8-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K/A

AMENDMENT NO. 1

TO

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): January 8, 2013

AMERICAN REALTY CAPITAL PROPERTIES, INC.

(Exact name of Registrant as specified in its charter)

Maryland	001-35263	45-2482685
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S. Employer Identification No.)

405 Park Avenue

New York, New York 10022

(Address, including zip code, of principal executive offices)

(212) 415-6500

Registrant’s telephone number, including area code: 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Explanatory Note

On December 14, 2012, American Realty Capital Properties, Inc., a Maryland corporation, which we refer to as “we,” “us” or “our,” entered into an Agreement and Plan of Merger with American Realty Capital Trust, III, Inc., a Maryland corporation, or ARCT III, Tiger Acquisition, LLC, a Delaware limited liability company and one of our wholly owned subsidiaries, or Merger Sub, ARC Properties Operating Partnership, L.P., a Delaware limited partnership, or our Operating Partnership, and American Realty Capital Operating Partnership III, L.P., a Delaware limited partnership and the operating partnership of ARCT III, or the ARCT III Operating Partnership. The merger agreement provides for the merger of ARCT III with and into Merger Sub, with Merger Sub surviving as one of our wholly owned subsidiaries. In addition, the merger agreement provides for the merger of ARCT III Operating Partnership with and into our Operating Partnership, with our Operating Partnership being the surviving entity.

On January 9, 2012, we filed a post-effective amendment to our Registration Statement on Form S-3 (Registration No. 333-182971), or the Universal Shelf Post-Effective Amendment, in order to provide investors with certain information relating to the merger and other matters. Also on January 9, 2012, we filed a Current Report on Form 8-K, or the Original Form 8-K, in order to file under the Securities Exchange Act of 1934, as amended, or the Exchange Act, and allow for incorporation by reference of, as applicable, certain material information relating to the merger in order that such information could be incorporated by reference into the Universal Shelf Post-Effective Amendment.

This Current Report on Form 8-K/A is being filed to (i) update the risk factors relating to the proposed merger that were filed as Exhibit 99.1 to the Original Form 8-K, (ii) update our pro forma financial information that was filed as Exhibit 99.2 to the Original Form 8-K, (iii) incorporate into our Universal Shelf Post-Effective Amendment certain information regarding us and ARCT III as a combined company as of September 30, 2012, (iv) incorporate into our Universal Shelf Post-Effective Amendment certain financial statements of ARCT III and (v) include financial information relating to certain significant lessees of us and ARCT III as described below.

As noted above, we are filing this Current Report on Form 8-K/A in order to supersede the summary financial statements of lessees that were filed as Exhibits 99.3 – 99.5 to the Original Form 8-K with certain financial statements, incorporated by reference in or filed as Exhibit 99.4 to, as applicable, this Current Report on Form 8-K/A, for certain lessees of us and ARCT III as a combined company, or corporate parents and/or financial guarantors of the lessees, as applicable, that were “significant lessees” as of September 30, 2012 within the meaning of Section 2340 of the Financial Reporting Manual of the Division of Corporation Finance of the Securities and Exchange Commission, or Section 2340. For purposes of Section 2340, a significant asset concentration is one that exceeds 20% of the registrant’s assets as of its most recent audited balance sheet date. Accordingly, we are incorporating by reference or filing, as applicable, certain financial statements for the lessees of us and ARCT III as a combined company, or corporate parents and/or financial guarantors of the lessees, as applicable, whose subject properties’ aggregate base purchase price as of September 30, 2012 exceeded 20% of the pro forma total assets of us and ARCT III as a combined company as of December 31, 2011 and whose financial statements are publicly available.

Lastly, we are filing this Current Report on Form 8-K/A in order to furnish XBRL interactive data.

No other changes have been made to the Original Form 8-K.

Item 8.01. Other Events.

The third paragraph and the table that immediately follows in the disclosure under Item 8.01 of the Original Form 8-K is deleted in its entirety and replaced with the following disclosure:

“Such information is provided below and in Exhibits 99.1 – 99.5 attached hereto (which are incorporated by reference herein), and consists of (i) certain financial statements of ARCT III, the entity with which we intend to merge, (ii) certain financial statements for the lessees of us and ARCT III as a combined company, or corporate parents and/or financial guarantors of the lessees, as applicable, whose subject properties’ aggregate base purchase price as of September 30, 2012 exceeded 20% of the pro forma total assets of us and ARCT III as a combined company as of December 31, 2011 and whose relevant financial statements are publicly available, which are incorporated by reference herein, (iii) certain risk factors relating to the proposed merger, (iv) our unaudited pro forma financial statements assuming we merged with ARCT III as of September 30, 2012 and (v) certain information regarding us and ARCT III as a combined company as of September 30, 2012.

The following financial statements of ARCT III are filed as Exhibit 99.5 hereto:

Financial Statements of ARCT III

Consolidated Balance Sheets as of December 31, 2011 and 2010

Consolidated Statements of Operations for the Year Ended December 31, 2011 and the Period from October 15, 2010 (date of inception) to December 31, 2010

Consolidated Statement of Stockholders’ Equity for the Year Ended December 31, 2011 and the Period from October 15, 2010 (date of inception) to December 31, 2010

Consolidated Statements of Cash Flows for the Year Ended December 31, 2011 and the Period from October 15, 2010 (date of inception) to December 31, 2010

Notes to Consolidated Financial Statements

Schedule III − Real Estate and Accumulated Depreciation at December 31, 2011

Consolidated Balance Sheets as of September 30, 2012 (Unaudited) and December 31, 2011

Consolidated Statements of Operations and Comprehensive Loss for the Three and Nine Months Ended September 30, 2012 and 2011 (Unaudited)

Consolidated Statement of Changes in Equity for the Nine Months Ended September 30, 2012 (Unaudited)

Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2012 and 2011 (Unaudited)

Notes to Consolidated Financial Statements (Unaudited)

The following portions of periodic reports filed by the entities set forth below are incorporated herein by reference:

ARCT III Lessee / Related Entity	Portions of SEC Filings Incorporated By Reference
Dollar General Corporation (1)	Item 1. Financial Statements to the Quarterly Report on Form 10-Q of Dollar General Corporation for the quarterly period ended November 2, 2012, filed with the SEC on December 11, 2012, available at http://www.sec.gov/ Archives/edgar/data/29534/000110465912083153/a12-22085_110q.htm. Item 8. Financial Statements and Supplementary Data to the Annual Report on Form 10-K of Dollar General Corporation for the fiscal year ended February 3, 2012, available at http://www.sec.gov/Archives/edgar/data/ 29534/000104746912003084/a2207856z10-k.htm.
Citizens Bank entities (2)	The summary financial statements of RBS Citizens, N.A. from the website of the Federal Deposit Insurance Corporation are filed as Exhibit 99.4 hereto and are incorporated herein by reference.
FedEx Corporation (1)	Item 2. Financial Statements to the Quarterly Report on Form 10-Q of FedEx Corporation for the quarterly period ended November 30, 2012, filed with the SEC on December 20, 2012, available at http://www.sec.gov/Archives/edgar/ data/1048911/000119312512510418/d456372d10q.htm. Item 9. Financial Statements to the Annual Report on Form 10-K of FedEx Corporation for the fiscal year ended May 31, 2012, filed with the SEC on July 16, 2012, available at http://www.sec.gov/Archives/edgar/ data/1048911/000119312512303558/d375407d10k.htm.
Walgreen Co. (3)	Item 3. Financial Statements to the Quarterly Report on Form 10-Q of Walgreen Co. for the quarterly period ended November 30, 2012, filed with the SEC on December 28, 2012, available at http://www.sec.gov/Archives/ edgar/data/104207/000010420712000129/form10-q.htm. Item 10. Financial Statements to the Annual Report on Form 10-K of Walgreen Co. for the fiscal year ended August 31, 2012, filed with the SEC on October 19, 2012, available at http://www.sec.gov/Archives/edgar/ data/104207/000010420712000098/fy2012_10-k.htm.
Bed Bath & Beyond Inc.	Item 4. Financial Statements to the Quarterly Report on Form 10-Q of Bed Bath & Beyond Inc. for the quarterly period ended November 24, 2012, filed with the SEC on January 2, 2013, available at http://www.sec.gov/ Archives/edgar/data/886158/000110465913000130/a12-28059_110q.htm. Item 11. Financial Statements to the Annual Report on Form 10-K of Bed Bath & Beyond Inc. for the fiscal year ended February 25, 2012, filed with the SEC on April 24, 2012, available at http://www.sec.gov/Archives/ edgar/data/886158/000110465912027814/a12-3159_110k.htm.
Williams-Sonoma, Inc. (4)	Item 5. Financial Statements to the Quarterly Report on Form 10-Q of Williams-Sonoma, Inc. for the quarterly period ended October 28, 2012, filed with the SEC on December 7, 2012, available at http://www.sec.gov/ Archives/edgar/data/719955/000119312512495336/d426549d10q.htm. Item 12. Financial Statements to the Annual Report on Form 10-K of Williams-Sonoma, Inc. for the fiscal year ended January 29, 2012, filed with the SEC on March 29, 2012, available at http://www.sec.gov/Archives/ edgar/data/719955/000119312512140070/d287202d10k.htm.
U.S. General Services Administration (5)	N/A

(1) The entity is not the lessee under the subject lease(s), but is the corporate parent of, and guarantor of the obligations of, the lessee(s) thereunder.

(2) Each of the properties in Pennsylvania is leased to Citizens Bank of Pennsylvania and all the other properties are leased to wholly owned subsidiaries of RBS Citizens, N.A. RBS Citizens, N.A. and Citizens Bank of Pennsylvania are subsidiaries of Citizens Financial Group, Inc., or CFG, and their financial statements are reported on a consolidated basis with CFG. CFG is owned by The Royal Bank of Scotland Group plc, or RBS. Neither CFG nor RBS provides any credit support for, or otherwise guarantees, our leases with RBS Citizens, N.A. and Citizens Bank of Pennsylvania. RBS Citizens, N.A. and Citizens Bank of Pennsylvania report their financial information to the Federal Deposit Insurance Corporation.

(3) The entity is not the lessee under one or more of the subject leases, but in any such instance, is the corporate parent of, and guarantor of the obligations of, the lessee(s) thereunder.

(4) The entity is not the lessee under the subject lease, but is the corporate parent of the lessee.

(5) The U.S. General Services Administration is an independent agency of the U.S. government. Its lease obligations are backed by the full faith and credit of the United States of America.

The following unaudited pro forma financial statements, presented as if we and ARCT III had merged in a stock exchange transaction as of September 30, 2012, are filed as Exhibit 99.2 hereto:

Unaudited Pro Forma Financial Statements

Unaudited Pro Forma Condensed Consolidated Balance Sheet as of September 30, 2012

Notes to Consolidated Pro Forma Balance Sheet

Unaudited Pro Forma Condensed Consolidated Statement of Operations and Comprehensive Loss For the Nine Months Ended September 30, 2012

Unaudited Pro Forma Condensed Consolidated Statement Of Operations and Comprehensive Loss

For the year ended December 31, 2011

Notes to Consolidated Pro Forma Statements of Operations

Unaudited Pro Forma Funds From Operations and Adjusted Funds From Operations For the nine months ended September 30, 2012”

Item 9.01. Financial Statements and Exhibits.

The disclosure under Item 9.01 of the Original Form 8-K is deleted in its entirety and replaced with the following:

“(d) Exhibits.

Exhibit No.	Description
23.1	Consent of Grant Thornton LLP
99.1	Risk Factors
99.2	Unaudited Pro Forma Financial Statements of American Realty Capital Properties, Inc.
99.3	Information About the Combined Companies
99.4	Summary Financial Statements of RBS Citizens, N.A.
99.5	Financial Statements of American Realty Capital Trust III, Inc.
101.INS	XBRL Instance Document *
101.SCH	XBRL Taxonomy Extension Schema Document *
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document *
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document *
101.LAB	XBRL Taxonomy Extension Label Linkbase Document *
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document *

* XBRL (eXtensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act, and otherwise is not subject to liability under these sections.”

SIGNATURES

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

	AMERICAN REALTY CAPITAL PROPERTIES, INC.
January 17, 2013	By:	/s/ Nicholas S. Schorsch
	Name:	Nicholas S. Schorsch
	Title:	Chief Executive Officer and
		Chairman of the Board of Directors

EX-23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We have issued our report dated February 29, 2012, with respect to the consolidated financial statements and schedule of American Realty Capital Trust III, Inc. for the year ended December 31, 2011 included in this Current Report on Form 8-K/A.  We hereby consent to the incorporation by reference of said report in the Registration Statement of American Realty Capital Properties, Inc. on Form S-3 (File No. 333-182971).

/s/ GRANT THORNTON LLP

Philadelphia, Pennsylvania

January 17, 2013

EX-99.1

RISK FACTORS

Risk Factors Relating to the Mergers

The exchange ratio is fixed and will not be adjusted in the event of any change in either our or ARCT III’s stock price.

Upon the consummation of the mergers, each share of ARCT III common stock will be converted into the right to receive, at the election of the holder of such share of ARCT III common stock, (a) 0.95 of a share of our common stock, with cash paid in lieu of fractional shares, or (b) cash equal to $12.00, at the election of ARCT III stockholders (subject to proration in accordance with the merger agreement). The stock exchange ratio was fixed in the merger agreement and will not be adjusted for changes in the market price of our common stock or the value of ARCT III common stock. Changes in the price of our common stock prior to the mergers will affect the market value of the merger consideration that ARCT III stockholders electing to receive our common stock will receive on the date of the mergers. Stock price changes may result from a variety of factors (many of which are beyond our control), including the following factors:

• market reaction to the announcement of the mergers and the prospects of the combined company;

• changes in our respective businesses, operations, assets, liabilities and prospects;

• changes in market assessments of the business, operations, financial position and prospects of either company;

• market assessments of the likelihood that the mergers will be completed;

• interest rates, general market and economic conditions and other factors generally affecting the price of our and ARCT III’s common stock;

• federal, state and local legislation, governmental regulation and legal developments in the businesses in which we and ARCT III operate; and

• other factors beyond the control of us and ARCT III, including those described or referred to elsewhere in this “Risk Factors” section.

The price of our common stock at the consummation of the mergers may vary from its price on the date the merger agreement was executed, on the date of this Form 8-K and on the date of the special meetings of us and ARCT III. As a result, the market value of the merger consideration represented by the stock exchange ratio will also vary. For example, based on the range of closing prices of ARCP common stock during the period from December 14, 2012, the last trading day before public announcement of the mergers, through January 17, 2013, the latest practicable date before the date of this Form 8-K, the exchange ratio of 0.95 shares of our common stock represented a market value ranging from a low of $11.98 to a high of $13.53.

In addition, the value of ARCT III common stock at the consummation of the mergers may vary from its value on the date the merger agreement was executed, on the date of this Form 8-K and on the date of the special meetings of us and ARCT III. As a result, the market value of ARCT III common stock could be more or less than $12.00, which represents the merger consideration payable if an ARCT III stockholder elects to receive cash (subject to any proration, as discussed herein).

The merger of us and ARCT III and related transactions are subject to approval by stockholders of both us and ARCT III.

In order for the merger of us and ARCT III to be completed, ARCT III stockholders must approve the merger of us and ARCT III and the other transactions contemplated by the merger agreement, which requires the affirmative vote of the holders of at least a majority of the outstanding shares of ARCT III common stock entitled to vote on such proposal. In addition, while a vote of our stockholders is not required to approve the merger of us and ARCT III, our stockholders’ approval is required under applicable NASDAQ rules in order for us to be authorized to issue the shares of our common stock to ARCT III stockholders as part of the merger consideration. Approval of the issuance of shares of our common stock to ARCT III stockholders under NASDAQ rules requires approval of at least a majority of the total votes cast, provided that the total votes cast represent at least a majority of the outstanding shares of our common stock entitled to vote on such

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proposal. If either or both of these required votes is not obtained by May 31, 2013 (subject to our right and the right of ARCT III to extend such date by up to 60 days), the mergers may not be consummated. The failure to achieve expected benefits and unanticipated costs relating to the mergers could reduce our financial performance.

Your ownership position will be diluted by the merger of us and ARCT III.

The merger of us and ARCT III will dilute the ownership position of our stockholders at the time they are consummated. Following the issuance of shares of our common stock to ARCT III stockholders pursuant to the merger agreement, assuming 70% of the merger consideration is paid in the form of shares of our common stock, our stockholders and the former ARCT III stockholders are expected to hold approximately 9% and 91%, respectively, of the combined company’s common stock outstanding immediately after the merger of us and ARCT III, based on the number of shares of common stock of each of us and ARCT III currently outstanding and various assumptions regarding share issuances by each of us and ARCT III prior to the effective time of the mergers (provided, however, such dilution could be greater than described herein depending on the number of shares of ARCT III common stock with respect to which ARCT III stockholders make stock elections). Consequently, our stockholders, as a general matter, will have less influence over our management and policies after the mergers than they exercise over our management and policies immediately prior to the mergers.

If the mergers do not occur, we may incur payment obligations to ARCT III.

If the merger agreement is terminated under certain circumstances, we may be required to pay ARCT III up to $10 million in expense reimbursement.

Failure to complete the mergers could negatively impact our future business and financial results.

If the mergers are not completed, our ongoing businesses could be adversely affected and we will be subject to several risks, including the following:

• our being required, under certain circumstances, to pay to ARCT III up to $10 million in expense reimbursement;

• our having to pay certain costs relating to the proposed mergers, such as legal, accounting, financial advisor, filing, printing and mailing fees; and

• the diversion of management focus and resources from operational matters and other strategic opportunities while working to implement the mergers.

If the mergers are not completed, these risks could materially affect our business, financial results and stock price.

The pendency of the mergers could adversely affect our business and operations.

In connection with the pending mergers, some of our customers or vendors may delay or defer decisions, which could negatively impact our revenues, earnings, cash flows and expenses, regardless of whether the mergers are completed. In addition, due to operating covenants in the merger agreement, we may be unable, during the pendency of the mergers, to pursue certain strategic transactions, undertake certain significant capital projects, undertake certain significant financing transactions and otherwise pursue other actions that are not in the ordinary course of business, even if such actions would prove beneficial.

The merger agreement contains provisions that grant the ARCT III board of directors with a general ability to terminate the merger agreement based on the exercise of the directors’ duties.

ARCT III may terminate the merger agreement if its board of directors determines in good faith, after consultation with outside legal counsel, that failure to change its recommendation with respect to the mergers (and to terminate the merger agreement) would be inconsistent with the directors’ duties under applicable law. If the mergers are not completed, our ongoing businesses could be adversely affected and we will be subject to several risks, including the risks described elsewhere in this “Risk Factors” section.

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There may be unexpected delays in the consummation of the mergers, which could impact our ability to timely achieve the benefits associated with the mergers.

The mergers are expected to close during the first quarter of 2013 assuming that all of the conditions in the merger agreement are satisfied or waived. The merger agreement provides that either we or ARCT III may terminate the merger agreement if the mergers have not occurred by May 31, 2013 (subject to our right and the right of ARCT III to extend this date by up to 60 days). Certain events may delay the consummation of the mergers. Some of the events that could delay the consummation of the mergers include difficulties in obtaining the approval of ARCT III or our stockholders or satisfying the other closing conditions to which the mergers are subject.

The mergers are subject to a number of conditions which, if not satisfied or waived, would adversely impact our ability to complete the transactions.

The mergers, which are expected to close during the first quarter of 2013, are subject to certain closing conditions, including, among other things (a) amendment of our management agreement to, among other things (i) eliminate certain acquisition and financing fees payable by us (exclusive of certain pipeline properties), (ii) the internalization of certain accounting, leasing and other management functions and (iii) the reduction of certain asset management fees, (b) the effectiveness of a registration statement on Form S-4 filed by us with the SEC on January 8, 2013, as amended, pursuant to which our shares of common stock will be issued, (c) the approval of the merger by at least 50% of all the votes entitled to be cast on the matter by the holders of all of ARCT III’s outstanding shares of common stock, (d) the approval of the issuance of our common stock to the ARCT III stockholders of at least a majority of the votes cast by our stockholders (provided the total number of votes cast constitutes a quorum), (e) the accuracy of the other parties’ representations and warranties and compliance with covenants, subject in each case to materiality standards, and (f) delivery of tax opinions. There can be no assurance these conditions will be satisfied or waived, if permitted, or the occurrence of any effect, event, development or change will not transpire. Therefore, there can be no assurance with respect to the timing of the closing of the mergers or whether the mergers will be completed at all.

If the proposed credit facility transactions do not close, we will need to replace the funding that will be used to finance a portion of the cash consideration and other merger costs.

We will need additional funding to consummate the mergers. We intend to pay for cash elections by ARCT III stockholders using a combination of (i) ARCT III’s and our available cash on hand and (ii) $850.0 million of financing, consisting of a $650 million credit facility (under which ARCT III has obtained a commitment for $385.0 million, and which contains an “accordion” feature to allow ARCT III, under certain circumstances, to request additional commitments in an aggregate amount not to exceed $350.0 million), borrowings under which will be subject to borrowing base availability, and the $200.0 million Bridge Facility (of which $200.0 million is committed but subject to reduction by up to $125.0 million to the extent the committing lender participates in the accordion feature of the credit facility). These commitments are subject to customary conditions for these types of financings, including, but not limited to (1) the completion of due diligence review of the assets, liabilities and properties of us and the ARCT III Operating Partnership and their respective subsidiaries, (2) the negotiation and execution of definitive loan documentation, (3) the absence of any change, occurrence or development that has had, or could reasonably be expected to result in, (a) a material adverse change in, or a material adverse effect on, the operations, business, assets, properties or liabilities of us and the ARCT III Operating Partnership and their respective subsidiaries, or (b) a material impairment of the rights and remedies of the respective credit facility lenders and agents under the definitive documentation for such credit facilities (4) the absence of any material adverse change or material disruption in the loan syndication, financial, banking or capital markets that has impaired or could reasonably be expected to impair the syndication of the credit facilities, (5) the negotiation, execution and delivery of definitive documentation concerning intercreditor arrangements among the respective credit facility lenders and agents and (6) repayment of ARCT III’s existing senior secured credit facility.

There can be no assurance that we will receive the fundings under the credit facilities described above, that we will finance the mergers as anticipated or that we will not subsequently enter into alternative financing arrangements, including debt or equity financing or the potential sales of properties to third parties, to fund all or a portion of the cash consideration and other merger costs. If the funding transactions are not consummated, we will need to finance a portion of the cash consideration and other merger costs by other means, which may result in our incurring increased interest and fees, and being subject to different terms and conditions generally, on any such replacement financing. The interest rate, fees payable and terms and conditions generally, on any such replacement financing will depend on prevailing market conditions at the time. If we are unable to obtain adequate funding for the cash consideration and other merger costs, we will be unable to consummate the mergers.

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An adverse judgment in a lawsuit challenging the mergers may prevent the mergers from becoming effective or from becoming effective within the expected timeframe.

If any purported stockholders file lawsuits challenging the mergers, we cannot assure you as to the outcome of these lawsuits, including the costs associated with defending these claims or any other liabilities that may be incurred in connection with the litigation or settlement of these claims. If plaintiffs are successful in obtaining an injunction prohibiting the parties from completing the mergers on the agreed-upon terms, such an injunction may prevent the completion of the mergers in the expected time frame, or may prevent them from being completed altogether. Whether or not the plaintiffs’ claims are successful, this type of litigation is often expensive and diverts management’s attention and resources, which could adversely affect the operation of our businesses.

Risk Factors Relating to Us Following the Mergers

We expect to incur substantial expenses related to the mergers.

We expect to incur substantial expenses in connection with completing the mergers and integrating the business, operations, networks, systems, technologies, policies and procedures of ARCT III that we are acquiring with ours. There are several systems that must be integrated, including accounting and finance and asset management. While we have assumed that a certain level of transaction and integration expenses would be incurred, there are a number of factors beyond our control that could affect the total amount or the timing of our integration expenses. Many of the expenses that will be incurred, by their nature, are difficult to estimate accurately at the present time. As a result, the transaction and integration expenses associated with the mergers could, particularly in the near term, exceed the savings that we expect to achieve from the elimination of duplicative expenses and the realization of economies of scale and cost savings related to the integration of the businesses following the completion of the mergers.

American Realty Capital Advisors III, LLC, or the ARCT III Advisor, will only provide support for a limited period of time under the Second Amended and Restated Advisory Agreement, dated as of November 13, 2012, by and among ARCT III, the ARCT III Advisor and the ARCT III Operating Partnership, or the ARCT III Advisory Agreement.

The ARCT III Advisory Agreement, which requires the ARCT III Advisor to provide certain services to ARCT III, including asset management, advisory services, and other essential services, has been terminated and will expire 60 days following the consummation of the mergers, which we anticipate will occur during the first quarter of 2013. To the extent the employees and infrastructure of the combined company cannot adequately provide any such services to the combined company after the expiration of the advisory agreement, the operations and the market price of the combined company’s common stock would be adversely affected.

Following the mergers, the combined company may be unable to integrate successfully the businesses of us and ARCT III and realize the anticipated benefits of the mergers or do so within the anticipated timeframe.

The mergers involve the combination of two companies which currently operate as independent public companies. Even though the companies are operationally similar, the combined company will be required to devote significant management attention and resources to integrating their business practices and operations. It is possible that the integration process could result in the distraction of the combined company’s management, the disruption of the combined company’s ongoing business or inconsistencies in the combined company’s operations, services, standards, controls, procedures and policies, any of which could adversely affect the ability of the combined company to maintain relationships with tenants, vendors and employees or to fully achieve the anticipated benefits of the mergers.

The future results of the combined company will suffer if the combined company does not effectively manage its expanded operations following the mergers.

Following the mergers, the combined company likely will continue to expand its operations through additional acquisitions and other strategic transactions, some of which may involve complex challenges. The future success of the combined company will depend, in part, upon its ability to manage its expansion opportunities, integrate new operations into its existing business in an efficient and timely manner, successfully monitor its

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operations, costs, regulatory compliance and service quality, and maintain other necessary internal controls. The combined company cannot assure you that its expansion or acquisition opportunities will be successful, or that the combined company will realize its expected operating efficiencies, cost savings, revenue enhancements, synergies or other benefits.

The market price of our common stock may decline as a result of the merger.

The market price of our common stock may decline as a result of the mergers if the combined company does not achieve the perceived benefits of the mergers as rapidly or to the extent anticipated by financial or industry analysts, or the effect of the mergers on our financial results is not consistent with the expectations of financial or industry analysts.

In addition, following the effective time of the mergers, our stockholders and former ARCT III stockholders will own interests in a combined company operating an expanded business with a different mix of properties, risks and liabilities. Current stockholders of our company and ARCT III may not wish to continue to invest in the combined company, or for other reasons may wish to dispose of some or all of their shares of our common stock. If, following the effective time of the mergers, there is selling pressure on our common stock that exceeds demand at the market price, the price of our common stock could decline.

We cannot assure you that we will be able to continue paying dividends at the current rate.

We plan to continue our current monthly dividend practices following the mergers. However, stockholders may not receive the same dividends following the mergers for various reasons, including the following:

• as a result of the mergers and the issuance of shares of our common stock in connection with the merger, the total amount of cash required for us to pay dividends at the current rate will increase;

• we may not have enough cash to pay such dividends due to changes in our cash requirements, capital spending plans, cash flow or financial position;

• decisions on whether, when and in which amounts to make any future distributions will remain at all times entirely at the discretion of our board of directors, which reserves the right to change our dividend practices at any time and for any reason;

• we may desire to retain cash to maintain or improve our credit ratings; and

• the amount of dividends that our subsidiaries may distribute to us may be subject to restrictions imposed by state law, restrictions that may be imposed by state regulators and restrictions imposed by the terms of any current or future indebtedness that these subsidiaries may incur.

Further, our stockholders have no contractual or other legal right to dividends that have not been declared.

Counterparties to certain significant agreements with us and/or ARCT III may have consent rights in connection with the mergers.

Each of us and ARCT III is party to certain agreements that give the counterparty certain rights, including consent rights, in connection with “change in control” transactions. Under certain of these agreements, the mergers may constitute a “change in control” and, therefore, the counterparty may assert its rights in connection with the mergers. Any such counterparty may request modifications of its agreements as a condition to granting a waiver or consent under those agreements and there can be no assurance that such counterparties will not exercise their rights under the agreements, including termination rights where available. In addition, the failure to obtain consent under one agreement may be a default under agreements and, thereby, trigger rights of the counterparties to such other agreements, including termination rights where available.

We may incur adverse tax consequences if ARCT III has failed or fails to qualify as a REIT for U.S. federal income tax purposes.

If ARCT III has failed or fails to qualify as a REIT for U.S. federal income tax purposes and the mergers completed, we may inherit significant tax liabilities and could lose our REIT status should disqualifying activities continue after the mergers.

5

Our anticipated level of indebtedness will increase upon completion of the mergers and will increase the related risks we now face.

In connection with the mergers, we will incur additional indebtedness and will assume certain indebtedness of ARCT III, as a result of which will be subject to increased risks associated with such debt financing, including an increased risk that the combined company’s cash flow could be insufficient to meet required payments on its debt. As of January 4, 2013, we had indebtedness of $160.3 million. Taking into account our existing indebtedness, the incurrence of additional indebtedness in connection with the mergers, and the assumption of indebtedness in the mergers, our pro forma consolidated indebtedness as of January 4, 2013, after giving effect to the mergers, would be approximately $1.3 billion.

Our increased indebtedness could have important consequences to holders of our common stock and preferred stock, including:

• increasing our vulnerability to general adverse economic and industry conditions;

• limiting our ability to obtain additional financing to fund future working capital, capital expenditures and other general corporate requirements;

• requiring the use of a substantial portion of our cash flow from operations for the payment of principal and interest on our indebtedness, thereby reducing our ability to use our cash flow to fund working capital, acquisitions, capital expenditures and general corporate operating requirements;

• limiting our flexibility in planning for, or reacting to, changes in our business and our industry; and

• putting us at a disadvantage compared to our competitors with less indebtedness.

If we default under a loan, we may automatically be in default under any other loan that has cross-default provisions, and we may lose the properties securing these loans as a result.

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EX-99.2

Unaudited Pro Forma Financial Statements

American Realty Capital Properties, Inc.
Unaudited Pro Forma Condensed Consolidated Balance Sheet

The following unaudited pro forma Condensed Consolidated Balance Sheet is presented as if ARCT III and ARCP had merged in a stock exchange transaction as of September 30, 2012.

ARCT III and ARCP are considered to be entities under common control. Both entities’ advisors are wholly owned subsidiaries of the entities’ sponsor, AR Capital, LLC. The sponsor and its related parties have has significant ownership interests in ARCP through the ownership of shares of common stock and other equity interests. In addition, the advisors of both companies are contractually eligible to charge significant fees for their services to both of the companies including asset management fees, fees for the arrangement of financing and incentive fees and other fees. Due to the significance of these fees, the advisors and ultimately the sponsor is determined to have a significant economic interest in both companies in addition to having the power to direct the activities of the companies through the advisory agreement, which qualifies them as affiliated companies under common control in accordance with U.S. Generally Accepted Accounting Principles, or U.S. GAAP. The acquisition of an entity under common control is accounted for on the carryover basis of accounting whereby the assets and liabilities of the companies are recorded upon the merger on the same basis as they were carried by the companies on the merger date.

This financial statement should be read in conjunction with the unaudited pro forma Consolidated Statement of Operations and the historical financial statements and notes thereto in this Form 8-K. The pro forma Condensed Consolidated Balance Sheet is unaudited and is not necessarily indicative of what the actual financial position would have been had ARCT III and ARCP merged as of September 30, 2012, nor does it purport to present the future financial position of ARCP.

