruals of a normal recurring nature, which, in the opinion of management, are necessary for a fair presentation of results for the interim periods. All intercompany accounts and transactions have been eliminated in consolidation. The results of operations for the three and nine months ended September 30, 2012 are not necessarily indicative of the results for the entire year or any subsequent interim period.

These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto as of, and for the year ended December 31, 2011, which are included in the Company's Annual Report on Form 10-K filed with the SEC on February 21, 2012.

There have been no significant changes to Company's significant accounting policies during the nine months ended September 30, 2012 other than the updates described below.

Development Stage Company

On March 5, 2012, the Company raised proceeds sufficient to break escrow in connection with its IPO. The Company received and accepted aggregate subscriptions in excess of the minimum $2.0 million and issued shares of common stock to its initial investors who were admitted as stockholders. The Company purchased its first property and commenced operations on June 8, 2012, and as of such date was no longer considered to be a development stage company.

Recently Issued Accounting Pronouncements

In May 2011, the Financial Accounting Standards Board ("FASB") issued guidance that expands the existing disclosure requirements for fair value measurements, primarily for Level 3 measurements, which are measurements based on unobservable inputs such as the Company's own data. This guidance is largely consistent with current fair value measurement principles with few exceptions that do not result in a change in general practice. The guidance was applied prospectively and was effective for interim and annual reporting periods beginning after December 15, 2011. The adoption of this guidance did not have a material impact on the Company's financial position or results of operations as the guidance relates only to disclosure requirements.

In June 2011, the FASB issued guidance requiring entities to present items of net income and other comprehensive income either in one continuous statement - referred to as the statement of comprehensive income - or in two separate, but consecutive, statements of net income and other comprehensive income. The new guidance does not change which components of comprehensive income are recognized in net income or other comprehensive income, or when an item of other comprehensive income must be reclassified to net income. In December 2011, the FASB deferred certain provisions of this guidance related to the presentation of certain reclassification adjustments out of accumulated other comprehensive income, by component in both the statement and the statement where the reclassification is presented. This guidance was applied prospectively and was effective for interim and annual periods beginning after December 15, 2011. The adoption of this guidance did not have a material impact on the Company's financial position or results of operations but changed the location of the presentation of other comprehensive income to more closely associate the disclosure with net income.

In September 2011, the FASB issued guidance that allows entities to perform a qualitative analysis as the first step in determining whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If it is determined that it is not more likely than not that the fair value of the reporting unit is less than its carrying amount, then a quantitative analysis for impairment is not required. The guidance was effective for interim and annual impairment tests for fiscal periods beginning after December 15, 2011.  The adoption of this guidance did not have a material impact on the Company's financial position or results of operations.

7

AMERICAN REALTY CAPITAL – RETAIL CENTERS OF AMERICA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2012

(Unaudited)

In December 2011, the FASB issued guidance regarding disclosures about offsetting assets and liabilities, which requires entities to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. The guidance is effective for fiscal years and interim periods beginning on or after January 1, 2013 with retrospective application for all comparative periods presented. The adoption of this guidance, which is related to disclosure only, is not expected to have a material impact on the Company's financial position or results of operations.

In July 2012, the FASB issued revised guidance intended to simplify how an entity tests indefinite-lived intangible assets for impairment. The amendments will allow an entity first to assess qualitative factors to determine whether it is necessary to perform a quantitative impairment test. An entity will no longer be required to calculate the fair value of an indefinite-lived intangible asset and perform the quantitative test unless the entity determines, based on a qualitative assessment, that it is more likely than not that its fair value is less than its carrying amount. The amendments are effective for annual and interim indefinite-lived intangible asset impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted. The Company does not expect the adoption to have a material impact on the Company’s financial position or results of operations.

Note 3 — Real Estate Investments

The following table presents the allocation of the assets acquired and liabilities assumed during the nine months ended September 30, 2012. There were no assets acquired or liabilities assumed during the nine months ended September 30, 2011.

	Nine Months Ended
(Dollar amounts in thousands)	September 30, 2012
Real estate investments, at cost:
Land	$	2,887
Buildings, fixtures and improvements	17,084
Total tangible assets	19,971
Acquired intangibles:
In-place leases	1,916
Above-market lease assets	199
Below market lease liabilities	(504		)
Total assets acquired, net	21,582
Mortgage notes payable used to acquire real estate investments	(16,200		)
Other liabilities assumed	(184		)
Cash paid for acquired real estate investments	$	5,198
Number of properties purchased	1

The Company acquires and operates retail properties. All such properties may be acquired and operated by the Company alone or jointly with another party. Buildings, fixtures and improvements include $17.1 million, comprised of $11.8 million, $1.0 million and $3.6 million, assigned to buildings, fixtures and land improvements, respectively, which is based upon a cost segregation analysis on such assets prepared by an independent third party specialist, as well as $0.7 million of tenant improvements.

8

AMERICAN REALTY CAPITAL – RETAIL CENTERS OF AMERICA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2012

(Unaudited)

The Company's portfolio of real estate properties is comprised of the following property as of September 30, 2012:

Portfolio	Acquisition Date	Number  of Properties	Square Feet	Occupancy		Remaining Lease Term (1)	Annualized Net Operating Income (2)		Base Purchase Price (3)		Capitalization Rate (4)		Annualized Rental Income (5) per Square Foot
							(In thousands)		(In thousands)
Liberty Crossing	Jun. 2012	1	105,970	94.7	%	4.2	$	1,544	$	21,582	7.2	%	$	15.73

_____________________

(1) Remaining lease term in years as of September 30, 2012, calculated on a weighted-average basis.

(2) Annualized net operating income for the three months ended September 30, 2012, or since acquisition date, for the property portfolio. Net operating income is rental income on a straight-line basis, which includes tenant concessions such as free rent, as applicable, plus operating expense reimbursement revenue less property operating expenses.

(3) Contract purchase price, excluding acquisition related costs.

(4) Annualized net operating income divided by base purchase price.

(5) Annualized rental income as of September 30, 2012 for the in-place leases in the property portfolio on a straight-line basis, which includes tenant concessions such as free rent, as applicable.

The following table presents pro forma information as if the acquisition during the nine months ended September 30, 2012 and September 30, 2011, had been consummated on January 1, 2011:

	Nine Months Ended September 30,
(In thousands)	2012			2011
Pro forma revenues	$	1,513		$	1,513
Pro forma net loss	$	(1,571	)	$	(1,885	)

The following table presents future minimum base rent cash payments due to the Company subsequent to September 30, 2012.  These amounts exclude contingent rent payments, as applicable, that may be collected from certain tenants based on provisions related to sales thresholds and increases in annual rent based on exceeding certain economic indexes among other items.

(In thousands)	Future Minimum Base Rent Payments
October 1, 2012 — December 31, 2012	$	406
2013	1,352
2014	1,106
2015	1,101
2016	1,080
Thereafter	1,952
	$	6,997

9

AMERICAN REALTY CAPITAL – RETAIL CENTERS OF AMERICA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2012

(Unaudited)

The following table lists the tenants whose annualized rental income on a straight-line basis represented greater than 10% of total annualized rental income for all portfolio properties on a straight-line basis as of September 30, 2012: 

Tenant	September 30, 2012
Ross Dress for Less, Inc.	18.1%
PetSmart, Inc.	15.6%

The termination, delinquency or non-renewal of leases by one or more of the above tenants may have a material adverse effect on revenues. No other tenant represents more than 10% of annualized rental income as of September 30, 2012.

The following table lists the states where the Company has concentrations of properties where annualized rental income on a straight-line basis represented greater than 10% of consolidated annualized rental income as of September 30, 2012: 

State	September 30, 2012
Texas	100.0%

The Company owned properties in no other state that in total represented more than 10% of the annualized rental income on a straight-line basis as of September 30, 2012.

Note 4 — Note Payable

In June 2012, the Company entered into an unsecured $3.0 million note payable with an unaffiliated third party. The note payable bears interest at a fixed rate of 8.0% per annum and matures in June 2013. The note payable contains twoone-year extension options and requires monthly interest payments only with the principal balance due at maturity. The note payable may be prepaid from time to time and at any time, in whole or in part. The Company is also required to pay an exit fee equal to 1% of the original loan amount upon final payment of the note payable. As of September 30, 2012, there was $3.0 million outstanding on the note payable. The Company did not have any note payable outstanding at December 31, 2011.

The Company's sources of financing generally contain financial covenants, including restrictions on corporate guarantees, the maintenance of certain financial ratios (such as specified debt to equity and debt service coverage ratios) as well as the maintenance of minimum net worth.

Note 5 — Mortgage Note Payable

The Company's mortgage note payable as of September 30, 2012 consists of the following. The Company did not have any mortgage notes payable outstanding as of December 31, 2011.

	Encumbered	Outstanding Loan Amount as of		Effective
Portfolio	Properties	September 30, 2012		Interest Rate		Interest Rate	Maturity
		(In thousands)
Liberty Crossing	1	$	16,200	5.58	%	Variable	Dec. 2013

The mortgage note payable bears interest at (i) the greater of (A) 0.5%, or (B) one-month LIBOR with respect to Eurodollar rate loans, plus (ii) a margin of 5.0%. The mortgage note payable requires monthly interest-only payments through June 2013. Commencing July 2013, principal and interest will be due monthly through maturity in December 2013.

10

AMERICAN REALTY CAPITAL – RETAIL CENTERS OF AMERICA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2012

(Unaudited)

The following table summarizes the scheduled aggregate principal payments for the Company's mortgage note payable subsequent to September 30, 2012.

(In thousands)	Future Principal Payments
October 1, 2012 — December 31, 2012	$	—
2013	16,200
2014	—
2015	—
2016	—
Thereafter	—
	$	16,200

The Company's sources of recourse financing generally contain financial covenants, including restrictions on corporate guarantees, the maintenance of certain financial ratios (such as specified debt to equity and debt service coverage ratios) as well as the maintenance of minimum net worth. As of September 30, 2012, the Company was in compliance with all the financial covenants under the mortgage note payable agreement.

Note 6 — Fair Value of Financial Instruments

The Company determines fair value based on quoted prices when available or through the use of alternative approaches, such as discounting the expected cash flows using market interest rates commensurate with the credit quality and duration of the investment. This alternative approach also reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. The guidance defines three levels of inputs that may be used to measure fair value:

Level 1 — Quoted prices in active markets for identical assets and liabilities that the reporting entity has the ability to access at the measurement date.

Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset and liability or can be corroborated with observable market data for substantially the entire contractual term of the asset or liability.

Level 3 — Unobservable inputs that reflect the entity’s own assumptions about the assumptions that market participants would use in the pricing of the asset or liability and are consequently not based on market activity, but rather through particular valuation techniques.

The determination of where an asset or liability falls in the hierarchy requires significant judgment and considers factors specific to the asset or liability. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company evaluates its hierarchy disclosures each quarter and depending on various factors, it is possible that an asset or liability may be classified differently from quarter to quarter. However, the Company expects that changes in classifications between levels will be rare.

The Company is required to disclose the fair value of financial instruments for which it is practicable to estimate that value. The fair value of short-term financial instruments such as cash and cash equivalents, restricted cash, other receivables, accounts payable and distributions payable approximates their carrying value on the consolidated balance sheets due to their short-term nature.

11

AMERICAN REALTY CAPITAL – RETAIL CENTERS OF AMERICA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2012

(Unaudited)

The fair values of the Company’s remaining financial instruments that are not reported at fair value on the consolidated balance sheets are reported below. The Company did not have any mortgage notes payable or notes payable outstanding as of December 31, 2011.

		Carrying Amount at		Fair Value at
(In thousands)	Level	September 30, 2012		September 30, 2012
Mortgage note payable	3	$	16,200	$	16,200
Note payable	3	$	3,000	$	3,000

The fair value of the note payable is obtained by calculating the present value at current market rates. The interest rate of the mortgage note payable is determined by variable market rates and the Company's leverage ratio, and has terms commensurate with market; as such, the outstanding balance on the mortgage note payable approximates fair value.

Note 7 — Common Stock

As of September 30, 2012, and December 31, 2011, the Company had 0.5 million and 33,056 shares of common stock outstanding, including unvested restricted shares and shares issued pursuant to the DRIP, and had received total gross proceeds of $4.4 million and $0.2 million, respectively.

On September 19, 2011, the Company's board of directors authorized, and the Company declared, a distribution, which is calculated based on stockholders of record each day during the applicable period at a rate of $0.0017534247 per day. The distributions began to accrue on June 8, 2012, the date of the Company's initial property acquisition. The distributions are payable by the 5th day following each month end to stockholders of record at the close of business each day during the prior month. The board of directors may reduce the amount of distributions paid or suspend distribution payments at any time and therefore distribution payments are not assured.

Note 8 — Commitments and Contingencies

Litigation

In the ordinary course of business, the Company may become subject to litigation or claims. There are no material legal proceedings pending or known to be contemplated against the Company.

Environmental Matters

In connection with the ownership and operation of real estate, the Company may potentially be liable for costs and damages related to environmental matters. The Company has not been notified by any governmental authority of any non-compliance, liability or other claim, and is not aware of any other environmental condition that it believes will have a material adverse effect on the results of operations.

Note 9 —Related Party Transactions and Arrangements

The Sponsor and American Realty Capital Retail Special Limited Partnership, LLC, an entity wholly owned by the Sponsor, owned 242,222 and 20,000 shares of the Company’s outstanding common stock as of September 30, 2012 and December 31, 2011, respectively. The Advisor and its affiliates may incur and pay costs and fees on behalf of the Company. All offering costs incurred by the Company or its affiliated entities on behalf of the Company are reflected in the accompanying consolidated balance sheets in additional paid-in capital. As of September 30, 2012 and December 31, 2011, the Company had $2.4 million and $1.6 million, respectively, payable to affiliated entities primarily related to funding the payment of third party professional fees and offering costs included in accounts payable and accrued expenses on the accompanying consolidated balance sheets.

12

AMERICAN REALTY CAPITAL – RETAIL CENTERS OF AMERICA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2012

(Unaudited)

Fees Paid in Connection with the IPO

The Dealer Manager receives fees and compensation in connection with the sale of the Company’s common stock in the IPO. The Dealer Manager receives a selling commission of up to 7.0% of gross offering proceeds before reallowance of commissions earned by participating broker-dealers. In addition, the Dealer Manager receives up to 3.0% of the gross proceeds from the sale of common stock, before reallowance to participating broker-dealers, as a dealer-manager fee. The Dealer Manager may reallow its dealer-manager fee to such participating broker-dealers, based on such factors as the volume of shares sold by respective participating broker-dealers and marketing support incurred as compared to those of other participating broker-dealers. The Company incurred total commissions and dealer manager fees from the Dealer Manager of $0.1 million and $0.2 million for the three and nine months ended September 30, 2012, respectively. There were no such fees incurred during the three and nine months ended September 30, 2011.

The Advisor and its affiliates receive compensation and reimbursement for services relating to the IPO. All offering costs incurred by the Company or its affiliated entities on behalf of the Company are charged to additional paid-in capital on the accompanying consolidated balance sheets. The following table details offering costs reimbursements from the Advisor and Dealer Manager during the three and nine months ended September 30, 2012 and 2011:

	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2012		2011		2012		2011
Fees and expense reimbursements incurred from the Advisor and Dealer Manager	$	398	$	406	$	1,210	$	1,151

The Company is responsible for offering and related costs from the IPO, excluding commissions and dealer manager fees, up to a maximum of 1.5% of gross proceeds received from the IPO, measured at the end of the IPO. Offering costs in excess of the 1.5% cap as of the end of the IPO are the Advisor's responsibility. As of September 30, 2012, offering and related costs exceeded 1.5% of gross proceeds received from the IPO by $5.3 million. The Advisor elected to cap cumulative offering costs incurred by the Company, net of unpaid amounts, to 15% of gross common stock proceeds during the IPO offering period. As of September 30, 2012, cumulative offering costs were $5.6 million. Cumulative offering costs, net of unpaid amounts, were less than the 15% threshold as of September 30, 2012.

The Company had accrued expenses payable to the Advisor and Dealer Manager of $3.1 million and $1.9 million as of September 30, 2012, and December 31, 2011, respectively, for services related to the IPO and offering and other cost reimbursements paid on behalf of the Company.

Fees Paid in Connection With the Operations of the Company

The Advisor receives an acquisition fee of 1.0% of the contract purchase price of each acquired property and is reimbursed for acquisition costs incurred in the process of acquiring properties, which is expected to be approximately 0.5% of the contract purchase price. In no event will the total of all acquisition and acquisition expenses (including any finance coordination fee) payable with respect to a particular investment exceed 4.5% of the contract purchase price.  Once the proceeds from the IPO have been fully invested, the aggregate amount of acquisition fees and financing coordination fees (as described below) shall not exceed 1.5% of the contract purchase price and the amount advanced for a loan or other investment, as applicable, for all the assets acquired.

If the Advisor provides services in connection with the origination or refinancing of any debt that the Company obtains and uses to acquire properties or to make other permitted investments, or that is assumed, directly or indirectly, in connection with the acquisition of properties, the Company will pay the Advisor a financing coordination fee equal to 1.0% of the amount available and/or outstanding under such financing, subject to certain limitations.

13

AMERICAN REALTY CAPITAL – RETAIL CENTERS OF AMERICA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2012

(Unaudited)

The Company pays the Advisor an annual fee of up to 0.75% of average invested assets to provide asset management services.  Average invested assets is defined as the average of the aggregate book value of assets invested, directly or indirectly, in properties, mortgage loans and other debt financing investments and other real estate-related investments secured by real estate before reserves for depreciation or bad debts or other similar non-cash reserves. However, the asset management fee shall be reduced by any amounts payable to the Advisor as an oversight fee, such that the aggregate of the asset management fee and the oversight fee does not exceed 0.75% per annum of average invested assets. Such asset management fee shall be payable, at the discretion of the Company’s board, in cash, common stock or restricted stock grants, or any combination thereof.  In addition, on a prospective basis, the Company’s board of directors, subject to the Advisor’s approval, may elect to issue performance based restricted shares in lieu of cash for any then unpaid amount of the asset management fee, in an amount not to exceed the limit for the asset management fee set forth in the advisory agreement. The asset management fee will be reduced to the extent that the Company’s funds from operations, as adjusted, during the six months ending on the last calendar quarter immediately preceding the date the asset management fee is payable is less than the distributions declared with respect to such six month period.

In connection with property management and leasing services, unless the Company contracts with a third party, the Company will pay to an affiliate of the Advisor a property management fee of 2% of gross revenues from the Company’s stand-alone single-tenant net leased properties and 4% of gross revenues from all other types of properties, respectively.  The Company will also reimburse the affiliate for property level expenses.  If the Company contracts directly with third parties for such services, the Company will pay them customary market fees and will pay the Advisor an oversight fee of up to 1.0% of the gross revenues of the property managed.

In connection with any construction, renovation or tenant finish-out on any property, the Company will pay the Advisor 6.0% of the hard costs of the construction, renovation and/or tenant finish-out, as applicable. No such fees were incurred during the three and nine months ended September 30, 2012 or 2011.

The following table details amounts incurred and amounts contractually due and forgiven in connection with the operations related services described above for the three and nine months ended September 30, 2012. No such fees were incurred or forgiven during the three and nine months ended September 30, 2011.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2012				2012
(In thousands)	Incurred		Forgiven (1)		Incurred		Forgiven (1)
One-time fees:
Acquisition fees and related cost reimbursements	$	—	$	—	$	324	$	—
Financing coordination fees	—		—		162		—
Other expense reimbursements	—		—		—		—
Ongoing fees:
Asset management fees	—		—		—		8
Property management and leasing fees	—		5		—		6
Total related party operation fees and reimbursements	$	—	$	5	$	486	$	14

_________________________________

(1) These fees have been waived. The Company's board of directors may elect, subject to the Advisor's approval, on a prospective basis, to pay asset management fees in the form of performance-based restricted shares of common stock.

14

AMERICAN REALTY CAPITAL – RETAIL CENTERS OF AMERICA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2012

(Unaudited)

The Company will reimburse the Advisor’s costs of providing services related to the Company, subject to the limitation that it will not reimburse the Advisor for any amount by which the Company's operating expenses (including the asset management fee) at the end of the four preceding fiscal quarters exceeds the greater of (a) 2% of average invested assets, and (b) 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.  Additionally, the Company will not reimburse the Advisor for personnel costs in connection with services for which the Advisor receives acquisition fees or real estate commissions.  No reimbursements were incurred from the Advisor for providing services during the three and nine months ended September 30, 2012 or 2011.

In order to improve operating cash flows and the ability to pay distributions from operating cash flows, the Advisor may waive certain fees including asset management and property management fees. Because the Advisor may waive certain fees, cash flow from operations that would have been paid to the Advisor may be available to pay distributions to stockholders.  The fees that may be forgiven are not deferrals and accordingly, will not be paid to the Advisor. In certain instances, to improve the Company’s working capital, the Advisor may elect to absorb a portion of the Company’s general and administrative costs or property operating expenses. The Advisor absorbed $0.1 million of expenses during the three and nine months ended September 30, 2012, which were recorded as offsets to property operating and general and administrative expense on the consolidated statement of operations. There were no expenses absorbed during the three and nine months ended September 30, 2011.

As the Company acquires properties and its real estate portfolio matures, the Company expects cash flows from operations (reported in accordance with GAAP) to cover a significant portion of distributions and over time to cover the entire distribution. As the cash flows from operations become more significant, the Advisor may discontinue its practice of forgiving fees and may charge the full fee owed to it in accordance with the Company’s agreements with the Advisor.

Fees Paid in Connection with the Liquidation or Listing of the Company’s Real Estate Assets

 The Company will pay a brokerage commission on the sale of property, not to exceed the lesser of 2% of the contract sale price of the property and one-half of the total brokerage commission paid if a third party broker is also involved; provided, however, that in no event may the real estate commissions paid to the Advisor, its affiliates and unaffiliated third parties exceed the lesser of 6% of the contract sales price and a reasonable, customary and competitive real estate commission, in each case, payable to the Advisor if the Advisor or its affiliates, as determined by a majority of the independent directors, provided a substantial amount of services in connection with the sale. No such fees were incurred during the three and nine months ended September 30, 2012 or 2011.

If the Company is not simultaneously listed on an exchange, the Company will pay a subordinated participation in the net sales proceeds of the sale of real estate assets of 15% of remaining net sale proceeds after return of capital contributions to investors plus payment to investors of a 7% cumulative, pre-tax non-compounded return on the capital contributed by investors.  The Company cannot assure that it will provide this 7% return but the Advisor will not be entitled to the subordinated participation in net sale proceeds unless the Company’s investors have received a 7% cumulative non-compounded return on their capital contributions. No such amounts were incurred during the three and nine months ended September 30, 2012 or 2011.

The Company will pay a subordinated incentive listing distribution of 15%, payable in the form of a non-interest bearing promissory note, of the amount by which the adjusted market value of real estate assets plus distributions exceeds the aggregate capital contributed by investors plus an amount equal to a 7% cumulative, pre-tax non-compounded annual return to investors.  The Company cannot assure that it will provide this 7% return but the Advisor will not be entitled to the subordinated incentive listing distribution unless investors have received a 7% cumulative, pre-tax non-compounded return on their capital contributions. No such amounts were incurred during the three and nine months ended September 30, 2012 or 2011.

  Neither the Advisor nor any of its affiliates can earn both the subordination participation in the net proceeds and the subordinated listing distribution.

Upon termination or non-renewal of the advisory agreement, the Advisor will receive distributions from the OP payable in the form of a non-interest bearing promissory note. In addition, the Advisor may elect to defer its right to receive a subordinated distribution upon termination until either a listing on a national securities exchange or other liquidity event occurs.

15

AMERICAN REALTY CAPITAL – RETAIL CENTERS OF AMERICA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2012

(Unaudited)

Note 10 — Economic Dependency

Under various agreements, the Company has engaged or will engage the Advisor and its affiliates to provide certain services that are essential to the Company, including asset management services, supervision of the management and leasing of properties owned by the Company, asset acquisition and disposition decisions, the sale of shares of the Company’s common stock available for issue, as well as other administrative responsibilities for the Company including accounting services and investor relations.

As a result of these relationships, the Company is dependent upon the Advisor and its affiliates. In the event that these companies are unable to provide the Company with the respective services, the Company will be required to find alternative providers of these services.

Note 11 — Share-Based Compensation

Stock Option Plan

 The Company has a stock option plan (the “Plan”) which authorizes the grant of nonqualified stock options to the Company’s independent directors, officers, advisors, consultants and other personnel, subject to the absolute discretion of the board of directors and the applicable limitations of the Plan. The exercise price for all stock options granted under the Plan will be fixed at $10.00 per share until the termination of the IPO, and thereafter the exercise price for stock options granted to the independent directors will be equal to the fair market value of a share on the last business day preceding the annual meeting of stockholders. A total of 0.5 million shares have been authorized and reserved for issuance under the Plan. As of September 30, 2012 and December 31, 2011, no stock options were issued under the Plan.

Restricted Share Plan

The Company has an employee and director incentive restricted share plan (the “RSP”), which provides for the automatic grant of 3,000 restricted shares of common stock to each of the independent directors, without any further action by the Company’s board of directors or the stockholders, on the date of initial election to the board of directors and on the date of each annual stockholder’s meeting. Restricted stock issued to independent directors will vest over a five-year period following the first anniversary of the date of grant in increments of 20% per annum. The RSP provides the Company with the ability to grant awards of restricted shares to the Company’s directors, officers and employees (if the Company ever has employees), employees of the Advisor and its affiliates, employees of entities that provide services to the Company, directors of the Advisor or of entities that provide services to the Company, certain consultants to the Company and the Advisor and its affiliates or to entities that provide services to the Company. The total number of shares of common stock granted under the RSP shall not exceed 5.0% of the Company’s authorized shares of common stock pursuant to the IPO and in any event will not exceed 7.5 million shares (as such number may be adjusted for stock splits, stock dividends, combinations and similar events).

Restricted share awards entitle the recipient to receive shares of common stock from the Company under terms that provide for vesting over a specified period of time or upon attainment of pre-established performance objectives. Such awards would typically be forfeited with respect to the unvested shares upon the termination of the recipient’s employment or other relationship with the Company. Restricted shares may not, in general, be sold or otherwise transferred until restrictions are removed and the shares have vested. Holders of restricted shares may receive cash distributions prior to the time that the restrictions on the restricted shares have lapsed. Any distributions payable in shares of common stock shall be subject to the same restrictions as the underlying restricted shares.  The following table reflects restricted share award activity for the nine months ended September 30, 2012:

	Number of Shares of Common Stock		Weighted-Average Issue Price
Unvested, December 31, 2011	9,000		$	10.00
Granted	12,000		9.25
Vested	(1,200	)	10.00
Forfeitures	(3,000	)	10.00
Unvested, September 30, 2012	16,800		$	9.46

16

AMERICAN REALTY CAPITAL – RETAIL CENTERS OF AMERICA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2012

(Unaudited)

Adjusted for the timing of board member resignations, compensation expense related to restricted stock was approximately $9,000 and $13,000 during the three and nine months ended September 30, 2012, respectively. Compensation expense related to restricted stock was approximately $5,000 and $10,000 for the three and nine months ended September 30, 2011, respectively.

Note 12 — Net Loss Per Share

 The following is a summary of the basic and diluted net loss per share computation for the three and nine months ended September 30, 2012 and 2011:

	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands)	2012			2011			2012			2011
Net loss	$	(431	)	$	(89	)	$	(1,202	)	$	(204	)
Weighted average shares of common stock outstanding	369,628			20,000			248,967			20,000
Net loss per share, basic and diluted	$	(1.17	)	NM			$	(4.83	)	NM

________________

NM - not meaningful

As of September 30, 2012 and 2011, the Company had 16,800 and 9,000 shares of unvested restricted stock outstanding, respectively, which were excluded from the calculation of diluted net loss per share as the effect would have been antidilutive.

Note 13 — Subsequent Events

The Company has evaluated subsequent events through the filing of this Quarterly Report on Form 10-Q, and determined that there have not been any events that have occurred that would require adjustments to disclosures in the consolidated financial statements except for the following transactions:

Sales of Common Stock

 As of October 31, 2012, the Company had 623,129 shares of common stock outstanding, including unvested restricted shares and shares issued under the DRIP. As of October 31, 2012, the aggregate value of all share issuances was $6.1 million based on a per share value of $10.00 (or $9.50 for shares issued under the DRIP).

Total capital, including shares issued under the DRIP, net of common stock repurchases, raised to date is as follows:

Source of Capital(in thousands)	Inception to September 30, 2012		October 1 to October 31, 2012		Total
Shares of common stock	$	4,350	$	1,490	$	5,840

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis should be read in conjunction with the accompanying financial statements of American Realty Capital — Retail Centers of America, Inc. and the notes thereto. As used herein, the terms the "Company," "we," "our" and "us" refer to American Realty Capital — Retail Centers of America, Inc, a Maryland corporation, and, as required by context, to American Realty Capital Retail Operating Partnership, L.P., a Delaware limited partnership, which we refer to as the "OP," and to their subsidiaries. American Realty Capital — Retail Centers of America, Inc. is externally managed by American Realty Capital Retail Advisor, LLC (our “Advisor”), a Delaware limited liability company.

Forward-Looking Statements

Certain statements included in this Quarterly Report on Form 10-Q are forward-looking statements. Those statements include statements regarding the intent, belief or current expectations of the Company and members of our management team, as well as the assumptions on which such statements are based, and generally are identified by the use of words such as “may,” “will,” “seeks,” “anticipates,” “believes,” “estimates,” “expects,” “plans,” “intends,” “should” or similar expressions. Actual results may differ materially from those contemplated by such forward-looking statements. Further, forward-looking statements speak only as of the date they are made, and we undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time, unless required by law.

The following are some of the risks and uncertainties, although not all risks and uncertainties, that could cause our actual results to differ materially from those presented in our forward-looking statements:

• We and our Advisor have a limited operating history and our Advisor has limited experience operating a public company. This inexperience makes our future performance difficult to predict.

• All of our executive officers are also officers, managers and/or holders of a direct or indirect controlling interest in our Advisor, our dealer manager, Realty Capital Securities, LLC (the “Dealer Manager”), and other American Realty Capital affiliated entities. As a result, our executive officers, our Advisor and its affiliates face conflicts of interest, including significant conflicts created by our Advisor’s compensation arrangements with us and other investors advised by American Realty Capital affiliates and conflicts in allocating time among these investors and us. These conflicts could result in unanticipated actions.

• Lincoln Retail REIT Services, LLC, a Delaware limited liability company (the “Service Provider”), and its affiliates may have conflicts of interests in determining which investment opportunities to recommend to our Advisor for presentation to us and to other programs for which they may provide these services.

• The Service Provider and its affiliates will have to allocate their time between providing services to our Advisor and other real estate programs and other activities in which they are presently involved or may be involved in the future.

• Because investment opportunities that are suitable for us may also be suitable for other American Realty Capital- advised programs or investors, our Advisor and its affiliates face conflicts of interest relating to the purchase of properties and other investments and such conflicts may not be resolved in our favor, meaning that we could invest in less attractive assets, which could reduce the investment return to our stockholders.

• No public market currently exists, or may ever exist, for shares of our common stock and our shares are, and may continue to be, illiquid.

• If we and our Advisor are unable to find suitable investments, then we may not be able to achieve our investment objectives or pay distributions.

• Our initial public offering of common stock (the “IPO”), which commenced on March 17, 2011, is a blind pool offering and you may not have the opportunity to evaluate our investments before you make your purchase of our common stock, thus making your investment more speculative.

• If we raise substantially less than the maximum offering in our IPO, we may not be able to invest in a diversified portfolio of real estate assets and the value of an investment in us may vary more widely with the performance of specific assets.

• We may be unable to pay or maintain cash distributions or increase distributions over time.

• We are obligated to pay substantial fees to our Advisor and its affiliates.

• We will depend on tenants for our revenue and, accordingly, our revenue is dependent upon the success and economic viability of our tenants.

• Increases in interest rates could increase the amount of our debt payments and limit our ability to pay distributions to our stockholders.

18

• We may not generate cash flows sufficient to pay our distributions to stockholders, as such we may be forced to borrow at higher rates or depend on our Advisor to waive reimbursement of certain expenses and fees to fund our operations.

• We are subject to risks associated with the significant dislocations and liquidity disruptions currently occurring in the credit markets of the United States of America.

• We may fail to qualify, or continue to qualify, to be treated as a real estate investment trust (“REIT”) for U.S. federal income tax purposes.

• We may be deemed to be an investment company under the Investment Company Act of 1940, as amended, and thus subject to regulation under the Investment Company Act of 1940, as amended.

• We currently only own one property.

Overview

We are a Maryland corporation incorporated on July 29, 2010, that intends to qualify as a REIT for the taxable year ending December 31, 2012.  On March 17, 2011, we commenced our IPO on a “reasonable best efforts” basis of up to 150.0 million shares of common stock, $0.01 par value per share, at a price of $10.00 per share, subject to certain volume and other discounts, pursuant to a registration statement on Form S-11 (File No. 333-169355) (the “Registration Statement”) filed with the U.S. Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended. The Registration Statement also covers up to 25.0 million shares available pursuant to a distribution reinvestment plan (the “DRIP”) under which our common stockholders may elect to have their distributions reinvested in additional shares of our common stock at a price initially equal to $9.50 per share, which is 95% of the offering price of the IPO.

On March 5, 2012, we raised proceeds sufficient to break escrow in connection with our IPO. At September 30, 2012, we had 0.5 million shares of common stock outstanding, including unvested restricted shares and shares issued pursuant to the DRIP, and had received total proceeds from these issuances of $4.4 million. As of September 30, 2012, the aggregate value of issuances and subscriptions of common stock outstanding was $4.6 million based on a per share value of $10.00 (or $9.50 for shares issued under the DRIP).