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American Realty Capital Properties, Inc.
Unaudited Pro Forma Condensed Consolidated Balance Sheet
September 30, 2012
(In thousands)

	ARCT III Historical(1)			ARCP Historical(2)			Pro Forma Subsequent Acquisition Adjustments(3)			Pro Forma Future Acquisition Adjustments(4)			Pro Forma			Pro Forma Merger Adjustments(5)			ARCP Pro Forma
Assets
Real estate investments, at cost:
Land	$	143,346		$	28,717		$	92,497		$	64,203		$	328,763		$	—		$	328,763
Buildings, fixtures and improvements		686,724			182,700			467,383			324,416			1,661,223			—			1,661,223
Acquired intangible lease assets		115,268			24,306			75,032			52,081			266,687			—			266,687
Total real estate investments, at cost		945,338			235,723			634,912			440,700			2,256,673			—			2,256,673
Less: accumulated depreciation and amortization		(16,712	)		(20,954	)		—			—			(37,666	)		—			(37,666	)
Total real estate investments, net		928,626			214,769			634,912			440,700			2,219,007			—			2,219,007
Cash and cash equivalents		691,674			3,779			(524,393	)		(115,700	)		55,360			(2,085	)(6)		53,275
Investment securities, at fair value		8,089			—			—			—			8,089			—			8,089
Restricted cash		1,212			—			—			—			1,212			—			1,212
Prepaid expenses and other assets		7,822			3,015			—			—			10,837			2,085	(6)		12,922
Receivable for issuance of common stock		4,320			—			—			—			4,320			—			4,320
Deferred costs, net		11,644			4,204			—			—			15,848			—			15,848
Assets held for sale		—			812			—			—			812			—			812
Total assets	$	1,653,387		$	226,579		$	110,519		$	325,000		$	2,315,485		$	—		$	2,315,485
Liabilities and Equity
Mortgage notes payable	$	156,730		$	35,760		$	72,630		$	—		$	265,120		$	—		$	265,120
Derivatives, at fair value		4,122			—			—			—			4,122			—			4,122
Senior secured revolving credit facility		—			91,090			33,514			—			124,604			—			124,604
Credit facility		—			—			—			325,000	(7)		325,000			631,263	(8)		956,263
Accounts payable and accrued expenses		3,163			1,276			—			—			4,439			—			4,439
Deferred rent		1,998			803			—			—			2,801			—			2,801
Distributions payable		9,251			—			—			—			9,251			—			9,251
Total liabilities		175,264			128,929			106,144			325,000			735,337			631,263			1,366,600
Series A convertible preferred stock		—			5			—			—			5			—			5
Series B convertible preferred stock		—			3			—			—			3			—			3
Preferred stock		—			—			—			—			—			—			—
Common stock		1,753			112			—			—			1,865			(587	)(9)		1,278
Additional paid-in capital		1,537,766			101,325			—			—			1,639,091			(700,115	)(10)		938,976
Accumulated other comprehensive loss		(4,088	)		(13	)		—			—			(4,101	)		—			(4,101	)
Accumulated deficit		(60,308	)		(13,295	)		—			—			(73,603	)		—			(73,603	)
Total stockholders’ equity		1,475,123			88,137			—			—			1,563,260			(700,702	)		862,558
Non-controlling interests		3,000			9,513			4,375			—			16,888			69,439	(11)		86,327
Total equity		1,478,123			97,650			4,375			—			1,580,148			(631,263	)		948,885
Total liabilities and equity	$	1,653,387		$	226,579		$	110,519		$	325,000		$	2,315,485		$	—		$	2,315,485

American Realty Capital Properties, Inc.
Notes to Consolidated Pro Forma Balance Sheet

Pro Forma Consolidated Balance Sheet as of September 30, 2012:

(1) Reflects the historical Balance Sheet of American Realty Capital Trust III, Inc. for the period indicated.

(2) Reflects the historical Balance Sheet of American Realty Capital Properties, Inc. for the period indicated.

(3) Adjustments and pro forma balances represent amounts for properties acquired by ARCP and ARCT III from October 1, 2012 to December 31, 2012 as if they had been acquired as of the beginning of the period with related financing thereon. All properties acquired during this period were net leased properties whereby the tenant is responsible for all operating expenses of the property. Allocations of the purchase price of the property between asset categories is based on allocations of similar types of assets acquired previously by the companies. In accordance with U.S. GAAP, ARCP has one year to finalize the allocation of the purchase price between the various classes of assets.

(4) Adjustments and pro forma balances represent amounts for properties probable to be acquired by ARCP and ARCT III as if they had been acquired as of the beginning of the period with related financing

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thereon. All properties probable to be acquired are net leased properties whereby the tenant is responsible for all operating expenses of the property. Allocations of the purchase price of the property between asset categories is based on allocations of similar types of assets acquired previously by the companies.

(5) Adjustments and pro forma balances based on the offering of 0.95 shares of ARCP’s common stock for every share of ARCT III’s common stock in addition to other arrangements made with ARCP’s advisor in conjunction with the merger.

(6) In conjunction with the merger and internalization of certain functions now performed by the advisor, ARCP agreed to acquire certain corporate furniture, fixtures, equipment and other assets for $2.0 million. An additional $3.8 million will be paid for transaction and offering-related costs in conjunction with the merger.

(7) Property acquisitions will be partially financed with proceeds from ARCP’s line of credit. ARCP has obtained commitments for a credit facility of up to $1 billion for the funding of such purchases.

(8) The merger agreement provides for the purchase of up to 30% of the outstanding shares of ARCT III’s common stock at $12.00 per share. Based on the 175.4 million shares outstanding at September 30, 2012, the cost of acquiring 30% of the outstanding shares would be $631.3 million. ARCP has obtained commitments for a credit facility of up to $1 billion for the funding of such share repurchases.

(9) Represents the exchange of 70% of 175.4 million shares of ARCT III shares of common stock at an exchange rate of 0.95 to 116.6 million shares of ARCP common stock. For pro forma financial statement purposes it was assumed that as provided for in the merger agreement, 30% of the outstanding shares of ARCT III shares are exchanged for cash at $12.00 per common share.

(10) Purchase of 30% of outstanding shares for cash at $12.00 per share	$	631,263
Issuance of OP units to the sponsor of ARCT III(a)		69,439
Less: The par value of the exchanged shares of ARCT III common stock net of ARCP shares issued		(587	)
	$	700,115

(a) See note (11) regarding the issuance of OP units to the sponsor of ARCT III.

(11) The sponsor of ARCT III is entitled a fee based on the achievement of certain total return to the ARCT III stockholders. This estimated calculation is based on the number of shares of ARCT III outstanding and the closing common stock price of ARCP shares on January 3, 2012 of $13.42 per share. The actual amount to be paid will not be known until the merger date. The fee will be paid in OP units which represent equity interests in the operations of ARCP.

American Realty Capital Properties, Inc.
Unaudited Pro Forma Condensed Consolidated Statement of Operations
For the Nine Months Ended September 30, 2012

The following unaudited pro forma Consolidated Statements of Operations are presented as if ARCT III and ARCP merged at the beginning of each period presented. These financial statements should be read in conjunction with the unaudited pro forma Condensed Consolidated Balance Sheet and ARCP’s historical financial statements and notes thereto in this Form 8-K and the documents incorporated by reference herein. The pro forma Consolidated Statements of Operations are unaudited and are not necessarily indicative of what the actual operations would have been had ARCP consummated this transaction at the beginning of the periods nor does it purport to present the future operations of ARCP.

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American Realty Capital Properties, Inc.
Unaudited Pro Forma Condensed Consolidated Statement Of Operations and Comprehensive Loss
For the nine months ended September 30, 2012
(In thousands except per share data)

	ARCT III Historical(1)			ARCP Historical(2)			Pro Forma Acquisition Adjustments(3)			Pro Forma Subsequent Acquisition Adjustments(4)			Pro Forma Future Acquisition Adjustments(5)			Pro Forma			Pro Forma Other Adjustments(6)			ARCP Pro Forma
Revenues:
Rental income	$	24,948		$	10,997		$	34,977	(7)	$	37,265	(7)	$	26,062	(7)	$	134,249			—		$	134,249
Operating expense reimbursements		598			175			—			—			—			773			—			773
Total revenues		25,546			11,172			34,977			37,265			26,062			135,022			—			135,022
Operating expenses:
Acquisition and transaction related		24,087			3,297			—			—			—			27,384			(16,778	)(12)		10,606
Property operating		1,102			555			—			—			—			1,657			—			1,657
Operating fees to affiliates		212			—			—			2,381			1,653			4,246			4,138	(13)		8,384
General and administrative		797			1,530			—			—			—			2,327			—	(14)		2,327
Depreciation and amortization		16,213			6,092			24,990	(8)		25,425	(8)		10,714	(8)		83,434			—			83,434
Total operating expenses		42,411			11,474			24,990			27,806			12,367			119,048			(12,640	)		106,408
Operating income (loss)		(16,865	)		(302	)		9,987			9,459			13,695			15,974			12,640			28,614
Other income (expenses):
Interest expense		(4,723	)		(2,873	)		(868	)(9)		(2,547	)(9)		(5,972	)(9)		(16,983	)		(11,599	)(15)		(28,582	)
Other income, net		273			—			232	(10)		—			—			505			—			505
Total other expenses		(4,450	)		(2,873	)		(636	)		(2,547	)		(5,972	)		(16,478	)		(11,599	)		(28,077	)
Income (loss) from continuing operations		(21,315	)		(3,175	)		9,351			6,912			7,723			(504	)		1,041			537
Net income (loss) from continuing operations attributable to non-controlling interests		—			141			(851	)(11)		(629	)(11)		(703	)(11)		(2,042	)		1,993	(11)		(49	)
Net income (loss) from continuing operations attributable to stockholders		(21,315	)		(3,034	)		8,500			6,283			7,020			(2,546	)		3,034			488
Discontinued operations:
Income (loss) from operations of held for sale properties		—			(12	)		—			—			—			(12	)		—			(12	)
Loss on held for sale properties		—			(452	)		—			—			—			(452	)		—			(452	)
Net loss from discontinued operations		—			(464	)		—			—			—			(464	)		—			(464	)
Net from discontinued operations attributable to non-controlling interests		—			24			—			—			—			24			—			24
Net from discontinued operations attributable to stockholders		—			(440	)		—			—			—			(440	)		—			(440	)
Net income (loss)		(21,315	)		(3,639	)		9,351			6,912			7,723			(968	)		1,041			73
Net income (loss) attributable to non-controlling interests		—			165			(851	)		(629	)		(703	)		(2,018	)		1,993			(25	)
Net income (loss) attributable to stockholders	$	(21,315	)	$	(3,474	)	$	8,500		$	6,283		$	7,020		$	(2,986	)	$	3,034		$	48
Earnings per share:
Basic	$	(0.30	)	$	(0.43	)																$	0.00
Fully Diluted	$	(0.30	)	$	(0.43	)																$	0.00
Weighted average common shares:
Basic		72,007,149			8,543,365																		125,151,702
Fully Diluted		72,024,549			9,508,246																		131,290,871

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American Realty Capital Properties, Inc.
Unaudited Pro Forma Condensed Consolidated Statement Of Operations and Comprehensive Loss
For the year ended December 31, 2011
(In thousands except per share data)

	ARCT III Historical(1)			ARCP Historical(2)			Pro Forma Acquisition Adjustments(3)			Pro Forma			Pro Forma Other Adjustments(6)			ARCP Pro Forma
Revenues:
Rental income	$	740		$	3,022			12,622	(7)	$	16,384		$	—		$	16,384
Operating expense reimbursements		55			153			—			208			—			208
Total revenues		795			3,175			12,622			16,592			—			16,592
Operating expenses:
Acquisition and transaction related		2,023			1,875			—			3,898			(1,692	)(12)		2,206
Property operating		67			153			—			220			—			220
Operating fees to affiliates		—			—			—			—			1,047	(13)		1,047
General and administrative		295			440			—			735			—	(14)		735
Depreciation and amortization		499			1,612			2,343	(9)		4,454			—			4,454
Total operating expenses		2,884			4,080			2,343			9,307			(645	)		8,662
Operating income (loss)		(2,089	)		(905	)		10,279			7,285			645			7,930
Other income (expenses):
Interest expense		(36	)		(924	)		(1,986	)(7)		(2,946	)		(156	)(15)		(3,102	)
Other income, net		1			1			—			2						2
Total other expenses		(35	)		(923	)		(1,986	)		(2,944	)		(156	)		(3,100	)
Income (loss) from continuing operations		(2,124	)		(1,828	)		8,293			4,341			489			4,830
Net income (loss) from continuing operations attributable to non-controlling interests		—			69			(754	)(11)		(685	)		(44	)(11)		(729	)
Net income (loss) from continuing operations attributable to stockholders		(2,124	)		(1,759	)		7,539			3,656			445			4,101
Discontinued operations:
Income (loss) from operations of held for sale properties		—			(37	)		—			(37	)		—			(37	)
Loss on held for sale properties		—			(815	)		—			(815	)		—			(815	)
Net loss from discontinued operations		—			(852	)		—			(852	)		—			(852	)
Net from discontinued operations attributable to non-controlling interests		—			36			—			36			—			36
Net from discontinued operations attributable to stockholders		—			(816	)		—			(816	)		—			(816	)
Net income (loss)		(2,124	)		(2,680	)		8,293			3,489			489			3,978
Net income (loss) attributable to non-controlling interests		—			105			(754	)		(649	)		(44	)		(693	)
Net income (loss) attributable to stockholders	$	(2,124	)	$	(2,575	)	$	9,047		$	2,840		$	445		$	3,285
Earnings per share:
Basic	$	(1.20	)	$	(1.26	)										$	1.02
Fully Diluted	$	(1.20	)	$	(1.26	)										$	1.02
Weighted average common shares:
Basic		1,763,190			2,045,320												3,217,842
Fully Diluted		1,769,190			2,531,720												3,756,355

American Realty Capital Properties, Inc.
Notes to Consolidated Pro Forma Statements of Operations

(1) Reflects the historical Statement of Operations of ARCT III for the period indicated.

(2) Reflects the historical Statement of Operations of ARCP for the period indicated.

(3) Adjustments reflect the annualization of certain income and expense items for property acquisitions made in 2011 and up to October 31, 2012 as if they were made at the beginning of each period.

(4) Adjustments and pro forma balances reflect income and expenses related to properties acquired by ARCP and ARCT III from October 1, 2012 to December 31, 2012 as if they had been acquired as of the beginning of the period with related financing thereon. All properties acquired during this period were net leased properties whereby the tenant is responsible for all operating expenses of the property.

(5) Adjustments and pro forma balances reflect income and expenses related to properties probable to be acquired by ARCP and ARCT III as if they had been acquired as of the beginning of the period with

5

related financing thereon. All properties probable to be acquired are net leased properties whereby the tenant is responsible for all operating expenses of the property.

(6) Adjustments and pro forma balances based on the offering of 0.95 shares of ARCP’s common stock for every share of ARCT III’s common stock in addition to other arrangements made with ARCP’s advisor in conjunction with the merger.

(7) Rental income, operating expense reimbursements and property operating expense adjustments reflect income and expenses for properties as if all properties were acquired during the periods by ARCP and ARCT III were acquired at the beginning of each period.

(8) Depreciation and amortization expense adjustment reflects the expense that would have been recorded if all properties acquired by ARCP and ARCT III during each period had been acquired as of the beginning of each period.

(9) Interest expense adjustment reflects the expense that would have been recognized had the properties for which the funding was used been acquired by ARCP and ARCT III during each period had been acquired as of the beginning of each period. Amounts were calculated based on ending period debt balances and average interest rates for lines of credit and mortgage loans.

(10) Adjustment reflects the annualization of income related to certain marketable securities made mid-period as if they had been purchased at the beginning of the period.

(11) Non-controlling interest adjustment reflects interests of operating partnership unit holders including those issued to the sponsor of ARCT III in conjunction with the merger.

(12) Acquisition and transaction related adjustment relates to contractual charges from the advisor for property acquisitions which will no longer be charged in accordance with the revised advisor agreement. Adjustment does not include approximately $69.4 million of estimated fees to be paid in OP Units to the sponsor in conjunction with the merger and $27.0 million of estimated merger related costs mainly related to investment banker, legal and accounting fees.

(13) Operating fees to affiliate adjustment relates to all asset management fees incurred under the arrangement regardless of whether such fees were previously waived. The contractual asset management fee is based on 0.50% (annualized) of real estate investments, at cost, up to $3.0 billion. The fee decreases to 0.40% (annualized) of real estate investments above $3.0 billion.

(14) General and administrative expenses exclude certain costs such as salary and benefits for certain property acquisition, accounting and property management personnel which will be borne by ARCP after the merger as well as certain additional costs that may be incurred to manage a larger public company such as legal, accounting, insurance and other costs. Total general and administrative expenses are expected to increase approximately $1.0 million annually.

(15) Interest expense adjustment reflects interest on an additional $631.3 million borrowing on ARCP’s committed line of credit at the expected interest rate of 2.45%. The estimate reflects the expected repurchase of up to 30% of the outstanding shares of ARCT III’s common stock at $12.00 per share as provided for in the merger agreement. ARCP has obtained commitments for a credit facility of up to $1 billion for the funding of such share purchases.

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American Realty Capital Properties, Inc.
Unaudited Pro Forma Funds From Operations and Adjusted Funds From Operations
For the nine months ended September 30, 2012
(In thousands except per share data)

	ARCT III Historical			ARCP Historical			Combined Historical			ARCP Pro Forma
Net loss attributable to stockholders (in accordance with GAAP)	$	(21,315	)	$	(3,474	)	$	(24,789	)	$	73
Loss on held for sale properties		—			428			428			428
Depreciation and amortization		16,212			5,717			21,929			83,434
Total funds from operations (FFO)		(5,103	)		2,671			(2,432	)		83,935
Adjustments:
Acquisition and transaction related costs		24,087			3,060			27,147			10,606
Amortization of above-market lease asset		—			52			52			152
Amortization of deferred financing costs		696			495			1,191			1,191
Straight-line rent		(592	)		(555	)		(1,147	)		(5,698	)
Mark-to-market adjustments		91			—			91			91
Non-cash equity compensation expense		45			792			837			837
Total adjusted funds from operations (AFFO)	$	19,224		$	6,515		$	25,739		$	91,114
Weighted average common shares:
Basic		72,007,149			8,543,365						125,151,702
Diluted		72,024,549			9,508,246						131,290,871
FFO per share:
Basic	$	(0.07	)	$	0.31					$	0.67
Diluted	$	(0.07	)	$	0.28					$	0.64	(1)
AFFO per share:
Basic	$	0.27		$	0.76					$	0.73
Diluted	$	0.27		$	0.69					$	0.69

(1) Previously issued guidance of annualized FFO of $0.91 to $0.95 per share, fully diluted, was based on run-rate statement of operations balances and excluded acquisition and transaction costs from net income as they are not expected to continue at the current rate in future periods. Excluding acquisition and transaction costs from net income, FFO would be $0.72 per share, fully diluted, for the nine month period or $0.96 on an annualized basis.

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EX-99.3

THE COMPANIES

American Realty Capital Properties, Inc. and Tiger Acquisition, LLC

American Realty Capital Properties, Inc., or ARCP, is a Maryland corporation incorporated in December 2010 that qualifies as a real estate investment trust, or REIT, commencing with its initial taxable year ended December 31, 2011. ARCP was formed to acquire and own single-tenant, freestanding commercial real estate primarily subject to medium-term net leases with high credit quality tenants. In July 2011, ARCP commenced an initial public offering on a “reasonable best efforts” basis, which closed on September 6, 2011. ARCP common stock began trading on the NASDAQ Capital Market under the symbol “ARCP” on September 7, 2011.

Substantially all of ARCP’s business is conducted through ARC Properties Operating Partnership, L.P., or the ARCP OP, of which ARCP is the sole general partner.

As of September 30, 2012, excluding one vacant property classified as held for sale, ARCP owned 124 properties consisting of 2.2 million square feet, 100% leased with a weighted average remaining lease term of 6.8 years. In constructing its portfolio, ARCP is committed to diversification (industry, tenant and geography). As of September 30, 2012, rental revenues derived from investment grade tenants and tenants affiliated with investment grade entities as determined by a major rating agency approximated 99% (the rating of each parent company has been attributed to its wholly owned subsidiary for purposes of this disclosure). ARCP’s strategy encompasses receiving the majority of its revenue from investment grade tenants as ARCP further acquires properties and enters into (or assumes) medium-term lease arrangements.

In connection with the merger, ARCP will internalize certain property level management and leasing services and accounting activities, and in connection with such internalization, American Realty Capital Advisors III, LLC, or the ARCT III Advisor, will sell to the ARCP OP certain furniture, fixtures, equipment and other assets used by the ARCT III Advisor in connection with managing the property-level business and operations and accounting functions of American Realty Capital Trust III, Inc., or ARCT III, and American Realty Capital Operating Partnership III, L.P., or the ARCT III OP.

ARCP’s principal executive offices are located at 405 Park Avenue, 15^th Floor, New York, New York 10022, and its telephone number is (212) 415-6500.

The entity into which ARCT III will merge, or the Merger Sub, is a Delaware limited liability company and a direct wholly owned subsidiary of ARCP that was formed for the purpose of entering into the merger agreement.

American Realty Capital Trust III, Inc.

ARCT III is a Maryland corporation incorporated in October 2010 that qualifies as a REIT commencing with its initial taxable year ended December 31, 2011. ARCT III is a non-traded REIT. ARCT III was formed to acquire a diversified portfolio of commercial real estate, which consists primarily of freestanding single tenant properties net leased to credit worthy tenants. In March 2011, ARCT III commenced an initial public offering on a “reasonable best efforts” basis to sell up to 150.0 million shares of common stock, excluding 25.0 million shares issuable pursuant to a distribution reinvestment plan, offered at a price of $10.00 per share, subject to certain volume and other discounts, which we refer to as the ARCT III IPO. In September 2011, ARCT III commenced real estate operations. The ARCT III IPO closed in September 2012. As of September 30, 2012, ARCT III had 175.4 million shares of common stock outstanding, including unvested restricted shares and shares issued pursuant to ARCT III’s distribution reinvestment plan.

Substantially all of ARCT III’s business is conducted through the ARCT III OP, of which ARCT III is the sole general partner.

As of September 30, 2012, ARCT III owned 382 properties comprised of 7.9 million square feet, which were 100% leased with a weighted average remaining lease term of 12.7 years. In constructing the portfolio, ARCT III has been committed to diversification by industry, tenant and geography.

ARCT III’s principal executive offices are located at 405 Park Avenue, 15^th Floor, New York, New York 10022, and its telephone number is (212) 415-6500.

1

ARCT III and ARCP each were sponsored, directly or indirectly, by AR Capital, LLC, or ARC. The ARCT III Advisor is a Delaware limited liability company wholly owned by ARC. ARC Properties Advisors, LLC, or the ARCP Manager, is a Delaware limited liability company wholly owned by ARC and is ARCP’s external manager. ARC and its affiliates, including the ARCT III Advisor and ARCP Manager, provide investment, management and advisory services, as well as certain acquisition and debt capital services to ARCT III and ARCP, as applicable. ARCT III and ARCP pay management fees and certain other fees to, and reimburse certain expenses of, the ARCT III Advisor and ARCP Manager, respectively. Affiliates of ARC also provide similar services for American Realty Capital New York Recovery REIT, Inc., Phillips Edison — ARC Shopping Center REIT, Inc., American Realty Capital — Retail Centers of America, Inc., American Realty Capital Healthcare Trust, Inc., American Realty Capital Daily Net Asset Value Trust, Inc., American Realty Capital Global Trust, Inc., American Realty Capital Healthcare Trust II, Inc., a development stage REIT, and American Realty Capital Trust IV, Inc. Certain of these ARC-sponsored REITs have investment strategies substantially similar to those of ARCT III, ARCP and the combined company.

The Combined Company

ARCT III’s and ARCP’s properties consist primarily of freestanding single-tenant commercial properties leased to investment grade (as determined by major credit rating agencies) and other creditworthy tenants that are diversified by tenant, industry and geography. Both ARCP’s and ARCT III’s portfolios of real estate investment properties (excluding one vacant property held by ARCP) were 100% leased as of September 30, 2012. ARCT III’s portfolio focuses on entering into (or assuming) long-term lease arrangements and targets assets at or below replacement cost, while ARCP focuses on entering into (or assuming) medium-term leases and purchasing properties with vintage in-place rents at valuations significantly below replacement cost. As of September 30, 2012, ARCT III owned 382 properties consisting of 7.9 million square feet, which were 100% leased with a weighted average remaining lease term of 12.7 years. As of September 30, 2012, rental revenues derived by ARCT III from investment grade tenants and tenants affiliated with investment grade entities as determined by a major rating agency approximated 80% (the rating of each parent company has been attributed to its wholly owned subsidiary for purposes of this disclosure). As of September 30, 2012, excluding one vacant property classified as held for sale, ARCP owned 124 properties consisting of 2.2 million square feet, which were 100% leased with a weighted average remaining lease term of 6.8 years. As of September 30, 2012, rental revenues derived by ARCP from investment grade tenants and tenants affiliated with investment grade entities as determined by a major rating agency approximated 99% (the rating of each parent company has been attributed to its wholly owned subsidiary for purposes of this disclosure). The surviving entity in the merger will own a portfolio that that uniquely combines ARCT III’s portfolio of properties with stable income from high credit quality tenants, with ARCP’s portfolio, which has substantial growth opportunities. The long-term business plan for the combined company contemplates the combined portfolio consisting of approximately 70% long-term leases and 30% medium-term leases, with an average remaining lease term of 10 to 12 years. The combined portfolio is additionally expected to develop growth potential from below market leases.

After the consummation of the merger, the combined company will have access to up to $850 million of financing, consisting of a $650 million credit facility (under which ARCT III has obtained a commitment for $385.0 million, and which contains an “accordion” feature to allow ARCT III, subject to certain conditions, to request additional commitments in an amount not to exceed $350.0 million), borrowings under which will be subject to borrowing base availability, and an additional credit facility in the amount of $200.0 million (of which $200.0 million is committed but subject to reduction by up to $125.0 million to the extent the committing lender participates in the accordion feature of the $650.0 million credit facility).

2

Property Portfolio Information

At September 30, 2012, ARCP owned a diversified portfolio:

• of 124 properties, excluding one vacant property classified as held for sale;

• with an occupancy rate of 100%;

• leased to 14 different retail and other commercial enterprises doing business in 10 separate industries;

• located in 24 states;

• with approximately 2.2 million square feet of leasable space; and

• with an average leasable space per property of approximately 17,700 square feet.

At September 30, 2012, ARCT III owned a diversified portfolio:

• of 382 properties;

• with an occupancy rate of 100%;

• leased to 27 different retail and other commercial enterprises doing business in 14 separate industries;

• located in 42 states;

• with approximately 7.9 million square feet of leasable space; and

• with an average leasable space per property of approximately 20,600 square feet.

Combined Property Portfolio

As of September 30, 2012, ARCP and ARCT III, on a pro forma basis, owned a portfolio with the following characteristics:

• 506 properties, including 124 ARCP properties at September 30, 2012 and 382 ARCT III properties at September 30, 2012;

• occupancy rate of 100%;

• leased to 33 different retail and other commercial enterprises doing business in 17 separate industries;

• located in 43 states;

• approximately 10.1 million square feet of leasable space; and

• an average leasable space per property of approximately 19,900 square feet.

The following table lists tenants whose annualized rental income on a straight-line basis represent greater than 10% of the total annualized rental income on a straight-line basis for the pro forma portfolio properties of ARCP and ARCT III as of September 30, 2012.

Tenant	September 30, 2012
FedEx		10.1	%
Citizens Bank		11.9	%
Dollar General		12.3	%

3

Set forth below are summary financial statements of the parent of the lessee of the FedEx properties included in ARCP’s and ARCT III’s portfolio on a pro forma basis as described above. FedEx Corporation currently files its financial statements in reports filed with the U.S. Securities and Exchange Commission, or the Commission, and the following summary financial data regarding FedEx Corporation are taken from such filings:

	Six Months Ended November 30, 2012 (Unaudited)		Year Ended
(Amounts in Millions)			May 31, 2012 (Audited)		May 31, 2011 (Audited)		May 31, 2010 (Audited)
Statements of Operations Data
Revenues	$	21,899	$	42,680	$	39,304	$	34,734
Operating income		1,460		3,186		2,378		1,998
Net income		897		2,032		1,452		1,894

(Amounts in Millions)	November 30, 2012 (Unaudited)		May 31, 2012 (Audited)		May 31, 2011 (Audited)		May 31, 2010 (Audited)
Consolidated Condensed Balance Sheets
Total assets	$	31,312	$	29,903	$	27,385	$	24,902
Long-term debt		2,241		1,250		1,667		1,668
Total common stockholders’ investment		15,543		14,727		15,220		13,811

Set forth below are summary financial statements of the parent guarantor of the Dollar General properties included in ARCP's and ARCT III's portfolio on a pro forma basis as described above. Dollar General Corporation currently files its financial statements in reports filed with the Commission, and the following summary financial data regarding Dollar General Corporation are taken from such filings:

	For the 39 Weeks Ended November 2, 2012 (Unaudited)		Fiscal Year Ended
(Amounts in Thousands)			February 3, 2012 (Audited)		January 28, 2011 (Audited)		January 29, 2010 (Audited)
Consolidated Condensed Statements of Income
Net sales	$	11,814,507	$	14,807,188	$	13,035,000	$	11,796,380
Operating profit		1,132,927		1,490,804		1,274,065		953,258
Net income		635,240		766,685		627,857		339,442

(Amounts in Thousands)	November 2, 2012 (Unaudited)		February 3, 2012 (Audited)		January 28, 2011 (Audited)		January 29, 2010 (Audited)
Consolidated Condensed Balance Sheets
Total assets	$	10,273,677	$	9,688,520	$	9,546,222	$	8,863,519
Long-term obligations		3,023,367		2,617,891		3,287,070		3,399,715
Total liabilities		5,538,815		5,020,025		5,491,743		5,473,221
Total shareholders’ equity		4,734,862		4,668,495		4,054,479		3,390,298

4

Set forth below are summary financial statements of the parent of the lessee of the Citizens Bank properties included in ARCP's and ARCT III's portfolio on a pro forma basis as described above. RBS Citizens, N.A. currently makes its financial statements available on the Federal Deposit Insurance Corporation website, and the following summary financial data regarding RBS Citizens, N.A. are taken from such filings:

	Nine Months Ended September 30, 2012 (Unaudited)		Fiscal Year Ended
(Amounts in millions)			December 31, 2011 (Audited)		December 31, 2010 (Audited)			December 31, 2009 (Audited)
Consolidated Condensed Statements of Income
Total interest income	$	4,873	$	3,484	$	4,008		$	4,868
Net interest income after provision for credit losses		3,523		1,230		1,289			494
Net income (loss)		843		345		(39	)		(600	)

(Amounts in millions)	September 30, 2012 (Unaudited)		December 31, 2011 (Audited)		December 31, 2010 (Audited)		December 31, 2009 (Audited)
Consolidated Condensed Balance Sheets
Total assets	$	107,214	$	106,941	$	107,836	$	116,921
Total liabilities		88,455		88,830		90,920		100,321
Total shareholders’ equity		18,759		18,111		16,916		16,600

All of the following property portfolio information is provided to illustrate the combined property portfolio of ARCP and ARCT III post-merger. This information includes an illustration of the combined portfolio by industry, property type and geography, as well as a combined lease expiration schedule. The ARCP information represents quarterly information for the 124 properties owned at September 30, 2012. The ARCT III information represents quarterly information for the 382 properties owned at September 30, 2012.

5

Industry Diversification

The following table sets forth certain information regarding the property portfolios classified according to the business of the respective tenants, expressed as a percentage of total rental revenue:

Percentage of Rental Revenue

Industries	ARCP(1)			ARCT III(2)			Combined Total
Auto Retail		2.3	%		2.6	%		2.5	%
Auto Services		—			0.6	%		0.5	%
Consumer Goods		7.9	%		—			1.7	%
Consumer Products		—			19.7	%		15.6	%
Discount Retail		8.0	%		23.2	%		20.0	%
Freight		5.5	%		16.7	%		14.3	%
Gas/Convenience		—			1.2	%		0.9	%
Government Services		11.4	%		3.1	%		4.8	%
Healthcare		—			4.5	%		3.5	%
Home Maintenance		11.2	%		—			2.4	%
Medical Office		—			1.9	%		1.5	%
Pharmacy		5.3	%		9.6	%		8.7	%
Restaurant		—			5.0	%		4.0	%
Retail Banking		33.6	%		8.4	%		13.8	%
Specialty Retail		12.6	%		2.3	%		4.4	%
Storage Facility		2.2	%		—			0.5	%
Supermarket		—			1.2	%		0.9	%
Totals		100.0	%		100.0	%		100.0	%

(1) Includes annualized rental revenue for all properties owned by ARCP at September 30, 2012.