We were formed to primarily acquire existing anchored, stabilized core retail properties, including power centers, lifestyle centers, large formatted centers with a grocery store component (with a purchase price in excess of $20.0 million) and other need-based shopping centers which are located in the United States and at least 80% leased at the time of acquisition. All such properties may be acquired and operated by us alone or jointly with another party. We may also originate or acquire first mortgage loans secured by real estate. The Company purchased its first property and commenced active operations in June 2012. As of September 30, 2012, the Company owned one property with a purchase price of $21.6 million, comprising 105,970 square feet, which was 94.7% leased.

Substantially all of our business is conducted through the OP. The Advisor is our affiliated advisor. We are the sole general partner and hold substantially all of the units of limited partner interests in the OP ("OP units"). The Advisor holds 202 units of limited partner interest in the OP, which represents a nominal percentage of the aggregate OP ownership. The holder of OP units has the right to convert OP units for the cash value of a corresponding number of shares of common stock or, at the option of the OP, a corresponding number of shares of our common stock, as allowed by the limited partnership agreement of the OP. The remaining rights of the holders of the OP units are limited, however, and do not include the ability to replace the general partner or to approve the sale, purchase or refinancing of the OP’s assets.

We do not have any paid employees. We have retained the Advisor to manage our affairs on a day-to-day basis. The Advisor has entered into a service agreement with an independent third party, the Service Provider, pursuant to which the Service Provider has agreed to provide, subject to the Advisor’s oversight, real estate-related services, including locating investments, negotiating financing, and providing property-level asset management services, property management services, leasing and construction oversight services, as needed, and disposition services. The Dealer Manager, an affiliate of our sponsor, American Realty Capital IV, LLC (the "Sponsor"), serves as the dealer manager of our IPO. The Advisor and Dealer Manager are related parties and will receive compensation and fees for services related to the IPO and for the investment and management of our assets. The Advisor and Dealer Manager will receive fees during the offering, acquisition, operational and liquidation stages. The Advisor will pay to the Service Provider a substantial portion of the fees payable to the Advisor for the performance of these real estate-related services.

19

Significant Accounting Estimates and Critical Accounting Policies

 Set forth below is a summary of the significant accounting estimates and critical accounting policies that management believes are important to the preparation of our financial statements. Certain of our accounting estimates are particularly important for an understanding of our financial position and results of operations and require the application of significant judgment by our management. As a result, these estimates are subject to a degree of uncertainty. These significant accounting estimates and critical accounting policies include:

Offering and Related Costs

Offering and related costs include all expenses incurred in connection with our IPO. Offering costs (other than selling commissions and the dealer manager fees) include costs that may be paid by the Advisor, the Dealer Manager or their affiliates on our behalf. These costs include but are not limited to (i) legal, accounting, printing, mailing, and filing fees; (ii) escrow service related fees; (iii) reimbursement of the Dealer Manager for amounts it may pay to reimburse the bona fide diligence expenses of broker-dealers; and (iv) reimbursement to the Advisor for a portion of the costs of its employees and other costs in connection with preparing supplemental sales materials and related offering activities. We are obligated to reimburse the Advisor or its affiliates, as applicable, for organization and offering costs paid by them on our behalf, provided that the Advisor is obligated to reimburse us to the extent organization and offering costs (excluding selling commissions and the dealer manager fee) incurred by us in our IPO exceed 1.5% of gross offering proceeds. As a result, these costs are only our liability to the extent aggregate selling commissions, the dealer manager fee and other organization and offering costs do not exceed 11.5% of the gross proceeds determined at the end of the offering.

Revenue Recognition

 Certain properties may have leases where minimum rent payments increase during the term of the lease. We record rental revenue for the full term of each lease on a straight-line basis. When we acquire a property, the term of existing leases is considered to commence as of the acquisition date for the purposes of this calculation. Cost recoveries from tenants are included in tenant reimbursement income in the period the related costs are incurred, as applicable.

Our revenues, which are derived primarily from rental income, include rents that each tenant pays in accordance with the terms of each lease reported on a straight-line basis over the initial term of the lease. Since many leases provide for rental increases at specified intervals, straight-line basis accounting requires us to record a receivable, and include in revenues, unbilled rent receivables that we only receive if the tenant makes all rent payments required through the expiration of the initial term of the lease. We defer the revenue related to lease payments received from tenants in advance of their due dates.

We review receivables related to rent and unbilled rent receivables and determine collectability by taking into consideration the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in the area in which the property is located, as applicable. In the event that the collectability of a receivable is in doubt, we record an increase in the allowance for uncollectible accounts or record a direct write-off of the receivable in the statement of operations.

Real Estate Investments

We record acquired real estate at cost and make assessments as to the useful lives of depreciable assets. We consider the period of future benefit of the asset to determine the appropriate useful lives. Depreciation is computed using the straight-line method over the estimated useful lives of forty years for buildings, fifteen years for land improvements, five years for building fixtures and improvements and the lesser of the useful life or remaining lease term for acquired intangible lease assets and tenant improvements.

Impairment of Long Lived Assets

Operations related to properties that have been sold or properties that are intended to be sold are presented as discontinued operations in the statement of operations for all periods presented, and properties intended to be sold are designated as “held for sale” on the balance sheet.

20

When circumstances indicate the carrying value of a property may not be recoverable, we review the asset for impairment. This review is based on an estimate of the future undiscounted cash flows, excluding interest charges, expected to result from the property’s use and eventual disposition. These estimates consider factors such as expected future operating income, market and other applicable trends and residual value, as well as the effects of leasing demand, competition and other factors. If impairment exists, due to the inability to recover the carrying value of a property, an impairment loss is recorded to the extent that the carrying value exceeds the estimated fair value of the property or properties to be held and used. For properties held for sale, the impairment loss is the adjustment to fair value less estimated cost to dispose of the asset. These assessments have a direct impact on net income because recording an impairment loss results in an immediate negative adjustment to net income.

Allocation of Purchase Price of Acquired Assets

 We allocate the purchase price of acquired properties to tangible and identifiable intangible assets acquired based on their respective fair values. Tangible assets include land, buildings, fixtures and tenant and land improvements on an as-if vacant basis. We utilize various estimates, processes and information to determine the as-if vacant property value. Estimates of value are made using customary methods, including data from appraisals, comparable sales, discounted cash flow analysis and other methods. Amounts allocated to land, buildings, improvements and fixtures are based on cost segregation studies performed by independent third-parties or our analysis of comparable properties in our portfolio. Identifiable intangible assets include amounts allocated to acquire leases for above- and below-market lease rates, the value of in-place leases, and the value of customer relationships, as applicable.

 The aggregate value of intangible assets related to in-place leases is primarily the difference between the property valued with existing in-place leases adjusted to market rental rates and the property valued as if vacant. Factors considered by us in our analysis of in-place lease intangibles include an estimate of carrying costs during the expected lease-up period for each property, taking into account current market conditions and costs to execute similar leases. In estimating carrying costs, we include real estate taxes, insurance and other operating expenses and estimates of lost rentals at market rates during the expected lease-up period. We also estimate costs to execute a similar lease including leasing commissions, legal and other related expenses.

  Above-market and below-market in-place lease values for owned properties are recorded based on the present value (using an interest rate which reflects the risks associated with the leases acquired) of the difference between the contractual amounts to be paid pursuant to the in-place lease and management’s estimate of fair market lease rates for the corresponding in-place lease, measured over a period equal to the remaining non-cancelable term of the lease. The capitalized above-market lease intangibles are amortized as a decrease to rental income over the remaining term of the lease. The capitalized below-market lease values are amortized as an increase to rental income over the remaining term and any fixed rate renewal periods provided within the respective leases. In determining the amortization period for below-market lease intangibles, we initially consider, and periodically evaluate on a quarterly basis, the likelihood that a lessee will execute the renewal option. The likelihood that a lessee will execute the renewal option is determined by taking into consideration the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in the area in which the property is located.

The aggregate value of intangible assets related to customer relationship, as applicable, is measured based on our evaluation of the specific characteristics of each tenant’s lease and our overall relationship with the tenant. Characteristics considered by us in determining these values include the nature and extent of our existing business relationship with the tenant, growth prospects for developing new business with the tenant, the tenant’s credit quality and expectations of lease renewals, among other factors.

 The value of in-place leases is amortized to expense over the initial term of the respective lease. The value of customer relationship intangibles, as applicable, is amortized to expense over the initial term and any renewal periods in the respective lease, but in no event will the amortization period for intangible assets exceed the remaining depreciable life of a building. If a tenant terminates its lease, the unamortized portion of the in-place lease value and customer relationship intangibles is charged to expense.

In making estimates of fair values for purposes of allocating purchase price, we utilize a number of sources, including independent appraisals that may be obtained in connection with the acquisition or financing of the respective property and other market data. We also consider information obtained about each property as a result of its pre-acquisition due diligence, as well as subsequent marketing and leasing activities, in estimating the fair value of the tangible and intangible assets acquired and intangible liabilities assumed.

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Derivative Instruments

We may use derivative financial instruments to hedge all or a portion of the interest rate risk associated with our borrowings. Certain of the techniques used to hedge exposure to interest rate fluctuations may also be used to protect against declines in the market value of assets that result from general trends in debt markets. The principal objective of such agreements is to minimize the risks and/or costs associated with our operating and financial structure as well as to hedge specific anticipated transactions.

We will record all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether we have elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Derivatives may also be designated as hedges of the foreign currency exposure of a net investment in a foreign operation. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. We may enter into derivative contracts that are intended to economically hedge certain risks, even though hedge accounting does not apply or we elect not to apply hedge accounting.

Recently Issued Accounting Pronouncements

In May 2011, the Financial Accounting Standards Board ("FASB") issued guidance that expands the existing disclosure requirements for fair value measurements, primarily for Level 3 measurements, which are measurements based on unobservable inputs such as our own data. This guidance is largely consistent with current fair value measurement principles with few exceptions that do not result in a change in general practice. The guidance was applied prospectively and was effective for interim and annual reporting periods beginning after December 15, 2011. The adoption of this guidance did not have a material impact on our financial position or results of operations as the guidance relates only to disclosure requirements.

In June 2011, the FASB issued guidance requiring entities to present items of net income and other comprehensive income either in one continuous statement - referred to as the statement of comprehensive income - or in two separate, but consecutive, statements of net income and other comprehensive income. The new guidance does not change which components of comprehensive income are recognized in net income or other comprehensive income, or when an item of other comprehensive income must be reclassified to net income. In December 2011, the FASB deferred certain provisions of this guidance related to the presentation of certain reclassification adjustments out of accumulated other comprehensive income, by component in both the statement and the statement where the reclassification is presented. This guidance was applied prospectively and was effective for interim and annual periods beginning after December 15, 2011. The adoption of this guidance did not have a material impact on our financial position or results of operations but changed the location of the presentation of other comprehensive income to more closely associate the disclosure with net income.

In September 2011, the FASB issued guidance that allows entities to perform a qualitative analysis as the first step in determining whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If it is determined that it is not more likely than not that the fair value of the reporting unit is less than its carrying amount, then a quantitative analysis for impairment is not required. The guidance was effective for interim and annual impairment tests for fiscal periods beginning after December 15, 2011.  The adoption of this guidance did not have a material impact on our financial position or results of operations.

In December 2011, the FASB issued guidance regarding disclosures about offsetting assets and liabilities, which requires entities to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. The guidance is effective for fiscal years and interim periods beginning on or after January 1, 2013 with retrospective application for all comparative periods presented. The adoption of this guidance, which is related to disclosure only, is not expected to have a material impact on our financial position or results of operations.

In July 2012, the FASB issued revised guidance intended to simplify how an entity tests indefinite-lived intangible assets for impairment. The amendments will allow an entity first to assess qualitative factors to determine whether it is necessary to perform a quantitative impairment test. An entity will no longer be required to calculate the fair value of an indefinite-lived intangible asset and perform the quantitative test unless the entity determines, based on a qualitative assessment, that it is more likely than not that its fair value is less than its carrying amount. The amendments are effective for annual and interim indefinite-lived intangible asset impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted. We do not expect the adoption to have a material impact on our financial position or results of operations.

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Results of Operations

 We purchased our first property and commenced our real estate operations in June 2012. As of September 30, 2012, we owned one property with a purchase price of $21.6 million, comprising of 105,970 square feet, which was 94.7% leased. As of September 30, 2011, we did not own any properties. Accordingly, our results of operations for the three and nine months ended September 30, 2012 as compared to the three and nine months ended September 30, 2011 reflect significant increases in most categories.

Comparison of the Three Months EndedSeptember 30, 2012 to Three Months EndedSeptember 30, 2011

Rental Income

Rental income for the three months ended September 30, 2012 was $0.4 million. Rental income was driven by our acquisition of one property for a purchase price of $21.6 million, representing 105,970 square feet, which was 94.7% leased as of September 30, 2012, with an annualized rental income per square foot of $15.73. We did not own any properties and therefore, had no rental income during the three months ended September 30, 2011.

Operating Expense Reimbursements

Operating expense reimbursements were approximately $0.1 million for the three months ended September 30, 2012.Pursuant to many of our lease agreements, tenants are required to pay their pro rata share of property operating expenses, in addition to base rent. We did not own any properties and therefore, had no operating expense reimbursement revenue for the three months ended September 30, 2011.

Property Operating Expenses

Property operating expenses were approximately $0.1 million for the three months ended September 30, 2012. These costs primarily relate to the costs associated with maintaining our property including real estate taxes, utilities, repairs, maintenance and property management fees incurred from our Service Provider. These costs were partially offset by the absorption of $44,000 of property operating expenses by the Advisor during the three months ended September 30, 2012. We did not own any properties and therefore, had no property operating expenses for the three months ended September 30, 2011.

Operating Fees to Affiliates

Our affiliated Advisor and Property Manager are entitled to fees for the management of our properties. Our Property Manager elected to waive these fees for the three months ended September 30, 2012. For the three months ended September 30, 2012, we would have incurred property management fees of approximately $5,000 had these fees not been waived. There were no asset management fees incurred or forgiven by the Advisor during the three months ended September 30, 2012. We did not own any properties and therefore had no operating fees to affiliates for the three months ended September 30, 2011.

Acquisition and Transaction Related Expense

Acquisition and transaction related expense was approximately $16,000 for the three months ended September 30, 2012. These costs related to professional fees incurred resulting from our acquisition of one property for a purchase price of $21.6 million. We did not own any properties and therefore did not incur acquisition and transaction related costs for the three months ended September 30, 2011.

General and Administrative Expenses

General and administrative expenses decreased $75,000 to $14,000 for the three months ended September 30, 2012, compared to $89,000 for the three months ended September 30, 2011. General and administrative expense for the three months ended September 30, 2012 and 2011 primarily included board member compensation, directors and officers insurance costs and professional fees. These costs were partially offset by the absorption of $0.1 million of general and administrative expenses by the Advisor during the three months ended September 30, 2012.

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Depreciation and Amortization Expense

Depreciation and amortization expense of $0.5 million for the three months ended September 30, 2012 related to the acquisition of one property for a purchase price of $21.6 million. The purchase price of acquired properties is allocated to tangible and identifiable intangible assets and depreciated or amortized over the estimated useful lives. We did not own any properties and therefore had no depreciation and amortization expense for the three months ended September 30, 2011.

Interest Expense

Interest expense for the three months ended September 30, 2012 was $0.3 million and primarily related to our mortgage notes payable of $16.2 million with a an effective interest rate of 5.58%, which was used to fund a portion of the purchase price of our one property. Interest expense also includes interest related to our unsecured note payable, received in June 2012, of $3.0 million, which bears interest at 8%, as well as amortization of deferred financing costs. There were no mortgage or notes payable and therefore no interest expense during the three months ended September 30, 2011.

Comparison of the Nine Months EndedSeptember 30, 2012 to Nine Months EndedSeptember 30, 2011

Rental Income

Rental income for the nine months ended September 30, 2012 was $0.5 million. Rental income was driven by our acquisition of one property for a purchase price of $21.6 million, representing 105,970 square feet, which was 94.7% leased as of September 30, 2012, with an annualized rental income per square foot of $15.73. We did not own any properties and therefore, had no rental income during the nine months ended September 30, 2011.

Operating Expense Reimbursements

Operating expense reimbursements were approximately $0.1 million for the nine months ended September 30, 2012. Pursuant to many of our lease agreements, tenants are required to pay their pro rata share of property operating expenses, in addition to base rent. We did not own any properties and therefore, had no operating expense reimbursement revenue for the nine months ended September 30, 2011.

Property Operating Expenses

Property operating expenses were approximately $0.1 million for the nine months ended September 30, 2012. These costs primarily relate to the costs associated with maintaining our property including real estate taxes, utilities, repairs, maintenance and property management fees incurred from our Service Provider. These costs were partially offset by the absorption of $44,000 of property operating expenses by the Advisor during the nine months ended September 30, 2012. We did not own any properties and therefore, had no property operating expenses for the nine months ended September 30, 2011.

Operating Fees to Affiliates

Our affiliated Advisor and Property Manager are entitled to fees for the management of our properties.  Our Advisor and Property Manager elected to waive these fees for the nine months ended September 30, 2012. For the nine months ended September 30, 2012, we would have incurred aggregate asset management and property management fees of $14,000 had these fees not been waived. We did not own any properties and therefore had no operating fees to affiliates for the nine months ended September 30, 2011.

Acquisition and Transaction Related Expense

Acquisition and transaction related expense was $0.4 million for the nine months ended September 30, 2012. These costs related to our acquisition of one property for a purchase price of $21.6 million. There were no properties purchased and therefore no acquisition and transaction related costs for the nine months ended September 30, 2011.

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General and Administrative Expenses

General and administrative expense for the nine months ended September 30, 2012 and 2011 remained relatively flat at $0.2 million. The effective date of our IPO occurred on March 17, 2011. We therefore had approximately 6.5 months of board member compensation, directors and officers insurance and professional fees during the nine months ended September 30, 2011 compared to a full nine months of expense during the nine months ended September 30, 2012. These costs were partially offset by the absorption of $0.1 million of general and administrative expenses by the Advisor during the nine months ended September 30, 2012.

Depreciation and Amortization Expense

Depreciation and amortization expense was $0.6 million for the nine months ended September 30, 2012, related to the purchase of one property for a purchase price of $21.6 million. The purchase price of acquired properties is allocated to tangible and identifiable intangible assets and depreciated or amortized over the estimated useful lives. There were no properties purchased and therefore no depreciation and amortization expense for the nine months ended September 30, 2011.

Interest Expense

Interest expense for the nine months ended September 30, 2012 was $0.4 million, primarily related to our mortgage notes payable of $16.2 million with a an effective interest rate of 5.58%, which was used to fund a portion of the purchase price of our one property. Interest expense also includes interest related to our unsecured note payable, received in June 2012, of $3.0 million, which bears interest at 8%, as well as amortization of deferred financing costs. There were no mortgage or notes payable and therefore no interest expense during the nine months ended September 30, 2011.

Cash Flows for the Nine Months EndedSeptember 30, 2012

During the nine months ended September 30, 2012, net cash used in operating activities was $0.4 million. The level of cash flows used in or provided by operating activities is affected by the volume of acquisition activity, timing of interest payments and the amount of borrowings outstanding during the period, as well as the receipt of scheduled rent payments. Cash flows used in operating activities during the nine months ended September 30, 2012 included $0.4 million of acquisition and transaction costs. Cash outflows included a net loss adjusted for non-cash items of $0.5 million (net loss of $1.2 million adjusted for depreciation and amortization of tangible and intangible real estate assets, amortization of deferred financing costs and share based compensation of $0.7 million) as well as an increase in prepaid expenses and other assets of $0.2 million primarily due to prepaid property and directors and officers insurance, rent receivables and unbilled rent receivables recorded in accordance with straight-line basis accounting. These cash outflows were partially offset by an increase of $0.3 million in accounts payable and accrued expenses mainly due to interest payable related to mortgage and notes payable and accrued property operating expenses, as well as an increase in deferred rent and other liabilities of $42,000 due to the timing of the receipt of rental payments.

Net cash used in investing activities of $5.2 million during nine months ended September 30, 2012 primarily related to the acquisition of one property with a purchase price of $21.6 million, which was financed at acquisition with a $16.2 million mortgage notes payable. We assumed $0.2 million of other liabilities in connection with this acquisition related to tenant deposits and improvements.

Net cash provided by financing activities of $6.6 million during the nine months ended September 30, 2012, related to proceeds from the issuance of common stock of $4.1 million, proceeds from notes payable of $3.0 million and $0.7 million in funding from affiliates, net. These inflows were partially offset by payments related to offering costs of $0.6 million, payments for financing costs of $0.3 million, an increase in restricted cash of $0.2 million and distribution payments of $46,000.

Cash Flows for the Nine Months EndedSeptember 30, 2011

During the nine months ended September 30, 2011, net cash used in operating activities was $0.1 million, primarily due to a net loss of $0.2 million, partially offset by an increase of $0.1 million in accounts payable and accrued expenses.

Net cash provided by financing activities of $0.1 million during nine months ended September 30, 2012 primarily related to $1.1 million in funding from affiliates, partially offset by payments relating to offering costs of $1.0 million.

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Liquidity and Capital Resources

In March 2012, we had raised proceeds sufficient to break escrow in connection with our IPO.  We received and accepted aggregate subscriptions in excess of the $2.0 million minimum and issued shares of common stock to our initial investors who were simultaneously admitted as stockholders.  We purchased our first property and commenced our real estate operations in June 2012. As of September 30, 2012, we owned one property with a base purchase price of $21.6 million.

Our principal demands for funds will continue to be for property acquisitions, either directly or through investment interests, for the payment of operating expenses, distributions to our stockholders, and for the payment of principal and interest on our outstanding indebtedness. Generally, capital needs for property acquisitions will be met through net proceeds received from the sale of common stock through our ongoing IPO, as well as proceeds from secured financings. We may also from time to time enter into other agreements with third parties whereby third parties will make equity investments in specific properties or groups of properties that we acquire. Expenditures other than property acquisitions are expected to be met from a combination of the proceeds from the sale of common stock and cash flows from operations.

We expect to meet our future short-term operating liquidity requirements through a combination of net cash provided by our current property operations, the operations of properties to be acquired in the future and proceeds from the sale of common stock.  Management expects that in the future, as our portfolio matures, our properties will generate sufficient cash flows to cover operating expenses and the payment of our monthly distribution. Other potential future sources of capital include proceeds from secured or unsecured financings from banks or other lenders, proceeds from public and private offerings and undistributed funds from operations.

We expect to continue to raise capital through the sale of our common stock and to utilize the net proceeds from the sale of our common stock and proceeds from secured financings to complete future property acquisitions. As of September 30, 2012, we had 0.5 million shares of common stock outstanding, including unvested restricted stock and shares issues under the DRIP, and had received total proceeds from these issuances of $4.4 million. Proceeds from our IPO will be applied to the investment in properties and the payment or reimbursement of selling commissions and other fees and expenses related to our IPO. We will experience a relative increase in liquidity as we receive additional subscriptions for shares and a relative decrease in liquidity as we spend net offering proceeds in connection with the acquisition and operation of our properties or the payment of distributions.

We expect to use debt financing as a source of capital. Under our charter, the maximum amount of our total indebtedness shall not exceed 300% of our total “net assets” (as defined by the North American Securities Administrators Association (“NASAA”) Statement of Policy Regarding Real Estate Investment Trusts, ("NASAA REIT Guidelines") as of the date of any borrowing, which is generally expected to be approximately 75% of the cost of our investments; however, we may exceed that limit if approved by a majority of our independent directors and disclosed to stockholders in our next quarterly report following such borrowing along with justification for exceeding such limit. Upon the acquisition of Liberty Crossing on June 8, 2012, we exceeded the 300% limit. The majority of independent directors authorized and affirmed a waiver of any excess in our aggregate borrowing limit due to the temporary nature of the excess in that we intend to repay the short-term debt incurred in connection with the acquisition on or before the debt matures in December 2013. This charter limitation, however, does not apply to individual real estate assets or investments. In addition, it is currently our intention to limit our aggregate borrowings to approximately 50% of the aggregate fair market value of our assets (calculated after the close of our IPO and once we have invested substantially all the proceeds of our IPO), unless borrowing a greater amount is approved by a majority of our independent directors and disclosed to stockholders in our next quarterly report following such borrowing along with justification for borrowing such a greater amount. This limitation, however, will not apply to individual real estate assets or investments. At the date of acquisition of each asset, we anticipate that the cost of investment for such asset will be substantially similar to its fair market value, which will enable us to satisfy our requirements under the NASAA REIT Guidelines. However, subsequent events, including changes in the fair market value of our assets, could result in our exceeding these limits. As of September 30, 2012, our secured debt leverage ratio (secured mortgage note payable divided by the base purchase price of acquired real estate investments) approximated 75.1%.

Our board of directors has adopted a share repurchase plan that enables our stockholders to sell their shares to us under limited circumstances. At the time a stockholder requests a repurchase, we may, subject to certain conditions, redeem the shares presented for repurchase for cash to the extent we have sufficient funds available to fund such purchase. As of September 30, 2012, we did not receive any repurchase requests or repurchase any of our securities.

As of September 30, 2012, we had cash of approximately $1.0 million.  We expect cash flows from operations and the sale of common stock, as well as proceeds from secured financings, to be used primarily to invest in additional real estate, pay debt service, pay operating expenses and pay stockholder distributions.

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Acquisitions

Our Advisor, with the assistance of its Service Provider, evaluates potential acquisitions of real estate and real estate related assets and engages in negotiations with sellers and borrowers on our behalf.  Investors should be aware that after a purchase contract is executed that contains specific terms the property will not be purchased until the successful completion of due diligence and negotiation of final binding agreements. During this period, we may decide to temporarily invest any unused proceeds from common stock offerings in certain investments that could yield lower returns than the properties. These lower returns may affect our ability to make distributions.

Funds from Operations and Modified Funds from Operations

Due to certain unique operating characteristics of real estate companies, as discussed below, the National Association of Real Estate Investment Trusts ("NAREIT"), an industry trade group, has promulgated a measure known as funds from operations ("FFO"), which we believe to be an appropriate supplemental measure to reflect the operating performance of a REIT. The use of FFO is recommended by the REIT industry as a supplemental performance measure. FFO is not equivalent to net income or loss as determined under accounting principles generally accepted in the United States of America ("GAAP").

We define FFO, a non-GAAP measure, consistent with the standards established by the White Paper on FFO approved by the Board of Governors of NAREIT, as revised in February 2004 (the "White Paper"). The White Paper defines FFO as net income or loss computed in accordance with GAAP, excluding gains or losses from sales of property and asset impairment writedowns, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect FFO. Our FFO calculation complies with NAREIT’s policy described above.

The historical accounting convention used for real estate assets requires straight-line depreciation of buildings and improvements, which implies that the value of real estate assets diminishes predictably over time, especially if such assets are not adequately maintained or repaired and renovated as required by relevant circumstances and/or is requested or required by lessees for operational purposes in order to maintain the value disclosed. We believe that, since real estate values historically rise and fall with market conditions, including inflation, interest rates, the business cycle, unemployment and consumer spending, presentations of operating results for a REIT using historical accounting for depreciation may be less informative. Additionally, we believe it is appropriate to disregard impairment charges, as this is a fair value adjustment that is largely based on market fluctuations and assessments regarding general market conditions which can change over time. An asset will only be evaluated for impairment if certain impairment indicators exist and if the carrying, or book value, exceeds the total estimated undiscounted future cash flows (including net rental and lease revenues, net proceeds on the sale of the property, and any other ancillary cash flows at a property or group level under GAAP) from such asset. Investors should note, however, that determinations of whether impairment charges have been incurred are based partly on anticipated operating performance, because estimated undiscounted future cash flows from a property, including estimated future net rental and lease revenues, net proceeds on the sale of the property, and certain other ancillary cash flows, are taken into account in determining whether an impairment charge has been incurred. While impairment charges are excluded from the calculation of FFO as described above, investors are cautioned that due to the fact that impairments are based on estimated undiscounted future cash flows and the relatively limited term of our operations, it could be difficult to recover any impairment charges.

Historical accounting for real estate involves the use of GAAP. Any other method of accounting for real estate such as the fair value method cannot be construed to be any more accurate or relevant than the comparable methodologies of real estate valuation found in GAAP. Nevertheless, we believe that the use of FFO, which excludes the impact of real estate related depreciation and amortization and impairments, provides a more complete understanding of our performance to investors and to management, and when compared year over year, reflects the impact on our operations from trends in occupancy rates, rental rates, operating costs, general and administrative expenses, and interest costs, which may not be immediately apparent from net income. However, FFO and modified funds from operations ("MFFO"), as described below, should not be construed to be more relevant or accurate than the current GAAP methodology in calculating net income or in its applicability in evaluating our operating performance. The method utilized to evaluate the value and performance of real estate under GAAP should be construed as a more relevant measure of operational performance and considered more prominently than the non-GAAP FFO and MFFO measures and the adjustments to GAAP in calculating FFO and MFFO.

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Changes in the accounting and reporting promulgations under GAAP (for acquisition fees and expenses from a capitalization/depreciation model to an expensed-as-incurred model) that were put into effect in 2009 and other changes to GAAP accounting for real estate subsequent to the establishment of NAREIT’s definition of FFO have prompted an increase in cash-settled expenses, specifically acquisition fees and expenses for all industries as items that are expensed under GAAP, that are typically accounted for as operating expenses. Management believes these fees and expenses do not affect our overall long-term operating performance. Publicly registered, non-listed REITs typically have a significant amount of acquisition activity and are substantially more dynamic during their initial years of investment and operation. While other start up entities also may experience significant acquisition activity during their initial years, we believe that non-listed REITs are unique in that they have a limited life with targeted exit strategies within a relatively limited time frame after the acquisition activity ceases. As disclosed in the prospectus for our IPO (the “Prospectus”), we will use the proceeds raised in our IPO to acquire properties, and intend to begin the process of achieving a liquidity event (i.e., listing of our common stock on a national exchange, a merger or sale or another similar transaction) within three to six years of the completion of our IPO. Thus, we will not continuously purchase assets and will have a limited life. Due to the above factors and other unique features of publicly registered, non-listed REITs, the Investment Program Association (“IPA”), an industry trade group, has standardized a measure known as MFFO, which the IPA has recommended as a supplemental measure for publicly registered non-listed REITs and which we believe to be another appropriate supplemental measure to reflect the operating performance of a non-listed REIT having the characteristics described above. MFFO is not equivalent to our net income or loss as determined under GAAP, and MFFO may not be a useful measure of the impact of long-term operating performance on value if we do not continue to operate with a limited life and targeted exit strategy, as currently intended. We believe that, because MFFO excludes costs that we consider more reflective of investing activities and other non-operating items included in FFO and also excludes acquisition fees and expenses that affect our operations only in periods in which properties are acquired, MFFO can provide, on a going forward basis, an indication of the sustainability (that is, the capacity to continue to be maintained) of our operating performance after the period in which we are acquiring our properties and once our portfolio is in place. By providing MFFO, we believe we are presenting useful information that assists investors and analysts to better assess the sustainability of our operating performance after our IPO has been completed and our properties have been acquired. We also believe that MFFO is a recognized measure of sustainable operating performance by the non-listed REIT industry. Further, we believe MFFO is useful in comparing the sustainability of our operating performance after our IPO and acquisitions are completed with the sustainability of the operating performance of other real estate companies that are not as involved in acquisition activities. Investors are cautioned that MFFO should only be used to assess the sustainability of our operating performance after our IPO has been completed and properties have been acquired, as it excludes acquisition costs that have a negative effect on our operating performance during the periods in which properties are acquired.

We define MFFO, a non-GAAP measure, consistent with the IPA’s Guideline 2010-01, Supplemental Performance Measure for Publicly Registered, Non-Listed REITs: Modified Funds from Operations, or the Practice Guideline, issued by the IPA in November 2010. The Practice Guideline defines MFFO as FFO further adjusted for the following items, as applicable, included in the determination of GAAP net income: acquisition fees and expenses; amounts relating to deferred rent receivables and amortization of above and below market leases and liabilities (which are adjusted in order to reflect such payments from a GAAP accrual basis to a cash basis of disclosing the rent and lease payments); accretion of discounts and amortization of premiums on debt investments; mark-to-market adjustments included in net income; nonrecurring gains or losses included in net income from the extinguishment or sale of debt, hedges, foreign exchange, derivatives or securities holdings where trading of such holdings is not a fundamental attribute of the business plan, unrealized gains or losses resulting from consolidation from, or deconsolidation to, equity accounting, and after adjustments for consolidated and unconsolidated partnerships and joint ventures, with such adjustments calculated to reflect MFFO on the same basis. The accretion of discounts and amortization of premiums on debt investments, nonrecurring unrealized gains and losses on hedges, foreign exchange, derivatives or securities holdings, unrealized gains and losses resulting from consolidations, as well as other listed cash flow adjustments are adjustments made to net income in calculating the cash flows provided by operating activities and, in some cases, reflect gains or losses which are unrealized and may not ultimately be realized. While we are responsible for managing interest rate, hedge and foreign exchange risk, we do retain an outside consultant to review all our hedging agreements. Inasmuch as interest rate hedges are not a fundamental part of our operations, we believe it is appropriate to exclude such non-recurring gains and losses in calculating MFFO, as such gains and losses are not reflective of ongoing operations.