(2) Includes annualized rental revenue for all properties owned by ARCT III at September 30, 2012.

Property Type Diversification

The following table sets forth certain property type information regarding the property portfolios (dollars in thousands):

ARCP

Property Type	Number of Properties		Approximate Leasable Square Feet		Quarterly Rental Revenue(1)		Percentage of Rental Revenue
Retail		108		749,800	$	2,520		50.1	%
Distribution		10		1,218,500		1,826		36.3
Office		5		103,900		573		11.4
Storage		1		126,700		111		2.2
Totals		124		2,198,900	$	5,030		100.0	%

6

ARCT III

Property Type	Number of Properties(2)		Approximate Leasable Square Feet		Quarterly Rental Revenue(2)		Percentage of Rental Revenue
Retail		343		2,732,800	$	9,929		53.4	%
Distribution		24		4,886,500		7,657		41.1
Office		15		239,800		1,024		5.5
Totals		382		7,859,100	$	18,610		100.0	%

Combined

Property Type	Number of Properties(2)		Approximate Leasable Square Feet		Total Quarterly Rental Revenue		Percentage of Total Quarterly Rental Revenue
Retail		451		3,482,600	$	12,449		52.7	%
Distribution		34		6,105,000		9,483		40.1
Office		20		343,700		1,597		6.7
Storage		1		126,700		111		0.5
Totals		506		10,058,000	$	23,640		100.0	%

(1) Includes quarterly rental revenue for all properties owned by ARCP at September 30, 2012.

(2) Includes quarterly rental revenue for all properties owned by ARCT III at September 30, 2012.

7

Geographic Diversification

The following table sets forth certain state-by-state information regarding the property portfolios (dollars in thousands):

ARCP

State	Number of Properties		Percent Leased			Approximate Leasable Square Feet		Quarterly Rental Revenue (1)		Percentage of Rental Revenue
Alabama		1		100	%		39,500	$	151		3.0	%
Alaska		—		—			—		—		—
Arizona		—		—			—		—		—
Arkansas		5		100			43,800		45		0.9
California		—		—			—		—		—
Colorado		—		—			—		—		—
Connecticut		2		100			5,600		31		0.6
Delaware		1		100			4,600		23		0.4
Florida		1		100			8,900		14		0.3
Georgia		2		100			20,900		83		1.7
Hawaii		—		—			—		—		—
Idaho		—		—			—		—		—
Illinois		10		100			77,900		302		6.0
Indiana		1		100			20,200		85		1.7
Iowa		1		100			553,000		588		11.7
Kansas		1		100			7,500		7		0.1
Kentucky		1		100			12,100		30		0.6
Louisiana		—		—			—		—		—
Maine		—		—			—		—		—
Maryland		—		—			—		—		—
Massachusetts		—		—			—		—		—
Michigan		22		100			125,000		712		14.2
Minnesota		—		—			—		—		—
Mississippi		—		—			—		—		—
Missouri		26		100			224,500		304		6.0
Montana		—		—			—		—		—
Nebraska		—		—			—		—		—
Nevada		—		—			—		—		—
New Hampshire		2		100			6,900		28		0.5
New Jersey		1		100			32,000		241		4.8
New Mexico		—		—			—		—		—
New York		13		100			87,000		526		10.5
North Carolina		—		—			—		—		—
North Dakota		—		—			—		—		—
Ohio		18		100			220,800		595		11.8
Oklahoma		2		100			18,000		19		0.4
Oregon		—		—			—		—		—
Pennsylvania		5		100			62,600		266		5.3
Rhode Island		—		—			—		—		—
South Carolina		2		100			480,000		626		12.4
South Dakota		—		—			—		—		—
Tennessee		1		100			10,700		37		0.7
Texas		2		100			113,600		204		4.1
Utah		—		—			—		—		—
Vermont		3		100			12,500		59		1.2
Virginia		1		100			11,300		54		1.1
Washington		—		—			—		—		—
West Virginia		—		—			—		—		—
Wisconsin		—		—			—		—		—
Wyoming		—		—			—		—		—
Totals/Average		124		100	%		2,198,900	$	5,030		100.0	%

8

ARCT III

State	Number of Properties		Percent Leased			Approximate Leasable Square Feet		Quarterly Rental Revenue(2)		Percentage of Rental Revenue
Alabama		12		100	%		91,500	$	378		2.0	%
Alaska		—		—			—		—		—
Arizona		2		100			23,700		102		0.6
Arkansas		3		100			19,100		137		0.7
California		2		100			1,050,700		1,261		6.8
Colorado		3		100			189,800		736		4.0
Connecticut		7		100			28,700		238		1.3
Delaware		2		100			4,300		28		0.2
Florida		9		100			58,600		317		1.7
Georgia		11		100			35,200		324		1.7
Hawaii		—		—			—		—		—
Idaho		2		100			43,300		165		0.9
Illinois		13		100			471,700		1,042		5.6
Indiana		6		100			110,600		320		1.7
Iowa		4		100			39,300		88		0.5
Kansas		13		100			769,200		679		3.7
Kentucky		4		100			71,600		231		1.2
Louisiana		18		100			181,600		521		2.8
Maine		—		—			—		—		—
Maryland		—		—			—		—		—
Massachusetts		13		100			107,700		472		2.5
Michigan		18		100			234,900		844		4.5
Minnesota		1		100			9,000		21		0.1
Mississippi		26		100			1,305,300		1,649		8.9
Missouri		38		100			579,700		1,693		9.1
Montana		1		100			45,800		174		0.9
Nebraska		1		100			8,100		20		0.1
Nevada		6		100			59,900		342		1.8
New Hampshire		4		100			16,100		108		0.6
New Jersey		5		100			47,700		378		2.0
New Mexico		3		100			22,500		81		0.4
New York		3		100			195,600		1,089		5.9
North Carolina		15		100			175,000		577		3.1
North Dakota		3		100			26,400		72		0.4
Ohio		21		100			704,500		944		5.1
Oklahoma		10		100			215,600		397		2.1
Oregon		—		—			—		—		—
Pennsylvania		30		100			111,900		697		3.8
Rhode Island		4		100			14,700		112		0.6
South Carolina		9		100			86,000		488		2.6
South Dakota		1		100			9,200		22		0.1
Tennessee		8		100			148,500		345		1.9
Texas		39		100			418,200		1,092		5.9
Utah		—		—			—		—		—
Vermont		—		—			—		—		—
Virginia		6		100			61,800		192		1.0
Washington		2		100			25,100		96		0.5
West Virginia		1		100			13,300		82		0.4
Wisconsin		3		100			27,700		56		0.3
Wyoming		—		—			—		—		—
Totals/Average		382		100	%		7,859,100	$	18,610		100.0	%

9

Combined

State	Number of Properties		Percent Leased			Approximate Leasable Square Feet		Total Quarterly Rental Revenue(1)(2)		Percentage of Total Rental Revenue
Alabama		13		100	%		131,000	$	529		2.2	%
Alaska		—		—			—		—		—
Arizona		2		100			23,700		102		0.4
Arkansas		8		100			62,900		182		0.8
California		2		100			1,050,700		1,261		5.3
Colorado		3		100			189,800		736		3.1
Connecticut		9		100			34,300		269		1.1
Delaware		3		100			8,900		51		0.2
Florida		10		100			67,500		331		1.4
Georgia		13		100			56,100		407		1.7
Hawaii		—		—			—		—		—
Idaho		2		100			43,300		165		0.7
Illinois		23		100			549,600		1,344		5.7
Indiana		7		100			130,800		405		1.7
Iowa		5		100			592,300		676		2.9
Kansas		14		100			776,700		686		2.9
Kentucky		5		100			83,700		261		1.1
Louisiana		18		100			181,600		521		2.2
Maine		—		—			—		—		—
Maryland		—		—			—		—		—
Massachusetts		13		100			107,700		472		2.0
Michigan		40		100			359,900		1,556		6.6
Minnesota		1		100			9,000		21		0.1
Mississippi		26		100			1,305,300		1,649		7.0
Missouri		64		100			804,200		1,997		8.4
Montana		1		100			45,800		174		0.7
Nebraska		1		100			8,100		20		0.1
Nevada		6		100			59,900		342		1.5
New Hampshire		6		100			23,000		136		0.6
New Jersey		6		100			79,700		619		2.6
New Mexico		3		100			22,500		81		0.4
New York		16		100			282,600		1,615		6.8
North Carolina		15		100			175,000		577		2.4
North Dakota		3		100			26,400		72		0.3
Ohio		39		100			925,300		1,539		6.5
Oklahoma		12		100			233,600		416		1.8
Oregon		—		—			—		—		—
Pennsylvania		35		100			174,500		963		4.1
Rhode Island		4		100			14,700		112		0.5
South Carolina		11		100			566,000		1,114		4.7
South Dakota		1		100			9,200		22		0.1
Tennessee		9		100			159,200		382		1.6
Texas		41		100			531,800		1,296		5.5
Utah		—		—			—		—		—
Vermont		3		100			12,500		59		0.3
Virginia		7		100			73,100		246		1.0
Washington		2		100			25,100		96		0.4
West Virginia		1		100			13,300		82		0.4
Wisconsin		3		100			27,700		56		0.2
Wyoming		—		—			—		—		—
Totals/Average		506		100	%		10,058,000	$	23,640		100.0	%

(1) Includes quarterly rental revenue for all properties owned by ARCP at September 30, 2012.

(2) Includes quarterly rental revenue for all properties owned by ARCT III at September 30, 2012.

10

Lease Expirations

The following table sets forth certain information regarding the property portfolios and the timing of the lease term expirations (excluding rights to extend a lease at the option of the tenant) on net leased, single-tenant properties (dollars in thousands):

	ARCP(1)
Year	Number of Leases Expiring		Approx. Leasable Sq. Feet		Quarterly Rental Revenue		Percentage of Quarterly Rental Revenue			Annualized Rental Revenue(3)		Percentage of Annualized Rental Revenue
2012		—		—	$	—		—	%	$	—		—	%
2013		—		—		—		—			—		—
2014		3		23,800		23		0.5			91		0.5
2015		14		130,700		206		4.1			823		4.1
2016		8		74,900		170		3.4			680		3.4
2017		38		470,400		1,218		24.2			4,873		24.2
2018		28		794,500		1,697		33.7			6,789		33.7
2019		20		132,100		858		17.1			3,432		17.1
2020		2		19,100		62		1.2			248		1.2
2021		5		42,400		141		2.8			566		2.8
2022		—		—		—		—			—		—
2023		—		—		—		—			—		—
2024		2		18,100		36		0.7			144		0.7
2025		3		27,300		54		1.1			216		1.1
2026		—		—		—		—			—		—
2027 – 2038		1		465,000		565		11.2			2,258		11.2
Totals		124		2,198,900	$	5,030		100.0	%	$	20,120		100.0	%

	ARCT III(2)
Year	Number of Leases Expiring		Approx. Leasable Sq. Feet		Quarterly Rental Revenue		Percentage of Quarterly Rental Revenue			Annualized Rental Revenue(3)		Percentage of Annualized Rental Revenue
2012		—		—	$	—		—	%	$	—		—	%
2013		—		—		—		—			—		—
2014		—		—		—		—			—		—
2015		—		—		—		—			—		—
2016		—		—		—		—			—		—
2017		—		—		—		—			—		—
2018		2		11,400		50		0.3			200		0.3
2019		3		23,300		70		0.4			280		0.4
2020		12		76,500		479		2.6			1,916		2.6
2021		22		726,500		2,060		11.1			8,240		11.1
2022		64		1,739,200		2,547		13.7			10,187		13.7
2023		15		1,748,700		2,763		14.8			11,051		14.8
2024		17		1,178,500		1,881		10.1			7,525		10.1
2025		65		473,400		1,714		9.2			6,856		9.2
2026		50		511,000		1,511		8.1			6,046		8.1
2027 – 2038		132		1,370,600		5,535		29.7			22,139		29.7
Totals		382		7,859,100	$	18,610		100.0	%	$	74,440		100.0	%

11

	Combined(1)(2)
Year	Number of Leases Expiring		Approx. Leasable Sq. Feet		Quarterly Rental Revenue		Percentage of Quarterly Rental Revenue			Annualized Rental Revenue(3)		Percentage of Annualized Rental Revenue
2012		—		—	$	—		—	%	$	—		—	%
2013		—		—		—		—			—		—
2014		3		23,800		23		0.1			91		0.1
2015		14		130,700		206		0.9			823		0.9
2016		8		74,900		170		0.7			680		0.7
2017		38		470,400		1,218		5.1			4,873		5.1
2018		30		805,900		1,747		7.4			6,989		7.4
2019		23		155,400		928		3.9			3,712		3.9
2020		14		95,600		541		2.3			2,164		2.3
2021		27		768,900		2,201		9.3			8,806		9.3
2022		64		1,739,200		2,547		10.8			10,187		10.8
2023		15		1,748,700		2,763		11.7			11,051		11.7
2024		19		1,196,600		1,917		8.1			7,669		8.1
2025		68		500,700		1,768		7.5			7,072		7.5
2026		50		511,000		1,511		6.4			6,046		6.4
2027 – 2038		133		1,836,200		6,100		25.8			24,397		25.8
Totals		506		10,058,000	$	23,640		100.0	%	$	94,560		100.0	%

(1) The ARCP information represents rental revenue for the properties owned at September 30, 2012.

(2) The ARCT III information represents rental revenue for the properties owned at September 30, 2012.

(3) Annualized rental revenue for net leases is rental revenue annualized on a straight-line basis for properties held as of September 30, 2012, which includes the effect of tenant concessions such as free rent, as applicable. For modified gross leased properties, the amount is rental income on a straight-line basis as of September 30, 2012, which includes the effect of tenant concessions such as free rent, as applicable, plus operating expense reimbursement revenue less property operating expenses.

12

EX-99.4

Summary Financial Statements of RBS Citizens, N.A.

Set forth below are summary financial statements of the parent of the lessee of the Citizens Bank properties included in the portfolio of American Realty Capital Properties, Inc. and American Realty Capital Trust III, Inc. on a pro forma basis. RBS Citizens, N.A. currently makes its financial statements available on the Federal Deposit Insurance Corporation website, and the following summary financial data regarding RBS Citizens, N.A. are taken from such filings:

	Nine Months Ended September 30, 2012 (Unaudited)		Fiscal Year Ended
(Amounts in millions)			December 31, 2011 (Audited)		December 31, 2010 (Audited)			December 31, 2009 (Audited)
Consolidated Condensed Statements of Income
Total interest income	$	4,873	$	3,484	$	4,008		$	4,868
Net interest income after provision for credit losses		3,523		1,230		1,289			494
Net income (loss)		843		345		(39	)		(600	)

(Amounts in millions)	September 30, 2012 (Unaudited)		December 31, 2011 (Audited)		December 31, 2010 (Audited)		December 31, 2009 (Audited)
Consolidated Condensed Balance Sheets
Total assets	$	107,214	$	106,941	$	107,836	$	116,921
Total liabilities		88,455		88,830		90,920		100,321
Total shareholders’ equity		18,759		18,111		16,916		16,600

EX-99.5

American Realty Capital Trust III, Inc. Financial Statements

Report of Independent Registered Public Accounting Firm.		2
Consolidated Balance Sheets as of December 31, 2011 and 2010		3
Consolidated Statements of Operations for the Year Ended December 31, 2011 and the Period from October 15, 2010 (date of inception) to December 31, 2010		4
Consolidated Statement of Stockholders' Equity for the Year Ended December 31, 2011 and the Period from October 15, 2010 (date of inception) to December 31, 2010		5
Consolidated Statements of Cash Flows for the Year Ended December 31, 2011 and the Period from October 15, 2010 (date of inception) to December 31, 2010		6
Notes to Consolidated Financial Statements		7
Schedule III – Real Estate and Accumulated Depreciation at December 31, 2011		27
Consolidated Balance Sheets as of September 30, 2012 (Unaudited) and December 31, 2011		29
Consolidated Statements of Operations and Comprehensive Loss for the Three and Nine Months Ended September 30, 2012 and 2011 (Unaudited)		30
Consolidated Statement of Changes in Equity for the Nine Months Ended September 30, 2012 (Unaudited)		31
Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2012 and 2011 (Unaudited)		32
Notes to Consolidated Financial Statements (Unaudited)		33

1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Stockholders and Board of Directors
American Realty Capital Trust III, Inc.

We have audited the accompanying consolidated balance sheets of American Realty Capital Trust III, Inc. and subsidiaries (the “Company”) as of December 31, 2011 and 2010, and the related consolidated statements of operations, stockholders' equity and cash flows for the year ended December 31, 2011 and the period from October 15, 2010 (date of inception) to December 31, 2010. Our audits of the basic consolidated financial statements included the financial statement schedule listed in the index appearing under Item 15(a). These financial statements and the financial statement schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of American Realty Capital Trust III, Inc. and subsidiaries as of December 31, 2011 and 2010, and the results of their operations and their cash flows for the year ended December 31, 2011 and the period from October 15, 2010 (date of inception) to December 31, 2010, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

/s/ GRANT THORNTON LLP

Philadelphia, Pennsylvania

February 29, 2012

2

AMERICAN REALTY CAPITAL TRUST III, INC.
 
CONSOLIDATED BALANCE SHEETS
(In thousands, except for share and per share data)

	December 31, 2011			December 31, 2010
ASSETS
Real estate investments, at cost:
Land	$	7,135		$	—
Buildings, fixtures and improvements		54,585			—
Acquired intangible lease assets		10,733			—
Total real estate investments at cost		72,453			—
Less: accumulated depreciation and amortization		(499	)		—
Total real estate investments, net		71,954			—
Cash and cash equivalents		16,183			—
Prepaid expenses and other assets		1,221			—
Deferred costs, net		639			402
Total assets	$	89,997		$	402
LIABILITIES AND STOCKHOLDERS’ EQUITY
Mortgage note payable	$	5,060		$	—
Derivative, at fair value		98			—
Accounts payable and accrued expenses		716			202
Deferred rent		163			—
Distributions payable		504			—
Total liabilities		6,541			202
Preferred stock, $0.01 par value per share, 50,000,000 shares authorized, no shares issued and outstanding at December 31, 2011; no shares authorized, issued or outstanding at December 31, 2010		—			—
Common stock, $0.01 par value per share, 300,000,000 and 100,000 shares authorized, 10,356,402 and 20,000 shares issued and outstanding at December 31, 2011 and December 31, 2010, respectively		104			—
Additional paid-in capital		86,643			200
Accumulated other comprehensive loss		(98	)		—
Accumulated deficit		(3,193	)		—
Total stockholders’ equity		83,456			200
Total liabilities and stockholders’ equity	$	89,997		$	402

 
 
The accompanying notes are an integral part of these statements.

3

AMERICAN REALTY CAPITAL TRUST III, INC.
 
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except for share and per share data)

	Year Ended December 31, 2011			For the Period from October 15, 2010 (date of inception) to December 31, 2010
Revenues:
Rental income	$	740		$	—
Operating expense reimbursements		55			—
Total revenues		795			—
Operating expenses:
Property operating		67			—
Acquisition and transaction related		2,023			—
General and administrative		295			—
Depreciation and amortization		499			—
Total operating expenses		2,884			—
Operating loss		(2,089	)		—
Other income (expenses):
Interest expense		(36	)		—
Other income, net		1			—
Total other expenses		(35	)		—
Net loss	$	(2,124	)	$	—
Basic and diluted weighted average shares outstanding		1,763,190			20,000
Basic and diluted net loss per share	$	(1.20	)	$	—

 
 
The accompanying notes are an integral part of these statements.

4

AMERICAN REALTY CAPITAL TRUST III, INC.
 
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY
(In thousands, except for share data)

	Common Stock				Additional Paid-In Capital			Accumulated Other Comprehensive Loss			Accumulated Deficit			Total Stockholders' Equity
	Number of Shares		Par Value
Balance, October 15, 2010		—	$	—	$	—		$	—		$	—		$	—
Issuance of common stock		20,000		—		200			—			—			200
Balance, December 31, 2010		20,000		—		200			—			—			200
Issuance of common stock		10,298,053		104		102,092			—			—			102,196
Common stock offering costs, commissions and dealer manager fees		—		—		(15,940	)		—			—			(15,940	)
Common stock issued through distribution reinvestment plan		28,599		—		271			—			—			271
Distributions declared		—		—		—			—			(1,069	)		(1,069	)
Common stock redemptions		—		—		(25	)		—			—			(25	)
Contribution from affiliate		—		—		2			—			—			2
Share based compensation		9,750		—		34			—			—			34
Amortization of restricted shares		—		—		9			—			—			9
Designated derivative, fair value adjustment		—		—		—			(98	)		—			(98	)
Net loss		—		—		—			—			(2,124	)		(2,124	)
Total comprehensive loss		—		—		—			—			—			(2,222	)
Balance, December 31, 2011		10,356,402	$	104	$	86,643		$	(98	)	$	(3,193	)	$	83,456

 
 
The accompanying notes are an integral part of this statement.

5

AMERICAN REALTY CAPITAL TRUST III, INC.
 
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)

	Year Ended December 31, 2011			Period from October 15, 2010 (date of inception) to December 31, 2010
Cash flows from operating activities:
Net loss	$	(2,124	)	$	—
Adjustment to reconcile net loss to net cash used in operating activities:
Depreciation		414			—
Amortization of intangibles		85			—
Amortization of deferred financing costs		5			—
Share based compensation		43			—
Changes in assets and liabilities:
Prepaid expenses and other assets		(232	)		—
Accounts payable and accrued expenses		469			—
Deferred rent		163			—
Net cash used in operating activities		(1,177	)		—
Cash flows from investing activities:
Investment in real estate and other assets		(72,453	)		—
Net cash used in investing activities		(72,453	)		—
Cash flows from financing activities:
Proceeds from mortgage note payable		5,060			—
Payments of deferred financing costs		(644	)		—
Proceeds from issuance of common stock, net		85,689			—
Contributions from affiliates		2			—
Distributions paid		(294	)		—
Net cash provided by financing activities		89,813			—
Net change in cash and cash equivalents		16,183			—
Cash and cash equivalents, beginning of period		—			—
Cash and cash equivalents, end of period	$	16,183		$	—
Supplemental Disclosures:
Cash paid for interest		32			—
Non-Cash Investing and Financing Activities:
Common stock issued through distribution reinvestment plan		271			—
Reclassification of deferred offering costs		—			402

 
 
The accompanying notes are an integral part of these statements.

6

AMERICAN REALTY CAPITAL TRUST III, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2011

Note 1 — Organization

American Realty Capital Trust III, Inc. (the “Company”), incorporated on October 15, 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 ended December 31, 2011. On March 31, 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. 333-170298) (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 stock holders may elect to have their distributions reinvested in additional shares of the Company’s common stock at the greater of $9.50 per share or 95% of the estimated value of a share of common stock.

The Company sold 20,000 shares of common stock to American Realty Capital III Special Limited Partnership, LLC (the “Special Limited Partner”), an entity wholly owned by AR Capital, LLC (formerly American Realty Capital II, LLC) (the “Sponsor”) on October 20, 2010, at $10.00 per share. In August 2011, the Company had raised proceeds sufficient to break escrow in connection with the IPO. As of December 31, 2011, the Company had issued 10.4 million shares of common stock, including unvested restricted shares and shares issued pursuant to the DRIP. Total gross proceeds from these issuances were $102.7 million. As of December 31, 2011, the aggregate value of all common share issuances was $103.5 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 a diversified portfolio of commercial properties, comprised primarily of free-standing single-tenant properties that are net leased to investment grade and other creditworthy tenants. 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. American Realty Capital Advisors III, LLC (the “Advisor”), is the Company’s affiliated advisor. The Company purchased its first property and commenced real estate operations in September 2011. As of December 31, 2011, the Company owned 41 properties with an aggregate purchase price of $72.5 million, comprised of 426,829 square feet which were 100% leased.

Substantially all of the Company’s business is conducted through American Realty Capital Operating Partnership III, L.P. (the “OP”), a Delaware limited partnership. The Company is the sole general partner and holder of more than 99.9% of the units of the OP. The Advisor is the sole limited partner and owner of less than 0.1% (non-controlling interest) of the OP. The limited partner interest 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 the Company's common stock, as allowed by the limited partnership agreement of the OP. The remaining rights of the limited partner interest 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 has retained the Advisor to manage its affairs on a day-to-day basis. The Company has retained American Realty Capital Properties III, LLC (the “Property Manager”), an entity wholly owned by the Special Limited Partner, to serve as the Company’s property manager. Realty Capital Securities, LLC (the “Dealer Manager”), an affiliate of the Sponsor, serves as the dealer manager of the Company’s IPO. The Advisor, Property Manager 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. Such entities will receive fees during the offering, acquisition, operational and liquidation stages.

7

AMERICAN REALTY CAPITAL TRUST III, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2011

Note 2 — Summary of Significant Accounting Policies

Basis of Accounting

The accompanying consolidated financial statements of the Company are prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

Principles of Consolidation and Basis of Presentation

The consolidated financial statements include the accounts of the Company and its subsidiaries. All inter-company accounts and transactions have been eliminated in consolidation. In determining whether the Company has a controlling financial interest in a joint venture and the requirement to consolidate the accounts of that entity, management considers factors such as ownership interest, authority to make decisions and contractual and substantive participating rights of the other partners or members as well as whether the entity is a variable interest entity for which the Company is the primary beneficiary.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Management makes significant estimates regarding revenue recognition, to record investments in real estate, and derivative financial instruments and hedging activities, as applicable.

Real Estate Investments

The Company records acquired real estate at cost and makes assessments as to the useful lives of depreciable assets. The Company considers the period of future benefit of the asset to determine the appropriate useful lives. Depreciation is computed using a straight-line method over the estimated useful life of 40 years for buildings, five to 15 years for building fixtures and improvements and the remaining lease term for acquired intangible lease assets.

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.

When circumstances indicate the carrying value of a property may not be recoverable, the Company reviews 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 for 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

The Company allocates the purchase price of acquired properties to tangible and identifiable intangible assets acquired based on their respective fair values. Tangible assets include land, buildings, equipment and tenant improvements on an as-if vacant basis. The Company utilizes various estimates, processes and

8

AMERICAN REALTY CAPITAL TRUST III, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2011

Note 2 — Summary of Significant Accounting Policies  – (continued)

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. 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.

Amounts allocated to land, buildings, equipment and fixtures are based on cost segregation studies performed by independent third-parties or on the Company's analysis of comparable properties in its portfolio. Depreciation is computed using the straight-line method over the estimated lives of forty years for buildings, five to 15 years for building, equipment, fixtures and improvements, and the shorter of the useful life or the remaining lease term for tenant improvements.

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 the Company in its analysis of the 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, the Company includes real estate taxes, insurance and other operating expenses and estimates of lost rentals at market rates during the expected lease-up period, which typically ranges from nine to 18 months. The Company also estimates costs to execute similar leases 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 leases and management's estimate of fair market lease rates for the corresponding in-place leases, 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 will be 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, the Company initially will 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 relationships is measured based on the Company's evaluation of the specific characteristics of each tenant's lease and the Company's overall relationship with the tenant. Characteristics considered by the Company in determining these values include the nature and extent of the Company's existing business relationships 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 leases, which range primarily from 5 to 20 years. The value of customer relationship intangibles is amortized to expense over the initial term and any renewal periods in the respective leases, but in no event does the amortization period for intangible assets exceed the remaining depreciable life of the 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, the Company utilizes 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. The Company also considers information obtained about each property as a result of its pre-acquisition due diligence, as well as subsequent marketing

9

AMERICAN REALTY CAPITAL TRUST III, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2011

Note 2 — Summary of Significant Accounting Policies  – (continued)

and leasing activities, in estimating the fair value of the tangible and intangible assets acquired and intangible liabilities assumed. The allocations presented in the accompanying consolidated balance sheets are substantially complete; however, there are certain items that the Company will finalize once the Company receives additional information. Accordingly, these allocations are subject to revision when final information is available, although the Company does not expect future revisions to have a significant impact on the Company's financial position or results of operations.

Intangible assets consist of the following as of December 31, 2011. The Company had no intangible assets at December 31, 2010 (amounts in thousands):

Intangible lease assets:
In-place leases, gross	$	10,733
Accumulated amortization on in-place leases		(85	)
In-place leases, net of accumulated amortization	$	10,648

The following table provides the weighted-average amortization period as of December 31, 2011 for intangible assets and the projected amortization expense for the next five years (amounts in thousands):

	Weighted-Average Amortization Period in Years		2012		2013		2014		2015		2016
In-place leases:
Total to be included in depreciation and amortization expense		15.9	$	761	$	761	$	761	$	761	$	761

Cash and Cash Equivalents

Cash and cash equivalents include cash in bank accounts as well as investments in highly-liquid money market funds with original maturities of three months or less.

The Company deposits cash with high quality financial institutions. These deposits are guaranteed by the Federal Deposit Insurance Company (“FDIC”) up to an insurance limit. At December 31, 2011, the Company had deposits of $16.2 million, of which $15.8 million were in excess of the amount insured by the FDIC. Although the Company bears risk to amounts in excess of those insured by the FDIC, it does not anticipate any losses as a result.

Deferred Costs

At December 31, 2011, amounts in deferred costs represent deferred financing costs. Deferred financing costs represent commitment fees, legal fees, and other costs associated with obtaining commitments for financing, which result in such financing. These costs are amortized over the terms of the respective financing agreements using the effective interest method. Unamortized deferred financing costs are expensed when the associated debt is refinanced or repaid before maturity. Costs incurred in seeking financial transactions that do not close are expensed in the period in which it is determined that the financing will not close.

At December 31, 2010, amounts in deferred costs represent deferred offering costs. Deferred offering costs represent costs incurred for the sale of common stock. Upon the commencement of the IPO in August 2011, all accumulated deferred offering costs were reclassified to additional paid-in capital.

Distribution Reinvestment Plan

The Company has adopted a DRIP, in which eligible stockholders may elect to reinvest distributions by purchasing shares of common stock in lieu of receiving cash. No dealer manager fees or selling commissions are paid with respect to shares purchased pursuant to the DRIP. Participants purchasing shares pursuant to the

10

AMERICAN REALTY CAPITAL TRUST III, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2011

Note 2 — Summary of Significant Accounting Policies  – (continued)

DRIP have the same rights and are treated in the same manner as if such shares were issued pursuant to the IPO. The Board of Directors may designate that certain cash or other distributions be excluded from the DRIP. The Company has the right to amend any aspect of the DRIP or terminate the DRIP with ten days' notice to participants. Shares issued under the DRIP are recorded to equity in the accompanying consolidated balance sheet in the period the distribution is declared. As of December 31, 2011, 28,599 shares with a value of $0.3 million have been issued through the DRIP.

Share Repurchase Program

The Company’s Board of Directors has adopted a Share Repurchase Program (“SRP”) that enables stockholders to sell their shares to the Company in limited circumstances. The SRP permits investors to sell their shares back to the Company after they have held them for at least one year, subject to the significant conditions and limitations described below.

Prior to the time that the Company’s shares are listed on a national securities exchange and until the Company establishes an estimated value for the shares, the purchase price per share will depend on the length of time investors have held such shares as follows: after one year from the purchase date — the lower of $9.25 or 92.5% of the amount they actually paid for each share; after two years from the purchase date — the lower of $9.50 or 95.0% of the amount they actually paid for each share; after three years from the purchase date — the lower of $9.75 or 97.5% of the amount they actually paid for each share; and after four years from the purchase date — the lower of $10.00 or 100% of the amount they actually paid for each share (in each case, as adjusted for any stock distributions, combinations, splits and recapitalizations). The Company expects to begin establishing an estimated value for its shares based on the value of its real estate and real estate-related investments beginning 18 months after the close of its offering. Beginning 18 months after the completion of the Company’s offering (excluding common shares issued under the DRIP), the Board of Directors will determine the value of the properties and the other assets based on such information as the Board determines appropriate, which is expected to include independent valuations of properties or of the Company as a whole.

The Company is only authorized to repurchase shares pursuant to the SRP using the proceeds received from the DRIP and will limit the amount spent to repurchase shares in a given quarter to the amount of proceeds received from the DRIP in that same quarter. In addition, the Board of Directors may reject a request for redemption, at any time. Due to these limitations, the Company cannot guarantee that it will be able to accommodate all repurchase requests. Purchases under the SRP by the Company will be limited in any calendar year to 5% of the weighted average number of shares outstanding during the prior year, applied on a ratable basis to each quarterly period.

When a stockholder requests redemption and the redemption is approved by the Company’s Board of Directors, it will reclassify such obligation from equity to a liability based on the settlement value of the obligation. At December 31, 2011 and 2010, no shares were eligible to be redeemed as the one-year holding requirement had not yet been met; however, the Company approved the redemption of 2,500 shares for $25,000 representing an average share price of $10.00 at December 31, 2011 pursuant to the death and disability provision of the SRP. The amounts were paid in January 2012.

Derivative Instruments

The Company may use derivative financial instruments to hedge all or a portion of the interest rate risk associated with its 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 the Company's operating and financial structure as well as to hedge specific anticipated transactions.

11

AMERICAN REALTY CAPITAL TRUST III, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2011

Note 2 — Summary of Significant Accounting Policies  – (continued)

The Company records 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 the Company has 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. The Company may enter into derivative contracts that are intended to economically hedge certain of its risk, even though hedge accounting does not apply or the Company elects not to apply hedge accounting.

The accounting for subsequent changes in the fair value of these derivatives depends on whether each has been designed and qualifies for hedge accounting treatment. If the Company elects not to apply hedge accounting treatment, any changes in the fair value of these derivative instruments is recognized immediately in gains (losses) on derivative instruments in the consolidated statement of operations. If the derivative is designated and qualifies for hedge accounting treatment the change in the estimated fair value of the derivative is recorded in other comprehensive income (loss) to the extent that it is effective. Any ineffective portion of a derivative's change in fair value will be immediately recognized in earnings.

Revenue Recognition

Upon the acquisition of real estate, certain properties will have leases where minimum rent payments increase during the term of the lease. The Company will record rental revenue for the full term of each lease on a straight-line basis. When the Company acquires 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.

The Company's 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 of the leases provide for rental increases at specified intervals, straight-line basis accounting requires the Company to record a receivable, and include in revenues, unbilled rent receivables that the Company will only receive if the tenant makes all rent payments required through the expiration of the initial term of the lease. The Company defers the revenue related to lease payments received from tenants in advance of their due dates.

The Company continually reviews receivables related to rent and unbilled rent receivables and determines 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. In the event that the collectability of a receivable is in doubt, the Company will record an increase in the allowance for uncollectible accounts or record a direct write-off of the receivable in the consolidated statements of operations.

Organization, Offering, and Related Costs

Organization and offering costs (other than selling commissions and the dealer manager fee) of the Company may have been paid by the Advisor, the Company’s affiliated dealer manager, Realty Capital Securities, LLC (the “Dealer Manager”) or their affiliates on behalf of the Company. Such organization and offering costs represent all expenses to be paid by the Company in connection with the Offering, including but

12

AMERICAN REALTY CAPITAL TRUST III, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2011

Note 2 — Summary of Significant Accounting Policies  – (continued)

not limited to (i) legal, accounting, printing, mailing, and filing fees; (ii) escrow 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 the salaries of its employees and other costs in connection with preparing supplemental sales materials and related Offering activities. Pursuant to the Advisory Agreement and the Dealer Manager Agreement, the Company was obligated to reimburse the Advisor or its affiliates, as applicable, for organization and offering costs paid by them on behalf of the Company, provided that the Advisor was obligated to reimburse the Company to the extent organization and offering costs (excluding selling commissions, the dealer manager fee and bona fide due diligence cost reimbursements) incurred by the Company in the Offering exceed 1.5% of gross offering proceeds. See Note 9 — Related Party Transactions and Arrangements for more information on amounts reimbursed to the Advisor and Dealer Manager.

Share-Based Compensation

The Company has a stock-based incentive award plan for its directors and an employee and director restricted share plan, which are accounted for under the guidance for share based payments. The guidance on share based compensation also requires the tax benefits associated with these share-based payments to be classified as financing activities in the consolidated statements of cash flows. See Note 11 — Share-Based Compensation for additional information on these plans.

Income Taxes

The Company intends to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code commencing with the taxable year ended December 31, 2011. If the Company qualifies for taxation as a REIT, it generally will not be subject to federal corporate income tax to the extent it distributes its REIT taxable income to its stockholders, and so long as it distributes at least 90% of its REIT taxable income. REITs are subject to a number of other organizational and operational requirements. Even if the Company qualifies for taxation as a REIT, it may be subject to certain state and local taxes on its income and property, and federal income and excise taxes on its undistributed income.

Per Share Data

Income (loss) per basic share of common stock is calculated by dividing net income (loss) less dividends on unvested restricted stock by the weighted-average number of shares of common stock issued and outstanding during such period. Diluted income (loss) per share of common stock considers the effect of potentially dilutive shares of common stock outstanding during the period.

Reportable Segments

The Company has determined that it has one reportable segment, with activities related to investing in real estate. The Company's investments in real estate generate rental revenue and other income through the leasing of properties, which comprised 100% of its total consolidated revenues. Although the Company's investments in real estate will be geographically diversified throughout the United States, management evaluates operating performance on an individual property level. The Company's properties have been aggregated into one reportable segment.

Recent Accounting Pronouncements

In May 2011, the 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 will be applied prospectively and will be effective for interim and annual reporting periods ending 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.

13

AMERICAN REALTY CAPITAL TRUST III, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2011

Note 2 — Summary of Significant Accounting Policies  – (continued)

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. The guidance will be applied prospectively and will be effective for interim and annual reporting periods ending after December 15, 2011. In December 2011, the FASB deferred certain provisions of this guidance related to the presentation of certain reclassification adjustments of accumulated other comprehensive income, by component in both the statement and the statement where the reclassification is presented. The adoption of this guidance is not expected to have a material impact on the Company’s financial position or results of operations but will change 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 which modifies the requirements for testing for goodwill impairment, and gives entities the option to perform a qualitative assessment of goodwill before calculating the fair value of a reporting unit. If the entities determine based on the qualitative assessment that the fair value of a reporting unit is more likely than not less than the carrying value then further impairment tests would be required. Otherwise, further testing would not be needed. The guidance is effective for annual impairment tests for fiscal periods beginning after December 15, 2011. The adoption of this guidance is not expected to have a material impact on the Company's financial position or results of operations.

In December 2011, the FASB issued guidance which contains new disclosure requirements regarding the nature of and entity's rights of offset and related arrangements associated with its financial instruments and derivative instruments. The new disclosures are designed to make financial statements prepared under U.S. GAAP more comparable to those prepared under International Financial Reporting Standards and will give the financial statement users information about both gross and net exposures. The guidance is effective for interim and annual reporting periods beginning on or after January 1, 2013. The adoption of this guidance is not expected 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 during the year ended December 31, 2011. There were no property acquisitions during the period from October 15, 2010 (date of inception) to December 31, 2010 (amounts in thousands):

Real estate investments, at cost:
Land	$	7,135
Buildings, fixtures and improvements		54,585
Total tangible assets		61,720
Acquired intangibles:
In-place leases		10,733
Cash paid for acquired real estate investments	$	72,453
Number of properties purchased		41

14

AMERICAN REALTY CAPITAL TRUST III, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2011

Note 3 — Real Estate Investments  – (continued)

The Company acquires and operates commercial properties. All such properties may be acquired and operated by the Company alone or jointly with another party. The Company acquired the following properties, which are 100% leased, during the year ended December 31, 2011 (base purchase price and annualized average rental income/net operating income (“NOI”) in thousands):

Portfolio	Acquisition Date		Number of Properties		Square Feet		Remaining Lease Term(1)		Base Purchase Price(2)		Capitalization Rate(3)			Annualized Rental Income/NOI(4)		Annualized Rental Income/NOI per Square Foot
FedEx		Sep. 2011		1		45,832		14.7	$	8,939		7.8	%	$	697	$	15.21
Advance Auto		Sep. 2011		2		13,471		9.8		3,144		8.0	%		252		18.71
Walgreens		Oct. & Nov. 2011		2		23,527		23.6		12,803		7.0	%		895		38.04
Walgreens II		Oct. 2011		1		14,820		21.4		4,603		7.1	%		327		22.06
Dollar General		Nov. 2011		11		109,349		13.7		12,452		8.2	%		1,024		9.36
Dollar General II		Nov. 2011		5		45,156		14.0		4,503		8.4	%		380		8.42
Walgreens III		Nov. 2011		1		14,820		20.9		4,932		7.4	%		365		24.63
Dollar General III		Dec. 2011		1		10,714		14.9		1,311		8.2	%		108		10.08
GSA(5)		Dec. 2011		1		6,255		8.2		1,973		8.4	%		166		26.54
Dollar General IV		Dec. 2011		1		9,014		14.8		929		8.3	%		77		8.54
FedEx II		Dec. 2011		1		11,403		11.5		2,972		7.6	%		226		19.82
Family Dollar		Dec. 2011		2		16,100		9.3		1,784		9.1	%		162		10.06
Dollar General V		Dec. 2011		8		74,601		14.2		7,846		8.3	%		649		8.70
Dollar General VI		Dec. 2011		3		27,439		14.9		2,692		8.6	%		231		8.42
GSA II(5)		Dec. 2011		1		4,328		13.9		1,570		8.6	%		135		31.19
Total				41		426,829		15.9	$	72,453		7.9	%	$	5,694	$	13.34

(1) Remaining lease term as of December 31, 2011, in years. If the portfolio has multiple locations with varying lease expirations, remaining lease term is calculated on a weighted-average basis. Total remaining lease term is an average of the remaining lease term of the total portfolio.

(2) Contract purchase price, excluding acquisition and transaction-related costs. Acquisition and transaction-related costs include legal and other closing costs on property.

(3) Annualized rental income on a straight-line basis or annualized NOI as applicable, divided by base purchase price. Total capitalization rate is an average of the capitalization rate of the total portfolio.

(4) Annualized rental income/NOI for net leases is rental income on a straight-line basis as of December 31, 2011, which includes the effect of tenant concessions such as free rent, as applicable. For modified gross leased properties amount is rental income on a straight-line basis as of December 31, 2011, which includes the effect of tenant concessions such as free rent, as applicable, plus operating expense reimbursement revenue less property operating expenses.

(5) Lease on the property is a modified gross lease. As such, annualized rental income/NOI for this property is rental income on a straight-line basis as of December 31, 2011, which includes the effect of tenant concessions such as free rent, as applicable, plus operating expense reimbursement revenue less property operating expenses.

15

AMERICAN REALTY CAPITAL TRUST III, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2011

Note 3 — Real Estate Investments  – (continued)

Future Lease Payments

The following table presents future minimum base rental cash payments due to the Company over the next five years and thereafter as of December 31, 2011. 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 (amounts in thousands):

Year	Future Minimum Base Rent Payments
2012	$	5,779
2013		5,779
2014		5,779
2015		5,779
2016		5,779
Thereafter		62,605
	$	91,500

Tenant Concentration

The following table lists the tenants whose annualized rental income on a straight-line basis or NOI represented greater than 10% of total annualized rental income/NOI for the portfolio properties on a straight-line basis as of December 31, 2011. The Company held no properties at December 31, 2010:

Tenant
Dollar General		43.4	%
Walgreens		27.9	%
FedEx		16.2	%

The termination, delinquency or non-renewal of one 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 December 31, 2011.

Geographic Concentration

The following table lists the states where the Company has concentrations of properties where annual rental income on a straight-line basis or NOI represented greater than 10% of consolidated annualized rental income/NOI as of December 31, 2011. The Company held no properties at December 31, 2010:

State
Texas		14.7	%
Montana		12.2	%

16

AMERICAN REALTY CAPITAL TRUST III, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2011

Note 4 — Mortgage Notes Payable

In November 2011, the Company received proceeds of $5.1 million related to a mortgage note payable, secured by the FedEx property, which bears interest at a variable-rate of the One-Month London Interbank Offered Rate plus 2.25%. The interest rate on the mortgage note is fixed at 3.70% through an interest rate swap agreement. The mortgage note requires monthly payments of interest with the principal due at maturity in October 2016. As of December 31, 2011, the Company was in compliance with the debt covenants under the mortgage loan agreements.

Note 5 — 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.

Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with those derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by the Company and its counterparties. However, as of December 31, 2011, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of the Company’s derivatives. As a result, the Company has determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy.

The valuation of derivative instruments is determined using a discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, as well as observable market-based inputs, including interest rate curves and implied volatilities. In addition, credit valuation adjustments, are incorporated into the fair values to account for the Company’s potential nonperformance risk and the performance risk of the counterparties.

17

AMERICAN REALTY CAPITAL TRUST III, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2011

Note 5 — Fair Value of Financial Instruments  – (continued)

The following table presents information about the Company’s assets (including derivatives) measured at fair value on a recurring basis as of December 31, 2011, aggregated by the level in the fair value hierarchy within which those instruments fall. There were no assets measured at fair value as of December 31, 2010 (amounts in thousands):

	Quoted Prices in Active Markets Level 1		Significant Other Observable Inputs Level 2		Significant Unobservable Inputs Level 3		Total
Derivatives:
Interest rate swap	$	—	$	98	$	—	$	98

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, 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 financial instruments that are not reported at fair value on the consolidated balance sheets are reported below. There were no financial instruments which require fair value disclosure as of December 31, 2010 (amounts in thousands):

	Carrying Amount at December 31, 2011		Fair Value at December 31, 2011
Mortgage note payable	$	5,060	$	5,060

Since the Company's mortgage note payable balance at December 31, 2011 includes only variable-rate debt with terms commensurate with the market, the carrying value of the mortgage note payable approximates fair value at December 31, 2011.

Note 6 — Derivatives and Hedging Activities

Risk Management Objective of Using Derivatives

The Company may use derivative financial instruments, including interest rate swaps, caps, options, floors and other interest rate derivative contracts, to hedge all or a portion of the interest rate risk associated with its borrowings. The principal objective of such arrangements is to minimize the risks and/or costs associated with the Company’s operating and financial structure as well as to hedge specific anticipated transactions. The Company does not intend to utilize derivatives for speculative or other purposes other than interest rate risk management. The use of derivative financial instruments carries certain risks, including the risk that the counterparties to these contractual arrangements are not able to perform under the agreements. To mitigate this risk, the Company only enters into derivative financial instruments with counterparties with high credit ratings and with major financial institutions with which the Company and its affiliates may also have other financial relationships. The Company does not anticipate that any of the counterparties will fail to meet their obligations.

Cash Flow Hedges of Interest Rate Risk

The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps and collars as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. Interest rate collars designated as cash flow hedges involve the receipt of variable-rate amounts if interest rates rise above the cap strike rate on the contract and payments of variable-rate amounts if interest rates fall below the floor strike rate on the contract.

18

AMERICAN REALTY CAPITAL TRUST III, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2011

Note 6 — Derivatives and Hedging Activities  – (continued)

Derivatives are used to hedge the variable cash flows associated with existing or forecasted, variable-rate debt. The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings.

As of December 31, 2011, the Company had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk. There were no derivative instruments as of December 31, 2010 (dollar amounts in thousands):

Interest Rate Derivative	Balance Sheet Location		Number of Instruments		Notional Amount		Fair Value
Interest Rate Swap		Derivative, at fair value		1	$	5,060	$	98

Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. During the next twelve months, the Company estimates that an additional $46,000 will be reclassified from other comprehensive income as an increase to interest expense.

The table below details the location in the financial statements of the gain or loss recognized on interest rate derivatives designated as cash flow hedges for the year ended December 31, 2011 (amounts in thousands):

Amount of loss recognized in accumulated other comprehensive loss from interest rate derivative (effective portion)	$	(111	)
Amount of loss reclassified from accumulated other comprehensive loss into income as interest expense (effective portion)	$	(13	)
Amount of gain (loss) recognized in income on derivative as loss on derivative instruments (ineffective portion and amount excluded from effectiveness testing)	$	—

Credit-risk-related Contingent Features

The Company has an agreement with its derivative counterparty that contains a provision where if the Company either defaults or is capable of being declared in default on any of its indebtedness, then the Company could also be declared in default on its derivative obligation.

As of December 31, 2011, the fair value of the derivative in a liability position related to this agreement was $0.1 million. As of December 31, 2011, the Company has not posted any collateral related to this agreement and was not in breach of any agreement provisions. If the Company had breached any of these provisions, it could have been required to settle its obligation under the agreement at its aggregate termination value of $0.1 million at December 31, 2011.

19

AMERICAN REALTY CAPITAL TRUST III, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2011

Note 7 — Common Stock

On March 31, 2011, the Company’s IPO became effective. As of December 31, 2011 and December 31, 2010, the Company had 10.4 million and 20,000 shares of common stock outstanding from gross proceeds of $102.7 million and $0.2 million, respectively, including proceeds from shares issued pursuant to the DRIP.

On July 20, 2011, the Company’s Board of Directors declared a distribution rate equal to a 6.60% annualized rate based on the common stock price of $10.00. The first distribution was paid in October 2011 to stockholders of record on September 27, 2011, the date of the Company's first property acquisition, through December 31, 2011. 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 at a rate of $0.00180821918 per day.

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 Special Limited Partner, an entity wholly owned by the Sponsor, owns 20,000 shares of the Company’s outstanding common stock.

The Advisor may provide expense support to the Company from time to time to assist the Company with operating cash flow, distributions or other operational purposes. For the year ended December 31, 2011, the Advisor provided $20,000 of expense support to the Company, which was recorded as an offset to general and administrative expense on the consolidated statement of operations for the year ended December 31, 2011. No expense support was provided to the Company for the period from October 15, 2010 (date of inception) to December 31, 2010. There can be no assurance that the Advisor will provide such expense support in the future.

The Advisor and its affiliates will receive compensation and reimbursement for services relating to the IPO and the investment and management of the Company’s assets. The Advisor and its affiliates may incur and pay costs and fees on behalf of the Company. All organization and offering costs incurred by the Company or its affiliated entities on behalf of the Company are reflected in the accompanying balance sheets. As of December 31, 2010, the Company had $16,000 payable to an affiliated entity for a cash advance. No such amounts were owed to affiliated entities at December 31, 2011. Additionally, the Company had accrued expenses payable to the Advisor and the Dealer Manager of $0.1 million and $46,000 as of December 31, 2011 and December 31, 2010, respectively, for services relating to the IPO and offering and other costs paid on behalf of the Company. The Company is responsible for offering and other costs related to the ongoing offering, excluding commissions and dealer manager fees, up to a maximum of 1.5% of gross proceeds received from its ongoing offering of common stock. As of December 31, 2011, offering and other costs the Company has incurred exceeded 1.5% of gross proceeds received from the IPO by $4.6 million. At the end of the offering, any such costs in excess of 1.5% of gross proceeds with be paid by the Advisor.

There were no fees or reimbursements paid to the Advisor or Dealer Manager during the period from October 15, 2010 (date of inception) to December 31, 2010 for the fees and reimbursements referenced in the remaining sections of this Note.

20

AMERICAN REALTY CAPITAL TRUST III, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2011

Note 9 — Related Party Transactions and Arrangements  – (continued)

Fees Paid in Connection with the IPO

The Dealer Manager and Sponsor receive fees and compensation in connection with the sale of the Company’s common stock. 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. Total commissions paid to the Dealer Manager for the year ended December 31, 2011 were $9.8 million.

The Company will reimburse the Advisor up to 1.5% of its gross offering proceeds. The following table details the results of such activities related to organizational and offering costs reimbursed to the Advisor for the year ended December 31, 2011 (amounts in thousands):

Organizational and offering expense reimbursements	$	4,383

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 approximate 0.5% of the contract purchase price. In no event will the total of all acquisition and advisory fees and acquisition expenses 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.

The Company will pay 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 Property Manager 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 on a monthly basis, 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.

Unless the Company contracts with a third party, the Company will pay to an affiliate of the Sponsor a property management fee of up to 2% of gross revenues from the Company’s stand-alone single-tenant net leased properties and 4% of gross revenues from its multi-tenant properties, plus, in each case, market-based leasing commissions applicable to the geographic location of the property. 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 affiliated Property Manager, an oversight fee of up to 1.0% of the gross revenues of the property managed.

21

AMERICAN REALTY CAPITAL TRUST III, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2011

Note 9 — Related Party Transactions and Arrangements  – (continued)

The Company will reimburse the Advisor’s costs of providing administrative services, subject to the limitation that it will not reimburse the Advisor for any amount by which its 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, or (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 reimbursement was paid to the Advisor for providing administrative services for the year ended December 31, 2011.

If the Company’s 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 following tables detail amounts paid and reimbursed to affiliates and amounts contractually due and forgiven in connection with the operations related services described above for the year ended December 31, 2011 (amounts in thousands):

	Paid		Forgiven
One-time fees:
Acquisition fees and related cost reimbursements	$	1,292	$	—
Financing coordination fees		51		—
Other expense reimbursements		13		—
Ongoing fees:
Asset management fees(1)		—		72
Property management and leasing fees(1)		—		15
Total related party operation fees and reimbursements	$	1,356	$	87

(1) These cash fees have been waived. The Company’s Board of Directors may elect, subject to the Advisor’s approval, on a prospective basis, to pay future asset management fees in the form of performance-based restricted shares.

As the Company’s real estate portfolio matures, the Company expects cash flows from operations (reported in accordance with GAAP) to cover a more 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 past 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 or paid for the year ended December 31, 2011.

22

AMERICAN REALTY CAPITAL TRUST III, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2011

Note 9 — Related Party Transactions and Arrangements  – (continued)

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 6% cumulative, pre-tax non-compounded return on the capital contributed by investors. The Company cannot assure that it will provide this 6% return but the Advisor will not be entitled to the subordinated participation in net sale proceeds unless the Company’s investors have received a 6% cumulative non-compounded return on their capital contributions. No such fees were incurred or paid for the year ended December 31, 2011.

The Company will pay a subordinated incentive listing distribution of 15% 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 6% cumulative, pre-tax non-compounded annual return to investors. The Company cannot assure that it will provide this 6% return but the Advisor will not be entitled to the subordinated incentive listing fee unless investors have received a 6% cumulative, pre-tax non-compounded return on their capital contributions. No such fees were incurred or paid for the year ended December 31, 2011. Neither the Advisor nor any of its affiliates can earn both the subordination participation in the net proceeds and the subordinated incentive listing distribution.

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 500,000 shares have been authorized and reserved for issuance under the Plan. As of December 31, 2011 and December 31, 2010, 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

23

AMERICAN REALTY CAPITAL TRUST III, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2011

Note 11 — Share-Based Compensation  – (continued)

Company and the Advisor and its affiliates or to entities that provide services to the Company. The total number of common shares granted under the RSP will not exceed 5.0% of the Company’s authorized common shares on a fully diluted basis at any time.

Restricted share awards entitle the recipient to receive common shares 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 common shares shall be subject to the same restrictions as the underlying restricted shares. In March 2011, 6,000 shares were issued to independent directors under the RSP at a fair value of $10.00 per share. The fair value of the shares are being expensed over the vesting period of five years.

Compensation expense related to restricted stock was approximately $9,000 for the year ended December 31, 2011. There was no restricted stock granted during the period from October 15, 2010 (date of inception) to December 31, 2010.

Other Share-Based Compensation

The Company may issue common stock in lieu of cash to pay fees earned by the Company's directors. There are no restrictions on the shares issued since these payments in lieu of cash relate to fees earned for services performed. The Company issued 3,750 shares of common stock to directors during the year ended December 31, 2011 in lieu of $34,000 of board fees earned for services performed. There were no such shares of common stock issued in lieu of cash during the period from October 15, 2010 (date of inception) to December 31, 2010.

Note 12 — Net Loss Per Share

The following is a summary of the basic and diluted net loss per share computation for the year ended December 31, 2011. The Company had no income or loss for the period from October 15, 2010 (date of inception) to December 31, 2010 (net loss in thousands):

Net loss	$	(2,124	)
Weighted average common shares outstanding		1,763,190
Net loss per share, basic and diluted	$	(1.20	)

As of December 31, 2011, the Company had 6,000 shares of unvested restricted stock outstanding which were excluded from the calculation of diluted loss per share as the effect would have been antidilutive.

24

AMERICAN REALTY CAPITAL TRUST III, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2011

Note 13 — Quarterly Results (Unaudited)

Presented below is a summary of the unaudited quarterly financial information for the years ended December 31, 2011 and the period from October 15, 2010 (date of inception) to December 31, 2010 (in thousands, except per share amounts):

			Quarters Ended
	Period from October 15, 2010 (Date of Inception) to December 31, 2010		March 31, 2011			June 30, 2011			September 30, 2011			December 31, 2011
Rental revenue	$	—	$	—		$	—		$	8		$	732
Net loss	$	—	$	(16	)	$	(82	)	$	(496	)	$	(1,530	)
Weighted average shares outstanding		20,000		20,000			20,000			685,340			6,270,579
Basic and diluted loss attributable to stockholders per share	$	—	$	(0.80	)	$	(4.10	)	$	(0.72	)	$	(0.24	)

Note 14 — Subsequent Events

The Company has evaluated subsequent events through the filing of this Annual Report on Form 10-K, and determined that there have been no events that have occurred that would require adjustments to its disclosures in the consolidated financial statements except for the following:

Completion of Acquisitions of Assets

The following table presents certain information about the properties that the Company acquired from January 1, 2012 to February 15, 2012 (dollar amounts in thousands):

	No. of Buildings		Square Feet		Base Purchase Price(1)
Total Portfolio – December 31, 2011		41		426,829	$	72,453
Acquisitions		25		490,737		85,121
Total portfolio – February 15, 2012		66		917,566	$	157,574

(1) Contract purchase price, excluding acquisition and transaction related costs.

The acquisitions made subsequent to December 31, 2011 were made in the normal course of business and none were individually significant to the total portfolio.

Financings

In January 2012, the Company received proceeds of $15.1 million related to a mortgage note payable, secured by 17 properties, which bears interest at a variable-rate of the One-Month London Interbank Offered Rate plus 2.495%. The interest rate on the mortgage note is fixed at 6.15% through an interest rate swap agreement. The mortgage note requires monthly payments of interest with the principal due at maturity in February 2022.

Additionally, in January 2012, the Company received proceeds of $24.4 million related to a mortgage note payable, secured by two properties, which bears interest at a variable-rate of the One-Month London Interbank Offered Rate plus 2.35%. The interest rate on the mortgage note is fixed at 3.75% through an interest rate swap agreement. The mortgage note requires monthly payments of interest with the principal due at maturity in February 2017.

25

AMERICAN REALTY CAPITAL TRUST III, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2011

Note 14 — Subsequent Events  – (continued)

Sales of Common Stock

From January 1, 2012 to February 15, 2012, the Company issued 5.5 million shares of common stock, including shares issued under the DRIP. Total gross proceeds from these issuances were $54.3 million.

26

Real Estate and Accumulated Depreciation
Schedule III
December 31, 2011
(in thousands)

Property	City		State		Encumbrances at December 31, 2011		Initial Costs				Adjustment to Basis		Gross Amount Carried at December 31, 2011		Accumulated Depreciation
							Land		Buildings and Fixtures
Advance Auto		Houston		TX	$	—	$	248	$	991	$	—	$	1,239	$	14
Advance Auto		Houston		TX		—		343		1,029		—		1,372		15
Dollar General		Red Level		AL		—		120		680		—		800		6
Dollar General		Molina		FL		—		178		1,007		—		1,185		9
Dollar General		Maysville		MO		—		107		607		—		714		6
Dollar General		Forest		OH		—		76		681		—		757		6
Dollar General		New Matamoras		OH		—		123		696		—		819		7
Dollar General		Payne		OH		—		81		729		—		810		7
Dollar General		Pleasant City		OH		—		131		740		—		871		7
Dollar General		Poteet		TX		—		96		864		—		960		8
Dollar General		Progreso		TX		—		169		957		—		1,126		9
Dollar General		Rio Grande City		TX		—		137		779		—		916		7
Dollar General		Roma		TX		—		253		1,010		—		1,263		9
Dollar General II		Auxvasse		MO		—		72		650		—		722		3
Dollar General II		Conway		MO		—		37		694		—		731		3
Dollar General II		King City		MO		—		33		625		—		658		3
Dollar General II		Licking		MO		—		77		688		—		765		3
Dollar General II		Stanberry		MO		—		111		629		—		740		3
Dollar General III		Tarrant		AL		—		217		869		—		1,086		4
Dollar General IV		Monroeville		IN		—		112		636		—		748		—
Dollar General V		Tuscaloosa		AL		—		133		756		—		889		—
Dollar General V		Grand Ridge		FL		—		76		684		—		760		—
Dollar General V		St. Clair		MO		—		220		879		—		1,099		—
Dollar General V		Pleasant Hill		TN		—		39		747		—		786		—
Dollar General V		Lyford		TX		—		80		724		—		804		—
Dollar General V		Mellen		WI		—		79		711		—		790		—
Dollar General V		Minong		WI		—		38		727		—		765		—
Dollar General V		Solon Springs		WI		—		76		685		—		761		—
Dollar General VI		Edwards		MS		—		75		671		—		746		—
Dollar General VI		Greensville		MS		—		82		739		—		821		—
Dollar General VI		Walmut Grove		MS		—		71		641		—		712		—
Family Dollar		Madison		NE		—		37		703		—		740		—
Family Dollar		Floydada		TX		—		36		681		—		717		—
Fed Ex		Butte		MT		5,060		403		7,653		—		8,056		117
Fed Ex II		Belmont		NH		—		265		2,386		—		2,651		—
GSA		Cocoa		FL		—		253		1,435		—		1,688		7
GSA II		Craig		CO		—		129		1,159		—		1,288		—
Walgreens		Maplewood		NJ		—		1,071		6,071		—		7,142		30
Walgreens		Staten Island		NY		—		—		3,984		—		3,984		60
Walgreens II		Coalings		CA		—		396		3,568		—		3,964		54
Walgreens III		Stevensville		MI		—		855		3,420		—		4,275		17
Total					$	5,060	$	7,135	$	54,585	$	—	$	61,720	$	414

Each location is a single tenant, freestanding property. Each of the properties has a depreciable life of 40 years. Acquired intangible lease assets in the amount of $10.7 million allocated to individual properties are not reflected in the table above. The accumulated depreciation column excludes $0.1 million of amortization associated with acquired intangible lease assets.

27

A summary of activity for real estate and accumulated depreciation for the year ended December 31, 2011 (amounts in thousands):

	Year Ended December 31, 2011
Real estate investments, at cost:
Balance at beginning of year	$	—
Additions- acquisitions and improvements		61,720
Balance at end of the year	$	61,720
Accumulated depreciation:
Balance at beginning of year	$	—
Depreciation expense		414
Balance at end of the year	$	414

There was no real estate activity for the period from October 15, 2010 (date of inception) to December 31, 2010.

28

AMERICAN REALTY CAPITAL TRUST III, INC.
 
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)

	September 30, 2012			December 31, 2011
	(Unaudited)
ASSETS
Real estate investments, at cost:
Land	$	143,346		$	7,135
Buildings, fixtures and improvements		686,724			54,585
Acquired intangible lease assets		115,268			10,733
Total real estate investments, at cost		945,338			72,453
Less: accumulated depreciation and amortization		(16,712	)		(499	)
Total real estate investments, net		928,626			71,954
Cash and cash equivalents		691,674			16,183
Investment securities, at fair value		8,089			—
Restricted cash		1,212			—
Prepaid expenses and other assets		7,822			252
Receivable for issuance of common stock		4,320			969
Deferred costs, net		11,644			639
Total assets	$	1,653,387		$	89,997
LIABILITIES AND EQUITY
Mortgage notes payable	$	156,730		$	5,060
Derivatives, at fair value		4,122			98
Accounts payable and accrued expenses		3,163			716
Deferred rent		1,998			163
Distributions payable		9,251			504
Total liabilities		175,264			6,541
Preferred stock, $0.01 par value per share, 50,000,000 shares authorized, none issued and outstanding		—			—
Common stock, $0.01 par value per share, 300,000,000 shares authorized, 175,350,883 and 10,356,402 shares issued and outstanding at September 30, 2012 and December 31, 2011, respectively		1,753			104
Additional paid-in capital		1,537,766			86,643
Accumulated other comprehensive loss		(4,088	)		(98	)
Accumulated deficit		(60,308	)		(3,193	)
Total stockholders’ equity		1,475,123			83,456
Non-controlling interest		3,000			—
Total equity		1,478,123			83,456
Total liabilities and equity	$	1,653,387		$	89,997

 
 
The accompanying notes are an integral part of these financial statements.