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Our MFFO calculation complies with the IPA’s Practice Guideline described above. In calculating MFFO, we exclude acquisition related expenses, amortization of above and below market leases, fair value adjustments of derivative financial instruments, deferred rent receivables and the adjustments of such items related to noncontrolling interests. Under GAAP, acquisition fees and expenses are characterized as operating expenses in determining operating net income. These expenses are paid in cash by us, and therefore such funds will not be available to distribute to investors. All paid and accrued acquisition fees and expenses negatively impact our operating performance during the period in which properties are acquired and will have negative effects on returns to investors, the potential for future distributions, and cash flows generated, unless earnings from operations or net sales proceeds from the disposition of other properties are generated to cover the purchase price of the property, these fees and expenses and other costs related to such property. Therefore, MFFO may not be an accurate indicator of our operating performance, especially during periods in which properties are being acquired. MFFO that excludes such costs and expenses would only be comparable to that of non-listed REITs that have completed their acquisition activities and have similar operating characteristics as us. Further, under GAAP, certain contemplated non-cash fair value and other non-cash adjustments are considered operating non-cash adjustments to net income in determining cash flow from operating activities. In addition, we view gains and losses from dispositions of assets as non-recurring items and we view fair value adjustments of derivatives as items which are unrealized and may not ultimately be realized. We view both gains and losses from dispositions of assets and fair value adjustments of derivatives as items which are not reflective of ongoing operations and are therefore typically adjusted for when assessing operating performance. As disclosed elsewhere in the Prospectus, the purchase of properties, and the corresponding expenses associated with that process, is a key operational feature of our business plan to generate operational income and cash flows in order to make distributions to investors. Acquisition fees and expenses will not be reimbursed by our Advisor if there are no further proceeds from the sale of shares in our IPO, and therefore such fees and expenses will need to be paid from either additional debt, operational earnings or cash flows, net proceeds from the sale of properties or from ancillary cash flows.

Our management uses MFFO and the adjustments used to calculate it in order to evaluate our performance against other non-listed REITs which have limited lives with short and defined acquisition periods and targeted exit strategies shortly thereafter. As noted above, MFFO may not be a useful measure of the impact of long-term operating performance on value if we do not continue to operate in this manner. We believe that our use of MFFO and the adjustments used to calculate it allow us to present our performance in a manner that reflects certain characteristics that are unique to non-listed REITs, such as their limited life, limited and defined acquisition period and targeted exit strategy, and hence that the use of such measures is useful to investors. For example, acquisition costs are funded from the proceeds of our IPO and other financing sources and not from operations. By excluding expensed acquisition costs, the use of MFFO provides information consistent with management’s analysis of the operating performance of the properties. Additionally, fair value adjustments, which are based on the impact of current market fluctuations and underlying assessments of general market conditions, but can also result from operational factors such as rental and occupancy rates, may not be directly related or attributable to our current operating performance. By excluding such changes that may reflect anticipated and unrealized gains or losses, we believe MFFO provides useful supplemental information.

Presentation of this information is intended to provide useful information to investors as they compare the operating performance of different REITs, although it should be noted that not all REITs calculate FFO and MFFO the same way. Accordingly, comparisons with other REITs may not be meaningful. Furthermore, FFO and MFFO are not necessarily indicative of cash flow available to fund cash needs and should not be considered as an alternative to net income (loss) or income (loss) from continuing operations as an indication of our performance, as an alternative to cash flows from operations as an indication of our liquidity, or indicative of funds available to fund our cash needs including our ability to make distributions to our stockholders. FFO and MFFO should be reviewed in conjunction with GAAP measurements as an indication of our performance. MFFO has limitations as a performance measure in an offering such as ours where the price of a share of common stock is a stated value and there is no net asset value determination during our offering stage and for a period thereafter. MFFO is useful in assisting management and investors in assessing the sustainability of operating performance in future operating periods, and in particular, after our offering and acquisition stages are complete and net asset value is disclosed. FFO and MFFO are not useful measures in evaluating net asset value because impairments are taken into account in determining net asset value but not in determining FFO or MFFO.

Neither the SEC, NAREIT nor any other regulatory body has passed judgment on the acceptability of the adjustments that we use to calculate FFO or MFFO. In the future, the SEC, NAREIT or another regulatory body may decide to standardize the allowable adjustments across the non-listed REIT industry and we would have to adjust our calculation and characterization of FFO or MFFO.     

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The below table reflects the items deducted or added to net loss in our calculation of FFO and MFFO for the period presented.

	Three Months Ended
(In thousands)	September 30, 2012
Net loss (in accordance with GAAP)	$	(431	)
Depreciation and amortization	455
FFO	24
Acquisition fees and expenses (1)	16
Amortization of above or below market leases and liabilities (2)	8
Straight-line rent (3)	(11		)
MFFO	$	37

_________________

(1) In evaluating investments in real estate, management differentiates the costs to acquire the investment from the operations derived from the investment. Such information would be comparable only for non-listed REITs that have completed their acquisition activity and have other similar operating characteristics. By excluding expensed acquisition costs, management believes MFFO provides useful supplemental information that is comparable for each type of real estate investment and is consistent with management’s analysis of the investing and operating performance of our properties. Acquisition fees and expenses include payments to our Advisor or third parties. Acquisition fees and expenses under GAAP are considered operating expenses and as expenses included in the determination of net income and income from continuing operations, both of which are performance measures under GAAP. All paid and accrued acquisition fees and expenses will have negative effects on returns to investors, the potential for future distributions, and cash flows generated by us, unless earnings from operations or net sales proceeds from the disposition of properties are generated to cover the purchase price of the property, these fees and expenses and other costs related to the property.

(2) Under GAAP, certain intangibles are accounted for at cost and reviewed at least annually for impairment, and certain intangibles are assumed to diminish predictably in value over time and amortized, similar to depreciation and amortization of other real estate related assets that are excluded from FFO. However, because real estate values and market lease rates historically rise or fall with market conditions, management believes that by excluding charges relating to amortization of these intangibles, MFFO provides useful supplemental information on the performance of the real estate.

(3) Under GAAP, rental receipts are allocated to periods using various methodologies. This may result in income recognition that is significantly different than underlying contract terms. By adjusting for these items (to reflect such payments from a GAAP accrual basis to a cash basis of disclosing the rent and lease payments), MFFO provides useful supplemental information on the realized economic impact of lease terms and debt investments, providing insight on the contractual cash flows of such lease terms and debt investments, and aligns results with management’s analysis of operating performance.

Distributions

On September 19, 2011, our board of directors authorized, and we declared, a distribution rate, which will be calculated based on stockholders of record each day during the applicable period at a rate of $0.0017534247 per day. The distributions began to accrue on June 8, 2012, the date of our initial property acquisition. The distributions are payable by the 5th day following each month end to stockholders of record at the close of business each day during the prior month.

The amount of distributions payable to our stockholders is determined by our board of directors and is dependent on a number of factors, including funds available for distribution, financial condition, capital expenditure requirements, as applicable, requirements of Maryland law and annual distribution requirements needed to qualify and maintain our status as a REIT under the Code. Our board of directors may reduce the amount of distributions paid or suspend distribution payments at any time and therefore distribution payments are not assured. Our Advisor may also defer, suspend and/or waive fees and expense reimbursements if we have not generated sufficient cash flow from our operations and other sources to fund distributions. Additionally, our organizational documents permit us to pay distributions from unlimited amounts of any source, and we may use sources other than operating cash flows to fund distributions, including proceeds from our IPO, which may reduce the amount of capital we ultimately invest in properties or other permitted investments, and negatively impact the value of your investment.

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During the three months ended September 30, 2012, distributions paid to common stockholders totaled $50,000, inclusive of $4,000 of distributions issued under the DRIP.  Distribution payments are dependent on the availability of funds. Our board of directors may reduce the amount of distributions paid or suspend distribution payments at any time and therefore distribution payments are not assured.

The following table shows the sources for the payment of distributions to common stockholders:

	Three Months Ended
	September 30, 2012
(In thousands)				Percentage of Distributions
Distributions:
Distributions paid in cash	$	46
Distributions reinvested	4
Total distributions	$	50
Source of distribution coverage:
Cash flows provided by operations (1)	$	46		92.0	%
Proceeds from issuance of common stock	—			—	%
Common stock issued under the DRIP / offering proceeds	4			8.0	%
Proceeds from financings	—			—	%
Total source of distribution coverage	$	50		100.0	%
Cash flows provided by operations (GAAP basis)	$	85
Net loss (in accordance with GAAP)	$	(431	)

___________________

(1) Cash flows provided by operations for the three months ended September 30, 2012 include acquisition and transaction related expenses of $16,000.

The following table compares cumulative distributions paid to cumulative net loss (in accordance with GAAP) for the period from July 29, 2010 (date of inception) through September 30, 2012:

	For the Period from July 29, 2010 (date of inception) to
(In thousands)	September 30, 2012
Distributions paid:
Common stockholders in cash	$	46
Common stockholders pursuant to DRIP/offering proceeds	4
Total distributions paid	$	50
Reconciliation of net loss:
Revenues	$	630
Acquisition and transaction-related	(387		)
Depreciation and amortization	(633		)
Other operating expenses	(687		)
Other non-operating expenses	(438		)
Net loss (in accordance with GAAP) (1)	$	(1,515	)

_____________________

(1) Net loss as defined by GAAP includes the non-cash impact of depreciation and amortization expense as well as costs incurred relating to acquisitions and related transactions.

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Loan Obligations

The payment terms of our loan obligations require interest amounts payable monthly with all unpaid principal and interest due at maturity. Our loan agreements stipulate that we comply with specific reporting covenants. As of September 30, 2012, we were in compliance with the debt covenants under our loan agreements.

Our Advisor may, with approval from our independent board of directors, seek to borrow short-term capital that, combined with secured mortgage financing, exceeds our targeted leverage ratio. Such short-term borrowings may be obtained from third-parties on a case-by-case basis as acquisition opportunities present themselves simultaneous with our capital raising efforts. We view the use of short-term borrowings as an efficient and accretive means of acquiring real estate in advance of raising equity capital. Accordingly, we can take advantage of buying opportunities as we expand our fund raising activities. As additional equity capital is obtained, these short-term borrowings will be repaid.

Contractual Obligations

The following is a summary of our contractual obligations as of September 30, 2012:

			October 1, 2012 to December 31, 2012		Years Ended December 31,
(In thousands)	Total				2013-2014		2015-2016		Thereafter
Principal Payments Due:
Mortgage notes payable	$	16,200	$	—	$	16,200	$	—	$	—
Note payable	3,000		—		3,000		—		—
	$	19,200	$	—	$	19,200	$	—	$	—
Interest Payments Due:
Mortgage notes payable	$	1,109	$	225	$	884	$	—	$	—
Note payable	165		61		104		—		—
	$	1,274	$	286	$	988	$	—	$	—

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Election as a REIT

We intend to elect to be taxed as a REIT under Sections 856 through 860 of the Code, effective for our taxable year ending December 31, 2012. We believe that, commencing with such taxable year, we are organized and operate in such a manner as to qualify for taxation as a REIT under the Code. We intend to continue to operate in such a manner to qualify for taxation as a REIT, but no assurance can be given that we will operate in a manner so as to qualify or remain qualified as a REIT. If we continue to qualify for taxation as a REIT, we generally will not be subject to federal corporate income tax to the extent we distribute our REIT taxable income to our stockholders, and so long as we distribute at least 90% of our REIT taxable income. REITs are subject to a number of other organizational and operational requirements. Even if we qualify for taxation as a REIT, we may be subject to certain state and local taxes on our income and property, and federal income and excise taxes on our undistributed income.

Inflation

We may be adversely impacted by inflation on any leases that do not contain indexed escalation provisions. In addition, we may be required to pay costs for maintenance and operation of properties which may adversely impact our results of operations due to potential increases in costs and operating expenses resulting from inflation.

Related-Party Transactions and Agreements

We have entered into agreements with affiliates of our Sponsor, whereby we pay certain fees or reimbursements to our Advisor or its affiliates in connection with acquisition and financing activities, sales of common stock under our IPO, asset and property management services and reimbursement of operating and offering related costs. See Note 9 —Related Party Transactions and Arrangements to our financial statements included in this report for a discussion of the various related party transactions, agreements and fees.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk.

The market risk associated with financial instruments and derivative financial instruments is the risk of loss from adverse changes in market prices or interest rates. Our long-term debt, which consists of a secured financing and unsecured note payable, bears interest at variable and fixed rates. Our interest rate risk management objectives are to limit the impact of interest rate changes in earnings and cash flows and to lower our overall borrowing costs. To achieve these objectives, from time to time, we may enter into interest rate hedge contracts such as swaps, collars, and treasury lock agreements in order to mitigate our interest rate risk with respect to various debt instruments. We would not hold or issue these derivative contracts for trading or speculative purposes. We do not have any foreign operations and thus we are not exposed to foreign currency fluctuations.

As of September 30, 2012, our debt included a fixed-rate note payable, with a carrying value and fair value of $3.0 million. Changes in market interest rates on our fixed-rate debt impacts the fair value, but it has no impact on interest incurred or cash flow. For instance, if interest rates rise 100 basis points and our fixed rate debt balance remains constant, we expect the fair value of our obligation to decrease, the same way the price of a bond declines as interest rates rise. The sensitivity analysis related to our fixed–rate debt assumes an immediate 100 basis point move in interest rates from their September 30, 2012 levels, with all other variables held constant. A 100 basis point increase in market interest rates would result in a decrease in the fair value of our fixed-rate debt by approximately $30,000. A 100 basis point decrease in market interest rates would result in an increase in the fair value of our fixed-rate debt by approximately $30,000. 

At September 30, 2012, our debt included a variable-rate secured mortgage note payable with a carrying value and fair value of $16.2 million. Interest rate volatility associated with this variable-rate mortgage debt effects interest expense incurred and cash flow. The sensitivity analysis related to our variable-rate debt assumes an immediate 100 basis point move in interest rates from their September 30, 2012 levels, with all other variables held constant. A 100 basis point increase or decrease in variable interest rates on our variable-rate mortgage note payable would increase or decrease our interest expense by $0.2 million annually.

These amounts were determined by considering the impact of hypothetical interest rates changes on our borrowing costs, and, assuming no other changes in our capital structure.

As the information presented above includes only those exposures that existed as of September 30, 2012, it does not consider exposures or positions arising after that date. The information represented herein has limited predictive value. Future actual realized gains or losses with respect to interest rate fluctuations will depend on cumulative exposures, hedging strategies employed and the magnitude of the fluctuations.

Item 4. Controls and Procedures.

In accordance with Rules 13a-15(b) and 15d-15(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), we, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act) as of the end of the period covered by this Quarterly Report on Form 10-Q and determined that the disclosure controls and procedures are effective.

No change occurred in our internal controls over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) of the Exchange Act) during the three months ended September 30, 2012 that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

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PART II — OTHER INFORMATION

Item 1. Legal Proceedings.

As of the end of the period covered by this Quarterly Report on Form 10-Q, we are not a party to, and none of our properties are subject to, any material pending legal proceedings.

Item 1A. Risk Factors.

There have been no material changes to the potential risks and uncertainties presented in the section entitled "Risk Factors," contained in the Prospectus, as supplemented, and included in our Registration Statement (File No. 333-169355), as amended from time to time, except for the following:

Distributions paid from sources other than our cash flows from operations, particularly from proceeds of our IPO, will result in us having fewer funds available for the acquisition of properties and other real estate-related investments and may dilute your interests in us, which may adversely affect our ability to fund future distributions with cash flows from operations and may adversely affect your overall return.

We began to pay distributions in July 2012. Our cash flows provided by operations were $85,000 for the three months ended September 30, 2012. During the three months ended September 30, 2012, we paid distributions of $50,000, of which $46,000, or 92.0%, was funded from cash flows from operations and $4,000, or 8.0%, was funded from proceeds from common stock issued under the DRIP. However, we may in the future pay distributions from sources other than from our cash flows from operations.

Until we acquire additional properties or other real estate-related investments, we may not generate sufficient cash flows from operations to pay distributions. Our inability to acquire additional properties or other real estate-related investments may result in a lower return on your investment than you expect. If we have not generated sufficient cash flows from our operations and other sources, such as from borrowings, the sale of additional securities, advances from our Advisor, and our Advisor's deferral, suspension or waiver of its fees and expense reimbursements, to fund distributions, we may use the proceeds from our IPO. Moreover, our board of directors may change our distribution policy, in its sole discretion, at any time. Distributions made from offering proceeds are a return of capital to stockholders, from which we will have already paid offering expenses in connection with our IPO. We have not established any limit on the amount of proceeds from our IPO that may be used to fund distributions, except that, in accordance with our organizational documents and Maryland law, we may not make distributions that would: (1) cause us to be unable to pay our debts as they become due in the usual course of business; (2) cause our total assets to be less than the sum of our total liabilities plus senior liquidation preferences, if any; or (3) jeopardize our ability to qualify as a REIT.

If we fund distributions from the proceeds of our IPO, we will have less funds available for acquiring properties or other real estate-related investments. As a result, the return you realize on your investment may be reduced. Funding distributions from borrowings could restrict the amount we can borrow for investments, which may affect our profitability. Funding distributions with the sale of assets or the proceeds of our IPO may affect our ability to generate cash flows. Funding distributions from the sale of additional securities could dilute your interest in us if we sell shares of our common stock or securities convertible or exercisable into shares of our common stock to third-party investors. Payment of distributions from the mentioned sources could restrict our ability to generate sufficient cash flows from operations, affect our profitability or affect the distributions payable to you upon a liquidity event, any or all of which may have an adverse effect on your investment.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds of Registered Securities.

We did not sell any equity securities that were not registered under the Securities Act of 1933, as amended (the "Securities Act") during the nine months ended September 30, 2012.

On March 17, 2011, we commenced our IPO on a “reasonable best efforts” basis of up to 150.0 million shares of common stock, $0.01 par value per share, at a price of $10.00 per share, subject to certain volume and other discounts, pursuant to the Registration Statement filed with the SEC under the Securities Act of 1933, as amended. The Registration Statement also covers up to 25.0 million shares available pursuant to a DRIP under which our common stockholders may elect to have their distributions reinvested in additional shares of our common stock. As of September 30, 2012, we have issued 0.5 million shares of our common stock, including unvested restricted shares and shares issued pursuant to the DRIP, and had received total proceeds from these issuances of $4.4 million.

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The following table reflects the offering costs associated with the issuance of common stock.

	Nine Months Ended
(in thousands)	September 30, 2012
Selling commissions and dealer manager fees	$	192
Other offering costs	1,700
Total offering costs	$	1,892

The Dealer Manager reallowed the selling commissions and a portion of the dealer manager fees to participating broker-dealers. The following table details the selling commissions incurred and reallowed related to the sale of shares of common stock.

	Nine Months Ended
(in thousands)	September 30, 2012
Total commissions paid to the Dealer Manager	$	192
Less:
Commissions to participating brokers	(131		)
Reallowance to participating broker dealers	(13		)
Net to the Dealer Manager	$	48

The Advisor elected to cap cumulative offering costs incurred by the Company, net of unpaid amounts, to 15% of gross common stock proceeds during the offering period. As of September 30, 2012, cumulative offering costs in connection with the issuance and distribution of our registered securities were $5.6 million. Cumulative offering costs, net of unpaid amounts, were less than the 15% threshold at September 30, 2012.

Cumulative offering costs incurred included $3.1 million from our Advisor and Dealer Manager. Cumulative offering costs exceeded gross proceeds by $1.2 million at September 30, 2012 due to the on-going nature of our offering process and that many expenses were incurred before the offering commenced.

We expect to use substantially all of the net proceeds from our IPO to primarily acquire existing anchored, stabilized core retail properties, including power centers, lifestyle centers, large formatted centers with a grocery store component (with a purchase price in excess of $20.0 million) and other need-based shopping centers which are located in the United States and at least 80% leased at the time of acquisition. All such properties may be acquired and operated by us alone or jointly with another party. We may also originate or acquire first mortgage loans secured by real estate.  As of September 30, 2012, we owned one property with a purchase price of $21.6 million, excluding acquisition costs.

During the nine months ended September 30, 2012, we did not receive any repurchase requests or repurchase any of our securities.

Item 3. Defaults Upon Senior Securities.

 None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item5. Other Information.

None.

Item6. Exhibits.

The exhibits listed on the Exhibit Index (following the signatures section of this report) are included, or incorporated by reference, in this Quarterly Report on Form 10-Q.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

AMERICAN REALTY CAPITAL — RETAIL CENTERS OF AMERICA, INC.
By:	/s/ Nicholas S. Schorsch
	Nicholas S. Schorsch
	Chief Executive Officer, Chairman of the Board of Directors (Principal Executive Officer)
By:	/s/ Brian S. Block
	Brian S. Block
	Executive Vice President, Chief Financial Officer (Principal Financial Officer)

Dated: November 13, 2012

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EXHIBITS INDEX

The following exhibits are included, or incorporated by reference, in this Quarterly Report on Form 10-Q for the quarter ended September 30, 2012 (and are numbered in accordance with Item 601 of Regulation S-K).

Exhibit No.	Description
10.17 *	Purchase and Sale Agreement, dated as of September 10, 2012, by and between BB Fonds International 1 USA, L.P. and American Realty Capital IV, LLC
10.18 *	Third Amendment to the Advisory Agreement, between American Realty Capital - Retail Centers of America, Inc. and American Realty Capital Retail Advisor, LLC
31.1 *	Certification of the Principal Executive Officer of the Company pursuant to Securities Exchange Act Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2 *	Certification of the Principal Financial Officer of the Company pursuant to Securities Exchange Act Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32 *	Written statements of the Principal Executive Officer and Principal Financial Officer of the Company pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101 *	XBRL (eXtensible Business Reporting Language). The following materials from American Realty Capital — Retail Centers of America, Inc.'s Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2012, formatted in XBRL: (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations and Comprehensive Loss, (iii) the Consolidated Statement of Changes in Stockholders' Deficit, (iv) the Consolidated Statements of Cash Flows and (v) the Notes to the Consolidated Financial Statements. As provided in Rule 406T of Regulation S-T, this information in furnished and not filed for purpose of Sections 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934

_____________________________

*    Filed herewith

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EX-10.17

PURCHASE AND SALE AGREEMENT

THIS PURCHASE AND SALE AGREEMENT (this "Agreement") is entered into by and between BB FONDS INTERNATIONAL 1 USA, L.P., a Delaware limited partnership ("Seller") and AMERICAN REALTY CAPITAL IV, LLC, a Delaware limited liability company ("Purchaser").

In consideration of the mutual covenants set forth herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

1. Sale and Purchase. Seller shall sell, convey, and assign to Purchaser, and Purchaser shall purchase and accept from Seller, for the Purchase Price (hereinafter defined) and on and subject to the terms and conditions herein set forth, the following:

a. the tracts or parcels of land described on Exhibit "A" situated on the City of San Antonio, Bexar County, Texas, together with all rights and interests appurtenant thereto, including all of Seller's right, title, and interest in and to adjacent streets, alleys, rights-of-way, any adjacent strips and gores of real estate, and including all of Seller’s right title and interest in and to all water, oil, gas and other mineral rights and interests (the "Land"), and all improvements located on the Land, including, but not limited to, the retail building(s) commonly known as "San Pedro Crossing" (the "Improvements");

b. all tangible personal property and fixtures of any kind owned by Seller and attached to or used in connection with the ownership, maintenance, use, leasing, service or operation of the Land or Improvements, including without limitation those items described on Exhibit "B" (the "Personalty");

c. all of the Landlord's right, title and interest in and to, and obligations under: (i) all leases demising space in the Improvements (collectively, the "Leases" and, individually, a "Lease"), as described in the schedule of the Leases attached hereto as Schedule 1 (hereinafter referred to as the "Lease Schedule"); (ii) all rents prepaid under any of the Leases for any period subsequent to the Closing Date (defined below); and (iii) all security deposits ("Deposits"), made by tenants (collectively, the "Tenants" and, individually, a "Tenant") holding under the Leases, except that the term Deposits shall not include and Seller shall be entitled to retain the amount of any security and other deposits delivered by Tenants that, prior to Closing, Seller has applied pursuant to the provisions of a Tenant’s Lease; and

d. all of Seller's right, title and interest in and to, and obligations under, all of the following, to the extent assignable: (i) all service, supply or maintenance contracts affecting the Land, Improvements or Personalty (the "Service Contracts"), as described in the schedule of the Service Contracts attached hereto as Schedule 2; provided, that to the extent a Service Contract is not assignable or with respect to

PURCHASE AND SALE AGREEMENT - Page 1

those Service Contracts Purchaser requests that Seller terminate pursuant to Section 7.c.ii: [a] Seller shall send written notice of termination to the vendor thereunder at Closing; and [b] Purchaser shall be responsible for payment and performance of all obligations arising under such Service Contract during the remaining term of such Service Contract following Closing, (ii) all warranties from third parties (except as provided below) in connection with the Improvements or the Personalty ("Warranties"), (iii) except as provided below, all licenses, permits, government approvals and other land use entitlements held by Seller in connection with the Land, Improvements or Personalty or otherwise benefitting the Land, Improvements or Personalty ("Licenses"), (iv) all telephone exchanges, trade names, including the name "San Pedro Crossing", marks, and other identifying material pertaining to the Land, Improvements or Personalty, (v) all plans, drawings, specifications, surveys, engineering reports, and other technical information in the possession of Seller pertaining to the Land, Improvements or Personalty ("Plans and Specifications"), and (vi) all construction, operating and reciprocal easement agreements affecting the Property.

The items listed in this Section 1 are herein collectively called the "Property". Notwithstanding any provision contained in this Agreement to the contrary, the term "Property" shall not include, and Seller shall not assign or convey to Purchaser at Closing, the following (the "Excluded Property"): (a) any insurance contracts or policies owned or held by Seller in connection with the Property; (b) the existing management contract in connection with the Property, which management contract shall be terminated at or prior to Closing; (c) the computer software program used by Seller and/or Seller’s property manager in connection with the Property; (d) any and all deposits (other than Deposits as described above), cash (except to the extent attributable to prepaid rents under the Leases) and other accounts owned or held by Seller; or (e) any contracts, agreements or information pertaining to the cost of acquiring or developing the Property.

2. Earnest Money. Within two (2) business days following execution of this Agreement by both parties and as a condition precedent to Seller’s obligations hereunder, Purchaser shall deliver to Chicago Title Insurance Company, 1515 Market Street, Suite 1325, Philadelphia, PA 19102-1930, Attn: Edwin G. Ditlow (the "Escrow Agent"), by check or wire transfer of immediately available funds, a deposit in the amount of $350,000 (the "Initial Earnest Money") which the Escrow Agent shall immediately deposit for collection in an interest-bearing, federally insured account. In the event Purchaser elects to extend the Closing Date as provided in Section 8 below, Purchaser shall deposit with the Escrow Agent additional earnest money in the amount of $350,000 (the "Additional Earnest Money") within one (1) business day after the date of delivery of the Extension Notice (as defined below). The Initial Earnest Money and the Additional Earnest Money (if and when it is deposited by Purchaser with the Escrow Agent) are collectively and individually referred to herein as the "Earnest Money"). Benchmark Title Services, 2000 McKinney Avenue, 4th Floor, Dallas, Texas 75201, Attn: Brian Ficke, (214) 485-8686 (the "Title Company") shall be responsible for the issuance of the Title Commitment and the Title Policy (as such terms are hereinafter defined) and the

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completion of the escrow and closing functions relating to the closing of the sale contemplated by this Agreement (other than the receipt and disbursement of the Earnest Money). In the event Purchaser shall fail to deliver any portion of the Earnest Money as and when required hereunder, or if any Earnest Money check is not honored when presented by the Escrow Agent, or if the Escrow Agent fails to deliver the Earnest Money in accordance with the terms of this Agreement and Purchaser fails to (within two (2) business days after the date that it receives written notice of such delivery failure) instruct the Escrow Agent to deliver the Earnest Money to the party entitled to the same under the terms of this Agreement, Purchaser shall be deemed to be in material default of its obligations hereunder, thereby entitling Seller to terminate this Agreement and to enforce any other remedies for default hereunder. The timely delivery of the Earnest Money as required by this Agreement is an obligation of Purchaser and is a condition to Seller’s obligations hereunder. In the event this Agreement is closed, the Earnest Money shall be applied to the Purchase Price at Closing. In the event this Agreement is not closed, then the Escrow Agent shall disburse the Earnest Money in the manner set forth herein. Concurrently with the execution of this Agreement, Purchaser shall deliver the sum of $100.00 (the "Independent Consideration") to the Escrow Agent as independent consideration for the execution of this Agreement by Seller and Purchaser. The Independent Consideration shall not be refundable to Purchaser and, following receipt by the Escrow Agent, shall be delivered by the Escrow Agent to, and thereafter retained by, Seller.

3. Purchase Price. The price for which Seller shall sell, convey, and assign the Property to Purchaser, and which Purchaser shall pay to Seller, is Thirty Two Million Seven Hundred Thousand and No/100 Dollars ($32,700,000.00) (the "Purchase Price"). The Purchase Price, subject to other adjustments and prorations provided herein, shall be paid by Purchaser to Seller on the Closing Date by wire transfer of immediately available funds in an amount equal to the Purchase Price. Simultaneously with the delivery of the Purchase Price to Seller, the Escrow Agent shall deliver the Earnest Money to Seller and Purchaser shall receive a credit against the Purchase Price in the amount of the Earnest Money so delivered to Seller.

4. Delivery of Information.

a. Due Diligence Materials. Within ten (10) days following the Effective Date, Seller, at its expense, shall deliver or cause to be delivered to Purchaser, or shall make available to Purchaser at the Land or at Seller’s offices, the information identified on Schedule 3 to the extent in the possession or control of Seller and not including any of the Excluded Property. Notwithstanding the delivery of the information identified on Schedule 3, Purchaser acknowledges that any information of any type which Purchaser has received or may receive from Seller, or its agents, is furnished to Purchaser as a courtesy only and on the express condition that Purchaser shall make an independent verification of the accuracy of such information, and, except as provided in Section 7 below, all such information is being furnished without any representation or warranty by Seller as to the truth or accuracy of such information.

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b. Title Commitment. Within ten (10) days following the Effective Date or as soon thereafter as possible, Seller, at its expense, shall deliver or cause to be delivered to Purchaser a commitment for Title Insurance (the "Title Commitment") from the Title Company, together with copies of all documents referred to in the Title Commitment (the "Title Commitment Documents").

c. Survey. Within two (2) business days after full execution of this Agreement, Seller shall order for delivery to Purchaser a current ALTA/ASCM survey (the "Survey") of the Property, certified to the Title Company, Seller, Purchaser and Purchaser's lender (to the extent identified to Seller). The Survey may be an update of Seller's existing survey of the Property, provided the Survey, as so updated, constitutes an ALTA/ASCM land title survey in form acceptable to the Title Company for issuance of the Title Policy with the “survey exception” modified to read “shortages in area” only, is dated a current date not earlier than the Effective Date and is certified as of such current date to the Title Company, Seller, Purchaser and Purchaser's lender.