29

AMERICAN REALTY CAPITAL TRUST III, 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	$	13,638		$	8		$	24,948		$	8
Operating expense reimbursement		426			—			598			—
Total revenues		14,064			8			25,546			8
Operating expenses:
Property operating		762			2			1,102			2
Operating fees to affiliates		—			—			212			—
Acquisition and transaction related		13,817			420			24,087			420
General and administrative		360			82			797			180
Depreciation and amortization		8,900			—			16,213			—
Total operating expenses		23,839			504			42,411			602
Operating loss		(9,775	)		(496	)		(16,865	)		(594	)
Other income (expenses):
Interest expense		(2,318	)		—			(4,723	)		—
Other income, net		206			—			273			—
Total other expenses		(2,112	)		—			(4,450	)		—
Net loss		(11,887	)		(496	)		(21,315	)		(594	)
Net loss attributable to non-controlling interest		—			—			—			—
Net loss attributable to stockholders	$	(11,887	)	$	(496	)	$	(21,315	)	$	(594	)
Other comprehensive loss:
Designated derivatives, fair value adjustment		(1,198	)		—			(4,024	)		—
Unrealized gain on investment securities, net		34			—			34			—
Comprehensive loss	$	(13,051	)	$	(496	)	$	(25,305	)	$	(594	)
Basic and diluted weighted average common shares outstanding		134,186,453			685,340			72,007,149			244,217
Basic and diluted net loss per share attributable to stockholders	$	(0.09	)	$	(0.72	)	$	(0.30	)	$	(2.43	)

 
 
The accompanying notes are an integral part of these financial statements.

30

AMERICAN REALTY CAPITAL TRUST III, INC.
 
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(In thousands, except for share data)
(Unaudited)

	Common Stock						Additional Paid-In Capital			Accumulated Other Comprehensive Loss			Accumulated Deficit			Total Stockholders’ Equity			Non-Controlling Interest		Total Equity
	Number of Shares			Par Value
Balance, December 31, 2011		10,356,402		$	104		$	86,643		$	(98	)	$	(3,193	)	$	83,456		$	—	$	83,456
Issuances of common stock		163,805,088			1,638			1,620,766			—			—			1,622,404			—		1,622,404
Common stock offering costs, commissions and dealer manager fees		—			—			(180,783	)		—			—			(180,783	)		—		(180,783	)
Common stock issued through distribution reinvestment plan		1,327,659			13			12,600			—			—			12,613			—		12,613
Distributions declared		—			—			—			—			(35,800	)		(35,800	)		—		(35,800	)
Common stock repurchases		(153,905	)		(2	)		(1,505	)		—			—			(1,507	)		—		(1,507	)
Share based compensation, net of forfeitures		15,639			—			45			—			—			45			—		45
Contribution from non-controlling interest holder		—			—			—			—			—			—			3,000		3,000
Net loss		—			—			—			—			(21,315	)		(21,315	)		—		(21,315	)
Other comprehensive loss		—			—			—			(3,990	)		—			(3,990	)		—		(3,990	)
Balance, September 30, 2012		175,350,883		$	1,753		$	1,537,766		$	(4,088	)	$	(60,308	)	$	1,475,123		$	3,000	$	1,478,123

 
 
The accompanying notes are an integral part of these financial statements.

31

AMERICAN REALTY CAPITAL TRUST III, INC.
 
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)

	Nine Months Ended September 30,
	2012			2011
Cash flows from operating activities:
Net loss	$	(21,315	)	$	(594	)
Adjustment to reconcile net loss to net cash used in operating activities:
Depreciation		13,171			—
Amortization of intangibles		3,042			—
Amortization of deferred financing costs		696			—
Share based compensation		45			6
Changes in assets and liabilities:
Prepaid expenses and other assets		(2,197	)		(35	)
Accounts payable and accrued expenses		1,418			59
Deferred rent		1,835			79
Net cash used in operating activities		(3,305	)		(485	)
Cash flows from investing activities:
Investment in real estate and other assets		(872,885	)		(12,083	)
Deposits for real estate investments		(4,914	)		—
Purchase of investment securities		(8,055	)		—
Net cash used in investing activities		(885,854	)		(12,083	)
Cash flows from financing activities:
Proceeds from mortgage notes payable		151,670			—
Payments of financing costs		(11,701	)		(150	)
Proceeds from issuance of common stock		1,619,053			25,337
Payments of offering costs and fees related to stock issuances		(180,365	)		(6,267	)
Proceeds from affiliates, net		(459	)		(16	)
Contributions from non-controlling interest holder		3,000			—
Distributions paid		(14,440	)		—
Repurchases of common stock		(896	)		—
Restricted cash		(1,212	)		—
Net cash provided by financing activities		1,564,650			18,904
Net change in cash and cash equivalents		675,491			6,336
Cash and cash equivalents, beginning of period		16,183			—
Cash and cash equivalents, end of period	$	691,674		$	6,336
Supplemental Disclosures:
Cash paid for interest	$	3,448		$	—
Cash paid for income taxes		24			—
Non-Cash Investing and Financing Activities:
Common stock issued through distribution reinvestment plan	$	12,613		$	—
Accrued offering costs		900			795

 
 
The accompanying notes are an integral part of these financial statements.

32

AMERICAN REALTY CAPITAL TRUST III, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2012
(Unaudited)

Note 1 — Organization

American Realty Capital Trust III, Inc. (the “Company”), was incorporated on October 15, 2010, as a Maryland corporation that qualified as a real estate investment trust (“REIT”) for U.S. federal income tax purposes beginning with the taxable year ended December 31, 2011. On March 31, 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. 333-170298) (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 the Company’s common stock at the greater of $9.50 per share or 95% of the estimated value of a share of common stock. The Company sold 20,000 shares of common stock to American Realty Capital III Special Limited Partnership, LLC (the “Special Limited Partner”), an entity wholly owned by AR Capital, LLC (the “Sponsor”) on October 20, 2010, at $10.00 per share. In August 2011, the Company had raised proceeds sufficient to break escrow in connection with the IPO.

As of August 31, 2012, the Company had issued the entire 150.0 million shares of common stock registered in connection with its IPO, plus 1.0 million DRIP shares, and as permitted, reallocated the remaining 24.0 million DRIP shares to the primary offering. In addition, on August 30, 2012, the Company registered an additional 25.0 million shares to be used under the DRIP pursuant to a registration statement on Form S-3 (File No. 333-183649). On September 28, 2012, the Company announced the close of the IPO following the successful achievement of its target equity raise of $1.7 billion, including the shares reallocated from the DRIP. As of September 30, 2012, the Company had 175.4 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 $1.7 billion. As of September 30, 2012, the aggregate value of all common share issuances, excluding unvested restricted stock, was $1.8 billion, based on a per share value of $10.00 (or $9.50 per share for shares issued under the DRIP).

The Company was formed to primarily acquire a diversified portfolio of commercial properties, comprised primarily of freestanding single-tenant properties that are net leased to investment grade and other creditworthy tenants. 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. American Realty Capital Advisors III, LLC (the “Advisor”), is the Company’s affiliated advisor. The Company purchased its first property and commenced real estate operations in September 2011. As of September 30, 2012, the Company owned 382 properties with an aggregate purchase price of $945.3 million, comprised of 7,859,173 square feet which were 100% leased.

Substantially all of the Company’s business is conducted through American Realty Capital Operating Partnership III, L.P. (the “OP”), a Delaware limited partnership. The Company is the sole general partner and holds substantially all of the equity interest in the OP. On September 28, 2012, the Company, the OP and an unaffiliated third party investor (the “Investor”) entered into a contribution agreement pursuant to which the OP issued 0.3 million operating partnership units (the “OP Units”) in exchange for a $3.0 million cash contribution by the Investor to the OP. As of September 30, 2012, the Advisor and the Investor are the sole limited partners and hold 202 and 0.3 million OP Units (non-controlling interest), respectively, which represent a nominal percentage of the aggregate equity interest. After holding the OP Units for a period of one year, or upon the liquidation of the OP or sale of substantially all of the assets of the OP, holders of the OP Units have 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 the Company’s common stock, as allowed by the limited partnership agreement of the OP. The remaining rights of the limited partner interest

33

AMERICAN REALTY CAPITAL TRUST III, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2012
(Unaudited)

Note 1 — Organization  – (continued)

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 has retained the Advisor to manage its affairs on a day-to-day basis. The Company has retained American Realty Capital Properties III, LLC (the “Property Manager”), an entity wholly owned by the Special Limited Partner, to serve as the Company’s property manager. Realty Capital Securities, LLC (the “Dealer Manager”), an affiliate of the Sponsor, serves as the dealer manager of the Company’s IPO. The Advisor, Property Manager 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. Such entities receive fees during the offering, acquisition, operational and liquidation stages.

On August 23, 2012, the Company retained UBS Investment Bank (“UBS”) as its financial advisor to assist in evaluating potential financing and strategic alternatives, consistent with the Company’s long-term business strategy.

Note 2 — Summary of Significant Accounting Policies

The accompanying consolidated financial statements of the Company included herein were prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. 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 December 31, 2011 and for the year then ended, which are included in the Company’s Annual Report on Form 10-K filed with the SEC on February 29, 2012.

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

Recent Accounting Pronouncements

In May 2011, the Financial Accounting Standards Board (the “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 was largely consistent with current fair value measurement principles with few exceptions that did 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 did 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

34

AMERICAN REALTY CAPITAL TRUST III, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2012
(Unaudited)

Note 2 — Summary of Significant Accounting Policies  – (continued)

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 which contains new disclosure requirements regarding the nature of and entity’s rights of offset and related arrangements associated with its financial instruments and derivative instruments. The new disclosures are designed to make financial statements prepared under U.S. GAAP more comparable to those prepared under International Financial Reporting Standards and will give the financial statement users information about both gross and net exposures. The guidance is effective for interim and annual reporting periods beginning on or after January 1, 2013. The adoption of this guidance 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 during the nine months ended September 30, 2012 and 2011 (dollar amounts in thousands):

	Nine Months Ended September 30,
	2012		2011
Real estate investments, at cost:
Land	$	136,211	$	994
Buildings, fixtures and improvements		632,139		9,673
Total tangible assets		768,350		10,667
Acquired intangibles:
In-place leases		104,535		1,416
Cash paid for acquired real estate investments	$	872,885	$	12,083
Number of properties purchased		341		3

35

AMERICAN REALTY CAPITAL TRUST III, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2012
(Unaudited)

Note 3 — Real Estate Investments  – (continued)

The Company acquires and operates commercial properties. All such properties may be acquired and operated by the Company alone or jointly with another party. The Company acquired the following properties, which are 100% leased, during the nine months ended September 30, 2012 (base purchase price and annualized net operating income (“NOI”) in thousands):

Portfolio	Acquisition Date		Number of Properties		Square Feet		Remaining Lease Term(1)		Base Purchase Price(2)		Capitalization Rate(3)			Annualized NOI(4)		Annualized Rental Income/NOI per Square Foot(5)
Portfolio as of Dec. 31, 2011				41		426,829		15.0	$	72,453		7.9	%	$	5,742	$	13.34
Family Dollar		Jan. 2012		5		43,860		8.0		5,105		9.1	%		464		10.58
Express Scripts		Jan. 2012		1		227,467		9.3		42,642		7.8	%		3,347		14.71
Tractor Supply		Jan. 2012		1		19,097		13.6		5,313		8.3	%		442		23.14
FedEx II		Feb. & Mar. 2012		2		210,434		11.0		42,874		7.4	%		3,183		15.13
Dollar General IV		Feb. & Mar. 2012		2		18,049		14.3		2,372		8.2	%		195		10.80
Dollar General V		Feb. 2012		1		10,765		14.3		1,294		8.3	%		107		9.94
Dollar General VII		Feb. & Mar. 2012		12		109,750		13.9		12,922		8.3	%		1,075		9.79
Dollar General VIII		Feb. 2012		4		37,870		14.3		4,020		8.3	%		335		8.85
Walgreens IV		Feb. 2012		6		87,659		18.8		27,990		7.0	%		1,959		22.35
FedEx III		Feb. 2012		2		227,962		9.0		18,369		7.8	%		1,431		6.28
GSA III(6)		Mar. 2012		1		35,311		10.1		7,300		8.0	%		581		16.45
Family Dollar II		Feb. 2012		1		8,000		9.3		860		9.2	%		79		9.88
Dollar General IX		Feb. 2012		2		19,592		14.0		2,237		8.3	%		186		9.49
GSA IV(6)		Mar. 2012		1		18,712		8.7		4,852		8.3	%		401		21.43
Dollar General X		Mar. 2012		1		10,640		14.5		1,252		8.5	%		106		9.96
Advance Auto II		Mar. 2012		1		8,075		9.3		970		8.2	%		80		9.91
Dollar General XI		Mar. & May 2012		4		36,154		14.4		4,205		8.3	%		350		9.68
FedEx IV		Mar. 2012		1		63,092		9.3		4,176		7.9	%		331		5.25
CVS		Mar. 2012		1		10,125		7.3		3,414		7.6	%		261		25.78
Advance Auto III		Mar. 2012		1		7,000		9.5		1,890		8.1	%		153		21.86
Family Dollar III		Mar. & May 2012		4		32,960		10.2		3,967		9.0	%		359		10.89
Family Dollar IV		Mar., Apr., May & Jul. 2012		8		66,398		9.1		7,505		9.0	%		675		10.17
Dollar General XII		Mar. 2012		1		10,566		14.5		988		8.3	%		82		7.76
FedEx V		Apr. 2012		1		142,139		14.4		46,525		7.9	%		3,669		25.81
Dollar General XIII		Apr., May, Jul., & Aug 2012		4		36,567		13.7		3,649		8.4	%		306		8.37
Dollar General XIV		Apr. 2012		2		18,052		14.6		1,815		8.8	%		159		8.81
Dollar General XV		Apr. to Sep. 2012		22		215,905		14.6		27,461		8.2	%		2,240		10.37
Dollar General XVI		Apr. 2012		3		27,226		14.6		3,123		8.3	%		260		9.55
Advance Auto IV		Apr. 2012		1		7,000		9.3		955		8.3	%		79		11.29
Shaw’s Supermarkets		Apr. 2012		1		59,766		8.4		5,750		8.9	%		513		8.58
Rubbermaid		Apr. 2012		1		660,820		10.3		23,125		7.7	%		1,787		2.70
Citizens Bank		Apr. & May 2012		30		83,642		9.8		27,389		7.5	%		2,061		24.64
Tire Kingdom		Apr. 2012		1		6,656		10.9		1,691		9.2	%		155		23.29
Circle K		May 2012		1		2,680		11.6		1,911		7.7	%		147		54.85
Family Dollar V		May 2012		4		32,306		8.9		3,934		9.1	%		358		11.08
GSA V(6)		May 2012		1		15,915		8.6		5,500		8.0	%		442		27.77
GSA VI(6)		May 2012		1		12,187		9.1		3,125		8.2	%		257		21.09
General Mills		May 2012		1		359,499		11.0		33,108		7.7	%		2,558		7.12
Walgreens V		May 2012		1		14,736		21.8		8,667		7.2	%		625		42.41
NTW & Big O Tires		Jun. 2012		2		17,159		11.6		4,025		7.8	%		312		18.18
Fresenius Medical		Jun. 2012		4		27,307		10.2		7,920		9.0	%		713		26.11
Tractor Supply II		Jun. 2012		1		15,097		12.5		2,789		8.5	%		238		15.76
Dollar General XVII		Jun. 2012		1		9,234		14.7		978		8.6	%		84		9.10
FedEx VI		Jun. & Sep. 2012		3		162,547		10.9		20,092		7.6	%		1,520		9.35

36

AMERICAN REALTY CAPITAL TRUST III, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2012
(Unaudited)

Note 3 — Real Estate Investments  – (continued)

Portfolio	Acquisition Date		Number of Properties		Square Feet		Remaining Lease Term(1)		Base Purchase Price(2)		Capitalization Rate(3)			Annualized NOI(4)		Annualized Rental Income/NOI per Square Foot(5)
Advance Auto V		Jun. 2012		2		14,000		10.2		3,995		7.8	%		310		22.14
Walgreens VI		Jun. 2012		4		58,410		20.0		20,900		6.6	%		1,379		23.61
Advance Auto VI		Jun. 2012		1		5,000		10.7		997		8.1	%		81		16.20
GSA VII(6)		Jul. 2012		1		21,000		13.8		3,520		7.4	%		261		12.43
Dollar General XVIII		Jul. 2012		3		27,530		13.8		2,703		8.2	%		222		8.06
Advance Auto VII		Jul. 2012		1		6,759		10.5		1,724		8.0	%		138		20.42
Dollar General XIX		Jul. 2012		3		27,078		14.6		3,043		8.5	%		258		9.53
FedEx VII		Jul. 2012		1		74,707		9.8		5,327		7.8	%		416		5.57
Dollar General XX		Jul. & Aug. 2012		3		27,355		14.8		2,721		8.3	%		227		8.30
Fresenius Medical II		Jul. 2012		1		9,304		11.6		3,247		8.2	%		266		28.59
Family Dollar VI		Jul. 2012		2		16,000		9.0		2,237		9.1	%		203		12.69
Dollar General XXI		Jul. & Sep. 2012		4		36,080		14.9		4,383		8.3	%		364		10.09
Dollar General XXII		Jul. & Sep. 2012		2		18,114		14.9		1,961		8.3	%		162		8.94
Advanced Auto & Bojangles		Jul. & Aug. 2012		14		65,266		12.8	$	24,193		7.8	%	$	1,890	$	28.96
Scotts Company		Jul. & Sep. 2012		3		551,249		10.3		19,050		7.9	%		1,512		2.74
Walgreens VII		Jul. 2012		1		14,820		20.1		7,848		6.8	%		534		36.03
Walgreens VIII		Jul. 2012		1		14,490		14.3		4,529		7.0	%		317		21.88
West Marine		Jul. 2012		1		15,404		9.8		3,210		8.6	%		277		17.98
Fresenius Medical III		Jul. 2012		2		14,792		11.1		4,811		8.4	%		405		27.38
O’Reilly Auto		Aug. 2012		1		5,084		14.6		623		7.9	%		49		9.64
Tractor Supply III		Aug. 2012		1		19,097		13.8		3,123		8.1	%		254		13.30
CVS II		Aug. 2012		1		8,193		25.4		1,459		7.8	%		113		13.79
Williams Sonoma		Aug. 2012		1		1,106,876		10.3		52,424		8.0	%		4,179		3.78
Dollar General XXIII		Aug. 2012		2		18,126		14.8		2,142		8.1	%		174		9.60
Bed Bath & Beyond		Aug. 2012		1		1,035,840		11.9		63,000		7.5	%		4,717		4.55
Advance Auto VIII		Aug. 2012		1		6,779		10.4		1,712		7.9	%		135		19.91
CVS III		Aug. 2012		1		12,941		11.9		5,072		6.9	%		349		26.97
Dollar General XXIV		Aug. & Sep. 2012		28		259,736		14.8		31,266		7.9	%		2,457		9.46
Circle K II		Aug. 2012		1		3,745		10.5		1,297		8.4	%		109		29.11
Dollar General XXV		Aug. 2012		4		36,968		14.8		3,975		8.4	%		332		8.98
Dollar General XXVI		Aug. 2012		24		220,490		12.4		25,195		7.7	%		1,940		8.80
Dollar General XXVII		Aug. & Sep. 2012		3		28,618		14.9		3,413		8.5	%		290		10.13
Family Dollar VII		Sep. 2012		1		8,000		10.5		999		9.0	%		90		11.25
Dollar General XXVIII		Sep. 2012		3		27,078		13.7		3,098		8.0	%		248		9.16
Family Dollar VIII		Sep. 2012		2		16,033		9.6		2,056		9.0	%		185		11.54
FedEx VIII		Sep. 2012		1		13,334		14.9		4,326		7.6	%		329		24.67
Family Dollar IX		Sep. 2012		1		8,320		10.8		1,042		9.0	%		94		11.30
Krystal		Sep. 2012		22		47,874		20.0		27,613		9.0	%		2,492		52.05
Mattress Firm I		Sep. 2012		1		24,000		11.2		1,852		8.6	%		160		6.67
Price Rite I		Sep. 2012		1		42,100		15.4		4,555		7.8	%		354		8.41
Circle K III		Sep. 2012		1		3,035		11.6		2,131		7.6	%		161		53.05
FedEx IX		Sep. 2012		3		53,263		9.7		7,577		8.0	%		606		11.38
Citizens Bank II		Sep. 2012		33		142,074		11.1		52,854		8.0	%		4,214		29.66
Kum & Go		Sep. 2012		2		9,909		20.0		6,000		7.9	%		473		47.73
Mattress Firm II		Sep. 2012		1		7,295		9.8		2,439		8.5	%		207		28.38
Mattress Firm III		Sep. 2012		1		4,200		9.8		1,194		8.5	%		102		24.29
2012 Acquisitions				341		7,432,344		12.5		872,885		7.9	%		68,700		9.24
Portfolio as of September 30, 2012				382		7,859,173		12.7	$	945,338		7.9	%	$	74,442	$	9.47

37

AMERICAN REALTY CAPITAL TRUST III, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2012
(Unaudited)

Note 3 — Real Estate Investments  – (continued)

(1) Remaining lease term as of September 30, 2012, in years. If the portfolio has multiple locations with varying lease expirations, remaining lease term is calculated on a weighted-average basis. Total remaining lease term is an average of the remaining lease term of the total portfolio.

(2) Contract purchase price, excluding acquisition and transaction-related costs. Acquisition and transaction-related costs include legal and other property closing costs.

(3) Annualized NOI divided by base purchase price. Total capitalization rate is an average of the capitalization rate of the total portfolio.

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

(5) Annualized rental income/NOI as of September 30, 2012 for the in-place leases in the property portfolio on a straight-line basis, which includes the effect of tenant concessions such as free rent, as applicable, plus operating expense reimbursement revenue less property operating expenses.

(6) Buildings, fixtures and improvements have been provisionally allocated pending receipt of the cost segregation analysis on such assets being prepared by a third party specialist.

Future Lease Payments

The following table presents future minimum base rent cash payments due to the Company subsequent to September 30, 2012. These amounts exclude contingent rental 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 (amounts in thousands):

	Future Minimum Base Rent Payments
October 1, 2012 to December 31, 2012	$	18,175
2013		72,837
2014		73,169
2015		73,626
2016		74,039
Thereafter		640,261
Total	$	952,107

Tenant Concentration

The following table lists the tenants whose annualized rental income on a straight-line basis or NOI represented greater than 10% of total annualized rental income for all portfolio properties on a straight-line basis as of September 30, 2012 and 2011:

Tenant	September 30, 2012			September 30, 2011
FedEx		17.0	%		73.4	%
Dollar General		19.6	%		*
Advance Auto		*			26.6	%

* The tenant’s annualized rental income/NOI on a straight-line basis was not greater than 10% of total annualized rental income for all portfolio properties on a straight-line basis as of the period specified or the tenant was not part of the total portfolio of properties as of the period specified.

38

AMERICAN REALTY CAPITAL TRUST III, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2012
(Unaudited)

Note 3 — Real Estate Investments  – (continued)

The termination, delinquency or non-renewal of one 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 and 2011.

Geographic Concentration

The following table lists the states where the Company has concentrations of properties whose annualized rental income on a straight-line basis or NOI represented greater than 10% of total annualized rental income for all portfolio properties on a straight-line basis as of September 30, 2012 and 2011:

State	September 30, 2012		September 30, 2011
Montana		*		73.4	%
Texas		*		26.6	%

* The state’s annualized rental income/NOI was not greater than 10% of total annualized rental income for all portfolio properties on a straight-line basis as of the period specified.

Note 4 — Senior Revolving Credit Facility

On July 20, 2012, the Company, through the OP, entered into a senior revolving credit facility in the amount of $100.0 million with RBS Citizens, N.A. (“RBS”). The credit facility contains an “accordion” feature to allow the Company, under certain circumstances, to increase the aggregate commitments under the credit facility to a maximum of $250.0 million.

The credit facility is a revolving line of credit which has a term of 36 months, subject to the Company’s right to a 12-month extension. The Company will have the option, based upon its corporate leverage, to draw loans under the credit facility priced at either: (a) LIBOR, plus an applicable margin that ranges from 2.10% to 3.50%; or (b) the Base Rate, plus an applicable margin that ranges from 2.50% to 3.00%. Base Rate is defined in the credit facility as the greater of (i) the fluctuating annual rate of interest announced from time to time by RBS as its “prime rate” or (ii) 1.0% above the federal funds effective rate. The credit facility includes an unused fee per annum of 0.25% and 0.15%, if the unused balance of the facility exceeds or is less than 50% of the available facility, respectively.

The credit facility provides for monthly interest payments, with all principal outstanding being due on the maturity date in July 2015. Borrowings under the credit facility may be prepaid from time to time and at any time, in whole or in part, without premium or penalty, subject to reimbursement of certain costs and expenses. In the event of a default, each lender has the right to terminate its obligations under the credit facility, and to accelerate the payment on any unpaid principal amount of all outstanding loans. The Company has guaranteed the obligations under the credit facility. The credit facility requires the Company to meet certain financial covenants, including the maintenance of certain financial ratios (such as specified debt to equity and debt service coverage ratios) as well as the maintenance of a minimum net worth. As of September 30, 2012, the Company was in compliance with the debt covenants under the credit facility agreement.

As of September 30, 2012, the Company had no outstanding borrowing under this facility. The Company incurred approximately $50,000 in unused fees for the three and nine months ended September 30, 2012, respectively.

39

AMERICAN REALTY CAPITAL TRUST III, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2012
(Unaudited)

Note 5 — Mortgage Notes Payable

The Company’s mortgage notes payable consist of the following (dollar amounts in thousands):

	Encumbered Properties		Outstanding Loan Amount		Weighted Average Effective Interest Rate(1)			Weighted Average Maturity(2)
September 30, 2012		102	$	156,730		4.60	%		6.22
December 31, 2011		1	$	5,060		3.75	%		4.59

(1) Mortgage notes payable have fixed rates or rates that are fixed through the use of interest rate hedging instruments. Effective interest rates range from 3.75% to 6.13% at September 30, 2012. The effective interest rate was 3.75% on the one mortgage note payable at December 31, 2011.

(2) Weighted average remaining years until maturity as of the periods presented.

The following table summarizes the scheduled aggregate principal repayments subsequent to September 30, 2012 (amounts in thousands):

	Future Principal Payments
October 1, 2012 to December 31, 2012	$	—
2013		—
2014		—
2015		—
2016		5,060
Thereafter		151,670
Total	$	156,730

The Company’s sources of mortgage loan financing generally require 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 a minimum net worth. As of September 30, 2012, the Company was in compliance with the debt covenants under the mortgage loan agreements.

Note 6 — Investment Securities

At September 30, 2012, the Company had investments in redeemable preferred stock and senior notes, accounted for as debt securities, with a fair value of $8.1 million. These investments are considered available-for-sale securities and therefore increases or decreases in the fair value of these investments are recorded in accumulated other comprehensive income as a component of equity on the balance sheet unless the securities are considered to be permanently impaired at which time the losses would be reclassified to expense.

The following table details the unrealized gains and losses on investment securities as of September 30, 2012. The Company did not have any such investments as of December 31, 2011 (in thousands):

	September 30, 2012
	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Investment securities	$	8,055	$	41	$	7	$	8,089

The Company’s preferred stock investments are redeemable at the respective issuer’s option after five years from issuance. The senior notes have a weighted average maturity of 29.9 years and a weighted average interest rate of 5.7% at September 30, 2012.

40

AMERICAN REALTY CAPITAL TRUST III, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2012
(Unaudited)

Note 7 — 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.

Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with those derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by the Company and its counterparties. However, as of September 30, 2012 and December 31, 2011, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of the Company’s derivatives. As a result, the Company has determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy.

The valuation of derivative instruments is determined using a discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, as well as observable market-based inputs, including interest rate curves and implied volatilities. In addition, credit valuation adjustments, are incorporated into the fair values to account for the Company’s potential nonperformance risk and the performance risk of the counterparties.

The Company has preferred units and senior note investments that are traded in active markets and therefore, due to the availability of quoted market prices in active markets, classified these investments as Level 1 in the fair value hierarchy.

41

AMERICAN REALTY CAPITAL TRUST III, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2012
(Unaudited)

Note 7 — Fair Value of Financial Instruments  – (continued)

The following table presents information about the Company’s assets and liabilities (including derivatives that are presented net) measured at fair value on a recurring basis as of September 30, 2012 and December 31, 2011, aggregated by the level in the fair value hierarchy within which those instruments fall (amounts in thousands):

	Quoted Prices in Active Markets Level 1		Significant Other Observable Inputs Level 2			Significant Unobservable Inputs Level 3		Total
September 30, 2012
Investment securities	$	8,089	$	—		$	—	$	8,089
Interest rate swaps	$	—	$	(4,122	)	$	—	$	(4,122	)
December 31, 2011
Interest rate swap	$	—	$	(98	)	$	—	$	(98	)

A review of the fair value hierarchy classification is conducted on a quarterly basis. Changes in the type of inputs may result in a reclassification for certain assets. There were no transfers between Level 1 and Level 2 of the fair value hierarchy during the nine months ended September 30, 2012.

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 financial instruments that are not reported at fair value on the consolidated balance sheets are reported below (amounts in thousands):

	Level		Carrying Amount at September 30, 2012		Fair Value at September 30, 2012		Carrying Amount at December 31, 2011		Fair Value at December 31, 2011
Mortgage notes payable		3	$	156,730	$	162,408	$	5,060	$	5,060

The fair value of the mortgage notes payable are estimated using a discounted cash flow analysis, based on the Advisor’s experience with similar types of borrowing arrangements.

Note 8 — Derivatives and Hedging Activities

Risk Management Objective of Using Derivatives

The Company may use derivative financial instruments, including interest rate swaps, caps, options, floors and other interest rate derivative contracts, to hedge all or a portion of the interest rate risk associated with its borrowings. The principal objective of such arrangements is to minimize the risks and/or costs associated with the Company’s operating and financial structure as well as to hedge specific anticipated transactions. The Company does not intend to utilize derivatives for speculative or other purposes other than interest rate risk management. The use of derivative financial instruments carries certain risks, including the risk that the counterparties to these contractual arrangements are not able to perform under the agreements. To mitigate this risk, the Company only enters into derivative financial instruments with counterparties with high credit ratings and with major financial institutions with which the Company and its affiliates may also have other financial relationships. The Company does not anticipate that any of the counterparties will fail to meet their obligations.

42

AMERICAN REALTY CAPITAL TRUST III, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2012
(Unaudited)

Note 8 — Derivatives and Hedging Activities  – (continued)

Cash Flow Hedges of Interest Rate Risk

The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps and collars as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. Interest rate collars designated as cash flow hedges involve the receipt of variable-rate amounts if interest rates rise above the cap strike rate on the contract and payments of variable-rate amounts if interest rates fall below the floor strike rate on the contract.

The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. During 2012, such derivatives were used to hedge the variable cash flows associated with variable-rate debt. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings.

Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. During the next 12 months, the Company estimates that an additional $1.5 million will be reclassified from other comprehensive income as an increase to interest expense.