5. Right of Inspection; Inspection Period; Condition of Property.

a. Right of Inspection. From the Effective Date to the Closing Date, upon 36 hours' notice to Seller and accompanied by a representative of Seller, to the extent Seller makes a representative of Seller available at the time of Purchaser's inspection, Purchaser and its representatives may inspect, at reasonable hours, the Property, all books, records, leases, contracts, accounting and management reports and other documents or data pertaining to the ownership, operation, or maintenance of the Property; provided, however, Seller shall not be required to provide Purchaser access to and Purchaser shall not be entitled to review any of the Excluded Property or any internal partnership or organizational information or materials of Seller, any memoranda or correspondence among Seller’s personnel or partners or Seller’s lender, or any other proprietary or confidential information. Purchaser shall be entitled to examine the Property’s physical condition, including the right to enter vacant space and upon reasonable notice and the Tenants’ consents, the right to enter leased areas; provided, however, that in conducting its inspection, Purchaser shall not unreasonably interfere with the business of Seller or with the rights of any Tenant. Purchaser shall have the right to contact the Tenants directly and conduct interviews with the Tenants, provided such actions are taken following notice to and in coordination with Seller’s property manager. Purchaser and any of its agents or consultants who desire to enter on to the Property shall have in effect and maintain commercial general liability insurance naming Seller as additional insured, with limits not less than $1,000,000.00 for personal injury, including bodily injury and death, and property damage. Prior to any entry on the Property, Purchaser shall deliver to Seller a certificate of insurance evidencing such coverage, and further evidencing that such coverage may only be terminated or modified upon thirty (30) days prior written notice to Seller. Purchaser shall make all inspections in good faith. Purchaser’s inspections may include a non-

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materially invasive Phase I environmental inspection of the Land, but no Phase II environmental inspection or other materially invasive inspection or sampling of soils or materials, either as part of the Phase I inspection or any other inspection, shall be performed without the prior written consent of Seller, which consent shall be in the discretion of Seller and shall be subject to such conditions and limitations, including such limitations on the scope of work and the consultants who shall perform the work, as Seller may in its discretion require. At Seller’s request, Purchaser shall deliver to Seller copies of any third party prepared environmental report that Purchaser obtains. All inspection fees, appraisal fees, engineering fees and other expenses of any kind incurred by Purchaser relating to the inspection of the Property will be solely Purchaser’s expense. Purchaser agrees to protect, defend, indemnify and hold harmless Seller and Seller’s partners, shareholders, members, affiliates, officers, employees, agents, trustees and beneficiaries (collectively, the "Seller Indemnitees" and their tenants and contractors from and against any and all injuries, losses, liens, claims, judgments, liabilities, costs, expenses or damages (including, without limitation, reasonable attorneys’ fees and court costs) sustained by or threatened against any of them which result from or arise out of the negligence or willful misconduct of Purchaser or its agents or employees during any inspections by Purchaser or its representatives pursuant to this Agreement. Purchaser agrees to return the Property to substantially the same condition in which the Property existed prior to Purchaser’s making any inspection. If Purchaser terminates the Agreement for any reason whatsoever, then Purchaser shall deliver to Seller copies of all third party prepared reports, studies, data, and other information acquired by Purchaser or its representatives from Seller or its representatives in connection with inspections of the Property. The provisions of this paragraph shall survive any termination of or Closing under this Agreement.

b. Inspection Period. If for any reason, or no reason, Purchaser, in its sole discretion, does not elect to acquire the Property, then Purchaser may terminate this Agreement by delivering to Seller written notice of termination at any time during the period from the Effective Date until the expiration of thirty (30) days following the Effective Date (the "Inspection Period"), in which event, the Earnest Money shall be refunded to Purchaser by the Escrow Agent and, except for obligations of Purchaser which survive termination of this Agreement, the parties shall have no further obligations hereunder. If Purchaser does not timely deliver such termination notice to Seller, Purchaser shall have no further right to terminate this Agreement pursuant to this Section 5.b.

c. Condition of Property. Purchaser acknowledges that, prior to Closing, Purchaser will have independently and personally inspected the Property and that Purchaser has entered into this Agreement based upon its ability to make such examination and inspection. NOTWITHSTANDING ANY PROVISION CONTAINED IN THIS AGREEMENT TO THE CONTRARY, EXCEPT ONLY FOR THE COVENANTS, REPRESENTATIONS AND WARRANTIES OF SELLER EXPRESSLY SET FORTH IN THIS AGREMEENT OR THE DOCUMENTS

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DELIVERED BY SELLER AT THE CLLOSING PURSUANT TO SECTION 8 BELOW, PURCHASER, ACKNOWLEDGES THAT PURCHASER IS PURCHASING THE PROPERTY IN "AS-IS, WHERE-IS" CONDITION "WITH ALL FAULTS" AS OF THE CLOSING AND SPECIFICALLY AND EXPRESSLY WITHOUT ANY WARRANTIES, REPRESENTATIONS OR GUARANTEES, EITHER EXPRESS OR IMPLIED, FROM SELLER OR ANY OF THE SELLER INDEMNITEES AS TO, AND PURCHASER, ON BEHALF OF ITSELF AND ITS SUCCESSORS AND ASSIGNS, INCLUDING, WITHOUT LIMITATION, ANY SUBSEQUENT OWNER OF THE PROPERTY OR ANY PORTION THEREOF, WAIVES ALL CLAIMS AGAINST AND RIGHT TO RECOVER FROM, RELEASES AND AGREES TO INDEMNIFY, DEFEND AND HOLD HARMLESS SELLER AND THE SELLER INDEMNITEES OF AND FROM ANY AND ALL PRESENT OR FUTURE DEMANDS, CLAIMS, LEGAL OR ADMINISTRATIVE PROCEEDINGS, LOSSES, LIABILITIES, DAMAGES, PENALTIES, FINES, LIENS, JUDGMENTS, COSTS OR EXPENSES, KNOWN OR UNKNOWN, FORESEEN OR UNFORESEEN, ARISING FROM OR RELATING TO: (I) THE PROPERTY'S CONDITION, FITNESS FOR ANY PARTICULAR PURPOSES, SUITABILITY, OR MERCHANTABILITY, (II) THE STRUCTURAL INTEGRITY OF AND/OR ANY DEFECTS IN THE IMPROVEMENTS, (III) THE ACCURACY OR COMPLETENESS OF ANY OF THE INFORMATION, DATA, MATERIALS OR CONCLUSIONS CONTAINED IN ANY INFORMATION PROVIDED PURCHASER, (IV) THE FAILURE OF THE PROPERTY TO COMPLY WITH ANY LAWS APPLICABLE TO THE PROPERTY, (V) ANY ENVIRONMENTAL CONDITION OF THE PROPERTY, INCLUDING, WITHOUT LIMITATION, THE PRESENCE OR ALLEGED PRESENCE OF ASBESTOS, RADON OR ANY HAZARDOUS MATERIALS OR HARMFUL OR TOXIC SUBSTANCES IN, ON, UNDER OR ABOUT THE PROPERTY, INCLUDING WITHOUT LIMITATION ANY CLAIMS UNDER OR ON ACCOUNT OF (A) THE COMPREHENSIVE ENVIRONMENTAL RESPONSE, COMPENSATION AND LIABILITY ACT OF 1980 AND THE TEXAS SOLID WASTE DISPOSAL ACT, AS THE SAME MAY HAVE BEEN OR MAY BE AMENDED FROM TIME TO TIME, AND ANY REGULATIONS PROMULGATED THEREUNDER, (B) ANY ENVIRONMENTAL LAW OR OTHER FEDERAL, STATE OR LOCAL LAW, ORDINANCE, RULE OR REGULATION, NOW OR HEREAFTER IN EFFECT, THAT DEALS WITH OR OTHERWISE IN ANY MANNER RELATES TO, ENVIRONMENTAL MATTERS OF ANY KIND, (C) THIS AGREEMENT, OR (D) THE COMMON LAW, OR (VI) ANY OTHER WARRANTY OF ANY KIND, NATURE, OR TYPE WHATSOEVER FROM SELLER OR ANY OTHER PARTY ON BEHALF OF SELLER. PURCHASER SHALL, AT ITS SOLE COST AND EXPENSE, CONDUCT AND RELY EXCLUSIVELY UPON ITS OWN INDEPENDENT INVESTIGATION IN THE EVALUATION OF THE PROPERTY. IF PURCHASER ACQUIRES THE PROPERTY, PURCHASER ASSUMES ALL RISKS RELATING IN ANY MANNER TO THE PROPERTY

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OR ANY DEFECTS THEREIN, IF ANY, OF ANY TYPE OR NATURE WHATSOEVER, AND SHALL BE SOLELY AND COMPLETELY RESPONSIBLE FOR THE PAYMENT OF ALL COSTS AND EXPENSES IN CONNECTION THEREWITH. "Hazardous Materials" as referred to in this Agreement means any hazardous or toxic substances, materials or wastes, including, but not limited to, solid, semi-solid, liquid or gaseous substances which are toxic, ignitable, corrosive, carcinogenic or otherwise harmful or potentially harmful to human, plant or animal health or well-being, and any substances, materials or wastes which are or become regulated under any applicable local, state or federal law. The provisions of this paragraph shall survive any termination of or Closing under this Agreement, and, at Seller’s option, shall be set forth in the deed to be executed and delivered by Seller and Purchaser at Closing.

6. Title. Purchaser may, at any time prior to the expiration of ten (10) days after receipt of the last of the Title Commitment, the Title Commitment Documents and Survey, but no later than the expiration of the Inspection Period (the "Title Review Period"), object in writing to any liens, encumbrances, and other matters reflected by the Title Commitment or Survey. All such matters to which Purchaser so objects shall be "Non-Permitted Encumbrances". If no such objection is delivered by Purchaser to Seller during the Title Review Period with respect to a matter reflected on the Title Commitment or Survey, such matters as to which no objection was delivered shall be "Permitted Encumbrances". Seller may, but shall not be obligated to, at its cost, cure or otherwise remove all Non-Permitted Encumbrances within ten (10) days after Seller’s receipt of Purchaser’s written objections (such ten (10) day period being referred to herein as the "Cure Period"); provided, however, Seller shall not be required to attempt to cure any of such objections or to incur any expenses in connection therewith. If Seller does not cause or commit in writing to cause all of the Non-Permitted Encumbrances to be removed or cured within the Cure Period, then Purchaser may either (a) terminate this Agreement by delivering written notice to Seller on or prior to the last day of the Inspection Period, or (b) by failing to terminate this Agreement by written notice delivered to Seller on or prior to the last day of the Inspection Period, Purchaser shall be deemed to have waived all of Purchaser’s uncured objections and to have elected to purchase the Property subject to the Non-Permitted Encumbrances and such Non-Permitted Encumbrances shall thereafter be Permitted Encumbrances. It shall be a condition to Purchaser's obligation to close that the Title Company shall issue an Owner's Policy of Title Insurance (Texas Form T-1 (Rev. 2/1/2010)) (the "Owner's Policy") to Purchaser in the amount of the Purchase Price, insuring that Purchaser has good and indefeasible fee simple title to the Property, subject only to the Permitted Encumbrances and showing that all requirements applicable to Seller have been satisfied. The cost of the basic premium for the Owner's Policy shall be paid by Seller and the costs for any endorsements to the Owner's Policy shall be paid by Purchaser.

7. Representations and Covenants.

a. Seller’s Representations. Seller hereby represents to Purchaser that:

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i. Good Standing. Seller is a limited partnership duly organized, validly existing and in good standing in the state of its organization and duly qualified to do business and in good standing in the state where the Property is located with the power to hold and convey the Property.

ii. Due Authority. Seller has all requisite power and authority to execute and deliver this Agreement and to carry out its obligations hereunder and the transactions contemplated hereby. This Agreement has been, and the documents contemplated hereby will be, duly executed and delivered by Seller and constitute Seller's legal, valid and binding obligation enforceable against Seller in accordance with its terms. The execution of this Agreement and consummation by Seller of the sale of the Property is not in violation of or in conflict with nor does it constitute a default under any term or provision of the organizational documents of Seller, or any of the terms of any agreement or instrument to which Seller is or may be bound.

iii. Collective Bargaining Agreements and Benefit Plans. No collective bargaining agreements between Seller and any labor organization apply to the operation and/or management of the Property. No pension, retirement, profit-sharing or similar plan or fund, ERISA qualified or otherwise, has been established by Seller in connection with the Property and no liabilities for pension or retirement payments exist in connection therewith.

iv. Governmental Proceedings. Except as set forth on Schedule 4, to the current actual knowledge of Seller, without investigation or inquiry, there are no pending or threatened material municipal or administrative proceedings with respect to the Property.

v. [intentionally deleted]

vi. Leases. Attached hereto as Schedule 1 is the Lease Schedule which, to Seller’s knowledge, identifies all Leases in effect at the Property. To Seller’s knowledge, no material default by a Tenant has occurred under a Lease which is continuing, except as set forth on the Lease Schedule. To Seller’s knowledge, there are no Leases or other tenancies for any space in the Property other than those set forth on the Lease Schedule. Seller has delivered (or will promptly deliver after request by Purchaser), to the extent in Seller's lease files, copies of each Lease (inclusive of all guarantees, amendments, letter agreements, addenda and/or assignments thereof, to the extent in Seller’s lease files) and subleases, if any, and to the extent in Seller’s possession or control, any other agreements between Seller (or any affiliate of Seller) and a Tenant (or any affiliate of a Tenant) described in the Lease Schedule. To Seller's knowledge, Seller' lease files contain true, correct and complete copies of all of the Lease and all

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guarantees, amendments, letter agreements, addenda, assignments and/or subleases thereof or relating thereto.

vii. Service Contracts. Attached hereto as Schedule 2 is a list of, to Seller’s knowledge, all Service Contracts. To Seller’s knowledge, all amounts due and payable under the Service Contracts have been paid and Seller has not received written notice of default under any of the Service Contracts nor, to Seller's knowledge, are any parties in default under any of the Service Contracts.

viii. Litigation. Except as set forth on Schedule 4 attached hereto, Seller is not a party to any actions, suits or other proceedings by any person, firm, corporation, Tenant or by any governmental authority arising in connection with the ownership or operation of the Property and, to Seller's knowledge, Seller has not received written notice of any actions, suits or other proceedings that are threatened against or affecting the Property or any part thereof, nor, to Seller’s knowledge, has Seller received written notice of any investigations pending or threatened against or affecting the Property by any governmental authority, which remain unresolved.

ix. Condemnation Proceedings. Except as set forth on Schedule 4 attached hereto, to Seller’s knowledge, Seller has not received written notice of any pending or threatened (a) eminent domain proceedings affecting the Property, in whole or in part, or (b) action or proceeding to change road patterns or grades which would affect ingress to or egress from the Property.

x. Parties in Possession. To Seller's knowledge, there are no persons having or asserting any claims for occupancy or possession of the Property, except Seller, the Tenants, as tenants only under the Leases, and parties having rights under the reciprocal easements and other easements appearing in the official public records of the county in which the Land is located (collectively, the “REAs”) affecting the Property, and to Seller’s knowledge, no party has been granted by Seller any license, lease, or other right of possession of the Property, or any part thereof, except the Tenants under the Leases and parties having rights under the REAs.

xi. FIRPTA. Seller is not a foreign person (as defined in Section 1445 of the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder).

xii. [intentionally omitted]

xiii. Tenant Improvements Costs and Commissions. Except as set forth in the Lease Schedule and this Agreement, to Seller’s knowledge, all bills and claims for labor performed on behalf of Seller and materials furnished to Seller with respect to the Property for all periods prior to the Closing

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Date have been (or prior to the Closing Date will be) paid in full or, if not paid, Purchaser shall receive a credit against the Purchase Price in the amount of all such unpaid bills and/or claims and Purchaser shall be obligated to pay such amount after Closing.

xiv. Insolvency. Seller is not insolvent or bankrupt. Seller has not commenced (within the meaning of any federal or state bankruptcy law) a voluntary case, consented to the entry of an order for relief against it in an involuntary case, or consented to the appointment of a custodian of it or for all or any substantial part of its property, nor has a court of competent jurisdiction entered an order or decree under any federal or state bankruptcy law that is for relief against Seller in an involuntary case or appointed a custodian of Seller for all or any substantial part of its property.

xv. Hazardous Materials. Seller has not received any written notice from any governmental authority of the violation of any Environmental Laws (as hereinafter defined). To Seller's knowledge and except as disclosed in any written environmental reports provided by Seller to Purchaser on or before the date that is ten (10) days after the Effective Date: (a) the Property is not in violation of any Environmental Laws, (b) there are no underground storage tanks located on the Property, and (c) no underground storage tanks have been removed from the Property by Seller. "Environmental Laws" means all laws or regulations which relate to the manufacture, processing, distribution, use or storage of Hazardous Materials (as hereinafter defined). "Hazardous Materials" shall mean:

(a) Those substances included within the definitions of "hazardous substances," "hazardous materials," "toxic substances," or "solid waste" in the: Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C. § 9601 et. seq., as amended by the Superfund Amendments and Reauthorization Act or any equivalent state or local laws or ordinances; the Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. § 6901 et. seq., as amended by the Hazardous and Solid Waste Amendments of 1984, or any equivalent state or local laws or ordinances; the Federal Insecticide, Fungicide, and Rodenticide Act ("FIFRA"), 7 U.S.C. § 136 et. seq. or any equivalent state or local laws or ordinances; the Hazardous Materials Transportation Act, 49 U.S.C. § 1801, et. seq.; the Emergency Planning and Community Right-to-Know Act ("EPCRA"), 42 U.S.C. § 11001 et. seq. or any equivalent state or local laws or ordinances; the Toxic Substance Control Act ("TSCA"), 15 U.S.C. § 2601 et. seq. or any equivalent state or local laws or ordinances; or the Occupational Safety and Health Act, 29 U.S.C. § 651 et. seq. or any equivalent state or local laws or ordinances;

(b) Those substances listed in the United States Department of Transportation Table (49 CFR 172.101 and amendments thereto or by the

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Environmental Protection Agency (or any successor agency) as hazardous substances (40 CFR Part 302 and amendments thereto);

(c) Any material waste or substance which is (A) designated as a "hazardous substance" pursuant to Section 311 of the Clean Water Act, 33 U.S.C. § 1251 et seq. (33 U.S.C. § 1321) or listed pursuant to Section 307 of the Clean Water Act (33 U.S.C. § 1317) or (B) radioactive materials; and

(d) These substances included within the definitions of "hazardous substances", "hazardous materials", "toxic substances" or "solid waste" in the Hazardous Waste Management Act of 1978.

xvi. Taxes. All general real estate taxes, assessments and personal property taxes that have become due and payable with respect to the Property (except for those that will be prorated at Closing) have been paid or will be so paid by Seller prior to or at Closing.

xvii. Options to Purchase. To Seller’s knowledge, there are no options to purchase or rights of first refusal affecting or relating to the Property.

xviii. No Other Agreements. Except as specifically described in a separate notice from Seller to Purchaser delivered prior to the Effective Date, or as set forth in this Agreement, no construction agreements or contracts relating to any capital expenditures or repairs relating to the Property have been entered into on behalf of Seller which have not been satisfied and completed, other than ongoing routine repairs and maintenance. Except as may be reflected in the Title Commitment, to Seller’s knowledge, Seller has not entered into any undertakings or commitments with any governmental authority, which require the payment of money or the performance of any duty in connection with the ownership of the Property, except for utility and other services commonly provided to owners of real property. To Seller’s knowledge, there does not exist any obligation to any governmental authority for the performance of any capital improvements or other work to be performed by Seller in or about the Property or donations of monies or land (other than general real estate taxes) which has not been completely performed and paid for.

xix. Due Diligence Materials. To Seller's knowledge, the due diligence materials delivered to Purchaser pursuant to Section 4.a. are true, correct and complete copies of the items as contained in Seller’s files.

xx. [Intentionally Deleted].

Subject to the limitations contained in this Agreement, Seller agrees that Purchaser shall be entitled to rely upon the foregoing representations and warranties made by Seller herein as a material inducement to enter into the transactions contemplated hereby and that Purchaser has so relied, it being

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further understood that in electing to proceed to the closing of this transaction, Purchaser shall conduct its own investigations and inspections of the Property and in closing this transaction, Purchaser shall be relying solely upon its own investigations and inspections. The representations of Seller shall survive the Closing for a period of one (1) year (the "Survival Period") and shall not merge into the documents executed by Seller and Purchaser at Closing. When any representation of Seller is made "to Seller’s knowledge" or the like, such representation is made to the current actual knowledge of Eric Horan of Phoenix Property Company and the person signing this Agreement on behalf of Seller, without investigation or inquiry, with the understanding and agreement that such persons shall have no liability under or in connection with this Agreement. The representations of Seller are made as of the Effective Date (but Seller makes no representation that there will not be a change in any of the matters referred to therein between the Effective Date and the date of Closing). In the event Purchaser discovers that any material representation of Seller is not true or correct in any material respect (hereinafter collectively referred to as a "Breach") and such Breach is discovered after the Effective Date but before Closing, Purchaser, as Purchaser’s sole and exclusive remedy, shall be entitled to terminate this Agreement by written notice delivered to Seller within five (5) days after Purchaser first learns of the Breach (unless Seller agrees in Seller’s sole discretion to cure such Breach and/or indemnify Purchaser for all losses and expenses pertaining to such Breach), failing which Purchaser shall be deemed to have waived such Breach and any corresponding right to terminate this Agreement pursuant to this Section and elected to purchase the Property in accordance with the provisions of this Agreement. In the event Purchaser discovers a Breach and such Breach is discovered after the Closing Date, but before the expiration of the Survival Period, Purchaser must give Seller written notice of such Breach (identifying in detail the specific representation or warranty that has been breached and the information obtained by Purchaser that evidences the Breach) and any claim Purchaser may have arising from such Breach prior to the expiration of the Survival Period (the “Breach Notice”). If Seller provides a written notice (a “Dispute Notice”) disputing a Breach that is the subject of a Breach Notice, then the subject Breach Notice shall be void (and claims for the underlying Breach shall be deemed waived) unless Purchaser commences an enforcement action for Purchaser’s claims arising from the subject Breach in a court of competent jurisdiction on or before the date that is ninety (90) days after the date that Seller provides a Dispute Notice to Purchaser. Any claim related to a Breach that Purchaser fails to assert in a Breach Notice prior to the expiration of the Survival Period shall be deemed waived by Purchaser. If Purchaser discovers a Breach during the Survival Period and timely delivers a Breach Notice thereof to Seller, then (subject to the limitations set forth above that may accrue in connection with the issuance of a Dispute Notice) Purchaser shall have the right to thereafter pursue an

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action against Seller for Purchaser's actual, direct damages incurred by Purchaser by reason of such Breach.

b. Purchaser's Representations and Warranties. Purchaser hereby represents and warrants to Seller that:

i. Good Standing. Purchaser is a limited liability company duly organized, validly existing and in good standing in the jurisdiction of its organization.

ii. Due Authority. Purchaser has all requisite power and authority to execute and deliver this Agreement and to carry out its obligations hereunder and the transactions contemplated hereby. This Agreement has been, and the documents contemplated hereby will be, duly executed and delivered by Purchaser and constitute Purchaser’s legal, valid and binding obligation enforceable against Purchaser in accordance with its terms. The consummation by Purchaser of the purchase of the Property is not in violation of or in conflict with nor does it constitute a default under any term or provision of the organizational documents of Purchaser, or any of the terms of any agreement or instrument to which Purchaser is or may be bound, or of any provision of any applicable law, ordinance, rule or regulation of any governmental authority or of any provision of any applicable order, judgment or decree of any court, arbitrator or governmental authority.

iii. Bankruptcy, Etc. Purchaser has never:

[a] filed a voluntary petition in bankruptcy;

[b] been adjudicated a bankrupt or insolvent or filed a petition or action seeking any reorganization, arrangement, recapitalization, readjustment, liquidation, dissolution or similar relief under any Federal bankruptcy act or any other laws;

[c] sought or acquiesced in the appointment of a trustee, receiver or liquidator of all or any substantial part of its or his properties, personal property or any portion thereof, or

[d] made an assignment for the benefit of creditors or admitted in writing its or his inability to pay its or his debts generally as the same become due.

Purchaser is not anticipating or contemplating any of the actions set forth in [a] through [d] of this subsection.

c. Covenants of Seller.

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i. Operation and Leasing of the Property. Seller agrees, until the Closing, to continue to operate, maintain and repair the Property in Seller's usual and customary manner. From the Effective Date until the end of the Inspection Period, Seller may enter into new leases, use, or occupancy agreements affecting the Property or extend, renew, amend, cancel, or terminate any Leases. Seller shall provide not less than two (2) business days' prior written notice of any such proposed new lease, use or occupancy agreement or proposed extension, renewal, amendment, cancellation or termination of any Lease, to the extent that the subject item requires the written consent, approval or agreement of Seller to be effective. After expiration of the Inspection Period, Seller will not enter into any lease, use, or occupancy agreement affecting any portion of the Property or extend, renew, amend, cancel, or terminate any Leases without the prior written approval of Purchaser, which approval shall not be unreasonably withheld, conditioned, or delayed, and which written approval shall in all cases be given or denied within five (5) days of request therefore, so long as (A) with respect to new leases, such leases are at market rents and terms, and (B) with respect to lease amendments, do not result in an adverse change to the economic terms of such Lease; will not credit or apply any security, utility, or other deposits to any Uncollected Rents (as hereinafter defined), and will comply with all the obligations of the lessor under all such Leases. Further, from the Effective Date until the Closing, Seller will not place any mortgage or other encumbrance on the Property without the prior written approval of Purchaser, which approval shall not be unreasonably withheld, conditioned, or delayed. Seller will pay or cause to be paid prior to Closing all costs and expenses for tenant improvements and commissions becoming due in connection with any Lease executed prior to the Effective Date. Purchaser will credit to Seller at Closing the amount of any tenant improvements and leasing commissions incurred and actually paid by Seller between the Effective Date and Closing Date for any space leased after the Effective Date and assume the obligation to pay any such amounts payable following the Closing. Seller will deliver to Purchaser copies of all default notices and other material notices received from any Tenant.

ii. Service Contracts. Without Purchaser's prior written consent, Seller agrees not to enter into any Service Contracts prior to the Closing which shall survive the Closing unless same are terminable upon thirty (30) days’ prior written notice without penalty or termination charge. Purchaser may request in writing on or before the expiration of the Inspection Period (but not otherwise) that Seller terminate any Service Contract that can be terminated without penalty upon thirty (30) days' notice, in which event Seller, at Closing, shall send written notice of termination to the vendors under such Service Contracts designated by Purchaser, and Purchaser shall be responsible for payment and performance of all obligations

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under such Service Contracts during the remaining term of such Service Contracts following Closing.

iii. Insurance Policies. Seller shall, at its own expense, keep and maintain in full force and effect through the Closing, a policy or policies of all risk and general liability insurance covering the Property, from time to time on the Property, against loss or damage by fire, vandalism, malicious mischief, lightning, windstorm, water, accidents, contingent liability and other insurable perils, and rent loss insurance in amounts not less than those in force as of the date hereof.

d. Tenant Estoppels; SNDAs. Seller agrees to use commercially reasonable efforts to obtain and deliver to Purchaser within the period expiring five (5) business days prior to the Closing Date (the "Estoppel Delivery Period"), estoppel certificates ("Estoppel Certificates") executed by each of the Tenants under the Leases of the Property as of the Effective Date, in the form and substances of the letter attached hereto and made a part hereof as Exhibit "C". Estoppel Certificates that (1) are dated not more than thirty (30) days prior to the Closing Date, (2) have all blanks completed or marked not applicable, as appropriate, (3) have all exhibits completed and attached, as applicable, (4) do not indicate (x) any material discrepancy from the due diligence materials provided by Seller to
Purchaser, (y) any Lease amendment, assignment or subletting that was not previously provided by Seller to Purchaser and which is not reasonably acceptable to Purchaser, or (z) any material and adverse claim or landlord default, and (5) if the Tenant's obligations under the applicable Lease have been guaranteed by another person or entity, also cover such guaranty and are also signed by the guarantor(s) (items (1)-(5) being collectively referred to herein as the "Estoppel Requirements") are herein referred to as the "Tenant Executed Estoppels". In the event that Seller shall not have obtained Tenant Executed Estoppels from all Major Tenants (as hereinafter defined) and from Tenants occupying at least 75% of the total square footage of tenant space within the Property (collectively, the "Required Tenant Executed Estoppels") at the Closing, then Seller shall not be in default under this Agreement and Purchaser, at Purchaser’s option and as Purchaser’s sole and exclusive remedy, shall (a) have the right to terminate this Agreement by delivering written notice of termination to Seller on or before the expiration of three (3) days following the expiration of the Estoppel Delivery Period, in which event the Earnest Money shall be promptly returned to Purchaser by the Escrow Agent, and the parties shall have no further obligations under this Agreement, one to the other, except as otherwise expressly provided in this Agreement, (b) proceed with the Closing, or (c) adjourn the Closing for a period not exceeding thirty (30) days to allow Seller additional time to obtain the Required Tenant Executed Estoppels. Seller agrees to forward each executed Estoppel Certificate received by Seller from a Tenant to Purchaser within three (3) business days after Seller's receipt of same and Purchaser agrees to give written notice to Seller of any deficiency in any Estoppel Certificate within three (3) business days after Purchaser’s receipt of same. If Purchaser elects to proceed

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with the Closing without receiving the Required Tenant Executed Estoppels, then Purchaser shall be deemed to have elected to waive this requirement and shall have no further right to object thereto. For purposes of this Agreement, the term Major Tenant shall be deemed to mean and refer to Toys R Us/Babies R Us, Office Depot, Container Store, Shoe Carnival, Barnes and Noble, Cavender's and Golf Galaxy. In addition to the foregoing, Seller agrees to reasonably cooperate with Purchaser and Purchaser's lender, at no cost or expense to Seller, in seeking to obtain executed subordination, non-disturbance and attornment agreements (the "SNDAs") from the Tenants. Further, Seller agrees that Purchaser and Purchaser's lender shall have the right to deal directly with the Tenants in negotiating and obtaining the execution of the SNDAs, provided such actions are taken following notice to and in coordination with Seller's counsel.

8. Closing. The closing (the "Closing") of the sale of the Property by Seller to Purchaser shall occur on or before the date that is the earlier to occur of (a) the date that is designated by Purchaser as the closing date in a written notice to Seller delivered not less than five (5) business days prior to such designated closing date, and (b) the date that is thirty (30) days after the expiration of the Inspection Period (as the same may be extended, as provided below, the "Closing Date"), and the closing documents and purchase price shall be held in escrow and delivered pursuant to the escrow instructions of each party through the escrow services of the Title Company (although neither party shall be obligated to be present at the Closing as long as all items required to be delivered by such party at Closing are timely delivered to the Title Company). Purchaser shall have the right to extend the Closing Date (not more than one time) to a date selected by Purchaser that is not later than thirty (30) days after the originally scheduled Closing Date; provided that Purchaser delivers (i) written notice of such extension (the "Extension Notice") to Seller and the Title Company on or before the originally scheduled Closing Date, and (ii) deposits the Additional Earnest Money with the Escrow Agent within one (1) business day after the date of delivery of the Extension Notice. On the Closing Date the following shall occur:

a. Seller to Deliver. Seller, at its expense, shall deliver or cause to be delivered to Purchaser the following:

i. A Special Warranty Deed (the "Deed") in the form of Exhibit "D", fully executed and acknowledged by Seller, conveying to Purchaser the Land and Improvements, subject only to the Permitted Encumbrances;

ii. An Assignment and Assumption of Tenant Leases (the "Assignment of Tenant Leases") in the form of Exhibit "E", fully executed by Seller, assigning, conveying, and transferring all of the Landlord's interest in and to the Leases;

ii. A Bill of Sale and Assignment (the "Bill of Sale") in the form of Exhibit "F", fully executed and acknowledged by Seller, assigning, conveying, and transferring all of Seller's right, title and interest in and to

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the Property other than the Land and Improvements, to Purchaser, subject only to the Permitted Encumbrances;

iii. Such affidavits as may be reasonably required by the Title Company, including, without limitation, mechanics' liens, parties in possession and gap affidavits;

iv. Evidence reasonably satisfactory to the Title Company that the persons executing and delivering the Closing documents on behalf of Seller have full right, power and authority to do so;

v. A Certificate in the form of Exhibit "G" meeting the requirements of Section 1445 of the Internal Revenue Code of 1986, executed and sworn to by Seller;

vi. A current tenant rent roll, certified by Seller to be true and correct to Seller's knowledge in all material respects;

vii. To the extent in Seller’s possession or control, originals (or true and correct copies if originals are not available) of all Leases, including all amendments thereto and the original lease files relating thereto; and

viii. To the extent not previously delivered by Seller to Purchaser, copies of (a) records and files which are in Seller's possession or control relating to the current operation and maintenance of the Property, including, without limitation, current tax bills, current water, sewer, utility and fuel bills, payroll records, billing records for Tenants, repair and maintenance records and the like which affect or relate to the Property, (b) all documents necessary to conduct 2012 Tenant reconciliations, (c) all architectural and engineering plans and specifications relating to the Property in Seller's possession or control, including the Plans and Specifications, (d) keys to the Property, and (e) all original Leases and Service Contracts, Warranties and Licenses. Seller's obligation to provide the files and materials listed herein shall survive the Closing. Items delivered pursuant to this clause viii shall be delivered without warranty, representation or recourse, except that the same are true copies of the items as contained in Seller’s files.

ix. The Owner's Policy (as hereinafter defined).

x. A notice to Tenants in the form set forth on Exhibit "H" attached hereto (the "Tenant Notice Letter"), which will be delivered by Seller to the respective Tenants following Closing.

b. Purchaser to Deliver. Purchaser, at its expense, shall deliver or cause to be delivered to Seller the following:

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i. Funds available for immediate credit in Seller's accounts, in the amount of the Purchase Price as specified in Section 3, subject to credit for adjustments and prorations;

ii. Evidence satisfactory to the Title Company that the person executing the Closing documents on behalf of Purchaser (to the extent applicable) has full right, power, and authority to do so;

iii. The Assignment of Tenant Leases, Bill of Sale and Tenant Notice Letter, duly executed by Purchaser.

c. Expenses of Closing. Seller shall pay the cost of the Survey, the base premium for the Owner's Policy, and the cost of releasing all liens, judgments and other encumbrances that are required by Seller to be released under this Agreement and the costs of recording such releases. Purchaser shall pay for all title endorsements, and any deletions, exceptions or other upgraded policy provisions desired by Purchaser in connection with the Owner's Policy. Purchaser shall pay any transfer, documentary, intangible or other taxes or fees in connection with the conveyance of the Property. Seller shall pay all fees for recording the Deed in the real property records of the county in which the Property is located. Purchaser and Seller shall share equally any escrow closing charges. Purchaser and Seller shall each be responsible for their own attorneys' fees and shall respectively pay such other costs in connection with the Closing as is customary in the county in which the Property is located.

d. Prorations. The following shall be apportioned between Seller and Purchaser as of the close of business on the Closing Date:

i. all rent and other amounts collected by Seller under or pursuant to the Leases with respect to the month in which the Closing occurs, to be apportioned and retained in accordance with Section 8.e. hereof;

ii. real estate taxes, assessments, vault charges and taxes, and any other governmental taxes and charges levied or assessed against the Property (collectively, "Property Taxes"), on the basis of the respective periods for which each is assessed or imposed, to be apportioned in accordance with Section 8.f. hereof;

iii. charges for electricity, gas and any other utilities (collectively, "Utilities") payable to utility companies servicing the Property to be apportioned in Section 8.g. hereof, and transferable utility deposits, if any, shall be transferred to Purchaser, and all transferable deposits which are transferred to Purchaser under utility agreements shall be reimbursed by Purchaser to Seller; and

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iv. expenses of the Property, including any charges or payments to be paid pursuant to any Service Contract or Lease with respect to the Property to be apportioned in accordance with Section 8.g. hereof.

e. Rents. Rents and other amounts payable under the Leases shall be apportioned on the basis of the period for which the same is payable and if, as and when collected, as follows:

i. Rents, common area charges, escalations, and other tenant reimbursements (other than Deposits) payable under the Leases (collectively, the "Rents") for the Property or portions thereof shall be prorated, except that no proration shall be made for Rents not received by Seller as of the Closing Date (hereinafter called the "Uncollected Rents"). During the period after Closing, Purchaser shall deliver to Seller any and all Uncollected Rents accrued but uncollected as of the Closing Date, to the extent subsequently collected by Purchaser, as follows. Amounts collected by Purchaser from Tenants owing Uncollected Rents shall be applied first to current amounts owed by such Tenant and accruing on or after the Closing Date, then to Uncollected Rents owing for the rent period during which the Closing occurred (such amount to be prorated between Purchaser and Seller as provided herein), and then the remainder, if any, to Seller as Uncollected Rents owing prior to the rent period during which the Closing occurred. Percentage rents for each applicable Lease shall be prorated on the basis of the number of days elapsed during the Tenant’s percentage rent period as of the Closing Date and not on the basis of the amount of the Tenant’s sales which accrued during such percentage rent period as of the Closing Date. All Deposits received by Seller from any Tenant under an existing Lease shall be paid over to Purchaser, net of any amounts that have been applied by Seller in accordance with the applicable Lease or returned to the applicable Tenant. Seller shall have no right to pursue the collection of Uncollected Rents which accrued prior to Closing. For a period of one (1) year after Closing, Purchaser shall continue to bill Tenants for Uncollected Rents and use reasonable efforts to collect such Uncollected Rents, provided that in no event shall Purchaser have any obligation to commence any legal proceedings against any Tenant or otherwise pursue any remedies against any such Tenant. Any sums received by Purchaser to which Seller is entitled shall be held for Seller on account of said Uncollected Rents payable to Seller, and Purchaser shall remit to Seller any such sums received by Purchaser to which Seller is entitled within ten (10) business days after receipt thereof. If Seller receives any amounts after the Closing Date which are attributable, in whole or in part, to any period after the Closing Date, Seller shall remit to Purchaser that portion of the moneys so received by Seller to which Purchaser is entitled within ten (10) business days after receipt thereof.