As of September 30, 2012, the Company had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk (dollar amounts in thousands):

Interest Rate Derivative	Balance Sheet Location		Number of Instruments		Notional Amount		Fair Value
Interest Rate Swaps		Derivatives, at fair value		7	$	152,590	$	(4,122	)

As of December 31, 2011, the Company had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk (dollar amounts in thousands):

Interest Rate Derivative	Balance Sheet Location		Number of Instruments		Notional Amount		Fair Value
Interest Rate Swap		Derivatives, at fair value		1	$	5,060	$	(98	)

Derivatives Designated as Hedging Instruments

The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the balance sheets as of September 30, 2012 and December 31, 2011 (amounts in thousands):

	Balance Sheet Location		September 30, 2012			December 31, 2011
Interest Rate Swaps		Derivatives, at fair value	$	(4,122	)	$	(98	)

43

AMERICAN REALTY CAPITAL TRUST III, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2012
(Unaudited)

Note 8 — Derivatives and Hedging Activities  – (continued)

The table below details the location in the consolidated financial statements of the gain or loss recognized on interest rate derivatives designated as cash flow hedges for the three and nine months ended September 30, 2012 and 2011 (amounts in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Amount of loss recognized in accumulated other comprehensive loss from interest rate derivatives (effective portion)	$	(1,541	)	$	(70	)	$	(4,702	)	$	(70	)
Amount of loss reclassified from accumulated other comprehensive loss into income as interest expense (effective portion)	$	(343	)	$	—		$	(678	)	$	—
Amount of loss recognized in income on derivative (ineffective portion, reclassifications of missed forecasted transactions and amounts excluded from effectiveness testing)*	$	(91	)	$	—		$	(91	)	$	—

* The Company reclassified to interest expense, $91,000 of other comprehensive loss into earnings due to hedged forecasted transactions no longer probable of occurring.

Credit-risk-related Contingent Features

The Company has agreements with its derivative counterparties that contain a provision where if the Company either defaults or is capable of being declared in default on any of its indebtedness, then the Company could also be declared in default on its derivative obligations.

As of September 30, 2012, the fair value of the derivatives in a net liability position, including accrued interest but excluding any adjustment for nonperformance risk related to these agreements was $4.4 million. As of September 30, 2012, the Company has not posted any collateral related to these agreements and was not in breach of any agreement provisions. If the Company had breached any of these provisions, it could have been required to settle its obligations under the agreements at their aggregate termination value of $4.4 million at September 30, 2012.

Note 9 — Common Stock

As of September 30, 2012 and December 31, 2011, the Company had 175.4 million and 10.4 million shares of common stock outstanding, from gross proceeds of $1.7 billion and $102.7 million, respectively, including restricted stock and shares issued pursuant to the DRIP. During October 2012, the Company collected the entire common stock issuance receivable outstanding as of September 30, 2012.

In July 2011, the Company’s board of directors authorized and the Company declared a distribution rate equal to a 6.60% annualized rate based on the common stock price of $10.00. The first distribution was paid in October 2011. The Company’s distributions are payable by the 5^th day following each month end to stockholders of record at the close of business each day during the prior month at a rate of $0.001803279 per day. 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.

44

AMERICAN REALTY CAPITAL TRUST III, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2012
(Unaudited)

Note 10 — 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 11 — Related Party Transactions and Arrangements

As of September 30, 2012 and December 31, 2011, the Special Limited Partner, an entity wholly owned by the Sponsor, owns 20,000 shares of the Company’s outstanding common stock.

Fees Paid in Connection with the IPO

The Dealer Manager and Sponsor receive 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 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 balance sheets. The following table details total commissions, fees and expense reimbursements incurred from the Advisor and Dealer Manager for the three and nine months ended September 30, 2012 and 2011 (amounts in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
Commissions, fees and expense reimbursements incurred from the Advisor and Dealer Manager	$	77,207	$	3,266	$	177,229	$	3,795

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 its IPO of common stock as measured at the end of the offering. Offering costs in excess of the 1.5% cap as of the end of the offering are the Advisor’s responsibility. As of September 30, 2012, offering and related costs, excluding commissions and dealer manager fees, were equal to 1.5% of gross proceeds received from the IPO. As of September 30, 2012, cumulative offering costs were $196.7 million. Offering proceeds of $1.7 billion exceeded cumulative offering costs by $1.5 billion at September 30, 2012.

The Company had accrued expenses payable to the Advisor and Dealer Manager of $0.4 million and $0.1 million as of September 30, 2012 and December 31, 2011, respectively, for services relating to the IPO.

45

AMERICAN REALTY CAPITAL TRUST III, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2012
(Unaudited)

Note 11 — Related Party Transactions and Arrangements  – (continued)

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 approximate 0.5% of the contract purchase price. In no event will the total of all acquisition and advisory fees and acquisition expenses 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.

The Company pays the Advisor an asset management fee equal 0.75% per annum of the cost of the Company’s assets (cost includes the purchase price, acquisition expenses, capital expenditures and other customarily capitalized costs, but excludes acquisition fees) plus costs and expenses incurred by the Advisor in providing asset management services; provided, however, that the asset management fee is reduced by any amounts payable to the Property Manager 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 the cost of the Company’s assets plus costs and expenses incurred by the Advisor in providing asset management services. Prior to July 1, 2012, this fee was payable in monthly installments at the discretion of the Company’s board of directors in cash, common stock or restricted stock grants, or any combination thereof. Effective July 1, 2012, the payment of asset management fees in monthly installments in cash, shares or restricted stock grants, or any combination thereof to the Advisor was eliminated. Instead, the Company expects to issue (subject to periodic approval by the board of directors) to the Advisor performance-based restricted partnership units of the OP designated as “Class B units,” which are intended to be profits interests and will vest, and no longer be subject to forfeiture, at such time as: (x) the value of the OP’s assets plus all distributions made equals or exceeds the total amount of capital contributed by investors plus a 6.0% cumulative, pre-tax, non-compounded annual return thereon (the “economic hurdle”); (y) any one of the following occurs: (1) the termination of the advisory agreement by an affirmative vote of a majority of the Company’s independent directors without cause; (2) a listing; or (3) another liquidity event; and (z) the Advisor is still providing advisory services to the Company (the “performance condition”). Such Class B units will be forfeited immediately if: (a) the advisory agreement is terminated other than by an affirmative vote of a majority of the Company’s independent directors without cause; or (b) the advisory agreement is terminated by an affirmative vote of a majority of the Company’s independent directors without cause before the economic hurdle has been met. When and if approved by the board of directors, the Class B units are expected to be issued to the Advisor quarterly in arrears pursuant to the terms of the OP agreement. As of September 30, 2012, the Company does not consider achievement of the performance condition to be probable. The value of issued Class B units will be determined and expensed, when the Company deems the achievement of performance condition to be probable. The Advisor will receive distributions on unvested Class B units equal to the distribution rate received on the Company’s common stock. Such distributions on issued Class B units will be included as operating fees to affiliates in the consolidated statement of operations until the performance condition is considered probable to occur. No Class B units have been approved by the board of directors or issued as of September 30, 2012 or through the date of the filing of this Form 10-Q.

Unless the Company contracts with a third party, the Company will pay to an affiliate of the Sponsor a property management fee of up to 2% of gross revenues from the Company’s stand-alone single-tenant net leased properties and 4% of gross revenues from its multi-tenant properties, plus, in each case, market-based leasing commissions applicable to the geographic location of the property. 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 affiliated Property Manager, an oversight fee of up to 1.0% of the gross revenues of the property managed.

46

AMERICAN REALTY CAPITAL TRUST III, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2012
(Unaudited)

Note 11 — Related Party Transactions and Arrangements  – (continued)

If the Company’s 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 0.75% of the amount available and/or outstanding under such financing, subject to certain limitations.

The following table details amounts paid and reimbursed to affiliates 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 and 2011 (amounts in thousands):

	Three Months Ended September 30, 2012				Three Months Ended September 30, 2011
	Incurred		Forgiven		Incurred		Forgiven(1)
One-time fees and reimbursements:
Acquisition fees and related cost reimbursements	$	7,569	$	—	$	196	$	—
Financing coordination fees		1,055		—		—		—
Other expense reimbursements		88		—
Ongoing fees:
Asset management fees(1)(2)		—		—		—		1
Property management fees		—		250		—		—
Total related party operation fees and reimbursements	$	8,712	$	250	$	196	$	1

	Nine Months Ended September 30, 2012				Nine Months Ended September 30, 2011
	Incurred		Forgiven(1)		Incurred		Forgiven(1)
One-time fees and reimbursements:
Acquisition fees and related cost reimbursements	$	15,075	$	—	$	196	$	—
Financing coordination fees		2,100		—		—		—
Other expense reimbursements		390		—
Ongoing fees:
Asset management fees(1)(2)		212		849		—		1
Property management fees		—		456		—		—
Total related party operation fees and reimbursements	$	17,777	$	1,305	$	196	$	1

(1) Asset management fees through June 30, 2012, have been waived. Effective July 1, 2012, the Company expects to issue (subject to approval by the board of directors) to the Advisor restricted performance-based Class B units for asset management fees, which will be forfeited immediately if certain conditions occur. No Class B units have been issued as of September 30, 2012 or through the date of the filing of this Form 10-Q.

(2) As of September 30, 2012, the Company had a receivable of $0.5 million, primarily for asset management fees to be refunded by the Advisor.

The Company will reimburse the Advisor’s costs of providing administrative services, subject to the limitation that it will not reimburse the Advisor for any amount by which its 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, or (b) 25% of net income other than any additions to reserves for depreciation, bad

47

AMERICAN REALTY CAPITAL TRUST III, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2012
(Unaudited)

Note 11 — Related Party Transactions and Arrangements  – (continued)

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 reimbursement was paid to the Advisor for providing administrative services for the three and nine months ended September 30, 2012 and 2011.

The Advisor may provide expense support to the Company from time to time to assist the Company with operating cash flow, distributions or other operational purposes. For the nine months ended September 30, 2012, the Advisor provided $0.1 million of expense support to the Company, which was recorded as an offset to general and administrative expense within the consolidated statements of operations. No expense support was provided to the Company for the three months ended September 30, 2012 and 2011, and the nine months ended September 30, 2011. There can be no assurance that the Advisor will provide such expense support in the future.

As the Company’s real estate portfolio matures, the Company expects cash flows from operations (reported in accordance with GAAP) to cover a more 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 past 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 or paid for the three and nine months ended September 30, 2012 and 2011.

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 6% cumulative, pre-tax non-compounded return on the capital contributed by investors. The Company cannot assure that it will provide this 6% return but the Advisor will not be entitled to the subordinated participation in net sale proceeds unless the Company’s investors have received a 6% cumulative non-compounded return on their capital contributions. No such fees were incurred or paid for the three and nine months ended September 30, 2012 and 2011.

The Company will pay a subordinated incentive listing distribution of 15% of the amount by which the market value of all issued and outstanding common stock plus distributions exceeds the aggregate capital contributed by investors plus an amount equal to a 6% cumulative, pre-tax non-compounded annual return to investors. The Company cannot assure that it will provide this 6% return but the Advisor will not be entitled to the subordinated incentive listing fee unless investors have received a 6% cumulative, pre-tax non-compounded return on their capital contributions. No such fees were incurred or paid for the three and nine months ended September 30, 2012 and 2011. Neither the Advisor nor any of its affiliates can earn both the subordination participation in the net proceeds and the subordinated incentive listing distribution.

Upon termination or non-renewal of the advisory agreement, the Advisor shall be entitled to receive distributions from the OP pursuant to a special limited partnership interest payable in the form of a

48

AMERICAN REALTY CAPITAL TRUST III, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2012
(Unaudited)

Note 11 — Related Party Transactions and Arrangements  – (continued)

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.

Note 12 — 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 13 — 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 fair market value of any shares of restricted stock granted under the RSP, together with the total amount of acquisition fees, acquisition expense reimbursements, asset management fees, financing coordination fees, disposition fees and subordinated distributions by the operating partnership payable to the Advisor (or its assignees), shall not exceed (a) 6% of all properties’ aggregate gross contract purchase price, (b) as determined annually, the greater, in the aggregate, of 2% of average invested assets and 25% of net income other than any additions to reserves for depreciation, bad debt or other similar non-cash reserves and excluding any gain from the sale of assets for that period, (c) disposition fees, if any, of up to 3% of the contract sales price of all properties that we sell and (d) 15% of remaining net sales proceeds after return of capital contributions plus payment to investors of a 6% cumulative, pre-tax, non-compounded return on the capital contributed by investors. Additionally, the total number of common shares granted under the RSP will not exceed 5.0% of the Company’s authorized common shares on a fully diluted basis at any time.

49

AMERICAN REALTY CAPITAL TRUST III, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2012
(Unaudited)

Note 13 — Share-Based Compensation  – (continued)

Restricted share awards entitle the recipient to receive common shares 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 the 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 common shares shall be subject to the same restrictions as the underlying restricted shares.

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

	Number of Common Shares			Weighted-Average Issue Price
Unvested, December 31, 2011		6,000		$	10.00
Granted		15,000		$	9.40
Vested		(600	)	$	10.00
Forfeitures		(3,000	)	$	10.00
Unvested, September 30, 2012		17,400		$	9.48

Compensation expense related to restricted stock was approximately $9,000 and $3,000 for the three months ended September 30, 2012 and 2011, respectively. The compensation expense related to restricted stock for the nine months ended September 30, 2012 and 2011 were $12,000 and $6,000, respectively. The fair value of these shares are being expensed over the vesting period of five years.

Other Share-Based Compensation

The Company may issue common stock in lieu of cash to pay fees earned by the Company’s directors. There are no restrictions on the shares issued since these payments in lieu of cash relate to fees earned for services performed. There were 3,639 shares of common stock issued during the nine months ended September 30, 2012 in lieu of $32,750 of board fees earned for services performed. No such shares were issued during the nine months ended September 30, 2011.

Note 14 — Net Loss Per Share

The following is a summary of the basic and diluted net loss per share attributable to stockholders computation for the three and nine months ended September 30, 2012 and 2011 (in thousands, except share and per share data):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Net loss attributable to stockholders	$	(11,887	)	$	(496	)	$	(21,315	)	$	(594	)
Weighted average common shares outstanding		134,186,453			685,340			72,007,149			244,217
Net loss per share attributable to stockholders, basic and diluted	$	(0.09	)	$	(0.72	)	$	(0.30	)	$	(2.43	)

As of September 30, 2012, the Company had 17,400 shares of unvested restricted stock outstanding which were excluded from the calculation of diluted loss per share as the effect would have been antidilutive.

50

AMERICAN REALTY CAPITAL TRUST III, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2012
(Unaudited)

Note 15 — Subsequent Events

The Company has evaluated subsequent events through the filing of this Quarterly Report on Form 10-Q, and determined that there have been no events that have occurred that would require adjustments to its disclosures in the consolidated financial statements except for the following:

Completion of Acquisitions of Assets

The following table presents certain information about the properties that the Company acquired from October 1, 2012 to November 13, 2012 (dollar amounts in thousands):

	No. of Buildings		Square Feet		Base Purchase Price(1)
Total Portfolio – September 30, 2012		382		7,859,173	$	945,338
Acquisitions		30		1,803,782		126,729
Total portfolio – November 13, 2012		412		9,662,955	$	1,072,067

(1) Contract purchase price, excluding acquisition and transaction related costs.

The acquisitions made subsequent to September 30, 2012 were made in the normal course of business and none were individually significant to the total portfolio.

From October 1, 2012 to November 13, 2012, the Company purchased investment securities at cost of $25.8 million.

Financings

On October 2, 2012, the Company entered into a $28.4 million mortgage note payable with Bank of Texas. The mortgage note has a five year term with an interest rate of 3.28%, which is fixed through the use of an interest rate hedging instrument. The mortgage note is encumbered with one property.

Impacts of Hurricane Sandy

The Company is communicating with its tenants to evaluate whether any of its properties may have been affected by Hurricane Sandy in a manner that would have resulted in any property damage or financial impact, as well as the Company’s ability to recover, through its insurance policies, any loss due to interruption of business or damage to any property. While the Company believes its property and other insurance will significantly defray the cost of fixing any damage and compensating the Company for any loss, there can be no assurance that such insurance will be sufficient to compensate the Company for construction costs or lost revenue and an estimate cannot be made at this time.

51

XML

Real Estate Investments (Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas) (Details)	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Michigan [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Annualized Rental Income, Percentage	14.20%	22.70%
South Carolina [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Annualized Rental Income, Percentage	12.40%	25.00%
Ohio [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Annualized Rental Income, Percentage	11.80%	20.00%
Iowa [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Annualized Rental Income, Percentage	11.70%
New York [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Annualized Rental Income, Percentage	10.40%	11.70%

XML

Related Party Transactions and Arrangements (Schedule of General and Administrative Expenses Absorbed) (Details) (Absorbed General and Administrative Expenses [Member], Manager [Member], ARC Properties Advisors, LLC [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2012
Absorbed General and Administrative Expenses [Member] | Manager [Member] | ARC Properties Advisors, LLC [Member]
Schedule of General and Administrative Expenses Absorbed [Line Items]
Related Party Transaction, Amounts of Transaction	$ 0	$ 164

XML

Convertible Preferred Stock (Details) (USD $) In Thousands, except Share data, unless otherwise specified	12 Months Ended		1 Months Ended			0 Months Ended
	Dec. 31, 2011	Jul. 24, 2012	May 31, 2012 Series A Preferred Stock [Member]	Sep. 30, 2012 Series A Preferred Stock [Member]	Dec. 31, 2011 Series A Preferred Stock [Member]	Jul. 24, 2012 Series B Preferred Stock [Member]	Sep. 30, 2012 Series B Preferred Stock [Member]
Class of Stock [Line Items]
Shares Issued (in shares)			545,454			283,018
Stock Issued During Period, Value, New Issues	$ 83,931		$ 6,000			$ 3,000
Proceeds from Issuance of stock, net			$ 5,800			$ 3,000
Liquidation Preference Per Share		$ 10.6	$ 11.0	$ 11.0	$ 11.0	$ 10.6	$ 10.6
Convertible Preferred Stock, Terms of Conversion			1 year			1 year
Redemption Premium Percent			1.00%			1.00%
Annualized rate of dividend (per share)			$ 0.77			$ 0.74
Redemption price per share		$ 10.6	$ 11.0			$ 10.6

XML

Share-Based Compensation (Details) (USD $) In Thousands, except Share data, unless otherwise specified	9 Months Ended		12 Months Ended	9 Months Ended		1 Months Ended		9 Months Ended	3 Months Ended	9 Months Ended		3 Months Ended	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011	Sep. 30, 2012 Equity Plan [Member]	Dec. 31, 2011 Equity Plan [Member]	Jun. 30, 2012 Equity Plan [Member] Key Personnel of Affiliate [Member] Manager [Member]	Jun. 30, 2012 Equity Plan [Member] ARC Properties Advisors, LLC [Member] Manager [Member]	Sep. 30, 2012 Equity Plan [Member] ARC Properties Advisors, LLC [Member] Manager [Member]	Sep. 30, 2012 Restricted Stock [Member] Equity Plan [Member]	Sep. 30, 2012 Restricted Stock [Member] Equity Plan [Member]	Dec. 31, 2011 Restricted Stock [Member] Equity Plan [Member]	Sep. 30, 2012 Restricted Stock [Member] Equity Plan [Member] Manager [Member]	Sep. 30, 2012 Restricted Stock [Member] Director Stock Plan [Member]	Dec. 31, 2011 Restricted Stock [Member] Director Stock Plan [Member]	Sep. 30, 2011 Restricted Stock [Member] Director Stock Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding, Number											167,400			9,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price				$ 12.5	$ 12.5								$ 11.47	$ 12.5
Shares issued in lieu of cash for services, in shares						93,683	93,683	167,400
Common stock held by related party, percent								3.00%
Restricted share vesting period								3 years					5 years
Share based compensation	$ 792	$ 2	$ 182						$ 400	$ 700
Maximum authorized amount as a percentage of shares authorized												10.00%
Shares granted automatically upon election to board of directors, in shares													3,000
Periodic vesting percentage													20.00%
Number of shares authorized, in shares													99,000
Aggregate shares issued, in shares									201,527	201,527			16,200		9,000
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period										93,683			9,000
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price				$ 10.65									$ 10.65
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period										(59,556)			(1,800)
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Weighted Average Grant Date Fair Value				$ 12.41									$ 12.5

XML

Derivatives and Hedging Activities (Schedule of Derivative Instruments in Statement of Financial Position, Fair Value) (Details) (Interest Rate Cap [Member], Cash Flow Hedging [Member], Derivative Financial Instruments, Liabilities [Member], USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Interest Rate Cap [Member] | Cash Flow Hedging [Member] | Derivative Financial Instruments, Liabilities [Member]
Derivatives, Fair Value [Line Items]
Interest Rate Derivative Liabilities, at Fair Value	$ 0	$ 0

XML

Subsequent Events (Tables)

9 Months Ended

Sep. 30, 2012

Subsequent Events [Abstract]

Schedule of Real Estate Properties

No. of Buildings		Square Feet		Base Purchase Price(1)
Total Portfolio - September 30, 2012(2)	124		2,198,877		$	235,723
Acquisitions	2		14,985			2,258
Total portfolio - October 26, 2012(2)	126		2,213,862		$	237,981

(1) Contract purchase price, excluding acquisition and transaction related costs.

(2) Total portfolio excludes one vacant property contributed in September 2011 which was classified as held for sale at September 30, 2012. The aggregate square footage and original base purchase price of this contributed vacant property was 3,200 and $1.2 million, respectively.

XML

Discontinued Operations and Properties Held for Sale (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Assets held for sale, net	$ 812		$ 812		$ 1,818
Operating Loss for Properties Held for Sale	$ 41	$ 9	$ 440	$ 9	$ 816
Vacant [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Number of Real Estate Properties	1		1		2
Vacant [Member] | Real Estate [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Number of Real Estate Properties	1		1		2

XML

Summary of Significant Accounting Policies (Policy)

9 Months Ended

Sep. 30, 2012

Summary of Significant Accounting Policies [Abstract]

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In May 2011, the Financial Accounting Standards Board (the "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 ending 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 reporting periods ended 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 which contains new disclosure requirements regarding the nature of and entity's rights of offset and related arrangements associated with its financial instruments and derivative instruments. The new disclosures are designed to make financial statements prepared under U.S. GAAP more comparable to those prepared under International Financial Reporting Standards and will give the financial statement users information about both gross and net exposures. The guidance is effective for interim and annual reporting periods beginning on or after January 1, 2013. The adoption of this guidance 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 adoption of this guidance is not expected to have a material impact on the Company's financial position or results of operations.

XML

Related Party Transactions and Arrangements (Details) (USD $) In Thousands, unless otherwise specified		9 Months Ended	1 Months Ended
	Sep. 30, 2012	Sep. 30, 2012 Gross Proceeds, Initial Public Offering [Member] Realty Capital Securities, LLC [Member] Dealer Manager [Member]	Sep. 30, 2012 Gross Proceeds, Common Stock [Member] Realty Capital Securities, LLC [Member] Dealer Manager [Member]	Sep. 30, 2012 Contract Purchase Price [Member] ARC Properties Advisors, LLC [Member] Manager [Member]	Sep. 30, 2012 Amount Available or Outstanding Under Financing Arrangement [Member] ARC Properties Advisors, LLC [Member] Manager [Member]	Sep. 30, 2012 Average Invested Assets [Member] ARC Properties Advisors, LLC [Member] Manager [Member]	Sep. 30, 2012 Operating Partnership Unit [Member] ARC Real Estate Partners, LLC [Member]	Dec. 31, 2011 Operating Partnership Unit [Member] ARC Real Estate Partners, LLC [Member]	Sep. 30, 2012 Operating Partnership Unit [Member] ARC Real Estate Partners, LLC [Member] Contributor [Member]
Related Party Transaction [Line Items]
Due from Affiliates	$ 2,000
Common stock held by related party, percent							19.40%	31.30%
Financing coordination as a percentage of benchmark					0.75%
Operating Partnership Units Held By Related Party									310,000
Sales commissions as a percentage of benchmark		6.00%	2.00%
Acquisition fees as a percentage of benchmark				1.00%
Asset management fees as a percentage of benchmark						0.50%

XML

Mortgage Note Payable (Schedule of Aggregate Future Principal Payments on Mortgage Notes Payable) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012
Debt Instrument [Line Items]
July 1, 2012 - December 31, 2012	$ 0
2013	74
2014	189
2015	13,767
2016	11,760
Thereafter	9,970
Fair Value, Inputs, Level 3 [Member] | Carrying (Reported) Amount, Fair Value Disclosure [Member]
Debt Instrument [Line Items]
Outstanding Loan Amount	$ 35,760

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 Investments [Abstract]
October 1, 2012 - December 31, 2012	$ 4,980
2013	20,228
2014	20,416
2015	20,246
2016	19,858
Thereafter	72,222
Total	$ 157,950

XML

Related Party Transactions and Arrangements (Schedule of Offering Costs Reimbursements to Related Parties) (Details) (Manager [Member], ARC Properties Advisors, LLC [Member], Fees and Expense Reimbursement, Stock Offering [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2012	Sep. 30, 2011
Manager [Member] | ARC Properties Advisors, LLC [Member] | Fees and Expense Reimbursement, Stock Offering [Member]
Schedule of Offering Costs Reimbursements to Related Parties [Line Items]
Related Party Transaction, Expenses from Transactions with Related Party	$ 59	$ 109	$ 0

XML

Derivatives and Hedging Activities (Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2012	Sep. 30, 2011
Derivative Instruments, Gain (Loss) [Line Items]
Amount of gain (loss) recognized in accumulated other comprehensive income on interest rate derivatives (effective portion)	$ 0
Amount of gain (loss) reclassified from accumulated other comprehensive income into income as interest expense (effective portion)	0
Amount of gain (loss) recognized in income on derivative instruments (ineffective portion and amounts excluded from effectiveness testing)	0
Cash Flow Hedging [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount of gain (loss) recognized in accumulated other comprehensive income on interest rate derivatives (effective portion)	0	(13)	0
Amount of gain (loss) recognized in income on derivative instruments (ineffective portion and amounts excluded from effectiveness testing)	0	0	0
Interest Expense [Member] | Cash Flow Hedging [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount of gain (loss) reclassified from accumulated other comprehensive income into income as interest expense (effective portion)	$ 0	$ 0	$ 0

XML

Real Estate Investments

9 Months Ended

12 Months Ended

Sep. 30, 2012

Dec. 31, 2011

Real Estate Investments [Abstract]

Real Estate Investments

Note 3 - Real Estate Investments

The following table presents the allocation of real estate investment assets acquired by the Company during the nine months ended September 30, 2012 (dollar amounts in thousands):

Real estate investments, at cost:
Land	$	10,228
Buildings, fixtures and improvements		75,360
Total tangible assets		85,588
Acquired intangibles:
In-place leases		13,262
Total assets acquired, net		98,850
OP Units issued to acquire real estate investments		(6,352	)
Cash paid to acquire real estate investments	$	92,498
Number of properties acquired		36

The Company owns and operates commercial properties. As of September 30, 2012, the Company owned 125 properties, one of which is vacant and classified as held for sale. Buildings, fixtures and improvements include $8.0 million, comprised of $5.1 million, $1.1 million and $1.8 million, provisionally assigned to buildings, fixtures and improvements, respectively, pending receipt of the final cost segregation analysis on such assets being prepared by a third party specialist. The Contributor, an affiliate of the Sponsor, contributed 63 properties (the "Contributed Properties") in September 2011 in conjunction with the completion of the IPO at amortized cost.

On July 3, 2012, the Company sold a vacant property in Havertown, PA, which was classified as held for sale for net proceeds of $0.6 million.

The Company's portfolio of real estate investment properties (excluding one vacant property), which were all 100% leased, is comprised of the following 124 properties as of September 30, 2012:

Portfolio	Contribution or Acquisition Date		Number of Properties		Square Feet		Remaining Lease Term(1)		Base Purchase Price(2)		Capitalization Rate(3)			Annualized Rental Income/ NOI(4)		Annualized Rental Income/NOI per Square Foot
									(in thousands)					(in thousands)
Home Depot		Sep, 2011		1		465,600		17.2	$	23,398		9.7	%	$	2,258	$	4.85
Citizens Bank		Sep, 2011		59		291,920		5.4		95,241		7.1	%		6,726		23.04
Community Bank		Sep, 2011		1		4,410		3.8		705		5.1	%		36		8.16
Dollar General I		Nov, 2011		20		177,668		6.9		9,981		9.7	%		965		5.43
Advance Auto		Nov. & Dec. 2011		6		42,000		7.1		5,122		8.9	%		457		10.88
Walgreens I		Dec, 2011		1		14,414		9.0		2,426		10.1	%		245		17.00
Portfolio - December 31, 2011				88		996,012		8.2		136,873		7.8%			10,687		10.73
GSA I(5)		Jan, 2012		1		12,009		6.4		4,850		8.2	%		396		32.98
Walgreens II		Jan, 2012		1		15,120		6.3		3,778		9.2	%		346		22.88
FedEx		May, 2012		6		92,935		4.2		12,207		9.0	%		1,099		11.83
John Deere		May, 2012		1		552,960		5.3		26,126		9.0	%		2,353		4.26
GSA II(5)		Jun, 2012		1		18,640		6.0		5,835		11.1	%		647		34.71
GSA III(5)		Jun, 2012		1		39,468		4.6		6,350		9.5	%		604		15.30
Tractor Supply		Jun, 2012		1		38,507		6.1		1,921		9.5	%		183		4.75
GSA IV(5)		Jun, 2012		1		22,509		6.0		3,890		11.0	%		428		19.01
Dollar General II		Jun, 2012		16		134,102		5.1		5,993		10.7	%		642		4.79
GSA V(5)		Jun, 2012		1		11,281		4.4		2,200		9.9	%		217		19.24
Mrs Baird's		Jul, 2012		1		75,050		4.7		6,213		10.2	%		631		8.40
Reckitt Benckiser		Aug, 2012		1		32,000		5.6		10,000		9.6	%		964		30.13
CVS		Sep, 2012		3		31,620		4.7		4,855		9.9	%		481		15.21
Iron Mountain		Sep, 2012		1		126,664		5.3		4,632		9.6	%		443		3.50
2012 Acquisitions				36		1,202,865		5.2		98,850		9.5%			9,434		7.84
Portfolio - September 30, 2012(6)				124		2,198,877		6.8	$	235,723		8.5%		$	20,121	$	9.15

(1) Remaining lease term as of September 30, 2012, in years. If the portfolio has multiple locations with varying lease expirations, remaining lease term is calculated on a weighted-average basis. Total remaining lease term is a weighted average of the remaining lease term of the total portfolio.

(2) Original purchase price of the Contributed Properties and base purchase price of all other properties, in each case excluding acquisition and transaction-related costs. Acquisition and transaction-related costs include legal and various other closing costs incurred in connection with acquiring investment properties.

(3) Annualized rental income or annualized net operating income ("NOI"), on a straight-line basis, divided by base purchase price.

(4) Annualized rental income/NOI for net leases is rental income on a straight-line basis as of September 30, 2012, which includes the effect of tenant concessions such as free rent, as applicable. For modified gross leased properties, NOI is rental income on a straight-line basis as of September 30, 2012, which includes the effect of tenant concessions such as free rent, as applicable, plus operating expense reimbursement revenue less property operating expenses.

(5) Lease on property is a modified gross lease. As such, annualized rental income/NOI for this property is rental income on a straight-line basis as of September 30, 2012, which includes the effect of tenant concessions such as free rent plus operating expense reimbursement revenue less property operating expenses.

(6) Total portfolio excludes one vacant property contributed in September 2011, which is classified as held for sale as of September 30, 2012.

Future Lease Payments

The following table presents future minimum base rental cash payments due to the Company over the next five years and thereafter. 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 (amounts in thousands):

	Future Minimum Base Rent Payments
October 1, 2012 - December 31, 2012	$	4,980
2013		20,228
2014		20,416
2015		20,246
2016		19,858
Thereafter		72,222
	$	157,950

Tenant Concentration

The following table lists the tenants whose annualized rental income/NOI on a straight-line basis represented greater than 10% of consolidated annualized rental income/NOI on a straight-line basis as of September 30, 2012 and 2011:

Tenant	September 30, 2012			September 30, 2011
Citizens Bank		33.4	%		75.0	%
John Deere		11.7	%		-	%
GSA		11.4	%		-	%
Home Depot		11.2	%		25.0	%

The termination, delinquency or non-renewal of one or more leases by either of the above tenants may have a material effect on revenues. No other tenant represents more than 10% of the annualized rental income/NOI for the period presented.

Geographic Concentration

The following table lists the states where the Company has concentrations of properties where annual rental income/NOI on a straight-line basis represented greater than 10% of consolidated annualized rental income/NOI on a straight-line basis as of September 30, 2012 and 2011:

State	September 30, 2012			September 30, 2011
Michigan		14.2	%		22.7	%
South Carolina		12.4	%		25.0	%
Ohio		11.8	%		20.0	%
Iowa		11.7	%		*
New York		10.4	%		11.7	%

* The state's annualized rental income/NOI was not greater than 10% of total annualized rental income for all portfolio properties as of the period specified.

Note 3 - Real Estate Investments

The following table presents the allocation of real estate investment assets acquired by or contributed to the Company during the year ended December 31, 2011. There were no property acquisitions during the period from December 2, 2010 (date of inception) to December 31, 2010 (amounts in thousands):

Real estate investments, at cost:
Land	$	18,489
Buildings, fixtures and improvements		107,340
Total tangible assets		125,829
Acquired intangibles:
In-place leases		11,044
Purchase price of acquired real estate investments(1)	$	136,873
Number of properties acquired		88

(1) Purchase price includes the properties that were contributed in September 2011 in conjunction with the completion of the IPO by the Contributor, an affiliate of the Sponsor, at amortized cost, as well as $17.5 million of properties acquired by the Company since the IPO.

The Company owns and operates commercial properties. As of December 31, 2011, the Company owned 90 properties, 2 of which are vacant and classified as held for sale at December 31, 2011. 63 of the properties were contributed in September 2011 in conjunction with the completion of the IPO by the Contributor, an affiliate of the Sponsor, at amortized cost.

The Company's portfolio of real estate investment properties, which were all 100% leased, is comprised of the following 88 properties as of December 31, 2011 (dollar amounts in thousands):

Portfolio	Contribution or Acquisition Date		Number of Properties		Square Feet		Remaining Lease Term(1)		Base Purchase Price(2)		Capitalization Rate(3)			Annualized Rental Income(4)		Annualized Rental Income per Square Foot
Home Depot		Sep. 2011		1		465,600		17.9	$	23,398		9.7	%	$	2,258	$	4.85
Citizens Bank		Sep. 2011		59		291,920		6.2		95,241		7.1	%		6,729		23.05
Community Bank		Sep. 2011		1		4,410		4.6		705		5.1	%		36		8.16
Dollar General		Nov. 2011		20		177,668		7.6		9,981		9.7	%		965		5.43
Advance Auto		Nov. & Dec. 2011		6		42,000		7.8		5,122		8.9	%		457		10.88
Walgreens		Dec. 2011		1		14,414		9.8		2,425		10.1	%		245		17.00
Total Portfolio(5)				88		996,012		8.9	$	136,872		7.8	%	$	10,690	$	10.73

(1) Remaining lease term as of December 31, 2011, in years. If the portfolio has multiple locations with varying lease expirations, remaining lease term is calculated on a weighted-average basis. Total remaining lease term is an average of the remaining lease term of the total portfolio.

(2) Original purchase price of properties contributed excluding acquisition and transaction-related costs. Acquisition and transaction-related costs include legal costs and closing costs on property.

(3) Annualized rental income on a straight-line basis divided by base purchase price.

(4) Annualized rental income on a straight-line basis for the leases in place as of December 31, 2011, which includes the effect of tenant concessions such as free rent, as applicable.

(5) Total portfolio excludes 2 vacant properties contributed in September 2011 which were classified as held for sale at December 31, 2011. The aggregate square footage and base purchase price of these vacant properties was 6,800 and $2.9 million, respectively.

Future Lease Payments

The following table presents future minimum base rental cash payments due to the Company over the next five years and thereafter. 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 (amounts in thousands):

	Future Minimum Base Rent Payments
2012	$	10,200
2013		10,400
2014		10,586
2015		10,717
2016		10,663
Thereafter		45,723
	$	98,289

Tenant Concentration

The following table lists the tenants whose annualized rental income on a straight-line basis represented greater than 10% of consolidated annualized rental income on a straight-line basis as of December 31, 2011:

Tenant
Citizens Bank	62.9	%
Home Depot	21.1	%

The termination, delinquency or non-renewal of one or more leases by any of the above tenants may have a material effect on revenues. No other tenant represents more than 10% of the rental income for the period presented.

Geographic Concentration

The following table lists the states where the Company has concentrations of properties where annual rental income on a straight-line basis represented greater than 10% of consolidated annualized rental income on a straight-line basis as of December 31, 2011:

State
Michigan	23.4	%
South Carolina	23.4	%
Ohio	16.8	%

XML

Fair Value of Financial Instruments (Fair Value, by Balance Sheet Grouping) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Mortgages Notes Payable [Member] | Carrying (Reported) Amount, Fair Value Disclosure [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt, fair value	$ 35,760	$ 30,260
Mortgages Notes Payable [Member] | Estimate of Fair Value, Fair Value Disclosure [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt, fair value	35,794	30,626
Senior Secured Revolving Credit Facility [Member] | Carrying (Reported) Amount, Fair Value Disclosure [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt, fair value	91,090	42,407
Senior Secured Revolving Credit Facility [Member] | Estimate of Fair Value, Fair Value Disclosure [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt, fair value	$ 91,090	$ 42,407

XML

Derivatives and Hedging Activities (Tables)

9 Months Ended

Sep. 30, 2012

Derivatives and Hedging Activities [Abstract]

Schedule of Interest Rate Derivatives

Interest Rate Derivative	Number of Instruments		Notional Amount
Interest Rate Cap		1	$	50,000

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value

	Balance Sheet Location		September 30, 2012
Derivatives designated as hedging instruments:
Interest Rate Cap		Derivative, at fair value	$	-

Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance

Three Months Ended					Nine Months Ended
	September 30, 2012		September 30, 2011			September 30, 2012			September 30, 2011
Amount of gain (loss) recognized in accumulated other comprehensive income on interest rate derivatives (effective portion)	$	-	$	-		$	(13	)	$	-
Amount of gain (loss) reclassified from accumulated other comprehensive income into income as interest expense (effective portion)	$	-	$	-		$	-		$	-
Amount of gain (loss) recognized in income on derivative instruments (ineffective portion and amounts excluded from effectiveness testing)	$	-	$	-		$	-		$	-

XML

Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2012

Fair Value of Financial Instruments [Abstract]

Fair Value, by Balance Sheet Grouping

	Level		Carrying Amount at September 30, 2012		Fair Value at September 30, 2012		Carrying Amount at December 31, 2011		Fair Value at December 31, 2011
Mortgage notes payable		3	$	35,760	$	35,794	$	30,260	$	30,626
Senior secured revolving credit facility		3	$	91,090	$	91,090	$	42,407	$	42,407

XML

Net Loss Per Share (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		9 Months Ended		12 Months Ended	9 Months Ended	1 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011	Sep. 30, 2012 Restricted Stock [Member]	May 31, 2012 Series A Preferred Stock [Member]
Earnings Per Share, Basic and Diluted, by Common Class, Including Two Class Method [Line Items]
Net loss from continuing operations attributable to stockholders	$ (763)	$ (625)	$ (3,034)	$ (641)	$ (1,759)
Less: dividends declared on Preferred shares	140	0	(210)
Net loss from continuing operations attributable to common stockholders	(903)	(625)	(3,244)	(641)
Loss from discontinued operations attributable to stockholders	(41)	(9)	(440)	(9)	(816)
Net loss attributable to common stockholders, net of distributions	$ (944)	$ (634)	$ (3,684)	$ (650)
Weighted average common shares outstanding	10,846,432	1,515,710	8,543,365	511,452
Basic and diluted net loss per share from continuing operations attributable to common stockholders	$ (0.08)	$ (0.41)	$ (0.38)	$ (1.25)	$ (0.86)
Basic and diluted net loss per share from discontinued operations attributable to stockholders	$ 0.0		$ (0.05)	$ (0.02)
Basic and diluted net loss per share attributable to common stockholders	$ (0.09)	$ (0.42)	$ (0.43)	$ (1.27)	$ (1.26)
Antidilutive securities excluded from computation of earnings per share			886,376			217,727
Shares Issued (in shares)							545,454

XML

Derivatives and Hedging Activities (Details) (Cash Flow Hedging [Member], Interest Rate Cap [Member], Interest Expense [Member], USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2012
Cash Flow Hedging [Member] | Interest Rate Cap [Member] | Interest Expense [Member]
Derivatives, Fair Value [Line Items]
Reclassification period from other comprehensive income as an increase to interest expense	12 months
Reclassified from other comprehensive income as an increase to interest expense	$ 13

XML

Related Party Transactions and Arrangements (Tables)

9 Months Ended

Sep. 30, 2012

Related Party Transactions and Arrangements [Abstract]

Schedule of selling commissions and Dealer Manager fees payable to Affiliate

Three Months Ended					Nine Months Ended
	September 30, 2012		September 30, 2011			September 30, 2012		September 30, 2011
Total commissions paid to affiliated Dealer Manager	$	-	$	919		$	-	$	919

Schedule of offering costs reimbursements and fees to related party

Three Months Ended					Nine Months Ended
	September 30, 2012		September 30, 2011			September 30, 2012		September 30, 2011
Offering expense reimbursements	$	59	$	-		$	109	$	-

Schedule of amount contractually due and forgiven in connection with operation related services

	Three Months Ended September 30, 2012					Three Months Ended September 30, 2011
		Incurred		Forgiven			Incurred		Forgiven
One-time fees:
Acquisition fees and related cost reimbursements		$	441	$	-		$	-	$	-
Financing fees and related cost reimbursements			369		-			-		-
Other expense reimbursements			45		-			-		-
On-going fees:
Base management fees			-		278			-		50
Incentive fees			-		-			-		-
Total operational fees and reimbursements		$	855	$	278		$	-	$	50

	Nine Months Ended September 30, 2012				Nine Months Ended September 30, 2011
	Incurred		Forgiven		Incurred		Forgiven
One-time fees:
Acquisition fees and related cost reimbursements	$	1,703	$	-	$	-	$	-
Financing fees and related cost reimbursements		583		-		-		-
Other expense reimbursements		71		-		-		-
On-going fees:
Base management fees		-		664		-		50
Incentive fees		-		-		-		-
Total operational fees and reimbursements	$	2,357	$	664	$	-	$	50

Schedule of general and administrative expenses absorbed by Affiliate

	Three months ended September 30, 2012			Nine months ended September 30, 2012
General and administrative expenses absorbed		$	-		$	164

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Share-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2012

Share-Based Compensation [Abstract]

Schedule of Share-based Compensation Activity

	Equity Plan					Director Stock Plan
	Number of Common Shares			Weighted-Average Issue Price		Number of Common Shares			Weighted-Average Issue Price
Unvested, December 31, 2011		167,400		$	12.50		9,000		$	12.50
Granted		93,683			10.65		9,000			10.65
Vested		(59,556	)		12.41		(1,800	)		12.50
Unvested, September 30, 2012		201,527		$	12.50		16,200		$	11.47

XML

Summary of Significant Accounting Policies

9 Months Ended

12 Months Ended

Sep. 30, 2012

Dec. 31, 2011

Summary of Significant Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Note 2 - Summary of Significant Accounting Policies

The consolidated financial statements of the Company included herein were prepared in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. 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. 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 Securities and Exchange Commission ("SEC") on March 19, 2012. There have been no significant changes to these policies during the nine months ended September 30, 2012, other than the updates described below.

Recent Accounting Pronouncements

In May 2011, the Financial Accounting Standards Board (the "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 ending 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 reporting periods ended 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 which contains new disclosure requirements regarding the nature of and entity's rights of offset and related arrangements associated with its financial instruments and derivative instruments. The new disclosures are designed to make financial statements prepared under U.S. GAAP more comparable to those prepared under International Financial Reporting Standards and will give the financial statement users information about both gross and net exposures. The guidance is effective for interim and annual reporting periods beginning on or after January 1, 2013. The adoption of this guidance 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 adoption of this guidance is not expected to have a material impact on the Company's financial position or results of operations.

Note 2 - Summary of Significant Accounting Policies

Basis of Accounting

The accompanying consolidated financial statements of the Company are prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP").

Principles of Consolidation and Basis of Presentation

The consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. In determining whether the Company has a controlling financial interest in a joint venture and the requirement to consolidate the accounts of that entity, management considers factors such as ownership interest, authority to make decisions and contractual and substantive participating rights of the other partners or members as well as whether the entity is a variable interest entity for which the Company is the primary beneficiary.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Management makes significant estimates regarding revenue recognition, to record investments in real estate, and derivative financial instruments and hedging activities, as applicable.

Formation Transactions

Upon the effectiveness of the IPO, the Company acquired certain properties from affiliated entities of the Company. The contribution of the properties from affiliates in the initial formation of the Company was accounted for as a reorganization of entities under common control and therefore all assets and liabilities related to the contributed properties were accounted for on the carryover basis of accounting whereby the real estate investments were contributed at amortized cost and all assets and liabilities of the predecessor entities became assets and liabilities of the Company.

Real Estate Investments

The Company records acquired real estate at cost and makes assessments as to the useful lives of depreciable assets. The Company considers the period of future benefit of the asset to determine the appropriate useful lives. Depreciation is computed using a straight-line method over the estimated useful life of 40 years for buildings, five to 15 years for building fixtures and improvements and the remaining lease term for acquired intangible lease assets.

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.

When circumstances indicate the carrying value of a property may not be recoverable, the Company reviews 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 for 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 assets. These assessments have a direct impact on net income because recording an unrealized impairment results in an immediate negative adjustment to net income. At December 31, 2011, the Company had two vacant properties classified as properties held for sale. See Note 13 - Discontinued Operations and Properties Held for Sale. Impairment of $0.8 million was recorded on these properties for the year ended December 31, 2011, to mark the assets to their aggregate fair value of $1.8 million.

Allocation of Purchase Price of Acquired Assets

The Company allocates the purchase price of acquired properties to tangible and identifiable intangible assets acquired based on their respective fair values. Tangible assets include land, buildings, equipment and tenant improvements on an as-if vacant basis. The Company utilizes 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. 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.

Amounts allocated to land, buildings, equipment and fixtures are based on cost segregation studies performed by independent third-parties or on the Company's analysis of comparable properties in its portfolio. Depreciation is computed using the straight-line method over the estimated lives of forty years for buildings, five to ten years for building equipment and fixtures, and the shorter of the useful life or the remaining lease term for tenant improvements.

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 the Company in its analysis of the 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, the Company includes real estate taxes, insurance and other operating expenses and estimates of lost rentals at market rates during the expected lease-up period, which typically ranges from six to 18 months. The Company also estimates costs to execute similar leases 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 leases and management's estimate of fair market lease rates for the corresponding in-place leases, 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 will be 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, the Company initially will 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 intangibles assets related to customer relationship is measured based on the Company's evaluation of the specific characteristics of each tenant's lease and the Company's overall relationship with the tenant. Characteristics considered by the company in determining these values include the nature and extent of the Company's existing business relationships 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 leases, which range primarily from 2 to 20 years. The value of customer relationship intangibles is amortized to expense over the initial term and any renewal periods in the respective leases, but in no event does the amortization period for intangible assets exceed the remaining depreciable life of the 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, The Company utilizes 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. The Company also considers 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. The allocations presented in the accompanying consolidated balance sheets are substantially complete; however, there are certain items that the Company will finalize once the Company receives additional information. Accordingly, these allocations are subject to revision when final information is available, although the Company does not expect future revisions to have a significant impact on the Company's financial position or results of operations.

Intangible assets consist of the following as of December 31, 2011. The Company had no intangible assets at December 31, 2010 (amounts in thousands):

Intangible lease assets:
In-place leases, gross	$	11,044
Accumulated amortization on in-place leases		(3,197	)
In-place leases, net of accumulated amortization	$	7,847

The following table provides the weighted-average amortization period as of December 31, 2011 for intangible assets and the projected amortization expense for the next five years (amounts in thousands):

	Weighted-Average Amortization Period in Years		2012		2013		2014		2015		2016
In-place leases:
Total to be included in depreciation and amortization expense		10.6	$	937	$	943	$	917	$	860	$	725

Cash and Cash Equivalents

Cash and cash equivalents include cash in bank accounts as well as investments in highly-liquid money market funds with original maturities of three months or less.

The Company deposits cash with high quality financial institutions. These deposits are guaranteed by the Federal Deposit Insurance Company ("FDIC") up to an insurance limit. At December 31, 2011 the company had deposits of $3.1 million of which $2.7 million were in excess of the amount insured by the FDIC. Although the Company bears risk to amounts in excess of those insured by the FDIC, it does not anticipate any losses as a result.

Deferred Costs, Net

Deferred costs, net consists of deferred financing costs net of accumulated amortization, deferred leasing costs net of accumulated amortization and deferred offering costs.

Deferred financing costs represent commitment fees, legal fees, and other costs associated with obtaining commitments for financing. These costs are amortized over the terms of the respective financing agreements using the effective interest method. Unamortized deferred financing costs are expensed when the associated debt is refinanced or repaid before maturity. Costs incurred in seeking financial transactions that do not close are expensed in the period in which it is determined the financing will not close. At December 31, 2011, the Company had $2.5 million of deferred financing costs net of accumulated amortization. The Company had no deferred financing costs at December 31, 2010.

Deferred leasing costs, consisting primarily of lease commissions and payments made to assume existing leases, are deferred and amortized over the term of the lease. At December 31, 2011, the Company had $0.3 million of deferred leasing costs. The Company had no deferred leasing costs at December 31, 2010.

Deferred offering costs represent professional fees, fees paid to various regulatory agencies, and other costs incurred in connection with registering to sell shares of the Company's common stock. As of December 31, 2010, deferred offering costs relating to the IPO totaled $0.3 million. On September 6, 2011, the day the Company closed its IPO, the deferred offering costs relating to the IPO were reclassified to stockholders' equity. As of December 31, 2011, the Company had no deferred offering costs.

Derivative Instruments

The Company may use derivative financial instruments to hedge all or a portion of the interest rate risk associated with its 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 the Company's operating and financial structure as well as to hedge specific anticipated transactions.

The Company records 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 the Company has 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. The Company may enter into derivative contracts that are intended to economically hedge certain of its risk, even though hedge accounting does not apply or the Company elects not to apply hedge accounting.

The accounting for subsequent changes in the fair value of these derivatives depends on whether each has been designed and qualifies for hedge accounting treatment. If the Company elects not to apply hedge accounting treatment, any changes in the fair value of these derivative instruments is recognized immediately in gains (losses) on derivative instruments in the consolidated statement of operations. If the derivative is designated and qualifies for hedge accounting treatment the change in the estimated fair value of the derivative is recorded in other comprehensive income (loss) to the extent that it is effective. Any ineffective portion of a derivative's change in fair value will be immediately recognized in earnings.

Revenue Recognition

Upon the acquisition of real estate, certain properties will have leases where minimum rent payments increase during the term of the lease. The Company will record rental revenue for the full term of each lease on a straight-line basis. When the Company acquires 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.

The Company's 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 of the leases provide for rental increases at specified intervals, straight-line basis accounting requires the Company to record a receivable, and include in revenues, unbilled rent receivables that the Company will only receive if the tenant makes all rent payments required through the expiration of the initial term of the lease. The Company defers the revenue related to lease payments received from tenants in advance of their due dates.

The Company continually reviews receivables related to rent and unbilled rent receivables and determines 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. In the event that the collectability of a receivable is in doubt, the Company will record an increase in the allowance for uncollectible accounts or record a direct write-off of the receivable in the consolidated statements of operations.

Organization, Offering, and Related Costs

Organization, offering and related costs include costs incurred in connection with the Company's issuance of common stock. These costs include, but are not limited to, (i) legal, accounting, printing, mailing and filing fees; (ii) escrow related fees, and (iii) reimbursement to the Dealer Manager for amount they paid to reimburse the bonified due diligence expenses of broker-dealers.

Share-Based Compensation

The Company has a stock-based incentive award plan for its affiliated Manager, non-executive directors, officers, other employees and independent contractors who are providing services to the company as applicable, and a non-executive director restricted share plan, which are accounted for under the guidance for share based payments. The expense for such awards is included in general and administrative expenses is recognized over the vesting period or when the requirements for exercise of the award have been met. See Note 11 - Share-Based Compensation for additional information on these plans.

Income Taxes

The Company elected to be qualified to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code commencing with the taxable year ended December 31, 2011. If the Company qualifies for taxation as a REIT as anticipated, it generally will not be subject to federal corporate income tax to the extent it distributes its REIT taxable income to its stockholders, and so long as it distributes at least 90% of its REIT taxable income. REITs are subject to a number of other organizational and operational requirements. Even if the Company qualifies for taxation as a REIT, it may be subject to certain state and local taxes on its income and property, and federal income and excise taxes on its undistributed income.

Per Share Data

Income (loss) per basic share of common stock is calculated by dividing net income (loss) less dividends on unvested restricted stock by the weighted-average number of shares of common stock issued and outstanding during such period. Diluted income (loss) per share of common stock considers the effect of potentially dilutive shares of common stock outstanding during the period.

Reportable Segments

The Company has determined that it has one reportable segment, with activities related to investing in real estate. The Company's investments in real estate generate rental revenue and other income through the leasing of properties, which comprised 100% of its total consolidated revenues. Although the Company's investments in real estate will be geographically diversified throughout the United States, management evaluates operating performance on an individual property level. The Company's properties have been aggregated into one reportable segment.

In May 2011, the Financial Accounting Standards Board (the "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 will be applied prospectively and will be effective for interim and annual reporting periods ending after December 15, 2011. The adoption of this guidance is not expected to 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. The guidance will be applied prospectively and will be effective for interim and annual reporting periods ending after December 15, 2011. 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. The adoption of this guidance is not expected to have a material impact on the Company's financial position or results of operations but will change 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 which modifies the requirements for testing for goodwill impairment, and gives entities the option to perform a qualitative assessment of goodwill before calculating the fair value of a reporting unit. If the entities determine based on the qualitative assessment that the fair value of a reporting unit is more likely than not less than the carrying value then further impairment tests would be required. Otherwise, further testing would not be needed. The guidance is effective for annual impairment tests for fiscal periods beginning after December 15, 2011. The adoption of this guidance is not expected to have a material impact on the Company's financial position or results of operations.

In December 2011, the FASB issued guidance which contains new disclosure requirements regarding the nature of and entity's rights of offset and related arrangements associated with its financial instruments and derivative instruments. The new disclosures are designed to make financial statements prepared under U.S. GAAP more comparable to those prepared under International Financial Reporting Standards and will give the financial statement users information about both gross and net exposures. The guidance is effective for interim and annual reporting periods beginning on or after January 1, 2013. The adoption of this guidance is not expected to have a material impact on the Company's financial position or results of operations.

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Net Loss Per Share (Tables)

9 Months Ended

Sep. 30, 2012

Net Loss Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Net loss from continuing operations attributable to stockholders	$	(763	)	$	(625	)	$	(3,034	)	$	(641	)
Less: dividends declared on preferred shares		(140	)		-			(210	)
Net loss from continuing operations attributable to common stockholders		(903	)		(625	)		(3,244	)		(641	)
Net loss from discontinued operations attributable to stockholders		(41	)		(9	)		(440	)		(9	)
Net loss attributable to common stockholders, net of dividends on preferred shares	$	(944	)	$	(634	)	$	(3,684	)	$	(650	)
Weighted average common shares outstanding		10,846,432			1,515,710			8,543,365			511,452
Basic and diluted net loss per share from continuing operations attributable to common stockholders	$	(0.08	)	$	(0.41	)	$	(0.38	)	$	(1.25	)
Basic and diluted net loss per share from discontinued operations attributable to stockholders	$	-		$	(0.01	)	$	(0.05	)	$	(0.02	)
Basic and diluted net loss per share attributable to common stockholders	$	(0.09	)	$	(0.42	)	$	(0.43	)	$	(1.27	)

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Senior Secured Revolving Credit Facility (Details) (USD $) In Thousands, unless otherwise specified	0 Months Ended	4 Months Ended	9 Months Ended
	Sep. 07, 2011	Dec. 31, 2011	Sep. 30, 2012
Line of Credit Facility [Line Items]
Long-term Line of Credit		$ 42,407	$ 91,090
Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Maximum capacity on credit facility	150,000
Term of credit facility	36 months
Debt, fair value		42,400	91,100
Interest rate during period		3.17%	2.70%
Properties collateralized, in properties		59	95
Credit facility, remaining borrowing capacity			18,900
Revolving Credit Facility [Member] | LIBOR [Member] | Minimum [Member]
Line of Credit Facility [Line Items]
Spread on variable rate basis	2.15%
Revolving Credit Facility [Member] | LIBOR [Member] | Maximum [Member]
Line of Credit Facility [Line Items]
Spread on variable rate basis	2.90%
Revolving Credit Facility [Member] | Option 1 [Member]
Line of Credit Facility [Line Items]
Unused capacity commitment fee percentage threshold	50.00%
Revolving Credit Facility [Member] | Option 2 [Member]
Line of Credit Facility [Line Items]
Unused capacity commitment fee percentage threshold	50.00%
Letter of Credit [Member] | Minimum [Member]
Line of Credit Facility [Line Items]
Maximum capacity on credit facility	$ 10,000
RBS Citizens, N.A. [Member] | Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Line of credit, length of extension option	24 years
Above Threshold [Member] | Revolving Credit Facility [Member] | Option 1 [Member]
Line of Credit Facility [Line Items]
Unused capacity commitment fee percentage threshold	0.15%
Below Threshold [Member] | Revolving Credit Facility [Member] | Option 2 [Member]
Line of Credit Facility [Line Items]
Unused capacity commitment fee percentage threshold	0.25%

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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	12 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Dec. 31, 2011
Paid [Member] | Total operation fees and reimbursements [Member]
Related Party Transaction [Line Items]
Related party operation fees and reimbursements	$ 855	$ 0	$ 2,357	$ 0
Paid [Member] | One-time Fees [Member] | Acquisition fees and related expenses [Member]
Related Party Transaction [Line Items]
Related party operation fees and reimbursements	441	0	1,703	0
Paid [Member] | One-time Fees [Member] | Financing fees and related cost reimbursements [Member]
Related Party Transaction [Line Items]
Related party operation fees and reimbursements	369	0	583	0
Paid [Member] | One-time Fees [Member] | Other expense reimbursements [Member]
Related Party Transaction [Line Items]
Related party operation fees and reimbursements	45	0	71	0
Paid [Member] | On-going Fees [Member] | Base management fees [Member]
Related Party Transaction [Line Items]
Related party operation fees and reimbursements	0	0	0	0
Paid [Member] | On-going Fees [Member] | Incentive fees [Member]
Related Party Transaction [Line Items]
Related party operation fees and reimbursements	0	0	0	0
Forgiven [Member] | Total operation fees and reimbursements [Member]
Related Party Transaction [Line Items]
Related party operation fees and reimbursements	278	50	664	50
Forgiven [Member] | One-time Fees [Member] | Acquisition fees and related expenses [Member]
Related Party Transaction [Line Items]
Related party operation fees and reimbursements	0	0	0	0
Forgiven [Member] | One-time Fees [Member] | Financing fees and related cost reimbursements [Member]
Related Party Transaction [Line Items]
Related party operation fees and reimbursements	0	0	0	0
Forgiven [Member] | One-time Fees [Member] | Other expense reimbursements [Member]
Related Party Transaction [Line Items]
Related party operation fees and reimbursements	0	0	0	0
Forgiven [Member] | On-going Fees [Member] | Base management fees [Member]
Related Party Transaction [Line Items]
Related party operation fees and reimbursements	278	50	664	50
Forgiven [Member] | On-going Fees [Member] | Incentive fees [Member]
Related Party Transaction [Line Items]
Related party operation fees and reimbursements	$ 0	$ 0	$ 0	$ 0

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CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Real estate investments, at cost:
Land	$ 28,717	$ 18,489
Buildings, fixtures and improvements	182,700	107,340
Acquired intangible lease assets	24,306	11,044
Total real estate investments, at cost	235,723	136,873
Less: accumulated depreciation and amortization	(20,954)	(14,841)
Total real estate investments, net	214,769	122,032
Cash and cash equivalents	3,779	3,148
Prepaid expenses and other assets	3,015	1,798
Deferred costs, net	4,204	2,785
Assets held for sale, net	812	1,818
Total assets	226,579	131,581
LIABILITIES AND EQUITY
Mortgage notes payable	35,760	30,260
Senior secured revolving credit facility	91,090	42,407
Accounts payable and accrued expenses	1,276	858
Deferred rent	803	724
Total liabilities	128,929	74,249
Common stock, $0.01 par value, 240,000,000 shares authorized, 7,323,434 shares issued and outstanding at March 31, 2012 and December 31, 2011, respectively	112	73
Additional paid-in capital	101,325	57,582
Accumulated other comprehensive loss	(13)
Accumulated deficit	(13,295)	(4,025)
Total stockholders' equity	88,137	53,630
Non-controlling interest	9,513	3,702
Total equity	97,650	57,332
Total liabilities and equity	226,579	131,581
Series A Preferred Stock [Member]
LIABILITIES AND EQUITY
Convertible Preferred Stock	5
Series B Preferred Stock [Member]
LIABILITIES AND EQUITY
Convertible Preferred Stock	$ 3

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Derivatives and Hedging Activities (Schedule of Interest Rate Derivatives) (Details) (Cash Flow Hedging [Member], Designated as Hedging Instrument [Member], Interest Rate Cap [Member], USD $) In Thousands, unless otherwise specified	Sep. 30, 2012
Cash Flow Hedging [Member] | Designated as Hedging Instrument [Member] | Interest Rate Cap [Member]
Derivative [Line Items]
Number of Instruments	1
Notional Amount	$ 50,000

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CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	9 Months Ended		12 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011
Cash flows from operating activities:
Net loss	$ (3,639)	$ (685)	$ (2,680)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation	4,875	351	1,465
Amortization of intangible lease assets	1,217	21	159
Amortization of deferred costs	530	30	195
Amortization of above-market lease asset	56
Loss on held for sale porperties	452		815
Share based compensation	792	2	182
Changes in assets and liabilities:
Prepaid expenses and other assets	(1,087)	(48)	(314)
Accounts payable and accrued expenses	142	(115)	374
Deferred rent	79	687	724
Net cash provided by operating activities	3,417	243	920
Cash flows from investing activities:
Investments in real estate	(92,498)		(17,528)
Proceeds from sale of property held for sale	553
Net cash used in investing activities	(91,945)		(17,528)
Cash flows from financing activities:
Proceeds from mortgage notes payable	5,500		16,410
Proceeds from senior secured revolving credit facility	48,793		2,066
Payments on senior secured revolving credit facility	(110)		(11,159)
Proceeds from issuances of preferred shares	9,000
Proceeds from issuances of common stock	34,935	5,237	21,766
Payments of offering costs and fees related to stock issuances	(672)	(3,912)	(5,346)
Payments of deferred financing costs	(1,949)	(1,016)	(2,464)
Advance from affiliate bridge loan	796
Payment of affiliate bridge loan	(796)
Proceeds from affiliates	(164)	278
Premium payment on interest rate cap	(13)
Distributions to non-controlling interest holders	(376)		(68)
Distributions paid	(5,785)		(1,449)
Net cash provided by financing activities	89,159	587	19,756
Net change in cash and cash equivalents	631	830	3,148
Cash and cash equivalents, beginning of period	3,148
Cash and cash equivalents, end of period	3,779	830	3,148
Supplemental Disclosures:
Cash paid for interest	2,301		590
Cash paid for income taxes	64
Non-cash investing and financing activities:
OP units issued to acquire real estate investments	6,352
Initial proceeds from senior secured revolving credit facility used to pay down mortgages assumed in Formation Transactions			51,500
Mortgage note payable contributed in Formation Transactions			$ 13,850

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Real Estate Investments (Assets And Liabilities Assumed) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended		12 Months Ended	9 Months Ended	12 Months Ended							9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011	Sep. 30, 2012 In-Place Leases [Member]	Jul. 03, 2013 Property in Havertown, PA [Member]	Sep. 30, 2012 Contributor [Member] ARC Real Estate Partners, LLC [Member]	Sep. 30, 2012 Occupied [Member]	Sep. 30, 2012 Vacant [Member]	Dec. 31, 2011 Vacant [Member]	Sep. 30, 2012 Vacant [Member] Real Estate [Member]	Dec. 31, 2011 Vacant [Member] Real Estate [Member]	Sep. 30, 2012 Building [Member]	Sep. 30, 2012 Furniture and Fixtures [Member]	Sep. 30, 2012 Building Improvements [Member]
Real Estate Properties [Line Items]
Land	$ 10,228
Buildings, fixtures and improvements	75,360
Total tangible assets	85,588
Acquired Intangibles				13,262
Purchase proce of acquired real estate investments	98,850
OP units issued to acquire real estate investments	(6,352)
Cash paid for acquired real estate investments	92,498		17,528
Number of real estate properties purchased, in properties	36
Number of properties contributed by affiliate, in properties						63
Number of Real Estate Properties							125	1	2	1	2
Business Acquisition, Pending Purchase Price Allocation	8,000											5,100	1,100	1,800
Proceeds from sale of property held for sale	$ 553				$ 600

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Discontinued Operations and Properties Held for Sale

9 Months Ended

Sep. 30, 2012

Discontinued Operations and Properties Held for Sale [Abstract]

Discontinued Operations and Properties Held for Sale

Note 15 - Discontinued Operations and Properties Held for Sale

The Company separately classifies properties held for sale in the accompanying consolidated balance sheets and operating results for those properties as discontinued operations in the accompanying consolidated statements of operations. In the normal course of business, changes in the market may compel the Company to decide to classify a property as held for sale or reclassify a property that is designated as held for sale back to held for investment. In these situations, the property is transferred to held for sale or back to held for investment at the lesser of fair value or depreciated cost. As of September 30, 2012 and December 31, 2011, the Company held one and two vacant properties, respectively, which were classified as held for sale on the accompanying respective balance sheets.