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ii. Any prepaid Rents shall be retained by Seller and the amount thereof shall be credited to Purchaser at Closing.

f. Property Taxes.

i. Property Taxes shall be apportioned on the basis of the fiscal period for which assessed. If the Closing Date shall occur either before an assessment is made or a tax rate is fixed for the tax period in which the Closing Date occurs, the apportionment of such Property Taxes based thereon shall be made at the Closing Date by applying the tax rate for the preceding year to the latest assessed valuation. Purchaser shall provide to Seller written evidence of such assessment and/or tax rate for the current year within thirty (30) days of Purchaser’s receipt of same. The apportionment thereof shall be recalculated and Seller or Purchaser, as the case may be, shall promptly make an appropriate payment to the other based on such recalculation within said thirty (30) day period, provided, however, if either Seller or Purchaser does not notify the other party of any required adjustments pursuant to this Section 8.f. on or prior to December 15 of the year in which Closing occurs, such party shall have no further right to seek or require payment by the other party of any other sums under this Section 8.f.

ii. Notwithstanding anything contained in this Agreement to the contrary, to the extent any Property Taxes for the year of Closing are payable on an annual basis by any Tenants pursuant to their Leases subsequent to Closing, such Property Taxes will not be prorated and Purchaser shall be entitled to receive all such payments made by such Tenants subsequent to Closing.

g. Other Expenses and Year-End Adjustments. All other expenses of the Property (other than interest on loans encumbering the Property), including, but not limited to, public utility charges, interest (other than interest on loans or liens encumbering the Property), maintenance charges and service charges, to the extent not required to be paid by Tenants, shall be prorated as of the Closing Date, with the purpose that in general Seller shall pay all expenses relating to the operation of the Property prior to and on the Closing Date, and Purchaser shall pay all expenses relating to the operation of the Property for the period subsequent to the Closing Date. To the extent that information for any such proration is not available at the Closing, the parties shall effect such proration within ninety (90) days after: (i) the end of the calendar year in which the Closing occurs if the Closing occurs in 2012; or (ii) the Closing Date if the Closing occurs in 2013 (the “Reconciliation Date”). Seller shall be entitled to retain any tenant common area maintenance expenses, taxes and insurance paid to Seller prior to Closing, and to the extent the same have not been applied by Seller in payment of applicable costs accruing and becoming payable prior to the Closing, Purchaser will receive a credit at the Closing for such amounts and Purchaser will recognize

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such amounts in the calculation of the amount owed by such tenants for the year in which the Closing occurs. Any tenant common area maintenance expenses, taxes and insurance expenses, to the extent payable on an annual basis by any Tenants pursuant to their Leases subsequent to Closing, will not be adjusted as of the Closing Date, but rather shall be calculated at the time Purchaser calculates year-end adjustments, as set forth below. On or before the Reconciliation Date, Purchaser shall calculate year-end adjustments for the year in which the Closing occurs for common area maintenance expenses, taxes and insurance owed by or to any Tenant under the Leases. If based on such year-end calculations any Tenants owe additional sums to the landlord for their pro rata share of common area maintenance expenses, taxes and insurance under their respective Leases, Purchaser agrees to send to, and use Purchaser's customary efforts to collect from, such Tenants' invoices for those sums owed by such Tenants and attributable to the portion of the annual period including the Closing Date during which Seller owned the Property and remit to Seller any amounts paid by Tenants and received by Purchaser in payment of such amounts. If based on such year-end calculations the landlord owes a refund, credit, or other sums to any one or more Tenants under the Leases for an overpayment of such Tenant’s pro rata share of common area maintenance expenses, taxes and insurance, Seller agrees to pay to Purchaser an amount equal to such refunds, credits or other sums, in the aggregate, owed to such Tenants, which sums are attributable to the portion of the annual period prior to the Closing Date during which Seller owned the Property and which sums Seller either received and retained prior to Closing or for which Seller received a credit at Closing. The provisions of this Section 8.g. shall survive the Closing.

h. Closing Adjustments. If the computation of the aforementioned apportionments shows that a net amount is owed by Seller to Purchaser, such amount shall be credited against the Purchase Price payable by Purchaser on the Closing Date. If such computation shows that a net amount is owed by Purchaser to Seller, such amount shall be paid to Seller by Purchaser on the Closing Date.

i. Possession. Upon completion of the Closing, Seller shall deliver to Purchaser possession of the Property, subject only to the rights of Tenants under the Leases and the Permitted Encumbrances.

j. Container Store. To the extent that the $456,340.00 tenant improvement allowance provided to Container Store under the Third Amendment of its lease has not been fully disbursed, the undisbursed balance shall be credited to Purchaser at Closing and Purchaser shall assume the obligation to pay such balance to such tenant.

k. Conditions to Obligations to Close. The obligations of Purchaser to consummate the transactions contemplated herein shall be subject to the fulfillment of the following conditions ("Purchaser's Conditions"), any of which may be waived by Purchaser in its sole and absolute discretion:

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i. The representations and warranties of Seller made herein shall be true and correct in all material respects, Seller shall have performed all covenants and agreements made herein and Seller shall have delivered in escrow all of the closing documents required pursuant to Section 8.a. hereof.

ii. Purchaser shall have received the Required Tenant Executed Estoppels.

iii. An unconditional and irrevocable agreement by the Title Company to issue the Owner's Policy (subject only to the satisfaction of conditions that are the obligation of Purchaser under this Agreement).

iv. Seller shall be prepared to deliver of possession of the Property to Purchaser subject only to the Permitted Encumbrances and to the rights of Tenants under the Leases, as tenants only, conditioned only upon the closing and funding of this transaction.

v. As of the Closing Date, no Major Tenant shall have (a) filed a petition in bankruptcy, (b) been adjudicated insolvent or bankrupt, (c) petitioned a court for the appointment of any receiver of or trustee for it or any substantial part of its property, (d) commenced any proceeding under any reorganization, arrangement, readjustment of debt, dissolution or liquidation law or statute of any jurisdiction, whether now or hereafter in effect, (e) become the subject of an involuntary bankruptcy petition, (f) vacated its leased premises, or (g) had its Lease terminated. There shall not have been commenced and be pending against any Tenant any proceeding of the nature described in the first sentence of this subparagraph. No order for relief shall have been entered with respect to any Major Tenant under the Federal Bankruptcy Code.

vi. Seller shall have confirmed to Purchaser that any existing management agreement and/or leasing agreement entered into by Seller with respect to the Property shall have been terminated, conditioned only upon the closing and funding of this transaction.

vii. Seller shall be prepared to assign to Purchaser, without recourse or warranty, any existing warranties for the Property, conditioned upon the closing and funding of this transaction.

In the event Purchaser has performed all of its obligations under this Agreement, including tender of the Purchase Price into escrow in immediately available funds and any of the Purchaser's Conditions shall not be satisfied as of the Closing Date, Purchaser shall give Seller written notice of the conditions that remain unsatisfied and if such conditions remain unsatisfied following three (3) business days after Purchaser’s notice, then Purchaser shall have the right to terminate this Agreement by giving written notice to Seller and receive a return of the Earnest Money, whereupon neither party shall have any further rights or obligations hereunder except for any provisions of this Agreement that expressly survive termination.

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9. Commissions. If, as and when the Closing occurs, Seller agrees to pay CBRE, Inc. ("Broker") a real estate brokerage commission pursuant to a separate agreement between Seller and Broker. Purchaser and Seller each warrant and represent to the other that it has not dealt or negotiated with any broker in connection with this transaction other than Broker. If Closing and funding do not occur for any reason, including without limitation, the default of either party, no commission shall be earned, due or payable. Each party hereby agrees to indemnify and hold the other party hereto harmless from and against any and all claims, demands, causes of action, loss, costs and expenses (including reasonable attorneys' fees and disbursements, as incurred) or other liability arising from or pertaining to any brokerage commissions, fees, or other compensation, which may be due to such brokers or any other brokers or persons claiming to have dealt with such party in connection with this transaction. Seller advises Purchaser that one or more of the principals in Seller are licensed real estate agents or brokers acting herein for their own account. By Purchaser’s execution hereof, Purchaser acknowledges that Purchaser has been informed that it should obtain in connection with the purchase of the Property either a policy of title insurance or should have an abstract of title to the Property examined by an attorney of its choice.

10. Destruction, Damage, or Taking Before Closing. If, before Closing, all or any part of the Land, Improvements or Personalty are destroyed or damaged, or become subject to condemnation or eminent domain proceedings (a "damage or taking"), then Seller shall promptly notify Purchaser thereof. In the event of a damage or taking involving a material part of the Land, Improvements or Personalty (a "material damage or taking"), Purchaser may elect to proceed with the Closing (subject to the other provisions of this Agreement) or may terminate this Agreement by delivering written notice thereof to Seller within five (5) business days after Purchaser’s receipt of Seller’s notice respecting the damage, destruction, or taking. If, within five (5) business days of receipt of Seller’s notice respecting such material damage or taking, Purchaser delivers written notice of termination of this Agreement to Seller, this Agreement shall terminate and, except for obligations of Seller and Purchaser which survive termination of this Agreement, the parties shall have no further obligations hereunder. If Purchaser does not timely elect to terminate this Agreement, Purchaser shall have no further right to terminate this Agreement as a result of the damage or taking and in such event, and Seller shall assign to Purchaser at Closing all insurance proceeds or condemnation awards payable as a result of such damage or taking. For the purposes of this Section 10, damage or a taking shall be considered to be "material" if the value of the portion of the Land, Improvements, or Personalty damaged or taken exceeds $500,000.00 in value, or, in the case of a taking, if the portion of the Land, Improvements, or Personalty taken are such that they materially and adversely affect the ability to use the remainder for the purposes for which they are presently used. If the damage or taking is not a material damage or taking, Purchaser shall not be entitled to terminate this Agreement as a result thereof, but at the Closing, Seller shall assign to Purchaser all insurance proceeds or condemnation awards payable as a result of such taking, less Seller’s actual out-of-pocket costs incurred in collecting such insurance proceeds or condemnation awards or in restoring damages resulting from the applicable casualty or condemnation.

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11. Termination and Remedies.

a. If Purchaser defaults under this Agreement or fails to consummate the purchase of the Property pursuant to this Agreement for any reason other than Seller's failure to perform its obligations hereunder or timely termination hereof pursuant to a right granted to Purchaser in Sections 5.b., 6, 7.a., 10 or 11.c., then Seller, as its sole remedy, may terminate this Agreement by notifying Purchaser thereof, in which event the Escrow Agent shall deliver the Earnest Money to Seller as liquidated damages, whereupon, except for obligations of Purchaser which survive termination of this Agreement, neither Purchaser nor Seller shall have any further rights or obligations hereunder. The provision for payment of liquidated damages has been included because, in the event of a breach by Purchaser, the actual damages to be incurred by Seller can reasonably expected to approximate the amount of liquidated damages called for herein and because the actual amount of such damages would be difficult if not impossible to measure accurately. In addition to the foregoing, Seller shall also be entitled to recover and pursue: (a) all expenses, including reasonable attorneys' fees and litigation costs, incurred in connection with recovering the Earnest Money following a breach hereof by Purchaser; and (b) all rights and remedies available to Seller with respect to any obligation of Purchaser which survives termination of this Agreement.

b. If Purchaser terminates this Agreement pursuant to Sections 5.b., 6, 7.a., 10 or 11.c., then the Escrow Agent shall return the Earnest Money to Purchaser, whereupon neither party hereto shall have any further rights or obligations hereunder, except for those which survive the termination of this Agreement.

c. If Seller fails to consummate the sale of the Property pursuant to this Agreement for any reason other than Purchaser’s failure to perform its obligations hereunder in all material respects or termination hereof by Purchaser in accordance with this Agreement, then Purchaser may, as its sole and exclusive remedies therefor: (i) terminate this Agreement by written notice to Seller, in which event the Escrow Agent shall deliver the Earnest Money to Purchaser and neither party hereto shall have any further rights or obligations hereunder, except for those which survive the termination of this Agreement; (ii) enforce specific performance of the obligations of Seller hereunder, or (iii) to the extent specific performance is not available to Purchaser as a result of a willful act or omission of Seller occurring after the Effective Date, Purchaser may recover actual damages (subject to the limitations on Seller’s liability contained herein), but in no event shall Purchaser be entitled to recover any consequential, punitive or speculative damages.

12. Miscellaneous.

a. Notices. All notices provided or permitted to be given under this Agreement must be in writing and may be served by depositing same in the United States mail, addressed to the party to be notified, postage prepaid and registered or certified

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with return receipt requested; by delivering the same to such party by recognized delivery service; by nationally recognized overnight delivery service or by facsimile copy transmission. Notice given in accordance herewith shall be effective upon delivery to the address of the addressee. For purposes of notice, the addresses of the parties shall be as follows:

If to Seller:	BB Fonds International 1 USA, L.P. c/o Phoenix Property Company 5950 Sherry Lane Suite 320 Dallas TX 75225-6585 Attn: Mr. Eric Horan Phone: (214) 880-0350 Fax: (214) 880-0360 email: ehoran@ppc-usa.com
with a copy to:	Robert A. McCulloch Haynes and Boone, LLP 2323 Victory Avenue, Suite 700 Dallas, Texas 75219-7672 Telephone No: (214) 651-5600 Facsimile No: (214) 200-0529 email: robert.mcculloch@haynesboone.com
If to Purchaser:	American Realty Capital IV, LLC 405 Park Avenue, 15th Floor New York, New York 10022 Attn: Mr. Michael Weil Facsimile No: (857) 207-3397 email: mweil@arlcap.com
with a copy to:	American Realty Capital IV, LLC  405 Park Avenue, 15th Floor  New York, New York 10022  Attn: Jesse Galloway  Facsimile No: (646) 861-7751  email: jgalloway@arlcap.com
with a copy to:	Lincoln Property Company 2000 McKinney Avenue Suite 1000 Dallas, Texas 75201 Attention: Mr. Robert Dozier Facsimile No.: (214) 740-3313 email: rdozier@lpc.com

PURCHASE AND SALE AGREEMENT - Page 25

with a copy to: with a copy to:	Lincoln Property Company 2000 McKinney Avenue Suite 1000 Dallas, Texas 75201 Attention: Mr. Jeff DeWeese Facsimile No.: (214) 740-3467 email: jdeweese@lpc.com William L. Sladek, Esq. Condon Thornton Sladek Harrell PLLC 8080 Park Lane, Suite 700 Dallas, TX 75231 Telephone No: (214) 691-6310 Facsimile No: (214) 691-6311 email: bsladek@ctshlaw.com
If to Escrow Agent: If to Title Company:	Chicago Title Insurance Company 1515 Market Street Suite 1325 Philadelphia, PA 19102-1930 Attn: Edwin G. Ditlow Facsimile No: (215) 732-1203 Email: ditlowe@ctt.com Benchmark Title Services, LLC 2000 McKinney Avenue 4th Floor Dallas TX 75201 Attn: Mr. Brian A. Ficke Phone: (214) 485-8686 Cell: (214) 674-8402 Fax: (214) 485-8698 Email: bficke@bmktitle.com

Either party hereto may change its address for notice by giving three days prior written notice thereof to the other party. Notices may be given by the above-named counsel to a party. Email addresses are included for reference purposes only, and any required notices must be delivered by one of the methods of delivery described above.

b. Assigns, Beneficiaries.

i. Except as hereinafter specified, this Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, legal representatives, successors and assigns. This Agreement is for the sole benefit of Seller and Purchaser, and no third party is intended to be a

PURCHASE AND SALE AGREEMENT - Page 26

beneficiary of this Agreement. Purchaser shall not have the right to transfer or assign its rights under this Agreement to any other party without the express written consent of Seller to be withheld or granted in Seller's sole discretion, except as set forth in the immediately following sentence. Notwithstanding the foregoing, Purchaser shall have the right to assign this Agreement and the rights of Purchaser hereunder to any affiliate of Purchaser without the consent of Seller. For purposes of this Agreement, the term "affiliate" means any entity which is controlled by, under common control with or controls Purchaser. In the event of any such assignment, Purchaser shall promptly furnish to Seller an executed copy of the assignment in which the assignee assumes all of the rights and obligations of Purchaser hereunder. No consent given by Seller to any transfer or assignment of Purchaser's rights or obligations hereunder shall be construed as a consent to any other transfer or assignment of Purchaser's rights or obligations hereunder. Further, without limiting the generality of the foregoing, Purchaser is entering into this Agreement for and on behalf of a special purpose entity owned or controlled by Purchaser (“Approved Assignee”) and intends, and shall have the right, to assign Approved Assignee its rights under this Agreement prior to the Closing. No transfer or assignment in violation of the provisions hereof shall be valid or enforceable.

ii. Purchaser and Seller acknowledge that either party may wish to structure this transaction as a tax deferred exchange of like-kind property within the meaning of Section 1031 of the Internal Revenue Code. Each party agrees to reasonably cooperate with the other party to effect such an exchange; provided, however, that: (i) the cooperating party shall not be required to acquire or take title to any exchange property; (ii) the cooperating party shall not be required to incur any expense (excluding attorneys' fees) or liability whatsoever in connection with the exchange, including, without limitation, any obligation for the payment of any escrow, title, brokerage or other costs incurred with respect to the exchange; (iii) no substitution of the effectuating party shall release said party from any of its obligations, warranties or representations set forth in this Agreement or from liability for any prior or subsequent default under this Agreement by the effectuating party, its successors, or assigns, which obligations shall continue as the obligations of a principal and not of a surety or guarantor; (iv) the effectuating party shall give the cooperating party at least three (3) days prior notice of the proposed changes required to effect such exchange and the identity of any party to be substituted in the escrow; (v) the effectuating party shall be responsible for preparing all additional agreements, documents and escrow instructions (collectively, the "Exchange Documents") required by the exchange, at its sole cost and expense; and (vi) the effectuating party shall be responsible for making all determinations as to the legal sufficiency, tax considerations and other considerations relating to the proposed exchange, the Exchange Documents and the transactions contemplated thereby, the cooperating

PURCHASE AND SALE AGREEMENT - Page 27

party shall in no event be responsible for, or in any way be deemed to warrant or represent any tax or other consequences of the exchange transaction arising by reason of the cooperating party's performance of the acts required hereby, and in no event shall either party's obligations be in any way subject to or conditioned upon the efficacy of any proposed tax deferred exchange.

c. Limitation on Liability. Notwithstanding any provision contained in this Agreement or any of the documents to be executed by Seller to Purchaser at Closing (collectively, the "Purchase Documents"): (i) the representations, warranties, indemnities, undertakings, covenants and agreements of Seller (collectively, "Seller’s Undertakings") under this Agreement and the Purchase Documents shall not constitute personal obligations of the officers, directors, employees, agents, trustees, limited partners, members, representatives, stockholders or other principals or representatives of Seller, and no personal liability or personal responsibility of any sort with respect to any of Seller’s Undertakings or any alleged breach thereof is assumed by, or shall at any time be asserted or enforceable against any of the officers, directors, employees, agents, trustees, limited partners, members, representatives, shareholders or other principals or representatives of Seller; (ii)  the Purchaser’s right of recourse with respect to Seller’s Undertakings shall expire upon the date which is one (1) year following the Closing, (iii) in no event shall Purchaser be entitled to recover any consequential, punitive or speculative damages or lost profits as a result of or in connection with Seller’s Undertakings, it being agreed and understood that any action by Purchaser against Seller in connection with any of Seller’s Undertakings shall be limited to actual, direct damages incurred by Purchaser in connection therewith as limited by clause (iv) below, and (iv) Seller's liability for any and all of Seller’s Undertakings shall be limited to $500,000.00 in the aggregate, and Seller shall have no liability in excess of such amount.

d. Governing Law. This Agreement shall be governed and construed in accordance with the laws of the state in which the Property is located.

e. Entire Agreement. This Agreement is the entire agreement between Seller and Purchaser concerning the sale of the Property, and no modification hereof or subsequent agreement relative to the subject matter hereof shall be binding on either party unless reduced to writing and signed by the party to be bound. All Exhibits attached hereto are incorporated herein by this reference for all purposes.

f. Rule of Construction; No Waiver. Purchaser and Seller acknowledge that each party has reviewed this Agreement and that the rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement or any amendments hereto. No provision of this Agreement shall be deemed to have been waived by either party unless the waiver is in writing and signed by that party. No custom or practice which may evolve between the Purchaser and Seller during the term of this

PURCHASE AND SALE AGREEMENT - Page 28

Agreement shall be deemed or construed to waive or lessen the right of either of the parties hereto to insist upon strict compliance of the terms of this Agreement.

g. Confidentiality. Seller and Purchaser agree that, unless required pursuant to a subpoena properly issued by a court of competent jurisdiction or as otherwise may be required by law, neither shall, prior to Closing, with respect to the Property or the terms of this Agreement, or at any time, with respect to financial information concerning the other party hereto, disclose any such information to any third party or parties, except to agents, employees or independent contractors (including, without limitation, attorneys and accountants) advising or assisting Seller or Purchaser with the transaction contemplated hereby, potential or actual investors, potential and actual lenders of all or a portion of the Purchase Price and as otherwise expressly allowed pursuant to the terms and provisions of this Agreement; provided such persons agree to maintain the confidentiality of such information. Seller and Purchaser shall not be required to keep confidential information that (i) is already in the public domain, or (ii) is or generally becomes available to the public other than as a result of a disclosure by a party hereto in violation of this Agreement or another party subject to the confidentiality provisions of this Section. Further, nothing in this Section shall prevent either Seller or Purchaser from disclosing the existence of this Agreement. The provisions of this Section shall survive Closing or termination of this Agreement.

h. Counterparts. This Agreement may be executed in multiple counterparts, and all such executed counterparts shall constitute the same agreement. It shall be necessary to account for only one (1) such counterpart executed by each party hereto in proving the existence, validity or content of this Agreement.

i. Severability. If any provision of this Agreement is determined by a court of competent jurisdiction to be invalid or unenforceable, the remainder of this Agreement shall nonetheless remain in full force and effect.

j. Section Headings. Section headings contained in this Agreement are for convenience only and shall not be considered in interpreting or construing this Agreement.

k. Words. Within this Agreement, words of any gender shall be held and construed to include any other gender, and words in the singular number shall be held and construed to include the plural, unless the context otherwise requires.

l. Back Up Contracts. Seller shall have the right during the pendency of this Agreement to negotiate and enter into back up contracts for the sale of the Property.

m. Rule 3-14 Audit and SEC Filing Requirements. Within nine (9) months after the Closing, Purchaser's auditor may conduct an audit, as may be required of Purchaser pursuant to Rule 3-14 of Securities and Exchange Commission

PURCHASE AND SALE AGREEMENT - Page 29

Regulation S-X (the "Audit"), of the accounting records of the Property for the last complete fiscal year immediately preceding the Closing Date and the stub period through the Closing Date (the "Audit Period"). Seller shall reasonably cooperate with Purchaser's auditor in the conduct of the Audit, but shall not be required to incur any cost, liability or expense, and Purchaser shall advance to Seller its estimated reasonable, out of pocket costs to be incurred in connection with said cooperation. Without limiting the foregoing, (a) Purchaser or its designated independent or other auditor may audit the accounting records of the Property, at Purchaser's expense and, upon Purchaser's prior written request of at least ten (10) business days, Seller shall allow Purchaser's auditors reasonable access to such books and records as are then maintained by Seller in respect to the Property and pertaining to the Audit Period as reasonably necessary to conduct the Audit (but without any specific obligation to maintain any such books and records); and (b) Seller shall use reasonable efforts to provide to Purchaser such existing financial information as may be reasonably required by Purchaser for Purchaser's auditors to conduct the Audit; provided, however, that the ongoing obligations of Seller shall be limited to providing such information or documentation as may be in the possession or control of Seller, at no unreimbursed cost to Seller, and in the format that Seller has from time to time maintained such information, with no obligation to compile such information except other than in the form it then exists. Seller shall provide a letter to Purchaser’s auditors in substantially the form attached hereto as Exhibit "I" or otherwise reasonably acceptable to Seller and Purchaser. All information provided in connection with this Section 12m shall be subject to the confidentiality requirements of Section 12g of this Agreement. Notwithstanding anything to the contrary contained herein, Seller has not and does not warrant the accuracy of its accounting records and Purchaser shall not be entitled to rely upon the same as being true, correct, complete or accurate. Purchaser shall defend, with counsel chosen by Purchaser, indemnify and hold Seller harmless of any and from all loss, cost and expense, including reasonable attorneys' fees, to the extent arising out of the disclosure by Purchaser of any actual or alleged inaccuracies, errors, mistakes, inconsistencies, incompleteness or misrepresentations contained in Seller’s financial statements; provided that the foregoing shall not apply to claims by Purchaser against Seller relating to a Breach. Any public disclosure by Purchaser of financial information containing, or based in any way upon, information contained in Seller’s accounting records shall specifically state that the same were made available to Seller as an accommodation to Seller, without representation, recourse or warranty except that the same were used by Seller in the ownership and operation of the Property and were not relied upon by Purchaser in acquiring the Property and shall not be relied upon by any other person.

n. Reporting Person. Seller and Purchaser hereby designate the Title Company as the "Reporting Person" for the transaction contemplated by this Agreement for purposes of Section 6045(e) of the Internal Revenue Code and the regulations promulgated thereunder.

PURCHASE AND SALE AGREEMENT - Page 30

o. Time of Essence. Time is of the essence with respect to this Agreement and each of the obligations of the parties hereunder. However, if the Closing or the final date of any period which is set out in any provision of this Agreement falls on a Saturday, Sunday or legal holiday under the laws of the United States or the State of Texas, then, and in such event, the Closing or such period shall be extended so that the Closing or the last day of such period falls on the next day which is not a Saturday, Sunday or legal holiday.

p. Offer and Acceptance. This Agreement constitutes an offer by the first party to execute this Agreement to sell or purchase the Property on the terms and conditions and for the Purchase Price stated herein. Unless sooner terminated or withdrawn by notice in writing to the second party, this offer shall automatically lapse and terminate at 5:00 p.m. on September 14, 2012, unless, prior to such time, the second party has returned to the first party a copy of this Agreement bearing the signature of the second party. The "Effective Date" or any other reference to the date of this Agreement shall mean the date on which this Agreement is signed by Seller, Purchaser, the Escrow Agent and the Title Company, as indicated by their signatures below.

[SIGNATURE PAGE FOLLOWS]

PURCHASE AND SALE AGREEMENT - Page 31

EXECUTED by Seller this 10^th day of September, 2012.

SELLER:

BB FONDS INTERNATIONAL 1 USA, L.P., a
Delaware limited partnership

By: BB-Lincoln, Inc.,

a Delaware corporation,

its General Partner

By: /s/ Michael Piontek                                        

Name: Michael Piontek

Title: General Partner, BB Lincoln

EXECUTED by Purchaser this 10th day of September, 2012.

PURCHASER:

AMERICAN REALTY CAPITAL IV, LLC,

a Delaware limited liability company

By: /s/ Edward M. Weil, Jr.                                          

Name: Edward M. Weil, Jr.

Title: President

PURCHASE AND SALE AGREEMENT - Page 32

The Title Company acknowledges receipt of a fully executed copy of this Agreement this 12th day of September, 2012, and agrees to comply with the provisions of this Agreement.

TITLE COMPANY:

BENCHMARK TITLE SERVICES, LLC

By: /s/ Brittney Rogers                                                 

Name: Brittney Rogers

Title: Escrow Officer

The Escrow Agent acknowledges receipt of a fully executed copy of this Agreement this 13^th day of September, 2012, and agrees to comply with the provisions of this Agreement governing the disposition of the Earnest Money. Escrow Agent hereby confirms that it is qualified to do business in the State of Texas, that Escrow Agent hereby submits to the jurisdiction of the state and federal courts of Texas in connection with any proceeding arising out of or in connection with this Agreement and that proper venue for any proceeding concerning this Agreement or over the Earnest Money shall be in the county and state in which the Land is located or at the location that the Closing of the subject transaction is to occur.

ESCROW AGENT:

CHICAGO TITLE INSURANCE COMPANY

By: /s/ Edwin G. Ditlow                                                

Name: Edwin G. Ditlow

Title: Vice President

PURCHASE AND SALE AGREEMENT - Page 33

Schedule of Exhibits

Exhibit A - Description of Land

Exhibit B - Description of Personalty

Exhibit C - Form of Tenant Estoppel Certificate

Exhibit D - Form of Special Warranty Deed

Exhibit E Form of Assignment of Tenant Leases

Exhibit F - Form of Bill of Sale and Assignment

Exhibit G - Form of Non-Foreign Certificate

Exhibit H - Form of Tenant Notice Letter

Schedule 1 - Lease Schedule

Schedule 2 - Service Contracts

Schedule 3 - Due Diligence Materials

Schedule 4 - Governmental Proceedings

PURCHASE AND SALE AGREEMENT - Page 34

EXHIBIT "A"

[Description of Land]

EXHIBIT "A", Description of Property – Page 1

EXHIBIT "B"

[Description of Personalty]

None

EXHIBIT "B", Description of Personalty - Page 1

EXHIBIT "C"

TENANT ESTOPPEL CERTIFICATE

san pedro crossing

san antonio, texas

The undersigned ("Tenant") hereby warrants and represents to and agrees with American Realty Capital IV, LLC, and its successors and assigns (the "Purchaser"), the Purchaser's lender and _____________________________, and its successors and assigns (the "Seller") as follows, with the understanding that Purchaser and Seller are relying on such warranties, representations and agreements in connection with Purchaser’s acquisition, the Purchaser's lender's financing and Seller's sale of the shopping center situated in San Antonio, Texas, and commonly known as "San Pedro Crossing" (the "Shopping Center") affected by the Lease (as defined herein below):

1. ____________________ ("Tenant") is the Tenant under that certain lease (the "Lease") dated ____________________, between ____________________, as Lessor or Landlord ("Lessor"), and Tenant, as Tenant, pertaining to that certain premises located at _________________________ (the "Leased Premises") consisting of ________ rentable square feet.

2. The undersigned has accepted and now occupies the premises. The current Lease term will expire on ____________________________ and there are no options to renew the Lease for any additional term or terms (except as indicated following this sentence).

3. The Lease has not been modified, changed, altered or amended in any respect (except as indicated following this sentence) and is the only lease or agreement between the undersigned and the Lessor affecting the premises.

4. No default exists under the terms of the Lease by either Lessor or the undersigned.

5. The undersigned has no claim against the Lessor under the Lease and has no defense or right of offset against collection of rent or other charges accruing under the Lease.

6. The minimum rent per month payable under the Lease for the premises in the amount of $___________________ was last paid on ___________________ for the period from ___________________________ to and including __________________________. No rent has been prepaid for more than one (1) month (except as indicated following this sentence).

7. A security deposit in the amount of $_________________ is being held by Lessor pursuant to the Lease.

8. The Lease does not contain and the undersigned has no outstanding options or rights of first refusal to purchase the premises or any part thereof or the real property of which the premises are a part.

EXHIBIT "C", Tenant Estoppel Certificate – Page 1

9. The identity and address of any guarantor of the Lease is indicated following this sentence.

EXECUTED this ____ day of __________________, 2012.

TENANT:

___________________________________

By:                                                                           

Printed Name:                                                        

Title:                                                                        

EXHIBIT "C", Tenant Estoppel Certificate – Page 2

EXHIBIT "D"

SPECIAL WARRANTY DEED

THE STATE OF TEXAS	§
	§	KNOW ALL MEN BY THESE PRESENTS:
COUNTY OF BEXAR	§

THAT BB FONDS INTERNATIONAL 1 USA, L.P., a Delaware limited partnership ("Grantor"), for and in consideration of the sum of TEN DOLLARS ($10.00) and other valuable consideration to the undersigned in hand paid by the Grantee herein named, the receipt and sufficiency of which are hereby acknowledged, has GRANTED, SOLD AND CONVEYED, and by these presents does GRANT, SELL AND CONVEY unto ____________________________, a ____________________ ("Grantee"), whose address is _____________________________, the real property situated in Bexar County, Texas described on Exhibit "A" attached hereto and incorporated herein by reference (the "Property"), together with all improvements situated thereon and all of Grantor’s right, title and interest in and to all rights and appurtenances to the Property in anywise belonging.

This conveyance, however, is made and accepted subject to the matters described on Exhibit "B" attached hereto and made a part hereof (the "Permitted Encumbrances"). Grantor warrants that the Property is free from any encumbrances arising by, through or under Grantor other than the Permitted Encumbrances, but does not warrant that the Property is free from any other encumbrances.

TO HAVE AND TO HOLD the Property, together with all and singular the rights and appurtenances thereto in anywise belonging, unto the Grantee and Grantee’s successors and assigns forever, subject to the matters set forth herein; and Grantor does hereby bind itself, its successors and assigns to WARRANT AND FOREVER DEFEND all and singular the Property unto the Grantee, Grantee’s successors and assigns against every person whomsoever claiming or to claim the same or any part thereof, by, through or under Grantor, but not otherwise.

Ad valorem taxes applicable to the Property have been paid up to, and including the year 2011. Ad valorem taxes applicable to the Property for the year 2012 have been prorated between the Grantor and the Grantee as of the date of this Special Warranty Deed and payment thereof is assumed by Grantee.

GRANTEE ACKNOWLEDGES THAT GRANTEE HAS INDEPENDENTLY AND PERSONALLY INSPECTED THE PROPERTY AND THAT GRANTEE HAS PURCHASED THE PROPERTY BASED UPON SUCH EXAMINATION AND INSPECTION. GRANTEE, ACKNOWLEDGES THAT, EXCEPT AS SET FORTH IN THAT CERTAIN PURCHASE AND SALE AGREEMENT (THE "SALE AGREEMENT"), DATED AUGUST ___, 2012, BETWEEN GRANTOR, AS SELLER, AND AMERICAN REALTY CAPUITAL IV, LLC, AS PURCHASER, WITH RESPECT TO THE PROPERTY, GRANTEE IS PURCHASING THE PROPERTY IN "AS-IS, WHERE-IS" CONDITION "WITH ALL FAULTS" AS OF THE CLOSING AND SPECIFICALLY AND EXPRESSLY WITHOUT ANY WARRANTIES,

EXHIBIT "D", Special Warranty Deed - Page 1

REPRESENTATIONS OR GUARANTEES, EITHER EXPRESS OR IMPLIED, FROM THE GRANTOR OR ANY OF GRANTOR’S PARTNERS, SHAREHOLDERS, MEMBERS, AFFILIATES, OFFICERS, EMPLOYEES, AGENTS, TRUSTEES AND BENEFICIARIES (THE "GRANTOR INDEMNITEES") AS TO, AND GRANTEE, ON BEHALF OF ITSELF AND ITS SUCCESSORS AND ASSIGNS, INCLUDING, WITHOUT LIMITATION, ANY SUBSEQUENT OWNER OF THE PROPERTY OR ANY PORTION THEREOF, WAIVES ALL CLAIMS AGAINST AND RIGHT TO RECOVER FROM, RELEASES AND AGREES TO INDEMNIFY, DEFEND AND HOLD HARMLESS GRANTOR AND THE GRANTOR INDEMNITEES OF AND FROM ANY AND ALL PRESENT OR FUTURE DEMANDS, CLAIMS, LEGAL OR ADMINISTRATIVE PROCEEDINGS, LOSSES, LIABILITIES, DAMAGES, PENALTIES, FINES, LIENS, JUDGMENTS, COSTS OR EXPENSES, KNOWN OR UNKNOWN, FORESEEN OR UNFORESEEN, ARISING FROM OR RELATING TO: (I) THE PROPERTY'S CONDITION, FITNESS FOR ANY PARTICULAR PURPOSES, SUITABILITY, OR MERCHANTABILITY, (II) THE STRUCTURAL INTEGRITY OF AND/OR ANY DEFECTS IN THE IMPROVEMENTS, (III) THE ACCURACY OR COMPLETENESS OF ANY OF THE INFORMATION, DATA, MATERIALS OR CONCLUSIONS CONTAINED IN ANY INFORMATION PROVIDED GRANTEE, (IV) THE FAILURE OF THE PROPERTY TO COMPLY WITH ANY LAWS APPLICABLE TO THE PROPERTY, (V) ANY ENVIRONMENTAL CONDITION OF THE PROPERTY, INCLUDING, WITHOUT LIMITATION, THE PRESENCE OR ALLEGED PRESENCE OF ASBESTOS, RADON OR ANY HAZARDOUS MATERIALS OR HARMFUL OR TOXIC SUBSTANCES IN, ON, UNDER OR ABOUT THE PROPERTY, INCLUDING WITHOUT LIMITATION ANY CLAIMS UNDER OR ON ACCOUNT OF (A) THE COMPREHENSIVE ENVIRONMENTAL RESPONSE, COMPENSATION AND LIABILITY ACT OF 1980, AS THE SAME MAY HAVE BEEN OR MAY BE AMENDED FROM TIME TO TIME, AND SIMILAR STATE STATUTES, AND ANY REGULATIONS PROMULGATED THEREUNDER, (B) ANY OTHER FEDERAL, STATE OR LOCAL LAW, ORDINANCE, RULE OR REGULATION, NOW OR HEREAFTER IN EFFECT, THAT DEALS WITH OR OTHERWISE IN ANY MANNER RELATES TO, ENVIRONMENTAL MATTERS OF ANY KIND, (C) THIS AGREEMENT, OR (D) THE COMMON LAW, OR (VI) ANY OTHER WARRANTY OF ANY KIND, NATURE, OR TYPE WHATSOEVER FROM GRANTOR OR ANY OTHER PARTY ON BEHALF OF GRANTOR. GRANTEE HAS CONDUCTED AND IS RELYING EXCLUSIVELY UPON ITS OWN INDEPENDENT INVESTIGATION IN THE EVALUATION OF THE PROPERTY. GRANTEE ASSUMES ALL RISKS RELATING IN ANY MANNER TO THE PROPERTY OR ANY DEFECTS THEREIN, IF ANY, OF ANY TYPE OR NATURE WHATSOEVER, AND SHALL BE SOLELY AND COMPLETELY RESPONSIBLE FOR THE PAYMENT OF ALL COSTS AND EXPENSES IN CONNECTION THEREWITH. FOR PURPOSES HEREOF, THE TERM "HAZARDOUS MATERIALS" SHALL MEAN ANY SUBSTANCE, CHEMICAL, WASTE OR MATERIAL THAT IS OR BECOMES REGULATED BY ANY FEDERAL, STATE OR LOCAL GOVERNMENTAL AUTHORITY BECAUSE OF ITS TOXICITY, INFECTIOUSNESS, RADIOACTIVITY, EXPLOSIVENESS, IGNITABILITY, CORROSIVENESS OR REACTIVITY, INCLUDING, WITHOUT LIMITATION, ASBESTOS OR ANY SUBSTANCE CONTAINING ASBESTOS, THE GROUP OF COMPOUNDS KNOWN AS POLYCHLORINATED BIPHENYLS, FLAMMABLE EXPLOSIVES, OIL, PETROLEUM OR ANY REFINED PETROLEUM PRODUCT. THE PROVISIONS OF THIS PARAGRAPH SHALL SURVIVE THE

EXHIBIT "D", Special Warranty Deed - Page 2

EXECUTION AND DELIVERY OF THIS SPECIAL WARRANTY DEED AND SHALL CONSTITUTE COVENANTS RUNNING WITH THE LAND AS TO THE PROPERTY BINDING UPON GRANTE, ITS SUCCESSORS AND ASSIGNS, INCLUDING, WITHOUT LIMITATION, ANY SUBSEQUENT OWNER OF THE PROPERTY.

Notwithstanding any provision contained herein to the contrary, it is expressly agreed and understood by and between the parties hereto that any liability of Grantor under this Special Warranty Deed shall be limited as set forth in that Sale Agreement.

EXHIBIT "D", Special Warranty Deed - Page 3

EXECUTED as of the _______ day of _________________, 2012.

GRANTOR:

BB FONDS INTERNATIONAL 1 USA, L.P., a

Delaware limited partnership

By: BB-Lincoln, Inc.,

a Delaware corporation,

its General Partner

By:                                                                                            

Name:                                                                                       

Title:                                                                                        

THE STATE OF TEXAS	§
	§
COUNTY OF _________	§

This instrument was acknowledged before me on the _____ day of _________________, 2012, by _____________________, ____________________ of BB Lincoln, Inc., a Delaware corporation, General Partner of BB Fonds International 1 USA, L.P., a Delaware limited partnership, on behalf of said corporation and limited partnership.

	NOTARY PUBLIC IN AND FOR
	THE STATE OF TEXAS
My Commission Expires:
	(Printed Name of Notary)

EXHIBIT "D", Special Warranty Deed - Page 4

EXHIBIT E

ASSIGNMENT AND ASSUMPTION OF TENANT LEASES

THE STATE OF TEXAS	§
	§	KNOW ALL MEN BY THESE PRESENTS:
COUNTY OF BEXAR	§

THIS ASSIGNMENT AND ASSUMPTION OF TENANT LEASES is made and entered into effective as of ______________, 201___ (the "Effective Date"), by and between BB FONDS INTERNATIONAL 1 USA, L.P., a Delaware limited partnership ("Assignor"), and ________________________________, a _____________________________ ("Assignee").

RECITALS

1. Assignor has this day conveyed to Assignee the real property (and improvements thereon) located in San Antonio, Bexar County, Texas, and more fully described in Annex A attached hereto and incorporated herein by reference for all purposes (the "Property").

2. The Property is subject to those leases described in Annex B attached hereto and incorporated herein by reference for all purposes (the "Tenant Leases").

3. Assignor desires to convey the interest of the landlord in, to and under the Tenant Leases to Assignee.

NOW, THEREFORE, for and in consideration of the sum of TEN AND NO/100 DOLLARS ($10.00) and other good and valuable consideration paid to Assignor by Assignee, the receipt and sufficiency of which are hereby acknowledged and confessed, Assignor does hereby ASSIGN, TRANSFER, SET-OVER and DELIVER unto Assignee all of the right, title and interest of the landlord in, to and under the Tenant Leases.

TO HAVE AND TO HOLD, all and singular, the interest of the landlord in, to and under the Tenant Leases unto Assignee and Assignee’s successors and assigns forever.

Assignor covenants and agrees to indemnify, save and hold harmless Assignee from and against any and all losses, liabilities, claims, or causes of action existing in favor of or asserted by the tenants under the Tenant Leases arising out of or related to the failure of the landlord under the Tenant Leases to perform any of the obligations of the landlord under the Tenant Leases accruing under the Tenant Leases prior to the date hereof.

Assignee hereby assumes and agrees to perform all of the terms, covenants and conditions required to be performed on the part of the landlord accruing under the Tenant Leases on and after the date hereof, including, but not limited to, the obligation to repay or credit all

EXHIBIT "E", Assignment and Assumption - Page 1 

security and prepaid rental deposits, if any, transferred to Assignee by Assignor to the tenants under the Tenant Leases in accordance with the terms thereof.

Assignee covenants and agrees to indemnify, save and hold harmless Assignor from and against any and all losses, liabilities, claims or causes of action existing in favor of or asserted by the tenants under the Tenant Leases arising out of or related to the landlord’s failure to perform any of the obligations of the landlord accruing under the Tenant Leases after the date hereof.

All the covenants, terms and conditions set forth herein shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns.

This Assignment and Assumption of Tenant Leases may be executed in multiple counterparts, each of which shall be deemed to be an original, but all of which, together, shall constitute one and the same instrument.

EXECUTED by Assignor and Assignee as of the Effective Date.

ASSIGNOR:

BB FONDS INTERNATIONAL 1 USA, L.P., a

Delaware limited partnership

By: BB-Lincoln, Inc.,

a Delaware corporation,

its General Partner

By:                                                                                            

Name:                                                                                       

Title:                                                                                        

ASSIGNEE:

____________________________

a __________________________

By:                                                                                            

Name:                                                                                       

Title:                                                                                        

EXHIBIT "E", Assignment and Assumption - Page 2

EXHIBIT F

BILL OF SALE AND ASSIGNMENT

THE STATE OF TEXAS	§
	§	KNOW ALL MEN BY THESE PRESENTS:
COUNTY OF BEXAR	§

THAT BB FONDS INTERNATIONAL 1 USA, L.P., a Delaware limited partnership ("Seller"), for and in consideration of the sum of Ten and No/100 Dollars ($10.00) and other good and valuable consideration to Seller in hand paid by ___________________________, a ___________________________ ("Purchaser"), has Granted, Sold, Assigned, Transferred, Conveyed, and Delivered and does by these presents Grant, Sell, Assign, Transfer, Convey, and Deliver unto the said Purchaser, all of Seller’s right, title and interest in and to the following described properties, rights, and interests arising in connection with that certain real property described in Exhibit "A" attached hereto and incorporated herein by reference (the "Land") and the improvements constructed thereon (the "Improvements"):

a. all tangible personal property and fixtures of any kind owned by Seller and attached to or used in connection with the ownership, maintenance, use, leasing, service, or operation of the Land or Improvements, including without limitation those items described on Exhibit B (the "Personalty");

b. all of the Landlord's interest in and to, and obligations under: (i) all leases demising space in the Improvements (collectively, the "Leases" and, individually, a "Lease"); (ii) all rents prepaid under any of the Leases for any period subsequent to the date hereof; and (iii) all security deposits ("Deposits"), made by tenants (collectively, the "Tenants" and, individually, a "Tenant") holding under the Leases, except that the term Deposits shall not include and Seller shall be entitled to retain the amount of any security and other deposits delivered by Tenants that, prior to the date hereof, Seller has applied pursuant to the provisions of a Tenant's Lease; and

c. all of Seller's right, title and interest in and to, and obligations under, all of the following, to the extent assignable: (i) all service, supply or maintenance contracts affecting the Land, Improvements or Personalty (the "Service Contracts"); provided, that to the extent a Service Contract is not assignable: [a] Seller has sent written notice of termination to the vendor thereunder as of the date hereof; and [b] Purchaser shall be responsible for payment and performance of all obligations arising under such Service Contract during the remaining term of such Service Contract following the date hereof, (ii) all warranties from third parties in connection with the Improvements or the Personalty ("Warranties"), (iii) except as provided below, all licenses, permits, government approvals and other land use entitlements held by Seller in connection with the Land, Improvements or Personalty, or otherwise benefitting the Land, Improvements or Personalty

EXHIBIT "F", Bill of Sale and Assignment - Page 1

("Licenses"), (iv) all telephone exchanges, trade names, marks, and other identifying material pertaining to the Land, Improvements or Personalty, and (v) all plans, drawings, specifications, surveys, engineering reports, and other technical information in the possession of Seller pertaining to the Land, Improvements or Personalty ("Plans and Specifications").

The items listed in this Section 1 are herein collectively called the "Property". Notwithstanding any provision contained in this Agreement to the contrary, the term "Property" shall not include, and Seller is not assigning or conveying to Purchaser, the following (the "Excluded Property"): (a) any insurance contracts or policies owned or held by Seller in connection with the Property; (b) the existing management contract in connection with the Property, which management contract has been terminated; (c) the computer software program used by Seller and/or Seller’s property manager in connection with the Property; (d) any and all deposits (other than Deposits as described above), cash (except to the extent attributable to prepaid rents under the Leases) and other accounts owned or held by Seller; or (e) any contracts, agreements or information pertaining to the cost of acquiring or developing the Property.

TO HAVE AND TO HOLD the Property unto Purchaser, its successors and assigns forever and Seller binds itself and its successors and assigns to forever WARRANT AND DEFEND the assets hereby sold unto Purchaser, its successors and assigns, forever against every person whomsoever lawfully to claim such herein described assets or any part thereof by, through or under Seller, but not otherwise; subject, however, to all matters in existence and affecting title to the Property.

PROVIDED, HOWEVER, THAT IT IS AGREED AND UNDERSTOOD THAT, EXCEPT AS SET FORTH IN THAT CERTAIN PURCHASE AND SALE AGREEMENT DATED AUGUST __, 2012, BETWEEN SELLER AND [ARC IV], THE PROPERTY IS USED, IS SOLD "AS IS" AND WITH ALL FAULTS AND "WHERE IS" AND SELLER EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES, EXPRESS OR IMPLIED, WITH REGARD TO THE PROPERTY, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTY OF FITNESS OR MERCHANTABILITY, QUALITY, DESIGN AND SUITABILITY OF THE ASSETS IN ANY RESPECT OR IN CONNECTION WITH, OR FOR THE PURPOSES AND USES OF, PURCHASER.

It is understood and agreed that, by its execution hereof, Purchaser hereby assumes and agrees to perform all of the terms, covenants and conditions contained in the Service Contracts properly due, owing or performable from and after the date hereof, to discharge any and all such obligations of Seller in the Service Contracts promptly and to indemnify, save and hold harmless Seller from any and all liability, claims or causes of action existing in favor of or asserted by other parties to the Service Contracts, arising out of or relating to Purchaser's failure to perform any of the obligations of Seller under the Service Contracts herein assigned properly due, owing or performable after the date hereof. Seller hereby agrees to indemnify, save and hold harmless Purchaser from any and all liability, claims, or causes of action, loss, cost, or expenses arising out of or relating to Seller's failure to perform any of the obligations of Seller under the Service

EXHIBIT "F", Bill of Sale and Assignment - Page 2

Contracts herein assigned properly due, owing or performable and properly allocable to the period prior to the date hereof.

Notwithstanding any provision contained herein to the contrary, it is expressly agreed and understood by and between the parties hereto that any liability of Seller under this Bill of Sale and Assignment shall be limited as set forth in that certain Purchase and Sale Agreement dated _______, entered into by and between Seller and Purchaser.

EXHIBIT "F", Bill of Sale and Assignment - Page 3

EXECUTED effective as of the _____ day of ____________, 2012.

SELLER:

BB FONDS INTERNATIONAL 1 USA, L.P., a

Delaware limited partnership

By: BB-Lincoln, Inc.,

a Delaware corporation,
its General Partner

By:                                                                                            

Name:                                                                                       

Title:                                                                                        

PURCHASER:

_________________________________,

a _________________________________

By:                                                                                            

Name:                                                                                       

Title:                                                                                        

EXHIBIT "F", Bill of Sale and Assignment - Page 4

THE STATE OF TEXAS	§
	§
COUNTY OF _________	§

This instrument was acknowledged before me on the _____ day of _________________, 2012, by _____________________, ____________________ of BB Lincoln, Inc., a Delaware corporation, General Partner of BB Fonds International 1 USA, L.P., a Delaware limited partnership, on behalf of said corporation and limited partnership.

	NOTARY PUBLIC IN AND FOR
	THE STATE OF TEXAS
My Commission Expires:
	(Printed Name of Notary)

THE STATE OF TEXAS	§
	§
COUNTY OF _________	§

This instrument was acknowledged before me on the _____ day of _________, 2012, by __________________, _______________ of __________________, a _______________, on behalf of said ______________.

	NOTARY PUBLIC IN AND FOR
	THE STATE OF TEXAS
My Commission Expires:
	(Printed Name of Notary)

EXHIBIT "F", Bill of Sale and Assignment - Page 5

EXHIBIT "G"

NON-FOREIGN CERTIFICATE

Section 1445 of the Internal Revenue Code (the "Code") provides that a transferee of a United States real property interest must withhold tax if the transferor is a "Foreign Person" as defined by the Code. For U.S. tax purposes (including Section 1445), the owner of a disregarded entity (which has legal title to a U.S. real property interest under local law) will be the transferor of the property and not the disregarded entity. To inform _______________________, a _________________ (the "Purchaser"), that withholding of tax is not required upon the disposition of a United States real property interest by BB FONDS INTERNATIONAL 1 USA, L.P., a Delaware limited partnership (the "Seller"), the undersigned hereby certifies to Purchaser the following on behalf of Seller:

1. Seller is not a foreign corporation, foreign partnership, foreign trust, or foreign estate (as all of those terms are defined in the Code and the Income Tax Regulations promulgated thereunder) for purposes of United States income taxation;

2. Seller is not a disregarded entity as defined in Section 1.1445-2(b)(2)(iii);

3. Transferor's U.S. employer identification number is ; and

4. Transferor's office address is .

Transferor understands that this certification may be disclosed to the Internal Revenue Service by transferee and that any false statement contained herein could be punished by fine, imprisonment, or both.

BB FONDS INTERNATIONAL 1 USA, L.P.,

a Delaware limited partnership

By: BB-Lincoln, Inc.,

a Delaware corporation,

its General Partner

By:                                                                        

Name:                                                                   

Title:                                                                     

Date:                                                                     

EXHIBIT "G", Nonforeign Certificate - Page 1

EXHIBIT "H"

TENANT NOTICE LETTER

[Date]

_____________________
_____________________
_____________________
_____________________

Re: Suite/Space No. ______, in the shopping center known as San Pedro Crossing, located in San Antonio, Bexar County, Texas (the "Shopping Center")

Gentlemen:

Please be advised that effective as of the date hereof, the Shopping Center has been sold by BB FONDS INTERNATIONAL 1 USA, L.P., a Delaware limited partnership ("Seller") to ________________________________, a ___________________________ ("Purchaser"). Purchaser has assumed Seller's obligations under the leases executed by each of you as tenant from and after the date hereof, including without limitation, any obligation Seller may have to return to you in accordance with the provisions of your lease the security deposit in the amount of $________ held by Seller. All future rental payments, including payments for any and all statements on hand, should be made payable to_____________ and delivered or mailed to the office of Purchaser at:

________________________________

________________________________

________________________________

________________________________

________________________________

If you have any questions, please contact the Purchaser.

SELLER:

BB FONDS INTERNATIONAL 1 USA, L.P., a

Delaware limited partnership

By: BB-Lincoln, Inc.,

a Delaware corporation,

its General Partner

By:                                                                    

Name:                                                                

Title:                                                                 

EXHIBIT "H", Tenant Notice – Page 1

PURCHASER:

_________________________________,

a _________________________________

By:                                                                                     

Name:                                                                                 

Title:                                                                                  

EXHIBIT "H", Tenant Notice – Page 2

EXHIBIT "I"

AUDIT LETTER

[Date]

[Address of Buyer’s Auditor]

We are providing this letter as an informational accommodation in connection with your audit of the statement of revenues and certain expenses (the “Statement”) of                 (the “Property”) for the period from                             to                             .

We confirm, to our actual, current knowledge, without any duty of inquiry or investigation, the following representation made to you during your audit:

1. The Statement referred to above was prepared consistent with Seller’s customary practices used in owning and operating the Property, but is otherwise without representation, recourse or warranty. Seller has not and does not warrant the accuracy of its accounting records and Auditor shall not be entitled to rely upon the same as being true, correct, complete or accurate.

2. Any public disclosure by Auditor of financial information containing, or based in any way upon, information contained in Seller’s accounting records shall specifically state that the same were made available to Auditor as an accommodation to AMERICAN REALTY CAPITAL IV, LLC, a Delaware limited liability company, without representation, recourse or warranty except that the same were used by Seller in the ownership and operation of the Property and were not relied upon by Purchaser in acquiring the Property and shall not be relied upon by any other person.

3. Except as indicated in the Statement or in this Letter, we have no actual, current knowledge of any fraud affecting the operations of the Property that had a material effect on the accuracy of the Statement.

      Date executed:   ______________, 2012   SELLER:   BB FONDS INTERNATIONAL 1 USA, L.P., a Delaware limited partnership   By: BB-Lincoln, Inc., a Delaware corporation,   its General Partner   By: _________________________   Name: _______________________   Title: _______________________

SCHEDULE 1

LEASE SCHEDULE

Actual or Potential Defaults:

1. Office Depot of Texas, L.P., was provided a tenant improvement allowance pursuant to Section 3 of its lease that was conditioned upon the tenant’s timely satisfaction of certain conditions set forth in Section 3.1(d) of its lease. The tenant did not fully and timely satisfy the conditions set forth in Section 3.1(d) of the lease, but proceeded to offset the tenant allowance amount against Fixed Rent payable under the lease.

2. Debi’s Floral and Bridal has failed to replenish a security deposit.

SCHEDULE 2

SERVICE CONTRACTS

SCHEDULE 3

DUE DILIGENCE MATERIALS

Copies of the following materials, to the extent they exist, relate to the Property and are in the actual possession or control of Seller, shall be delivered to Purchaser, without representation, recourse or warranty, except that, to the knowledge of Seller, the same are correct copies of the items as they exist in Seller’s files:

Tenant Information

1. Current Rent Roll

2. Tenant Leases/Ground Leases/REAs

3. Schedule of Security Deposits

Property Information

1. Current Site/Building Plans

2. Existing ALTA Survey

3. All Certificates of Occupancy

4. Current Architectural plans (to be made available to Purchaser at Seller's office)

5. Plans and Specifications for Original Development of Property (to be made available to Purchaser at Seller's office)

6. Plans and Specifications for Major Capital Repairs or Tenant Improvements (to be made available to Purchaser at Seller's office)

7. Engineering Drawings (to be made available to Purchaser at Seller's office)

8. Current Zoning Information

9. Current Real Estate Tax Information

10. Warranties at the Property

11. Current Construction Agreements

12. Current list of Personalty owned by Seller

Property Reports

1. Most recent Environmental Report

2. Most recent Geotechnical Reports

3. Most recent Boring Logs

4. Most recent Soils Reports

5. Most recent Utility Reports

Property Operations

1. Historical operating statements for 2010, 2011 and year to date

2. Current Annual Operating Budget

3. Current Account Receivables

4. Current Delinquency Report

5. CAM/RE Tax Reconciliation (most recent)

6. Current Tenant CAM and Tax Invoices

7. Current Prepaid Rent Report (with delinquent report)

8. Insurance Certificates for Tenants and Seller

9. Schedule of Pending Insurance Claims

10. Real Estate Tax Bills and Receipts

11. Service Contracts - elevator, trash disposal, security, music, exterior landscaping, interior plant maintenance, cleaning, janitorial, postage meter, fire alarm, etc.

12. Schedule of Outstanding Tenant Improvement Costs and Leasing Commissions

13. Tenant Ledgers

Leasing/Marketing

1. List of all Current Lease Deals (proposals/correspondence/approvals)

2. Current Leasing Report

Legal

1. List of all Current/Pending Litigation

SCHEDULE 4

GOVERNMENTAL PROCEEDINGS

None

Schedule 4

EX-10.18

THIRD AMENDMENT TO

ADVISORY AGREEMENT

This THIRD AMENDMENT to ADVISORY AGREEMENT is entered into as of November 13, 2012, among American Realty Capital - Retail Centers of America, Inc. (the “Company”) and American Realty Capital Retail Advisor, LLC (the “Advisor”).

RECITALS

WHEREAS, the Company and the Advisor entered into that certain Advisory Agreement (the “Advisory Agreement”), dated as of March 17, 2011, as amended from time to time; and

WHEREAS, pursuant to Section 15.2 of the Advisory Agreement, the Company and the Advisor desire to make a certain amendment to the Advisory Agreement.

NOW, THEREFORE, in consideration of the premises made hereunder, and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

1. Amendment to Section 8.2 of the Advisory Agreement. Effective July 1, 2012, Section 8.2 of the Advisory Agreement is hereby replaced in its entirety with the following:

“8.2Asset Management Fee. The Company shall pay an Asset Management Fee to the Advisor as compensation for services rendered in connection with the management of the Company's assets in an amount equal to 0.75% per annum of Average Invested Assets; provided, however, that the Asset Management Fee shall be reduced by any Oversight Fee payable to the Advisor, such that the aggregate Asset Management Fee and the Oversight Fee do not exceed 0.75% per annum of the Average Invested Assets. The Asset Management Fee is payable on the first business day of each month for the respective current month in the amount of 0.0625% of Average Invested Assets as of such date. The Advisor shall submit an invoice to the Company, accompanied by a computation of the Asset Management Fee for the applicable month. The Asset Management Fee to be paid for a month will be reduced by the average monthly amount that NAREIT FFO, as adjusted, during the six months ending on the last day of the calendar quarter immediately preceding the date that such Asset Management Fee is payable is less than the Distributions declared with respect to such six month period. For purposes of this determination, NAREIT FFO, as adjusted, is NAREIT FFO adjusted to (i) include acquisition fees and related expenses which is deducted in computing NAREIT FFO; and (ii) include non-cash restricted stock grant amortization, if any, which is deducted in computing NAREIT FFO.”

2. Amendment to Article 5 of the Advisory Agreement. Article 5 of the Advisory Agreement is hereby replaced in its entirety with the following:

“Article 5

Bank Accounts

The Advisor may establish and maintain one or more bank accounts in the name of the Company or the Operating Partnership and may collect and deposit into such account or accounts, and disburse from any such account or accounts, any money on behalf of the Company or the Operating Partnership, under such terms and conditions as the Board may approve; provided, that no funds shall be commingled with the funds of the Advisor.  The Advisor shall upon request render appropriate accountings of such collections and payments to the Board and the independent auditors of the Company.”

[Signature page follows.]

IN WITNESS WHEREOF, the undersigned, intending to be legally bound hereby, have duly executed this agreement as of the date first set forth above.

AMERICAN REALTY CAPITAL - RETAIL CENTERS OF AMERICA, INC.

By:_/s/ Edward M. Weil, Jr.__________________

Name:Edward M. Weil, Jr.

Title:President

AMERICAN REALTY CAPITAL RETAIL ADVISOR, LLC

By: American Realty Capital Retail Special Limited Partner, LLC,

its Member

By: American Realty Capital Trust IV, LLC,

its Managing Member

By:_/s/ Nicholas S. Schorsch________________

Name:Nicholas S. Schorsch

Title:Authorized Signatory

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO RULE 13a-14(a) AND 15d-14(a) UNDER

THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, Nicholas S. Schorsch, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of American Realty Capital – Retail Centers of America, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated this 13th day of November, 2012	/s/ Nicholas S. Schorsch
	Nicholas S. Schorsch
	Chief Executive Officer and Chairman of the Board of Directors
	(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO RULE 13a-14(a) AND 15d-14(a) UNDER

THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, Brian S. Block, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of American Realty Capital – Retail Centers of America, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated this 13th day of November, 2012	/s/ Brian S. Block
	Brian S. Block
	Executive Vice President, Chief Financial Officer
	(Principal Financial Officer)

EX-32

Exhibit 32

SECTION 1350 CERTIFICATIONS

This Certificate is being delivered pursuant to the requirements of Section 1350 of Chapter 63 (Mail Fraud) of Title 18 (Crimes and Criminal Procedures) of the United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed for purposes of Section 18 of the Securities Act of 1934, as amended.

The undersigned, who are the Chief Executive Officer and Chief Financial Officer of American Realty Capital – Retail Centers of America, Inc. (the “Company”), each hereby certify as follows:

The quarterly report on Form 10-Q of the Company, which accompanies this Certificate, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and all information contained in this quarterly report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated this 13th day of November, 2012

/s/ Nicholas S. Schorsch

Nicholas S. Schorsch

Chief Executive Officer and Chairman of the Board of Directors

(Principal Executive Officer)

/s/ Brian S. Block

Brian S. Block

Executive Vice President, Chief Financial Officer

(Principal Financial Officer)

XML

Fair Value of Financial Instruments (Fair Value, by Balance Sheet Grouping) (Details) (Fair Value, Inputs, Level 3 [Member], USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Mortgage Notes Payable [Member] | Carrying Amount [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt, fair value	$ 16,200	$ 0
Mortgage Notes Payable [Member] | Fair Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt, fair value	16,200	0
Notes Payable [Member] | Carrying Amount [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt, fair value	3,000	0
Notes Payable [Member] | Fair Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt, fair value	$ 3,000	$ 0

XML

Subsequent Events (Details) (USD $) In Millions, except Share data, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011	Sep. 30, 2012 Common Stock [Member]	Mar. 17, 2011 Common Stock [Member]	Oct. 31, 2012 Subsequent Event [Member]	Oct. 31, 2012 Subsequent Event [Member] Common Stock [Member]	Mar. 17, 2011 Minimum [Member] Common Stock [Member]	Oct. 31, 2012 Minimum [Member] Subsequent Event [Member] Common Stock [Member]
Subsequent Event [Line Items]
Common stock, shares outstanding	476,750	33,056			623,129
Aggregate value of all issuances and subscriptions of common stock outstanding	$ 4.6				$ 6.1
Per share value, in dollars per share			$ 10	$ 10		$ 10
Share Price, Dividend Reinvestment Plan							$ 9.50	$ 9.50

XML

Real Estate Investments (Schedule of Future Minimum Rental Payments for Operating Leases) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012
Real Estate [Abstract]
October 1, 2012 - December 31, 2012	$ 406
2013	1,352
2014	1,106
2015	1,101
2016	1,080
Thereafter	1,952
Total	$ 6,997

XML

Share-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2012

Share-based Compensation [Abstract]

Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]

The following table reflects restricted share award activity for the nine months ended September 30, 2012:

	Number of Shares of Common Stock		Weighted-Average Issue Price
Unvested, December 31, 2011	9,000		$	10.00
Granted	12,000		9.25
Vested	(1,200	)	10.00
Forfeitures	(3,000	)	10.00
Unvested, September 30, 2012	16,800		$	9.46

XML

Related Party Transactions and Arrangements (Schedule of Amount Contractually Due and Forgiven in Connection With Operation Related Services) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2012
Acquisition and Related Expenses [Member] | Incurred [Member] | One-Time Fees [Member]
Related Party Transaction [Line Items]
Related party operation fees and reimbursements	$ 0	$ 324
Acquisition and Related Expenses [Member] | Forgiven [Member] | One-Time Fees [Member]
Related Party Transaction [Line Items]
Related party operation fees and reimbursements	0	0
Financing Coordination Fees [Member] | Incurred [Member] | One-Time Fees [Member]
Related Party Transaction [Line Items]
Related party operation fees and reimbursements	0	162
Financing Coordination Fees [Member] | Forgiven [Member] | One-Time Fees [Member]
Related Party Transaction [Line Items]
Related party operation fees and reimbursements	0	0
Other Expense Reimbursements [Member] | Incurred [Member] | One-Time Fees [Member]
Related Party Transaction [Line Items]
Related party operation fees and reimbursements	0	0
Other Expense Reimbursements [Member] | Forgiven [Member] | One-Time Fees [Member]
Related Party Transaction [Line Items]
Related party operation fees and reimbursements	0	0
Asset Management Fees [Member] | Incurred [Member] | Ongoing Fees [Member]
Related Party Transaction [Line Items]
Related party operation fees and reimbursements	0	0
Asset Management Fees [Member] | Forgiven [Member] | Ongoing Fees [Member]
Related Party Transaction [Line Items]
Related party operation fees and reimbursements	0	8
Property Management and Leasing Fees [Member] | Incurred [Member] | Ongoing Fees [Member]
Related Party Transaction [Line Items]
Related party operation fees and reimbursements	0	0
Property Management and Leasing Fees [Member] | Forgiven [Member] | Ongoing Fees [Member]
Related Party Transaction [Line Items]
Related party operation fees and reimbursements	5	6
Operation Fees and Reimbursements [Member] | Incurred [Member]
Related Party Transaction [Line Items]
Related party operation fees and reimbursements	0	486
Operation Fees and Reimbursements [Member] | Forgiven [Member]
Related Party Transaction [Line Items]
Related party operation fees and reimbursements	$ 5	$ 14

XML

Mortgage Notes Payable (Schedule of Mortgage Notes Payable) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Debt Instrument [Line Items]
Outstanding Loan Amount	$ 16,200	$ 0
Mortgage Notes Payable [Member]
Debt Instrument [Line Items]
Outstanding Loan Amount	16,200
Debt Instrument, Basis Spread on Variable Rate	5.00%
Mortgage Notes Payable [Member] | Liberty Crossing [Member]
Debt Instrument [Line Items]
Encumbered Properties, in properties	1	0
Outstanding Loan Amount	$ 16,200	$ 0
Effective Interest Rate	5.58%	0.00%
Minimum [Member] | Option One [Member] | Mortgage Notes Payable [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	0.50%

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Subsequent Events (Schedule of Subsequent Events) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended		26 Months Ended	27 Months Ended	1 Months Ended
	Sep. 30, 2012	Sep. 30, 2012 Common Stock [Member]	Sep. 30, 2012 Common Stock [Member] Subsequent Event [Member]	Oct. 31, 2012 Common Stock [Member] Subsequent Event [Member]	Oct. 31, 2012 Common Stock [Member] Subsequent Event [Member] Issuance of Equity [Member]
Subsequent Event [Line Items]
Issuance of common stock	$ 4,101	$ 5	$ 4,350	$ 5,840	$ 1,490

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Real Estate Investments

9 Months Ended

Sep. 30, 2012

Real Estate [Abstract]

Real Estate Investments

Real Estate Investments

The following table presents the allocation of the assets acquired and liabilities assumed during the nine months ended September 30, 2012. There were no assets acquired or liabilities assumed during the nine months ended September 30, 2011.

	Nine Months Ended
(Dollar amounts in thousands)	September 30, 2012
Real estate investments, at cost:
Land	$	2,887
Buildings, fixtures and improvements	17,084
Total tangible assets	19,971
Acquired intangibles:
In-place leases	1,916
Above-market lease assets	199
Below market lease liabilities	(504		)
Total assets acquired, net	21,582
Mortgage notes payable used to acquire real estate investments	(16,200		)
Other liabilities assumed	(184		)
Cash paid for acquired real estate investments	$	5,198
Number of properties purchased	1

The Company acquires and operates retail properties. All such properties may be acquired and operated by the Company alone or jointly with another party. Buildings, fixtures and improvements include $17.1 million, comprised of $11.8 million, $1.0 million and $3.6 million, assigned to buildings, fixtures and land improvements, respectively, which is based upon a cost segregation analysis on such assets prepared by an independent third party specialist, as well as $0.7 million of tenant improvements.

The Company's portfolio of real estate properties is comprised of the following property as of September 30, 2012:

Portfolio	Acquisition Date	Number  of Properties	Square Feet	Occupancy		Remaining Lease Term (1)	Annualized Net Operating Income (2)		Base Purchase Price (3)		Capitalization Rate (4)		Annualized Rental Income (5) per Square Foot
							(In thousands)		(In thousands)
Liberty Crossing	Jun. 2012	1	105,970	94.7	%	4.2	$	1,544	$	21,582	7.2	%	$	15.73

_____________________

(1) Remaining lease term in years as of September 30, 2012, calculated on a weighted-average basis.

(2) Annualized net operating income for the three months ended September 30, 2012, or since acquisition date, for the property portfolio. Net operating income is rental income on a straight-line basis, which includes tenant concessions such as free rent, as applicable, plus operating expense reimbursement revenue less property operating expenses.

(3) Contract purchase price, excluding acquisition related costs.

(4) Annualized net operating income divided by base purchase price.

(5) Annualized rental income as of September 30, 2012 for the in-place leases in the property portfolio on a straight-line basis, which includes tenant concessions such as free rent, as applicable.

The following table presents pro forma information as if the acquisition during the nine months ended September 30, 2012 and September 30, 2011, had been consummated on January 1, 2011:

	Nine Months Ended September 30,
(In thousands)	2012			2011
Pro forma revenues	$	1,513		$	1,513
Pro forma net loss	$	(1,571	)	$	(1,885	)

The following table presents future minimum base rent cash payments due to the Company subsequent to September 30, 2012.  These amounts exclude contingent rent payments, as applicable, that may be collected from certain tenants based on provisions related to sales thresholds and increases in annual rent based on exceeding certain economic indexes among other items.

(In thousands)	Future Minimum Base Rent Payments
October 1, 2012 — December 31, 2012	$	406
2013	1,352
2014	1,106
2015	1,101
2016	1,080
Thereafter	1,952
	$	6,997

The following table lists the tenants whose annualized rental income on a straight-line basis represented greater than 10% of total annualized rental income for all portfolio properties on a straight-line basis as of September 30, 2012: 

Tenant	September 30, 2012
Ross Dress for Less, Inc.	18.1%
PetSmart, Inc.	15.6%

The termination, delinquency or non-renewal of leases by one or more of the above tenants may have a material adverse effect on revenues. No other tenant represents more than 10% of annualized rental income as of September 30, 2012.

The following table lists the states where the Company has concentrations of properties where annualized rental income on a straight-line basis represented greater than 10% of consolidated annualized rental income as of September 30, 2012: 

State	September 30, 2012
Texas	100.0%

The Company owned properties in no other state that in total represented more than 10% of the annualized rental income on a straight-line basis as of September 30, 2012.

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Share-Based Compensation (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options, fixed exercise price, in dollars per share	$ 10.00		$ 10.00
Stock Options [Member] | Stock Option Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized, in shares	500,000		500,000
Restricted Stock [Member] | Restricted Share Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized, in shares	7,500,000		7,500,000
Shares granted automatically upon election to board of directors, in shares	3,000		3,000
Periodic vesting percentage	20.00%		20.00%
Maximum authorized amount as a percentage of shares authorized	5.00%
Share based compensation	$ 9,000	$ 5,000	$ 13,000	$ 10,000

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Summary of Significant Accounting Policies Summary Of Significant Accounting Policies (Details) (Minimum [Member], USD $) In Millions, unless otherwise specified	Mar. 05, 2012
Minimum [Member]
Class of Stock [Line Items]
Minimum subscription required to break escrow	$ 2.0

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Organization (Details) (USD $)	9 Months Ended	26 Months Ended
	Dec. 31, 2011	Sep. 30, 2012 sqft property	Mar. 17, 2011
Operations [Line Items]
Common stock, par value, in dollars per share	$ 0.01	$ 0.01	$ 0.01
Common Stock, shares outstanding	33,056	476,750
Proceeds from Issuance of stock	$ 200,000	$ 4,400,000
Aggregate value of all issuances and subscriptions of common stock outstanding		4,600,000
Number of real estate properties		1
Total real estate investments, at cost		21,600,000
Square Feet		105,970
Real Estate Property, Occupancy Rate		94.70%
Units of limited partner interest in OP held by The Advisor		202
Minimum [Member]
Operations [Line Items]
Required purchase price for acquisition targets		$ 20,000,000
Required occupancy rate for acquisition targets		80.00%
Common Stock [Member]
Operations [Line Items]
Shares available for issuance under initial public offering, shares			150,000,000
Shares issued or available for issuance under initial public offering, price per share		$ 10	$ 10
Shares available for issuance under a distribution reinvestment plan, shares			25,000,000
Common Stock [Member] | Minimum [Member]
Operations [Line Items]
Shares issued or available for issuance under a distribution reinvestment plan, price per share			$ 9.50
Percent of estimated value of a share of common stock			95.00%

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Share-Based Compensation Restricted Stock Activity (Details) (Restricted Share Plan [Member], Restricted Stock [Member], USD $)	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2012
Restricted Share Plan [Member] | Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Intrinsic Value [Roll Forward]
Unvested, Number of Common Shares, in shares	9,000	16,800
Unvested, Weighted Average Issue Price, in dollars per share	$ 10.00	$ 9.46
Granted, Number of Shares, in shares	12,000
Granted, Weighted-Average Issue Price, in dollars per share	$ 9.25
Vested, Number of Common Shares, in shares	(1,200)
Vested, Weighted-Average Issue Price, in dollars per share	$ 10.00
Forfeitures, Number of Common Shares, in shares	(3,000)
Forfeitures, Weighted-Average Issue Price, in dollars per share	$ 10.00

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Real Estate Investments (Schedule of Assets and Liabilities Assumed) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2012 property
Real Estate Properties [Line Items]
Land	$ 2,887
Business Acquisition, Purchase Price Allocation, Buildings, Fixtures and Improvements Acquired in Period	17,084
Total tangible assets	19,971
Total assets acquired, net	21,582
Mortgage notes payable proceeds used to acquire real estate investments	(16,200)
Other liabilities assumed	(184)
Cash paid for acquired real estate investments	5,198
Number of properties purchased	1
In-Place Leases [Member]
Real Estate Properties [Line Items]
Acquired intangibles	1,916
Above Market Leases [Member]
Real Estate Properties [Line Items]
Acquired intangibles	199
Below Market Leases [Member]
Real Estate Properties [Line Items]
Acquired intangibles	(504)
Building [Member]
Real Estate Properties [Line Items]
Business Acquisition, Purchase Price Allocation, Buildings, Fixtures and Improvements Acquired in Period	11,800
Furniture and Fixtures [Member]
Real Estate Properties [Line Items]
Business Acquisition, Purchase Price Allocation, Buildings, Fixtures and Improvements Acquired in Period	1,000
Building Improvements [Member]
Real Estate Properties [Line Items]
Business Acquisition, Purchase Price Allocation, Buildings, Fixtures and Improvements Acquired in Period	3,600
Tenant Improvements [Member]
Real Estate Properties [Line Items]
Business Acquisition, Purchase Price Allocation, Buildings, Fixtures and Improvements Acquired in Period	$ 700

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Real Estate Investments (Schedule of Real Estate Properties) (Details) (USD $) In Thousands, unless otherwise specified			9 Months Ended
	Sep. 30, 2012 sqft property	Dec. 31, 2011	Sep. 30, 2012 Liberty Crossing [Member] property sqft
Real Estate Properties [Line Items]
Number of real estate properties	1		1
Square Feet	105,970		105,970
Real Estate Property, Occupancy Rate	94.70%		94.70%
Remaining lease term			4 years 2 months 12 days	[1]
Annualized Net Operating Income			$ 1,544	[2]
Base Purchase Price	$ 22,086	$ 0	$ 21,582	[3]
Capitalization Rate			7.20%	[4]
Annualized Rental Income per Square Foot, in dollars per square foot			15.73	[5]

[1] Remaining lease term in years as of September 30, 2012, calculated on a weighted-average basis.

[2] Annualized net operating income for the three months ended September 30, 2012, or since acquisition date, for the property portfolio. Net operating income is rental income on a straight-line basis, which includes tenant concessions such as free rent, as applicable, plus operating expense reimbursement revenue less property operating expenses.

[3] Contract purchase price, excluding acquisition related costs.

[4] Annualized net operating income divided by base purchase price.

[5] Annualized rental income as of September 30, 2012 for the in-place leases in the property portfolio on a straight-line basis, which includes tenant concessions such as free rent, as applicable.

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Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2012

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

The accompanying consolidated financial statements of the Company included herein were prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and with the instructions to this Quarterly Report on Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The information furnished includes all adjustments and accruals of a normal recurring nature, which, in the opinion of management, are necessary for a fair presentation of results for the interim periods. All intercompany accounts and transactions have been eliminated in consolidation. The results of operations for the three and nine months ended September 30, 2012 are not necessarily indicative of the results for the entire year or any subsequent interim period.

These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto as of, and for the year ended December 31, 2011, which are included in the Company's Annual Report on Form 10-K filed with the SEC on February 21, 2012.

There have been no significant changes to Company's significant accounting policies during the nine months ended September 30, 2012 other than the updates described below.

Development Stage Company

On March 5, 2012, the Company raised proceeds sufficient to break escrow in connection with its IPO. The Company received and accepted aggregate subscriptions in excess of the minimum $2.0 million and issued shares of common stock to its initial investors who were admitted as stockholders. The Company purchased its first property and commenced operations on June 8, 2012, and as of such date was no longer considered to be a development stage company.

Recently Issued Accounting Pronouncements

In May 2011, the Financial Accounting Standards Board ("FASB") issued guidance that expands the existing disclosure requirements for fair value measurements, primarily for Level 3 measurements, which are measurements based on unobservable inputs such as the Company's own data. This guidance is largely consistent with current fair value measurement principles with few exceptions that do not result in a change in general practice. The guidance was applied prospectively and was effective for interim and annual reporting periods beginning after December 15, 2011. The adoption of this guidance did not have a material impact on the Company's financial position or results of operations as the guidance relates only to disclosure requirements.

In June 2011, the FASB issued guidance requiring entities to present items of net income and other comprehensive income either in one continuous statement - referred to as the statement of comprehensive income - or in two separate, but consecutive, statements of net income and other comprehensive income. The new guidance does not change which components of comprehensive income are recognized in net income or other comprehensive income, or when an item of other comprehensive income must be reclassified to net income. In December 2011, the FASB deferred certain provisions of this guidance related to the presentation of certain reclassification adjustments out of accumulated other comprehensive income, by component in both the statement and the statement where the reclassification is presented. This guidance was applied prospectively and was effective for interim and annual periods beginning after December 15, 2011. The adoption of this guidance did not have a material impact on the Company's financial position or results of operations but changed the location of the presentation of other comprehensive income to more closely associate the disclosure with net income.

In September 2011, the FASB issued guidance that allows entities to perform a qualitative analysis as the first step in determining whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If it is determined that it is not more likely than not that the fair value of the reporting unit is less than its carrying amount, then a quantitative analysis for impairment is not required. The guidance was effective for interim and annual impairment tests for fiscal periods beginning after December 15, 2011.  The adoption of this guidance did not have a material impact on the Company's financial position or results of operations.

In December 2011, the FASB issued guidance regarding disclosures about offsetting assets and liabilities, which requires entities to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. The guidance is effective for fiscal years and interim periods beginning on or after January 1, 2013 with retrospective application for all comparative periods presented. The adoption of this guidance, which is related to disclosure only, is not expected to have a material impact on the Company's financial position or results of operations.

In July 2012, the FASB issued revised guidance intended to simplify how an entity tests indefinite-lived intangible assets for impairment. The amendments will allow an entity first to assess qualitative factors to determine whether it is necessary to perform a quantitative impairment test. An entity will no longer be required to calculate the fair value of an indefinite-lived intangible asset and perform the quantitative test unless the entity determines, based on a qualitative assessment, that it is more likely than not that its fair value is less than its carrying amount. The amendments are effective for annual and interim indefinite-lived intangible asset impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted. The Company does not expect the adoption to have a material impact on the Company’s financial position or results of operations.

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Real Estate Investments (Schedule of Pro Forma Revenues and Losses) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Real Estate [Abstract]
Pro forma revenues	$ 1,513	$ 1,513
Pro forma net loss	$ (1,571)	$ (1,885)

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Common Stock (Details) (USD $) In Millions, except Share data, unless otherwise specified	0 Months Ended	9 Months Ended	26 Months Ended
	Sep. 19, 2011	Dec. 31, 2011	Sep. 30, 2012
Stockholders' Equity Note [Abstract]
Common stock, shares outstanding		33,056	476,750
Proceeds from Issuance of stock		$ 0.2	$ 4.4
Dividends declared per day, in dollars per share	$ 0.0017534247

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CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
ASSETS
Land	$ 2,887	$ 0
Buildings, fixtures and improvements	17,084	0
Acquired intangible lease assets	2,115	0
Total real estate investments, at cost	22,086	0
Less: Accumulated depriciation and amortization	(653)	0
Total real estate investments, net	21,433	0
Cash	1,023	0
Restricted cash	176	0
Prepaid expenses and other assets	276	36
Deferred costs, net	269	0
Total assets	23,177	36
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Mortgage note payable	16,200	0
Notes Payable	3,000	0
Below-market lease liabilities	494	0
Accounts payable and accrued expenses	6,186	3,755
Deferred rent and other liabilities	42	0
Distributions payable	25	0
Total Liabilities	25,947	3,755
Preferred stock, $0.01 par value, 50,0000,000 authorized, none issued and outstanding at June 30, 2012 and December 31, 2011	0	0
Common stock, $0.01 par value, 300,000,000 shares authorized, 345,507 and 33,056 shares issued and outstanding at June 30, 2012 and December 31, 2011, respectively	5	0
Additional paid-in capital	(1,185)	(3,406)
Accumulated deficit	(1,590)	(313)
Total stockholders' deficit	(2,770)	(3,719)
Total liabilities and stockholders' deficit	$ 23,177	$ 36

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Net Loss Per Share (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Earnings Per Share, Basic and Diluted, by Common Class, Including Two Class Method [Line Items]
Net loss attributable to stockholders	$ (431)	$ (89)	$ (1,202)	$ (204)
Weighted average common shares outstanding, in shares	369,628	20,000	248,967	20,000
Net loss per share attributable to stockholders, basic and diluted, in dollars per share	$ (1.17)		$ (4.83)
Restricted Stock [Member]
Earnings Per Share, Basic and Diluted, by Common Class, Including Two Class Method [Line Items]
Antidilutive securities excluded from computation of earnings per share			16,800	9,000

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CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Cash flows from operating activities:
Net loss	$ (1,202,000)	$ (204,000)
Adjustments to Reconcile Net Income (Loss) to Cash Provided by (Used in) Operating Activities [Abstract]
Depreciation	375,000	0
Amortization of Intangibles	258,000	0
Amortization of deferred financing costs	75,000	0
Accretion of below-market lease liabilities and amortization of above-market lease assets, net	10,000	0
Share based compensation	13,000	10,000
Changes in assets and liabilities:
Prepaid expenses and other assets	(240,000)	(20,000)
Accounts payable and accrued expenses	252,000	80,000
Increase (Decrease) in Other Operating Liabilities	42,000	0
Net cash used in operating activities	(417,000)	(134,000)
Net Cash Provided by (Used in) Investing Activities [Abstract]
Investment in real estate and other assets	(5,198,000)	0
Net cash used in investing activities	(5,198,000)	0
Cash flows from financing activities:
Proceeds from notes payable	3,000,000	0
Payments of deferred financing costs	(314,000)	0
Proceeds from issuance of common stock	4,101,000	0
Payments of offering costs and fees related to stock issuance	(643,000)	(1,005,000)
Payments of Dividends	(46,000)	0
Proceeds from affiliates	716,000	1,138,000
Restricted cash	(176,000)	0
Net cash provided by financing activities	6,638,000	133,000
Net change in cash	1,023,000	(1,000)
Cash, beginning of period	0	1,000
Cash, end of period	1,023,000	0
Supplemental Disclosures:
Cash paid for interest	273,000	0
Non-Cash Operating, Investing and Financing Activities:
Proceeds from mortgage notes payable used to acquire investments in real estate	16,200,000	0
Stock Issued During Period, Value, Dividend Reinvestment Plan	4,000	0
Accrued Offering Costs	$ 3,331,000	$ 1,556,000

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Real Estate Investments Real Estate Investments (Schedule of Revenue from External Customers and Long-Lived Assets, by Geographic Areas) (Details) (TEXAS)	9 Months Ended
	Sep. 30, 2012
TEXAS
Revenues from External Customers and Long-Lived Assets [Line Items]
Entity Wide Revenue, Major State, Percentage	100.00%

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Mortgage Notes Payable (Tables)

9 Months Ended

Sep. 30, 2012

Debt Disclosure [Abstract]

Schedule of Mortgage Notes Payable

The Company's mortgage note payable as of September 30, 2012 consists of the following. The Company did not have any mortgage notes payable outstanding as of December 31, 2011.

	Encumbered	Outstanding Loan Amount as of		Effective
Portfolio	Properties	September 30, 2012		Interest Rate		Interest Rate	Maturity
		(In thousands)
Liberty Crossing	1	$	16,200	5.58	%	Variable	Dec. 2013

Schedule of Aggregate Principal Payments of Mortgages

The following table summarizes the scheduled aggregate principal payments for the Company's mortgage note payable subsequent to September 30, 2012.

(In thousands)	Future Principal Payments
October 1, 2012 — December 31, 2012	$	—
2013	16,200
2014	—
2015	—
2016	—
Thereafter	—
	$	16,200

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Note Payable (Details) (USD $)			1 Months Ended
	Sep. 30, 2012	Dec. 31, 2011	Jun. 30, 2012 Notes Payable, Other Payables [Member]	Sep. 30, 2012 Notes Payable, Other Payables [Member] extension_options	Jun. 05, 2012 Notes Payable, Other Payables [Member]
Debt Instrument [Line Items]
Note payable, face amount					$ 3,000,000
Debt Instrument, Interest Rate, Stated Percentage				8.00%
Number of extension options				2
Term of extension option			1 year
Exit fee as a percent of original loan amount				1.00%
Notes Payable	$ 3,000,000	$ 0		$ 3,000,000

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Related Party Transactions and Arrangements (Tables)

9 Months Ended

Sep. 30, 2012

Related Party Transactions [Abstract]

Schedule Of Offering Costs Reimbursements to Related Party

The following table details offering costs reimbursements from the Advisor and Dealer Manager during the three and nine months ended September 30, 2012 and 2011:

	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2012		2011		2012		2011
Fees and expense reimbursements incurred from the Advisor and Dealer Manager	$	398	$	406	$	1,210	$	1,151

Schedule of Amount Contractually Due and Forgiven in Connection With Operation Related Services

The following table details amounts incurred and amounts contractually due and forgiven in connection with the operations related services described above for the three and nine months ended September 30, 2012. No such fees were incurred or forgiven during the three and nine months ended September 30, 2011.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2012				2012
(In thousands)	Incurred		Forgiven (1)		Incurred		Forgiven (1)
One-time fees:
Acquisition fees and related cost reimbursements	$	—	$	—	$	324	$	—
Financing coordination fees	—		—		162		—
Other expense reimbursements	—		—		—		—
Ongoing fees:
Asset management fees	—		—		—		8
Property management and leasing fees	—		5		—		6
Total related party operation fees and reimbursements	$	—	$	5	$	486	$	14

_________________________________

(1) These fees have been waived. The Company's board of directors may elect, subject to the Advisor's approval, on a prospective basis, to pay asset management fees in the form of performance-based restricted shares of common stock.

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Organization

9 Months Ended

Sep. 30, 2012

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization

Organization

American Realty Capital — Retail Centers of America, Inc. (the “Company”), incorporated on July 29, 2010, is a Maryland corporation that intends to qualify as a real estate investment trust (“REIT”) for U.S. federal income tax purposes for the taxable year ending December 31, 2012.  On March 17, 2011, the Company commenced its initial public offering (the “IPO”) on a “reasonable best efforts” basis of up to 150.0 million shares of common stock, $0.01 par value per share, at a price of $10.00 per share, subject to certain volume and other discounts, pursuant to a registration statement on Form S-11 (File No. 333-169355) (the “Registration Statement”) filed with the U.S. Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended. The Registration Statement also covers up to 25.0 million shares available pursuant to a distribution reinvestment plan (the “DRIP”) under which the Company's common stockholders may elect to have their distributions reinvested in additional shares of our common stock at a price initially equal to $9.50 per share, which is 95% of the offering price of the IPO.

On March 5, 2012, the Company raised proceeds sufficient to break escrow in connection with its IPO. At September 30, 2012, the Company had 0.5 million shares of common stock outstanding, including unvested restricted shares and shares issued pursuant to the DRIP, and had received total proceeds from these issuances of $4.4 million. As of September 30, 2012, the aggregate value of all issuances and subscriptions of common stock outstanding was $4.6 million based on a per share value of $10.00 (or $9.50 for shares issued under the DRIP).

The Company was formed to primarily acquire existing anchored, stabilized core retail properties, including power centers, lifestyle centers, large formatted centers with a grocery store component (with a purchase price in excess of $20.0 million) and other need-based shopping centers which are located in the United States and at least 80% leased at the time of acquisition. All such properties may be acquired and operated by the Company alone or jointly with another party. The Company may also originate or acquire first mortgage loans secured by real estate. The Company purchased its first property and commenced active operations in June 2012. As of September 30, 2012, the Company owned one property with a purchase price of $21.6 million, comprising 105,970 square feet which was 94.7% leased.

Substantially all of the Company’s business is conducted through American Realty Capital Retail Operating Partnership, L.P. (the “OP”), a Delaware limited partnership. American Realty Capital Retail Advisor, LLC (the “Advisor”) is the Company’s affiliated advisor. The Company is the sole general partner and holds substantially all the units of limited partner interests in the OP ("OP units"). The Advisor holds 202 units of limited partner interest in the OP, which represents a nominal percentage of the aggregate OP ownership. The holder of OP units has the right to convert OP units for the cash value of a corresponding number of shares of common stock or, at the option of the OP, a corresponding number of shares of common stock of the Company, as allowed by the limited partnership agreement of the OP. The remaining rights of the holders of the OP units are limited, however, and do not include the ability to replace the general partner or to approve the sale, purchase or refinancing of the OP’s assets.

The Company does not have any paid employees. The Company has retained the Advisor to manage its affairs on a day-to-day basis. The Advisor has entered into a service agreement with an independent third party, Lincoln Retail REIT Services, LLC, a Delaware limited liability company (the “Service Provider”), pursuant to which the Service Provider has agreed to provide, subject to the Advisor’s oversight, real estate-related services, including locating investments, negotiating financing, and providing property-level asset management services, property management services, leasing and construction oversight services, as needed, and disposition services. Realty Capital Securities, LLC (the “Dealer Manager”), an affiliate of the Company's sponsor, American Realty Capital IV, LLC (the "Sponsor"), serves as the dealer manager of the IPO. The Advisor and Dealer Manager are related parties and will receive compensation and fees for services related to the IPO and for the investment and management of the Company’s assets. The Advisor and Dealer Manager will receive compensation and fees during the offering, acquisition, operational and liquidation stages. The Advisor will pay to the Service Provider a substantial portion of the fees payable to the Advisor for the performance of these real estate-related services.

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CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Sep. 30, 2012	Dec. 31, 2011
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	50,000,000	50,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	300,000,000	300,000,000
Common Stock, shares issued	476,750	33,056
Common Stock, shares outstanding	476,750	33,056

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Share-Based Compensation

9 Months Ended

Sep. 30, 2012

Share-based Compensation [Abstract]

Share-Based Compensation

Share-Based Compensation

Stock Option Plan

 The Company has a stock option plan (the “Plan”) which authorizes the grant of nonqualified stock options to the Company’s independent directors, officers, advisors, consultants and other personnel, subject to the absolute discretion of the board of directors and the applicable limitations of the Plan. The exercise price for all stock options granted under the Plan will be fixed at $10.00 per share until the termination of the IPO, and thereafter the exercise price for stock options granted to the independent directors will be equal to the fair market value of a share on the last business day preceding the annual meeting of stockholders. A total of 0.5 million shares have been authorized and reserved for issuance under the Plan. As of September 30, 2012 and December 31, 2011, no stock options were issued under the Plan.

Restricted Share Plan

The Company has an employee and director incentive restricted share plan (the “RSP”), which provides for the automatic grant of 3,000 restricted shares of common stock to each of the independent directors, without any further action by the Company’s board of directors or the stockholders, on the date of initial election to the board of directors and on the date of each annual stockholder’s meeting. Restricted stock issued to independent directors will vest over a five-year period following the first anniversary of the date of grant in increments of 20% per annum. The RSP provides the Company with the ability to grant awards of restricted shares to the Company’s directors, officers and employees (if the Company ever has employees), employees of the Advisor and its affiliates, employees of entities that provide services to the Company, directors of the Advisor or of entities that provide services to the Company, certain consultants to the Company and the Advisor and its affiliates or to entities that provide services to the Company. The total number of shares of common stock granted under the RSP shall not exceed 5.0% of the Company’s authorized shares of common stock pursuant to the IPO and in any event will not exceed 7.5 million shares (as such number may be adjusted for stock splits, stock dividends, combinations and similar events).

Restricted share awards entitle the recipient to receive shares of common stock from the Company under terms that provide for vesting over a specified period of time or upon attainment of pre-established performance objectives. Such awards would typically be forfeited with respect to the unvested shares upon the termination of the recipient’s employment or other relationship with the Company. Restricted shares may not, in general, be sold or otherwise transferred until restrictions are removed and the shares have vested. Holders of restricted shares may receive cash distributions prior to the time that the restrictions on the restricted shares have lapsed. Any distributions payable in shares of common stock shall be subject to the same restrictions as the underlying restricted shares.  The following table reflects restricted share award activity for the nine months ended September 30, 2012:

	Number of Shares of Common Stock		Weighted-Average Issue Price
Unvested, December 31, 2011	9,000		$	10.00
Granted	12,000		9.25
Vested	(1,200	)	10.00
Forfeitures	(3,000	)	10.00
Unvested, September 30, 2012	16,800		$	9.46

Adjusted for the timing of board member resignations, compensation expense related to restricted stock was approximately $9,000 and $13,000 during the three and nine months ended September 30, 2012, respectively. Compensation expense related to restricted stock was approximately $5,000 and $10,000 for the three and nine months ended September 30, 2011, respectively.

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Document and Entity Information	9 Months Ended
	Sep. 30, 2012	Oct. 31, 2012
Entity Information [Line Items]
Entity Registrant Name	AMERICAN REALTY CAPITAL - RETAIL CENTERS OF AMERICA, INC.
Entity Central Index Key	0001500554
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Document Type	10-Q
Document Period End Date	Sep. 30, 2012
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q3
Amendment Flag	false
Entity Common Stock, Shares Outstanding		623,129

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Net Loss Per Share

9 Months Ended

Sep. 30, 2012

Earnings Per Share [Abstract]

Net Loss Per Share

Net Loss Per Share

 The following is a summary of the basic and diluted net loss per share computation for the three and nine months ended September 30, 2012 and 2011:

	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands)	2012			2011			2012			2011
Net loss	$	(431	)	$	(89	)	$	(1,202	)	$	(204	)
Weighted average shares of common stock outstanding	369,628			20,000			248,967			20,000
Net loss per share, basic and diluted	$	(1.17	)	NM			$	(4.83	)	NM

________________

NM - not meaningful

As of September 30, 2012 and 2011, the Company had 16,800 and 9,000 shares of unvested restricted stock outstanding, respectively, which were excluded from the calculation of diluted net loss per share as the effect would have been antidilutive.

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CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Revenues:
Rental income	$ (409)		$ (499)	$ 0
Operating expense reimbursements	(109)		(131)	0
Total revenue	(518)	0	(630)	0
Operating expenses:
Property operating	115	0	142	0
Operating fees to affiliate	0	0	0	0
Acquisition and transaction related	16	0	387	0
General and administrative	14	89	232	204
Depreciation and amortization	455	0	633	0
Total operating expenses	600	89	1,394	204
Operating loss	(82)	(89)	(764)	(204)
Interest Expense	349	0	438	0
Net loss	(431)	(89)	(1,202)	(204)
Comprehensive loss	$ (431)	$ (89)	$ (1,202)	$ (204)
Basic and diluted weighted average shares outstanding	369,628	20,000	248,967	20,000
Basic and diluted net loss per share attributable to stockholders, in dollars per share	$ (1.17)		$ (4.83)

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Fair Value of Financial Instruments

9 Months Ended

Sep. 30, 2012

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The Company determines fair value based on quoted prices when available or through the use of alternative approaches, such as discounting the expected cash flows using market interest rates commensurate with the credit quality and duration of the investment. This alternative approach also reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. The guidance defines three levels of inputs that may be used to measure fair value:

Level 1 — Quoted prices in active markets for identical assets and liabilities that the reporting entity has the ability to access at the measurement date.

Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset and liability or can be corroborated with observable market data for substantially the entire contractual term of the asset or liability.

Level 3 — Unobservable inputs that reflect the entity’s own assumptions about the assumptions that market participants would use in the pricing of the asset or liability and are consequently not based on market activity, but rather through particular valuation techniques.

The determination of where an asset or liability falls in the hierarchy requires significant judgment and considers factors specific to the asset or liability. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company evaluates its hierarchy disclosures each quarter and depending on various factors, it is possible that an asset or liability may be classified differently from quarter to quarter. However, the Company expects that changes in classifications between levels will be rare.

The Company is required to disclose the fair value of financial instruments for which it is practicable to estimate that value. The fair value of short-term financial instruments such as cash and cash equivalents, restricted cash, other receivables, accounts payable and distributions payable approximates their carrying value on the consolidated balance sheets due to their short-term nature.

The fair values of the Company’s remaining financial instruments that are not reported at fair value on the consolidated balance sheets are reported below. The Company did not have any mortgage notes payable or notes payable outstanding as of December 31, 2011.

		Carrying Amount at		Fair Value at
(In thousands)	Level	September 30, 2012		September 30, 2012
Mortgage note payable	3	$	16,200	$	16,200
Note payable	3	$	3,000	$	3,000

The fair value of the note payable is obtained by calculating the present value at current market rates. The interest rate of the mortgage note payable is determined by variable market rates and the Company's leverage ratio, and has terms commensurate with market; as such, the outstanding balance on the mortgage note payable approximates fair value.

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Mortgage Notes Payable

9 Months Ended

Sep. 30, 2012

Debt Disclosure [Abstract]

Mortgage Note Payable

Mortgage Note Payable

The Company's mortgage note payable as of September 30, 2012 consists of the following. The Company did not have any mortgage notes payable outstanding as of December 31, 2011.

	Encumbered	Outstanding Loan Amount as of		Effective
Portfolio	Properties	September 30, 2012		Interest Rate		Interest Rate	Maturity
		(In thousands)
Liberty Crossing	1	$	16,200	5.58	%	Variable	Dec. 2013

The mortgage note payable bears interest at (i) the greater of (A) 0.5%, or (B) one-month LIBOR with respect to Eurodollar rate loans, plus (ii) a margin of 5.0%. The mortgage note payable requires monthly interest-only payments through June 2013. Commencing July 2013, principal and interest will be due monthly through maturity in December 2013.

The following table summarizes the scheduled aggregate principal payments for the Company's mortgage note payable subsequent to September 30, 2012.

(In thousands)	Future Principal Payments
October 1, 2012 — December 31, 2012	$	—
2013	16,200
2014	—
2015	—
2016	—
Thereafter	—
	$	16,200

The Company's sources of recourse financing generally contain financial covenants, including restrictions on corporate guarantees, the maintenance of certain financial ratios (such as specified debt to equity and debt service coverage ratios) as well as the maintenance of minimum net worth. As of September 30, 2012, the Company was in compliance with all the financial covenants under the mortgage note payable agreement.

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Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2012

Fair Value Disclosures [Abstract]

Fair Value, by Balance Sheet Grouping

The fair values of the Company’s remaining financial instruments that are not reported at fair value on the consolidated balance sheets are reported below. The Company did not have any mortgage notes payable or notes payable outstanding as of December 31, 2011.

		Carrying Amount at		Fair Value at
(In thousands)	Level	September 30, 2012		September 30, 2012
Mortgage note payable	3	$	16,200	$	16,200
Note payable	3	$	3,000	$	3,000

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Subsequent Events

9 Months Ended

Sep. 30, 2012

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

The Company has evaluated subsequent events through the filing of this Quarterly Report on Form 10-Q, and determined that there have not been any events that have occurred that would require adjustments to disclosures in the consolidated financial statements except for the following transactions:

Sales of Common Stock

 As of October 31, 2012, the Company had 623,129 shares of common stock outstanding, including unvested restricted shares and shares issued under the DRIP. As of October 31, 2012, the aggregate value of all share issuances was $6.1 million based on a per share value of $10.00 (or $9.50 for shares issued under the DRIP).

Total capital, including shares issued under the DRIP, net of common stock repurchases, raised to date is as follows:

Source of Capital(in thousands)	Inception to September 30, 2012		October 1 to October 31, 2012		Total
Shares of common stock	$	4,350	$	1,490	$	5,840

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Related Party Transactions and Arrangements

9 Months Ended

Sep. 30, 2012

Related Party Transactions [Abstract]

Related Party Transactions and Arrangements

Related Party Transactions and Arrangements

The Sponsor and American Realty Capital Retail Special Limited Partnership, LLC, an entity wholly owned by the Sponsor, owned 242,222 and 20,000 shares of the Company’s outstanding common stock as of September 30, 2012 and December 31, 2011, respectively. The Advisor and its affiliates may incur and pay costs and fees on behalf of the Company. All offering costs incurred by the Company or its affiliated entities on behalf of the Company are reflected in the accompanying consolidated balance sheets in additional paid-in capital. As of September 30, 2012 and December 31, 2011, the Company had $2.4 million and $1.6 million, respectively, payable to affiliated entities primarily related to funding the payment of third party professional fees and offering costs included in accounts payable and accrued expenses on the accompanying consolidated balance sheets.

Fees Paid in Connection with the IPO

The Dealer Manager receives fees and compensation in connection with the sale of the Company’s common stock in the IPO. The Dealer Manager receives a selling commission of up to 7.0% of gross offering proceeds before reallowance of commissions earned by participating broker-dealers. In addition, the Dealer Manager receives up to 3.0% of the gross proceeds from the sale of common stock, before reallowance to participating broker-dealers, as a dealer-manager fee. The Dealer Manager may reallow its dealer-manager fee to such participating broker-dealers, based on such factors as the volume of shares sold by respective participating broker-dealers and marketing support incurred as compared to those of other participating broker-dealers. The Company incurred total commissions and dealer manager fees from the Dealer Manager of $0.1 million and $0.2 million for the three and nine months ended September 30, 2012, respectively. There were no such fees incurred during the three and nine months ended September 30, 2011.

The Advisor and its affiliates receive compensation and reimbursement for services relating to the IPO. All offering costs incurred by the Company or its affiliated entities on behalf of the Company are charged to additional paid-in capital on the accompanying consolidated balance sheets. The following table details offering costs reimbursements from the Advisor and Dealer Manager during the three and nine months ended September 30, 2012 and 2011:

	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2012		2011		2012		2011
Fees and expense reimbursements incurred from the Advisor and Dealer Manager	$	398	$	406	$	1,210	$	1,151

The Company is responsible for offering and related costs from the IPO, excluding commissions and dealer manager fees, up to a maximum of 1.5% of gross proceeds received from the IPO, measured at the end of the IPO. Offering costs in excess of the 1.5% cap as of the end of the IPO are the Advisor's responsibility. As of September 30, 2012, offering and related costs exceeded 1.5% of gross proceeds received from the IPO by $5.3 million. The Advisor elected to cap cumulative offering costs incurred by the Company, net of unpaid amounts, to 15% of gross common stock proceeds during the IPO offering period. As of September 30, 2012, cumulative offering costs were $5.6 million. Cumulative offering costs, net of unpaid amounts, were less than the 15% threshold as of September 30, 2012.

The Company had accrued expenses payable to the Advisor and Dealer Manager of $3.1 million and $1.9 million as of September 30, 2012, and December 31, 2011, respectively, for services related to the IPO and offering and other cost reimbursements paid on behalf of the Company.

Fees Paid in Connection With the Operations of the Company

The Advisor receives an acquisition fee of 1.0% of the contract purchase price of each acquired property and is reimbursed for acquisition costs incurred in the process of acquiring properties, which is expected to be approximately 0.5% of the contract purchase price. In no event will the total of all acquisition and acquisition expenses (including any finance coordination fee) payable with respect to a particular investment exceed 4.5% of the contract purchase price.  Once the proceeds from the IPO have been fully invested, the aggregate amount of acquisition fees and financing coordination fees (as described below) shall not exceed 1.5% of the contract purchase price and the amount advanced for a loan or other investment, as applicable, for all the assets acquired.

If the Advisor provides services in connection with the origination or refinancing of any debt that the Company obtains and uses to acquire properties or to make other permitted investments, or that is assumed, directly or indirectly, in connection with the acquisition of properties, the Company will pay the Advisor a financing coordination fee equal to 1.0% of the amount available and/or outstanding under such financing, subject to certain limitations.

The Company pays the Advisor an annual fee of up to 0.75% of average invested assets to provide asset management services.  Average invested assets is defined as the average of the aggregate book value of assets invested, directly or indirectly, in properties, mortgage loans and other debt financing investments and other real estate-related investments secured by real estate before reserves for depreciation or bad debts or other similar non-cash reserves. However, the asset management fee shall be reduced by any amounts payable to the Advisor as an oversight fee, such that the aggregate of the asset management fee and the oversight fee does not exceed 0.75% per annum of average invested assets. Such asset management fee shall be payable, at the discretion of the Company’s board, in cash, common stock or restricted stock grants, or any combination thereof.  In addition, on a prospective basis, the Company’s board of directors, subject to the Advisor’s approval, may elect to issue performance based restricted shares in lieu of cash for any then unpaid amount of the asset management fee, in an amount not to exceed the limit for the asset management fee set forth in the advisory agreement. The asset management fee will be reduced to the extent that the Company’s funds from operations, as adjusted, during the six months ending on the last calendar quarter immediately preceding the date the asset management fee is payable is less than the distributions declared with respect to such six month period.

In connection with property management and leasing services, unless the Company contracts with a third party, the Company will pay to an affiliate of the Advisor a property management fee of 2% of gross revenues from the Company’s stand-alone single-tenant net leased properties and 4% of gross revenues from all other types of properties, respectively.  The Company will also reimburse the affiliate for property level expenses.  If the Company contracts directly with third parties for such services, the Company will pay them customary market fees and will pay the Advisor an oversight fee of up to 1.0% of the gross revenues of the property managed.

In connection with any construction, renovation or tenant finish-out on any property, the Company will pay the Advisor 6.0% of the hard costs of the construction, renovation and/or tenant finish-out, as applicable. No such fees were incurred during the three and nine months ended September 30, 2012 or 2011.

The following table details amounts incurred and amounts contractually due and forgiven in connection with the operations related services described above for the three and nine months ended September 30, 2012. No such fees were incurred or forgiven during the three and nine months ended September 30, 2011.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2012				2012
(In thousands)	Incurred		Forgiven (1)		Incurred		Forgiven (1)
One-time fees:
Acquisition fees and related cost reimbursements	$	—	$	—	$	324	$	—
Financing coordination fees	—		—		162		—
Other expense reimbursements	—		—		—		—
Ongoing fees:
Asset management fees	—		—		—		8
Property management and leasing fees	—		5		—		6
Total related party operation fees and reimbursements	$	—	$	5	$	486	$	14

_________________________________

(1) These fees have been waived. The Company's board of directors may elect, subject to the Advisor's approval, on a prospective basis, to pay asset management fees in the form of performance-based restricted shares of common stock.

The Company will reimburse the Advisor’s costs of providing services related to the Company, subject to the limitation that it will not reimburse the Advisor for any amount by which the Company's operating expenses (including the asset management fee) at the end of the four preceding fiscal quarters exceeds the greater of (a) 2% of average invested assets, and (b) 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.  Additionally, the Company will not reimburse the Advisor for personnel costs in connection with services for which the Advisor receives acquisition fees or real estate commissions.  No reimbursements were incurred from the Advisor for providing services during the three and nine months ended September 30, 2012 or 2011.

In order to improve operating cash flows and the ability to pay distributions from operating cash flows, the Advisor may waive certain fees including asset management and property management fees. Because the Advisor may waive certain fees, cash flow from operations that would have been paid to the Advisor may be available to pay distributions to stockholders.  The fees that may be forgiven are not deferrals and accordingly, will not be paid to the Advisor. In certain instances, to improve the Company’s working capital, the Advisor may elect to absorb a portion of the Company’s general and administrative costs or property operating expenses. The Advisor absorbed $0.1 million of expenses during the three and nine months ended September 30, 2012, which were recorded as offsets to property operating and general and administrative expense on the consolidated statement of operations. There were no expenses absorbed during the three and nine months ended September 30, 2011.

As the Company acquires properties and its real estate portfolio matures, the Company expects cash flows from operations (reported in accordance with GAAP) to cover a significant portion of distributions and over time to cover the entire distribution. As the cash flows from operations become more significant, the Advisor may discontinue its practice of forgiving fees and may charge the full fee owed to it in accordance with the Company’s agreements with the Advisor.

Fees Paid in Connection with the Liquidation or Listing of the Company’s Real Estate Assets

 The Company will pay a brokerage commission on the sale of property, not to exceed the lesser of 2% of the contract sale price of the property and one-half of the total brokerage commission paid if a third party broker is also involved; provided, however, that in no event may the real estate commissions paid to the Advisor, its affiliates and unaffiliated third parties exceed the lesser of 6% of the contract sales price and a reasonable, customary and competitive real estate commission, in each case, payable to the Advisor if the Advisor or its affiliates, as determined by a majority of the independent directors, provided a substantial amount of services in connection with the sale. No such fees were incurred during the three and nine months ended September 30, 2012 or 2011.

If the Company is not simultaneously listed on an exchange, the Company will pay a subordinated participation in the net sales proceeds of the sale of real estate assets of 15% of remaining net sale proceeds after return of capital contributions to investors plus payment to investors of a 7% cumulative, pre-tax non-compounded return on the capital contributed by investors.  The Company cannot assure that it will provide this 7% return but the Advisor will not be entitled to the subordinated participation in net sale proceeds unless the Company’s investors have received a 7% cumulative non-compounded return on their capital contributions. No such amounts were incurred during the three and nine months ended September 30, 2012 or 2011.

The Company will pay a subordinated incentive listing distribution of 15%, payable in the form of a non-interest bearing promissory note, of the amount by which the adjusted market value of real estate assets plus distributions exceeds the aggregate capital contributed by investors plus an amount equal to a 7% cumulative, pre-tax non-compounded annual return to investors.  The Company cannot assure that it will provide this 7% return but the Advisor will not be entitled to the subordinated incentive listing distribution unless investors have received a 7% cumulative, pre-tax non-compounded return on their capital contributions. No such amounts were incurred during the three and nine months ended September 30, 2012 or 2011.

  Neither the Advisor nor any of its affiliates can earn both the subordination participation in the net proceeds and the subordinated listing distribution.

Upon termination or non-renewal of the advisory agreement, the Advisor will receive distributions from the OP payable in the form of a non-interest bearing promissory note. In addition, the Advisor may elect to defer its right to receive a subordinated distribution upon termination until either a listing on a national securities exchange or other liquidity event occurs.

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Common Stock

9 Months Ended

Sep. 30, 2012

Stockholders' Equity Note [Abstract]

Common Stock

Common Stock

As of September 30, 2012, and December 31, 2011, the Company had 0.5 million and 33,056 shares of common stock outstanding, including unvested restricted shares and shares issued pursuant to the DRIP, and had received total gross proceeds of $4.4 million and $0.2 million, respectively.

On September 19, 2011, the Company's board of directors authorized, and the Company declared, a distribution, which is calculated based on stockholders of record each day during the applicable period at a rate of $0.0017534247 per day. The distributions began to accrue on June 8, 2012, the date of the Company's initial property acquisition. The distributions are payable by the 5th day following each month end to stockholders of record at the close of business each day during the prior month. The board of directors may reduce the amount of distributions paid or suspend distribution payments at any time and therefore distribution payments are not assured.

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2012

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Litigation

In the ordinary course of business, the Company may become subject to litigation or claims. There are no material legal proceedings pending or known to be contemplated against the Company.

Environmental Matters

In connection with the ownership and operation of real estate, the Company may potentially be liable for costs and damages related to environmental matters. The Company has not been notified by any governmental authority of any non-compliance, liability or other claim, and is not aware of any other environmental condition that it believes will have a material adverse effect on the results of operations.

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Economic Dependency

9 Months Ended

Sep. 30, 2012

Economic Dependency [Abstract]

Economic Dependency

Economic Dependency

Under various agreements, the Company has engaged or will engage the Advisor and its affiliates to provide certain services that are essential to the Company, including asset management services, supervision of the management and leasing of properties owned by the Company, asset acquisition and disposition decisions, the sale of shares of the Company’s common stock available for issue, as well as other administrative responsibilities for the Company including accounting services and investor relations.

As a result of these relationships, the Company is dependent upon the Advisor and its affiliates. In the event that these companies are unable to provide the Company with the respective services, the Company will be required to find alternative providers of these services.

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Real Estate Investments (Schedule of Annualized Rental Income by Major Tenants) (Details)	9 Months Ended
	Sep. 30, 2012
Ross Dress for Less [Member]
Revenue, Major Customer [Line Items]
Major tenant rental income, as a percentage of total annualized rental income	18.10%
Petsmart [Member]
Revenue, Major Customer [Line Items]
Major tenant rental income, as a percentage of total annualized rental income	15.60%

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Real Estate Investments (Tables)

9 Months Ended

Sep. 30, 2012

Real Estate [Abstract]

Assets and Liabilities Assumed

The following table presents the allocation of the assets acquired and liabilities assumed during the nine months ended September 30, 2012. There were no assets acquired or liabilities assumed during the nine months ended September 30, 2011.

	Nine Months Ended
(Dollar amounts in thousands)	September 30, 2012
Real estate investments, at cost:
Land	$	2,887
Buildings, fixtures and improvements	17,084
Total tangible assets	19,971
Acquired intangibles:
In-place leases	1,916
Above-market lease assets	199
Below market lease liabilities	(504		)
Total assets acquired, net	21,582
Mortgage notes payable used to acquire real estate investments	(16,200		)
Other liabilities assumed	(184		)
Cash paid for acquired real estate investments	$	5,198
Number of properties purchased	1

Schedule of Real Estate Properties

The Company's portfolio of real estate properties is comprised of the following property as of September 30, 2012:

Portfolio	Acquisition Date	Number  of Properties	Square Feet	Occupancy		Remaining Lease Term (1)	Annualized Net Operating Income (2)		Base Purchase Price (3)		Capitalization Rate (4)		Annualized Rental Income (5) per Square Foot
							(In thousands)		(In thousands)
Liberty Crossing	Jun. 2012	1	105,970	94.7	%	4.2	$	1,544	$	21,582	7.2	%	$	15.73

_____________________

(1) Remaining lease term in years as of September 30, 2012, calculated on a weighted-average basis.

(2) Annualized net operating income for the three months ended September 30, 2012, or since acquisition date, for the property portfolio. Net operating income is rental income on a straight-line basis, which includes tenant concessions such as free rent, as applicable, plus operating expense reimbursement revenue less property operating expenses.

(3) Contract purchase price, excluding acquisition related costs.

(4) Annualized net operating income divided by base purchase price.

(5) Annualized rental income as of September 30, 2012 for the in-place leases in the property portfolio on a straight-line basis, which includes tenant concessions such as free rent, as applicable.

Proforma Revenue and Losses Disclosure

The following table presents pro forma information as if the acquisition during the nine months ended September 30, 2012 and September 30, 2011, had been consummated on January 1, 2011:

	Nine Months Ended September 30,
(In thousands)	2012			2011
Pro forma revenues	$	1,513		$	1,513
Pro forma net loss	$	(1,571	)	$	(1,885	)

Schedule of Future Minimum Rental Payments for Operating Leases

The following table presents future minimum base rent cash payments due to the Company subsequent to September 30, 2012.  These amounts exclude contingent rent payments, as applicable, that may be collected from certain tenants based on provisions related to sales thresholds and increases in annual rent based on exceeding certain economic indexes among other items.

(In thousands)	Future Minimum Base Rent Payments
October 1, 2012 — December 31, 2012	$	406
2013	1,352
2014	1,106
2015	1,101
2016	1,080
Thereafter	1,952
	$	6,997

Schedule of Annualized Rental Income by Major Tenants

The following table lists the tenants whose annualized rental income on a straight-line basis represented greater than 10% of total annualized rental income for all portfolio properties on a straight-line basis as of September 30, 2012: 

Tenant	September 30, 2012
Ross Dress for Less, Inc.	18.1%
PetSmart, Inc.	15.6%

Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas [Table Text Block]

The following table lists the states where the Company has concentrations of properties where annualized rental income on a straight-line basis represented greater than 10% of consolidated annualized rental income as of September 30, 2012: 

State	September 30, 2012
Texas	100.0%

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Net Loss Per Share (Tables)

9 Months Ended

Sep. 30, 2012

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

The following is a summary of the basic and diluted net loss per share computation for the three and nine months ended September 30, 2012 and 2011:

	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands)	2012			2011			2012			2011
Net loss	$	(431	)	$	(89	)	$	(1,202	)	$	(204	)
Weighted average shares of common stock outstanding	369,628			20,000			248,967			20,000
Net loss per share, basic and diluted	$	(1.17	)	NM			$	(4.83	)	NM

________________

NM - not meaningful

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Related Party Transactions and Arrangements (Details) (USD $)	9 Months Ended								3 Months Ended		9 Months Ended				3 Months Ended	9 Months Ended											9 Months Ended				3 Months Ended	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2012 Maximum [Member]	Sep. 30, 2012 Sponsor and Entity Wholly Owned by Sponsor [Member] American Realty Capital IV, LLC and American Realty Capital Retail Special Limited Partnership, LLC [Member]	Dec. 31, 2011 Sponsor and Entity Wholly Owned by Sponsor [Member] American Realty Capital IV, LLC and American Realty Capital Retail Special Limited Partnership, LLC [Member]	Sep. 30, 2012 Affiliated Entity [Member]	Dec. 31, 2011 Affiliated Entity [Member]	Sep. 30, 2012 Advisor and Dealer Manager [Member] American Realty Capital Retail Advisor, LLC and Realty Capital Securities LLC [Member]	Dec. 31, 2011 Advisor and Dealer Manager [Member] American Realty Capital Retail Advisor, LLC and Realty Capital Securities LLC [Member]	Sep. 30, 2012 Advisor and Dealer Manager [Member] Related Party Transactions, Fee and expense reimbursment, stock offering [Member] American Realty Capital Retail Advisor, LLC and Realty Capital Securities LLC [Member]	Sep. 30, 2011 Advisor and Dealer Manager [Member] Related Party Transactions, Fee and expense reimbursment, stock offering [Member] American Realty Capital Retail Advisor, LLC and Realty Capital Securities LLC [Member]	Sep. 30, 2012 Advisor and Dealer Manager [Member] Related Party Transactions, Fee and expense reimbursment, stock offering [Member] American Realty Capital Retail Advisor, LLC and Realty Capital Securities LLC [Member]	Sep. 30, 2011 Advisor and Dealer Manager [Member] Related Party Transactions, Fee and expense reimbursment, stock offering [Member] American Realty Capital Retail Advisor, LLC and Realty Capital Securities LLC [Member]	Sep. 30, 2012 Dealer Manager [Member] Realty Capital Securities, LLC [Member] Gross Proceeds, Initial Public Offering [Member] Maximum [Member]	Sep. 30, 2012 Dealer Manager [Member] Realty Capital Securities, LLC [Member] Gross Proceeds, Common Stock [Member] Maximum [Member]	Sep. 30, 2012 Dealer Manager [Member] Sales Commissions and Fees [Member] Realty Capital Securities, LLC [Member]	Sep. 30, 2012 Dealer Manager [Member] Sales Commissions and Fees [Member] Realty Capital Securities, LLC [Member]	Sep. 30, 2012 Advisor [Member] American Realty Capital Retail Advisor, LLC [Member]	Sep. 30, 2012 Advisor [Member] American Realty Capital Retail Advisor, LLC [Member] Contract Purchase Price [Member]	Sep. 30, 2012 Advisor [Member] American Realty Capital Retail Advisor, LLC [Member] Contract Purchase Price [Member] Maximum [Member]	Sep. 30, 2012 Advisor [Member] American Realty Capital Retail Advisor, LLC [Member] Amount Available or Outstanding Under Financing Arrangement [Member]	Sep. 30, 2012 Advisor [Member] American Realty Capital Retail Advisor, LLC [Member] Average Invested Assets [Member]	Sep. 30, 2012 Advisor [Member] American Realty Capital Retail Advisor, LLC [Member] Average Invested Assets [Member] Maximum [Member]	Sep. 30, 2012 Advisor [Member] American Realty Capital Retail Advisor, LLC [Member] Average Invested Assets [Member] Maximum [Member] Greater Of [Member]	Sep. 30, 2012 Advisor [Member] American Realty Capital Retail Advisor, LLC [Member] Gross Revenue, Stand-alone Single-tenant Net Leased Properties [Member]	Sep. 30, 2012 Advisor [Member] American Realty Capital Retail Advisor, LLC [Member] Gross Revenue, Excluding Stand-alone Single-tenant Net Leased Properties [Member]	Sep. 30, 2012 Advisor [Member] American Realty Capital Retail Advisor, LLC [Member] Gross Revenue, Managed Properties [Member] Maximum [Member]	Sep. 30, 2012 Advisor [Member] American Realty Capital Retail Advisor, LLC [Member] Hard Costs Of Construction, Renovation and/or Tenant Finish-out [Member]	Sep. 30, 2012 Advisor [Member] American Realty Capital Retail Advisor, LLC [Member] Net Income, Excluding Additions to Non-cash Reserves and Gains on Sales of Assets [Member] Maximum [Member] Greater Of [Member]	Sep. 30, 2012 Advisor [Member] American Realty Capital Retail Advisor, LLC [Member] Net Sale Proceeds, after Return of Capital Contributions and Annual Targeted Investor Return [Member]	Sep. 30, 2012 Advisor [Member] American Realty Capital Retail Advisor, LLC [Member] Excess of Adjusted Market Value of Real Estate Assets Plus Distributions Over Aggregate Contributed Investor Capital [Member]	Sep. 30, 2012 Advisor [Member] Fees and Expense Reimbursement [Member] American Realty Capital Retail Advisor, LLC [Member]	Sep. 30, 2012 Advisor [Member] Fees and Expense Reimbursement [Member] American Realty Capital Retail Advisor, LLC [Member]	Sep. 30, 2012 Advisor [Member] Brokerage Commission Fees [Member] American Realty Capital Retail Advisor, LLC [Member] Contract Sales Price [Member] Maximum [Member]	Sep. 30, 2012 Advisor [Member] Real Estate Commissions [Member] American Realty Capital Retail Advisor, LLC [Member] Contract Sales Price [Member] Maximum [Member]	Sep. 30, 2012 Advisor [Member] Annual Targeted Investor Return [Member] American Realty Capital Retail Advisor, LLC [Member] Pre-tax Non-compounded Return on Capital Contribution [Member]
Related Party Transaction [Line Items]
Common stock held by related party, in shares			242,222	20,000
Accrued expenses payable to related parties					$ 2,400,000	$ 1,600,000	$ 3,100,000	$ 1,900,000
Related Party Transaction Sales Commissions Earned by Related Percentage of Benchmark													7.00%
Sales commissions as a percentage of benchmark														3.00%
Fees paid to related parties									398,000	406,000	1,210,000	1,151,000			100,000	200,000
Liability for offering and related costs from IPO		1.50%
Aggregate costs borne by related party																	5,300,000
Cumulative offering cost cap		15.00%
Cumulative offering costs, net of unpaid amounts	5,600,000
Acquisition fees as a percentage of benchmark																		1.00%
Financing advance fees as a percentage of benchmark																		0.50%
Aggregate acquisition fees and acquisition related expenses as a percentage of benchmark																			4.50%
Acquisition and financing coordination fees as a percentage of benchmark																			1.50%
Financing coordination as a percentage of benchmark																				1.00%
Asset management fees as a percentage of benchmark																					0.75%
Aggregate asset management and oversight fees as a percentage of benchmark																						0.75%
Property management fees as a percentage of benchmark																								2.00%	4.00%
Oversight fees as a percentage of benchmark																										1.00%
Construction, renovation or tenant finish-out as a percentage of benchmark																											6.00%
Operating expenses as a percentage of benchmark																							2.00%					25.00%
Related Party Transaction, Amounts of Transaction																															$ (149,000)	$ (149,000)
Real estate commissions as a percentage of benchmark																																	2.00%	6.00%
Related Party Transaction, Subordinated Participation Fee Earned by Related Party, Percentage of Benchmark																													15.00%
Cumulative capital investment return to investors as a percentage of benchmark																																			7.00%
Subordinated incentive listing distribution as a percentage of the benchmark																														15.00%

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CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT) (USD $)	Total	Common Stock [Member]	Additional Paid-in Capital	Retained Earnings [Member]
Beginning Balance at Dec. 31, 2011	$ (3,719,000)	$ 0	$ (3,406,000)	$ (313,000)
Beginning Balance (in shares) at Dec. 31, 2011		33,056
Issuance of common stock (in shares)		434,234
Issuance of common stock	4,101,000	5,000	4,096,000
Common stock offering costs, commissions and dealer manager fees	(1,892,000)		(1,892,000)
Stock Issued During Period, Shares, Dividend Reinvestment Plan		460
Stock Issued During Period, Value, Dividend Reinvestment Plan	4,000		4,000
Share-based compensation		9,000
Amortization of restricted stock	13,000		13,000
Dividends	(75,000)			(75,000)
Net loss	(1,202,000)			(1,202,000)
Ending Balance at Sep. 30, 2012	$ (2,770,000)	$ 5,000	$ (1,185,000)	$ (1,590,000)
Ending Balance (in shares) at Sep. 30, 2012		476,750

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Note Payable

9 Months Ended

Sep. 30, 2012

Debt Disclosure [Abstract]

Notes Payable

Note Payable

In June 2012, the Company entered into an unsecured $3.0 million note payable with an unaffiliated third party. The note payable bears interest at a fixed rate of 8.0% per annum and matures in June 2013. The note payable contains twoone-year extension options and requires monthly interest payments only with the principal balance due at maturity. The note payable may be prepaid from time to time and at any time, in whole or in part. The Company is also required to pay an exit fee equal to 1% of the original loan amount upon final payment of the note payable. As of September 30, 2012, there was $3.0 million outstanding on the note payable. The Company did not have any note payable outstanding at December 31, 2011.

The Company's sources of financing generally contain financial covenants, including restrictions on corporate guarantees, the maintenance of certain financial ratios (such as specified debt to equity and debt service coverage ratios) as well as the maintenance of minimum net worth.

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Subsequent Events (Tables)

9 Months Ended

Sep. 30, 2012

Subsequent Events [Abstract]

Schedule of Subsequent Events

Total capital, including shares issued under the DRIP, net of common stock repurchases, raised to date is as follows:

Source of Capital(in thousands)	Inception to September 30, 2012		October 1 to October 31, 2012		Total
Shares of common stock	$	4,350	$	1,490	$	5,840

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Mortgage Notes Payable (Schedule Of Aggregate Future Principal Payments On Mortgage Notes Payable) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Debt Instrument [Line Items]
Total	$ 16,200	$ 0
Mortgage Notes Payable [Member]
Debt Instrument [Line Items]
October 1, 2012 - December 31, 2012	0
2013	16,200
2014	0
2015	0
2016	0
Thereafter	0
Total	$ 16,200

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Summary of Significant Accounting Policies Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2012

Accounting Policies [Abstract]

Development Stage Company [Policy Text Block]

Development Stage Company

On March 5, 2012, the Company raised proceeds sufficient to break escrow in connection with its IPO. The Company received and accepted aggregate subscriptions in excess of the minimum $2.0 million and issued shares of common stock to its initial investors who were admitted as stockholders. The Company purchased its first property and commenced operations on June 8, 2012, and as of such date was no longer considered to be a development stage company.

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

In May 2011, the Financial Accounting Standards Board ("FASB") issued guidance that expands the existing disclosure requirements for fair value measurements, primarily for Level 3 measurements, which are measurements based on unobservable inputs such as the Company's own data. This guidance is largely consistent with current fair value measurement principles with few exceptions that do not result in a change in general practice. The guidance was applied prospectively and was effective for interim and annual reporting periods beginning after December 15, 2011. The adoption of this guidance did not have a material impact on the Company's financial position or results of operations as the guidance relates only to disclosure requirements.

In June 2011, the FASB issued guidance requiring entities to present items of net income and other comprehensive income either in one continuous statement - referred to as the statement of comprehensive income - or in two separate, but consecutive, statements of net income and other comprehensive income. The new guidance does not change which components of comprehensive income are recognized in net income or other comprehensive income, or when an item of other comprehensive income must be reclassified to net income. In December 2011, the FASB deferred certain provisions of this guidance related to the presentation of certain reclassification adjustments out of accumulated other comprehensive income, by component in both the statement and the statement where the reclassification is presented. This guidance was applied prospectively and was effective for interim and annual periods beginning after December 15, 2011. The adoption of this guidance did not have a material impact on the Company's financial position or results of operations but changed the location of the presentation of other comprehensive income to more closely associate the disclosure with net income.

In September 2011, the FASB issued guidance that allows entities to perform a qualitative analysis as the first step in determining whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If it is determined that it is not more likely than not that the fair value of the reporting unit is less than its carrying amount, then a quantitative analysis for impairment is not required. The guidance was effective for interim and annual impairment tests for fiscal periods beginning after December 15, 2011.  The adoption of this guidance did not have a material impact on the Company's financial position or results of operations.

In December 2011, the FASB issued guidance regarding disclosures about offsetting assets and liabilities, which requires entities to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. The guidance is effective for fiscal years and interim periods beginning on or after January 1, 2013 with retrospective application for all comparative periods presented. The adoption of this guidance, which is related to disclosure only, is not expected to have a material impact on the Company's financial position or results of operations.

In July 2012, the FASB issued revised guidance intended to simplify how an entity tests indefinite-lived intangible assets for impairment. The amendments will allow an entity first to assess qualitative factors to determine whether it is necessary to perform a quantitative impairment test. An entity will no longer be required to calculate the fair value of an indefinite-lived intangible asset and perform the quantitative test unless the entity determines, based on a qualitative assessment, that it is more likely than not that its fair value is less than its carrying amount. The amendments are effective for annual and interim indefinite-lived intangible asset impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted. The Company does not expect the adoption to have a material impact on the Company’s financial position or results of operations.