The Company sold one held for sale property during the three months ended September 30, 2012. See Note 3 - Real Estate Investments.

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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	Dec. 31, 2011	Sep. 30, 2012 Home Depot [Member] sqft	Sep. 30, 2012 Citizens Bank [Member] sqft	Sep. 30, 2012 Community Bank [Member] sqft	Sep. 30, 2012 Dollar General I [Member] sqft	Sep. 30, 2012 Advance Auto [Member] sqft	Sep. 30, 2012 Walgreens I [Member] sqft	Sep. 30, 2012 Portfolio as of Dec. 31, 2011 [Member] sqft	Sep. 30, 2012 GSA I [Member] sqft	Sep. 30, 2012 Walgreens II [Member] sqft	Sep. 30, 2012 FedEx [Member] sqft	Sep. 30, 2012 John Deere [Member] sqft	Sep. 30, 2012 GSA II [Member] sqft	Sep. 30, 2012 GSA III [Member] sqft	Sep. 30, 2012 Tractor Supply [Member] sqft	Sep. 30, 2012 GSA IV [Member] sqft	Sep. 30, 2012 Dollar General, Two [Member] sqft	Sep. 30, 2012 GSA, Five [Member] sqft	Sep. 30, 2012 Mrs. Baird's [Member] sqft	Sep. 30, 2012 Reckitt Benckiser [Member] sqft	Sep. 30, 2012 CVS I [Member] sqft	Sep. 30, 2012 Iron Mountian [Member] sqft	Sep. 30, 2012 2012 Acquisitons [Member] sqft	Sep. 30, 2012 Portfolio as of September 30, 2012 [Member] sqft	Sep. 30, 2012 Occupied [Member]
Real Estate Properties [Line Items]
Occupancy Rate	100.00%
Number of Real Estate Properties			1	59	1	20	6	1	88	1	1	6	1	1	1	1	1	16	1	1	1	3	1	36	124	125
Square Feet			465,600	291,920	4,410	177,668	42,000	14,414	996,012	12,009	15,120	92,935	552,960	18,640	39,468	38,507	22,509	134,102	11,281	75,050	32,000	31,620	126,664	1,202,865	2,198,877
Remaining Lease Term			17 years 2 months 12 days	5 years 4 months 24 days	3 years 9 months 18 days	6 years 10 months 24 days	7 years 1 month 6 days	9 years	8 years 2 months 12 days	6 years 4 months 24 days	6 years 3 months 18 days	4 years 2 months 12 days	5 years 3 months 18 days	6 years	4 years 7 months 6 days	6 years 1 month 6 days	6 years	5 years 1 month 6 days	4 years 4 months 24 days	4 years 8 months 12 days	5 years 7 months 6 days	4 years 8 months 12 days	5 years 3 months 18 days	5 years 2 months	6 years 9 months 18 days
Base Purchase Price	$ 235,723	$ 136,873	$ 23,398	$ 95,241	$ 705	$ 9,981	$ 5,122	$ 2,426	$ 136,873	$ 4,850	$ 3,778	$ 12,207	$ 26,126	$ 5,835	$ 6,350	$ 1,921	$ 3,890	$ 5,993	$ 2,200	$ 6,213	$ 10,000	$ 4,855	$ 4,632	$ 98,850	$ 235,723
Capitalization Rate			9.70%	7.10%	5.10%	9.70%	8.90%	10.10%	7.80%	8.20%	9.20%	9.00%	9.00%	11.10%	9.50%	9.50%	11.00%	10.70%	9.90%	10.20%	9.60%	9.90%	9.60%	9.50%	8.50%
Annualized Rental Income or Annualized Net Operating Income			$ 2,258	$ 6,726	$ 36	$ 965	$ 457	$ 245	$ 10,687	$ 396	$ 346	$ 1,099	$ 2,353	$ 647	$ 604	$ 183	$ 428	$ 642	$ 217	$ 631	$ 964	$ 481	$ 443	$ 9,434	$ 20,121
Annualized Rental Income/NOI per Square Foot			4.85	23.04	8.16	5.43	10.88	17.0	10.73	32.98	22.88	11.83	4.26	34.71	15.3	4.75	19.01	4.79	19.24	8.4	30.13	15.21	3.5	7.84	9.15

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Subsequent Events

9 Months Ended

12 Months Ended

Sep. 30, 2012

Dec. 31, 2011

Subsequent Events [Abstract]

Subsequent Events

Note 16 - Subsequent Events

The Company has evaluated subsequent events through the filing of this Quarterly Report on Form 10-Q, and determined that there have been no events that have occurred that would require adjustments to our disclosures in the consolidated financial statements except for the transaction described below.

Completion of Acquisition of Assets

The following table presents certain information about the properties that the Company acquired from October 1, 2012 to October 26, 2012 (dollar amounts in thousands):

	No. of Buildings		Square Feet		Base Purchase Price(1)
Total Portfolio - September 30, 2012(2)		124		2,198,877	$	235,723
Acquisitions		2		14,985		2,258
Total portfolio - October 26, 2012(2)		126		2,213,862	$	237,981

(1) Contract purchase price, excluding acquisition and transaction related costs.

(2) Total portfolio excludes one vacant property contributed in September 2011 which was classified as held for sale at September 30, 2012. The aggregate square footage and original base purchase price of this contributed vacant property was 3,200 and $1.2 million, respectively.

Note 16 - Subsequent Events

The Company has evaluated subsequent events through the filing of this Form 10-K, and determined that there have been no events that have occurred that would require adjustments to our disclosures in the consolidated financial statements except for the following:

Completion of Acquisitions of Assets

The following table presents certain information about the properties that the Company acquired from January 1, 2012 to March 1, 2012 (dollar amounts in thousands):

	No. of Buildings		Square Feet		Base Purchase Price(1)
Total Portfolio - December 31, 2011(2)		88		996,012	$	136,872
Acquisitions		2		27,129		8,628
Total portfolio - March 1, 2012(2)		90		1,023,141	$	145,500

(1) Contract purchase price, excluding acquisition and transaction related costs.

(2) Total portfolio excludes 2 vacant properties contributed in September 2011 which were classified as held for sale at December 31, 2011. The aggregate square footage and base purchase price of these vacant properties was 6,800 and $2.9 million, respectively.

The acquisitions made subsequent to December 31, 2011 were made in the normal course of business and none were individually significant to the total portfolio.

Financings

In January 2012, the Company received proceeds of $7.2 million from advances on the senior secured revolving credit facility in order to finance 3 properties. As of March 1, 2012, there was $49.6 million outstanding on this facility.

In March 2012, RBS Citizens approved a request by the Company to add two one-year extensions to the senior secured revolving credit facility. Each extension will be subject to customary requirements, including written notice of intent, no defaults and payment of an extension fee.

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Organization

9 Months Ended

12 Months Ended

Sep. 30, 2012

Dec. 31, 2011

Organization [Abstract]

Organization

Note 1 - Organization

American Realty Capital Properties, Inc. (the "Company"), is a Maryland corporation incorporated on December 2, 2010 that qualified as a real estate investment trust for U.S. federal income tax purposes for the year ended December 31, 2011. On September 6, 2011, the Company completed its initial public offering (the "IPO") and sold a total of 5.6 million shares of common stock. The shares began trading on the NASDAQ Capital Market under the symbol "ARCP" on September 7, 2011. As of September 30, 2012, the Company had 11.2 million shares of common stock outstanding, including unvested restricted shares, and had received aggregate gross proceeds from common stock issuances of $118.9 million. In addition, as of September 30, 2012, the Company had received aggregate gross proceeds of $9.0 million from the issuance of convertible preferred stock.

On August 1, 2012, the Company filed a universal shelf registration statement and a resale registration statement with the U.S. Securities and Exchange Commission. Each registration statement became effective on August 17, 2012. The $500.0 million universal shelf registration statement, as amended, will enable the Company to grow its capital base over time while providing it flexibility to issue common stock, preferred stock, debt or equity-linked securities. As of September 30, 2012, no common stock, preferred stock, debt or equity-linked security has been issued under the universal shelf registration statement. The resale registration statement, as amended, registers the resale of up to 1,882,248 shares of common stock issued in connection with any future conversion of certain currently outstanding restricted shares, convertible preferred stock or limited partnership interests. As of September 30, 2012, no common stock has been issued under the resale registration statement.

The Company was formed to acquire and own single-tenant, freestanding commercial real estate primarily subject to medium-term net leases with high credit quality tenants. The Company considers properties that are net leased on a "medium-term basis" to mean properties originally leased long-term (ten years or longer) that currently have a primary remaining lease duration of generally three to eight years, on average.

Substantially all of the Company's business is conducted through ARC Properties Operating Partnership, L.P. (the "OP"), a Delaware limited partnership. The Company is the sole general partner and holder of 92.5% of the equity interest in the OP as of September 30, 2012. ARC Real Estate Partners, LLC (the "Contributor") and an unaffiliated investor are limited partners and owners of 2.6% and 4.9%, respectively, of the equity interest in the OP. After holding units of limited partner interests in the OP ("OP Units") for a period of one year, holders of OP Units have the right to convert OP Units for the cash value of a corresponding number of shares of the Company's common stock or, at the option of the OP, a corresponding number of shares of the Company's common stock, as allowed by the limited partnership agreement of the OP. The remaining rights of the holders of 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, which is externally managed with no employees, has retained ARC Properties Advisors, LLC (the "Manager"), a wholly owned subsidiary of AR Capital, LLC (the "Sponsor"), to manage its affairs on a day to day basis. These affiliated parties, including the Manager, the Sponsor and the Sponsor's wholly owned broker-dealer, Realty Capital Securities, LLC ("RCS" or the "Dealer Manager"), have received compensation and fees for services provided to the Company, and will continue to receive compensation and fees for providing on-going investment oversight, financing and management services to the Company, as applicable, in accordance with the terms of the respective agreements to which such affiliates are party.

Note 1 - Organization

American Realty Capital Properties, Inc. (the "Company"), incorporated on December 2, 2010, is a Maryland corporation that elected to be qualified as a real estate investment trust ("REIT") for U.S. federal income tax purposes for the taxable year ended December 31, 2011. On July 7, 2011, the Company commenced its initial public offering (the "IPO") on a "reasonable best efforts" basis, through its co-dealer managers, Realty Capital Securities, LLC ("RCS" or the "affiliated Dealer Manager") and Ladenburg Thalmann & Co. Inc. (together, the "Dealer Managers"), pursuant to a registration statement on Form S-11 (File No. 333-172205) (the "Registration Statement") filed with the U.S. Securities and Exchange Commission (the "SEC") under the Securities Act of 1933, as amended. The IPO closed on September 6, 2011. The Company sold a total of 5.6 million shares of common stock for net proceeds of $66.0 million. The shares began trading on the NASDAQ Capital Market under the symbol "ARCP" on September 7, 2011.

On September 22, 2011, the Company filed a registration statement on Form S-11 (File No. 333-176952) to register an additional 1.3 million shares of common stock, which was subsequently increased to 1.5 million (plus up to an additional 0.2 million shares of common stock that the Company could issue and sell upon the exercise of the underwriters' over-allotment option) in connection with an underwritten follow-on offering (the "Follow-On Offering"). On November 2, 2011, the Company sold 1.5 million shares for net proceeds of $14.4 million. In addition, the Company granted the underwriters a 30 day option to purchase an additional 0.2 million shares of common stock at the original offering price, less underwriting discounts and commissions. On November 2, 2011, the underwriters exercised their option to purchase an additional 0.1 million shares, which closed on November 7, 2011 for net proceeds of $0.7 million.

The Company was formed to primarily own and acquire single-tenant, freestanding commercial real estate that is net leased on a medium-term basis, primarily to investment grade credit rated and other creditworthy tenants. The Company considers properties that are net leased on a "medium-term basis," to mean properties originally leased long-term (ten years or longer) that currently have net leases with remaining lease terms of generally three to eight years, on average.

Substantially all of the Company's business is conducted through ARC Properties Operating Partnership, L.P. (the "OP"), a Delaware limited partnership. The Company is the sole general partner and holder of 95.9% of the interest in the OP. ARC Real Estate Partners, LLC (the "Contributor") is the sole limited partner and owner of 4.1% of the interest in the OP. After holding units of limited partner interests ("OP Units") for a period of one year, holders of OP Units have the right to convert OP Units for the cash value of a corresponding number of shares of the Company's common stock or, at the option of the OP, a corresponding number of shares of the Company's common stock, as allowed by the limited partnership agreement. The remaining rights of the holders of 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 has retained ARC Properties Advisors, LLC (the "Manager"), a wholly owned subsidiary of AR Capital, LLC (formerly American Realty Capital II, LLC) (the "Sponsor"), to manage its affairs on a day to day basis. These affiliated parties, as well as RCS, have received compensation for services provided to the Company, and will continue to receive compensation for providing on-going investment oversight and management of the Company.

Formation Transactions

At the completion of the IPO, the Contributor, an affiliate of the Sponsor, contributed to the OP its indirect ownership interests in certain assets of ARC Income Properties, LLC and ARC Income Properties III, LLC (the "Contributed Companies"). Assets contributed included (1) 59 properties that are presently leased to RBS Citizens Bank, N.A. and Citizens Bank of Pennsylvania, or collectively, Citizens Bank, one property presently leased to Community Bank, N.A, or Community Bank, and one property leased to Home Depot U.S.A., Inc., or Home Depot, and (2) two vacant properties. Additionally, the OP assumed certain liabilities of

the Contributed Companies, including $30.6 million of unsecured notes payable and $96.2 million of mortgage notes secured by the contributed properties.

Because the contribution was from an affiliate of the Sponsor and deemed to be a transaction between entities under common control, the assets and liabilities were recorded by the Company at the Contributor's carrying amount, or book value, at the time of the contribution. The assets and liabilities of the Contributed Companies are summarized as follows (amounts in thousands):

Assets and liabilities of Contributed Companies, at carryover basis:
Real estate investments, net of accumulated depreciation and amortization of $13,453	$	108,759
Other assets		2,402
Notes payable(1)		(30,626	)
Mortgage notes payable(2)		(96,472	)
Other liabilities		(834	)
Net assets (liabilities) of Contributed Companies	$	(16,771	)

(1) Notes payable were repaid from the proceeds of the IPO concurrently with closing.

(2) $82.6 million of mortgage notes payable were refinanced with a new $51.5 million revolving credit facility and the remaining balance was repaid from the proceeds of the IPO concurrently with closing of the IPO.

In exchange for the net assets of the Contributed Companies, the Contributor received 310,000 OP Units, which represents a non-controlling interest in the OP. After holding the OP Units for a period of one year, the Contributor 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, as allowed by the limited partnership agreement of the OP. As of December 31, 2011, the Contributor's 310,000 OP Units represented a 4.1% interest in the OP, based on 310,000 OP Units convertible to common stock as a percentage of the 7.6 million of total common shares outstanding on a fully diluted basis. For the year ended December 31, 2011, losses of approximately $0.1 million were allocated to the Contributor's non-controlling interest.

Concurrently with the completion of the IPO and contribution of the net assets of the Contributed Companies, the Company closed on a $150.0 million senior secured revolving credit facility. See Note 4 - Senior Secured Revolving Credit Facility. The Company refinanced mortgage notes payable of $82.6 million and repaid the unsecured notes payable of $30.6 million, along with interest and penalties of $0.4 million, owed by the Contributed Companies directly from net proceeds from the IPO and $51.5 million drawn from the senior secured revolving credit facility.

In addition, the Company has issued restricted stock to the Manager and non-executive directors in conjunction with share-based compensation plans. See Note 11 - Share-Based Compensation.

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CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Sep. 30, 2012	Dec. 31, 2011	Sep. 30, 2012 Series A Preferred Stock [Member]	Dec. 31, 2011 Series A Preferred Stock [Member]	Sep. 30, 2012 Series B Preferred Stock [Member]	Dec. 31, 2011 Series B Preferred Stock [Member]
Common stock, par value per share	$ 0.01	$ 0.01
Common stock, shares authorized	240,000,000	240,000,000
Common stock, shares issued	11,163,617	7,323,434
Common stock, shares outstanding	11,163,617	7,323,434
Convertible preferred stock, par value per share			$ 0.01	$ 0.01	$ 0.01	$ 0.01
Convertible preferred stock, shares authorized			545,454	0	283,018	0
Convertible preferred stock, shares issued			545,454	0	283,018	0
Convertible preferred stock, shares outstanding			545,454	0	283,018	0
Liquidation Preference Per Share			$ 11.0	$ 11.0	$ 10.6

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Related Party Transactions and Arrangements

9 Months Ended

12 Months Ended

Sep. 30, 2012

Dec. 31, 2011

Related Party Transactions and Arrangements [Abstract]

Related Party Transactions and Arrangements

Note 11 - Related Party Transactions and Arrangements

Common Stock Ownership

Certain affiliates of the Company have purchased shares of the Company's common stock. As of September 30, 2012 and December 31, 2011, certain affiliates owned 19.4% and 31.3%, respectively, of the Company's common stock outstanding on a fully diluted basis, including the Contributor's 310,000 OP Units owned by the Company's Sponsor.

The Company has issued restricted stock to the Manager and non-executive directors in conjunction with a share-based compensation plan. See Note 13 - Share-Based Compensation.

Fees Paid in Connection with the Offering

RCS received selling commissions of 6% of the gross offering proceeds from the sale of the Company's common stock in the IPO, which were entirely re-allowed to participating broker-dealers. In addition, RCS received dealer manager fees of 2% of the gross offering proceeds before reallowance to participating broker-dealers. RCS was permitted to re-allow all or a portion of its dealer manager fee to participating broker-dealers.

The following table details the results of such activities related to RCS (in thousands):

	Three Months Ended				Nine Months Ended
	September 30, 2012		September 30, 2011		September 30, 2012		September 30, 2011
Total commissions paid to affiliated Dealer Manager	$	-	$	919	$	-	$	919

The Company will reimburse the Manager for services relating to the IPO and the follow-on offerings. The following table details the results of such activities related to organizational and offering costs reimbursed to the Manager (amounts in thousands):

	Three Months Ended				Nine Months Ended
	September 30, 2012		September 30, 2011		September 30, 2012		September 30, 2011
Offering expense reimbursements	$	59	$	-	$	109	$	-

Fees Paid in Connection With the Operations of the Company

The Company will pay the Sponsor an acquisition fee equal to 1.0% of the contract purchase price (including assumed indebtedness) of each property the Company acquires which is originated by the Sponsor. The acquisition fee is payable in cash at the closing of each acquisition.

The Company will pay the Sponsor a financing fee equal to 0.75% of the amount available under any secured mortgage financing or refinancing that the Company obtains and uses for the acquisition of properties that is arranged by the Sponsor. The financing coordination fee is payable in cash at the closing of each financing.

The Company will pay the Manager an annual base management fee equal to 0.50% per annum of the average unadjusted book value of the Company's real estate assets, calculated and payable monthly in advance, provided that the full amount of the distributions declared by the Company for the six immediately preceding months is equal to or greater than certain net income thresholds related to our operations. Our Manager will waive such portion of its management fee in excess of such thresholds. The management fee is payable in cash. No such management fees have been incurred or paid to the Manager since inception.

The Company may be required to pay the Manager a quarterly incentive fee, calculated based on the Company's annualized earnings, weighted average number of shares and weighted average price per share of common stock. One half of each quarterly installment of the incentive fee will be payable in shares of common stock. The remainder of the incentive fee will be payable in cash. No such incentive fees have been incurred or paid to the Manager since inception.

The Company is required to reimburse the Sponsor for all out-of-pocket costs actually incurred by the Sponsor, including without limitation, legal fees and expenses, due diligence fees and expenses, other third party fees and expenses, costs of appraisals, travel expenses, nonrefundable option payments and deposits on properties not acquired, accounting fees and expenses, title insurance premiums and other closing costs, personnel costs and miscellaneous expenses relating to the selection, acquisition and due diligence of properties. The Company's reimbursement obligation is not subject to any dollar limitation. Expenses will be reimbursed in cash on a monthly basis following the end of each month. However, the Company will not reimburse the Sponsor for the salaries and other compensation of its personnel.

The following table details amounts incurred by the Company and contractually due to the Sponsor and the Manager and forgiven in connection with the operations related services described above (amounts in thousands):

	Three Months Ended September 30, 2012				Three Months Ended September 30, 2011
	Incurred		Forgiven		Incurred		Forgiven
One-time fees:
Acquisition fees and related cost reimbursements	$	441	$	-	$	-	$	-
Financing fees and related cost reimbursements		369		-		-		-
Other expense reimbursements		45		-		-		-
On-going fees:
Base management fees		-		278		-		50
Incentive fees		-		-		-		-
Total operational fees and reimbursements	$	855	$	278	$	-	$	50

	Nine Months Ended September 30, 2012				Nine Months Ended September 30, 2011
	Incurred		Forgiven		Incurred		Forgiven
One-time fees:
Acquisition fees and related cost reimbursements	$	1,703	$	-	$	-	$	-
Financing fees and related cost reimbursements		583		-		-		-
Other expense reimbursements		71		-		-		-
On-going fees:
Base management fees		-		664		-		50
Incentive fees		-		-		-		-
Total operational fees and reimbursements	$	2,357	$	664	$	-	$	50

Under an administrative support agreement between the Company and the Sponsor, the Sponsor will pay or reimburse the Company for its general administrative expenses, including, without limitation, legal fees, audit fees, board of directors fees, insurance, marketing and investor relation fees, until September 6, 2012, which was one year after the closing of the IPO, to the extent the amount of certain net earnings from operations thresholds, as specified in the agreement, is less than the amount of the distributions declared by the Company during this one-year period. To the extent these amounts are paid by the Sponsor, they would

not be subject to reimbursement by the Company. These costs are presented net in the accompanying consolidated statements of operations and comprehensive loss.

The following table details general and administrative expenses absorbed by the Sponsor during the three and nine months ended September 30, 2012 (amounts in thousands).

	Three months ended September 30, 2012		Nine months ended September 30, 2012
General and administrative expenses absorbed	$	-	$	164

The Company had a receivable from affiliates of $0.2 million at September 30, 2012, related to absorbed general and administrative expenses.

Note 9 - Related Party Transactions and Arrangements

Common Stock Ownership

Certain affiliates of the Company have purchased shares of the Company's common stock. As of December 31, 2011, 31.3% of the shares of common stock outstanding on a fully diluted basis, including the Contributor's 310,000 OP Units that are convertible to common stock and the 167,400 restricted shares granted to the Manager, were purchased by or granted to affiliates of the Company. See Note 1 - Organization for more information on stock issued in the Formation Transactions.

The Company has issued restricted stock to the Manager and non-executive directors in conjunction with share-based compensation plans. See Note 11 - Share-Based Compensation.

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Document and Entity Information	9 Months Ended
	Sep. 30, 2012
Document And Entity Information Abstract
Document Type	8-K
Amendment Flag	false
Document Period End Date	Jan. 07, 2013
Entity Registrant Name	American Realty Capital Properties, Inc.
Entity Central Index Key	0001507385
Entity Filer Category	Non-accelerated Filer

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Economic Dependency

9 Months Ended

12 Months Ended

Sep. 30, 2012

Dec. 31, 2011

Economic Dependency Abstract

Economic Dependency

Note 12 - Economic Dependency

Under various agreements, the Company has engaged or will engage the Manager 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 in follow-on offerings, 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 Manager, the Sponsor and their affiliates. In the event that these companies were unable to provide the Company with the respective services, the Company would be required to find alternative providers of these services.

Note 10 - Economic Dependency

Under various agreements, the Company has engaged or will engage the Manager 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 in follow-on offerings, 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 Manager, the Sponsor and their affiliates. In the event that these companies were unable to provide the Company with the respective services, the Company would be required to find alternative providers of these services.

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CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011
Revenues:
Rental income	$ 4,791	$ 576	$ 10,997	$ 576	$ 3,022
Operating expense reimbursements	89		175		153
Total revenues	4,880	576	11,172	576	3,175
Operating expenses:
Acquisition and transaction related	819	604	3,297	604	1,875
Property operating	315		555		153
General and administrative	617	84	1,530	100	440
Depreciation and amortization	2,818	363	6,092	363	1,612
Total operating expenses	4,569	1,051	11,474	1,067	4,080
Operating income (loss)	311	(475)	(302)	(491)	(905)
Interest expense	(1,136)	(185)	(2,873)	(185)	(924)
Other income					1
Total other expenses					(923)
Loss from continuing operations	(825)	(660)	(3,175)	(676)	(1,828)
Net loss from continuing operations attributable to non-controlling interests	62	35	141	35	69
Net loss from continuing operations attributable to stockholders	(763)	(625)	(3,034)	(641)	(1,759)
Discontinued operations:
Loss from operations of held for sale properties	3	(9)	(12)	(9)	(37)
Loss on held for sale properties	(47)		(452)		(815)
Loss from discontinued operations	(44)	(9)	(464)	(9)	(852)
Loss from discontinued operations attributable to non-controlling interests	3		24		36
Loss from discontinued operations attributable to stockholders	(41)	(9)	(440)	(9)	(816)
Net loss	(869)	(669)	(3,639)	(685)	(2,680)
Net loss attributable to non-controlling interests	65	35	165	35	105
Net loss attributable to stockholders	(804)	(634)	(3,474)	(650)	(2,575)
Comprehensive loss			(13)
Comprehensive loss	$ (804)	$ (634)	$ (3,487)	$ (650)
Basic and diluted net loss per share from continuing operations attributable to common stockholders	$ (0.08)	$ (0.41)	$ (0.38)	$ (1.25)	$ (0.86)
Basic and diluted net loss per share attributable to common stockholders	$ (0.09)	$ (0.42)	$ (0.43)	$ (1.27)	$ (1.26)

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Fair Value of Financial Instruments

9 Months Ended

12 Months Ended

Sep. 30, 2012

Dec. 31, 2011

Fair Value of Financial Instruments [Abstract]

Fair Value of Financial Instruments

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. 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.

Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with those derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by the Company and its counterparties. However, as of September 30, 2012, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of the Company's derivatives. As a result, the Company has determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy.

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, due to affiliates and accounts payable approximate their carrying value on the accompanying consolidated balance sheets due to their short-term nature.

The fair values of the Company's financial instruments that are not reported at fair value on the consolidated balance sheet are reported below (amounts in thousands):

	Level		Carrying Amount at September 30, 2012		Fair Value at September 30, 2012		Carrying Amount at December 31, 2011		Fair Value at December 31, 2011
Mortgage notes payable		3	$	35,760	$	35,794	$	30,260	$	30,626
Senior secured revolving credit facility		3	$	91,090	$	91,090	$	42,407	$	42,407

The fair value of mortgage notes payable are obtained by calculating the present value at current market rates. The interest rate of the senior secured revolving credit facility is determined by a variable market rate and the Company's leverage ratio, and each have terms commensurate with market; as such the outstanding balance on the facility approximates fair value.

Note 6 - Fair Value of Financial Instruments

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, due to affiliates and accounts payable approximate their carrying value on the accompanying 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 accompanying consolidated balance sheets are reported below. There were no financial instruments which require fair value disclosure as of December 31, 2010 (amounts in thousands):

	Carrying Amount at December 31, 2011		Fair Value at December 31, 2011
Mortgage note payable	$	30,260	$	30,626
Senior secured revolving credit facility	$	42,407	$	42,407

The fair value of mortgage notes payable is estimated using a discounted cash flow analysis, based on the Manager's experience with similar types of borrowing arrangements. The interest rate of the senior secured revolving credit facility is determined by a variable market rate and the Company's leverage ratio, and has terms commensurate with the market; as such the outstanding balance on the facility approximates fair value.

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Mortgage Notes Payable

9 Months Ended

12 Months Ended

Sep. 30, 2012

Dec. 31, 2011

Mortgage Notes Payable [Abstract]

Mortgages Notes Payable

Note 5 - Mortgage Notes Payable

The Company's mortgage notes payable consist of the following as of September 30, 2012 and December 31, 2011 (dollar amounts in thousands):

	Encumbered Properties		Outstanding Loan Amount		Weighted Average Effective Interest Rate(1)			Weighted Average Maturity(2)
September 30, 2012		29	$	35,760		4.52	%		3.77
December 31, 2011		28	$	30,260		4.67	%		4.32

(1) Mortgage notes payable have fixed rates. Effective interest rates range from 3.68% to 5.32% at September 30, 2012 and 3.80% to 5.32% at December 31, 2011.

(2) Weighted average remaining years until maturity as of September 30, 2012 and December 31, 2011, respectively.

The following table summarizes the scheduled aggregate principal repayments subsequent to September 30, 2012 (amounts in thousands):

	Total
October 1, 2012 - December 31, 2012	$	-
2013		74
2014		189
2015		13,767
2016		11,760
Thereafter		9,970
Total	$	35,760

The Company's sources of recourse financing generally require 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 a minimum net worth. As of September 30, 2012, the Company was in compliance with the debt covenants under the mortgage loan agreements.

Note 5 - Mortgage Notes Payable

The Company's mortgage notes payable consist of the following as of December 31, 2011. The Company had no mortgage notes payable at December 31, 2010 (dollar amounts in thousands):

	Encumbered Properties		Outstanding Loan Amount		Weighted Average Effective Interest Rate(1)			Weighted Average Maturity(2)
December 31, 2011		28	$	30,260		4.67	%		4.32

(1) Mortgage notes payable have fixed rates. Effective interest rates range from 3.80% to 5.32% at December 31, 2011.

(2) Weighted average remaining years until maturity as of December 31, 2011.

The following table summarizes the scheduled aggregate principal repayments subsequent to December 31, 2011 (amounts in thousands):

Year	Total
2012	$	-
2013		88
2014		190
2015		13,752
2016		11,760
Thereafter		4,470
Total	$	30,260

The Company's sources of recourse financing generally require 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 a minimum net worth. As of December 31, 2011, the Company was in compliance with the debt covenants under the mortgage loan agreements.

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Pro Forma Consolidated Statement of Operations (Unaudited)

12 Months Ended

Dec. 31, 2011

Pro Forma Consolidated Statement of Operations [Abstract]

Pro Forma Consolidated Statement of Operations

Note 15 - Pro Forma Consolidated Statement of Operations (Unaudited)

The following pro forma Consolidated Statement of Operations for the year ended December 31, 2011 is presented as if the assets and liabilities of ARC Income Properties, LLC and ARC Income Properties III, LLC had been contributed to the Company as of January 1, 2011. This financial statement should be read in conjunction with the Company's historical financial statements and notes thereto. The pro forma Consolidated Statement of Operations is unaudited and is not necessarily indicative of what the actual results of operations

would have been had these entities been contributed to the Company as of January 1, 2011, nor does it purport to present the future results of operations of the Company (in thousands, except share and per share amounts):

	American Realty Capital Properties, Inc.(1)			ARC Income Properties, LLC(2)			ARC Income Properties III, LLC(3)			Pro Forma Adjustments(4)			Pro Forma(4)
Revenues:
Rental income	$	3,175		$	4,650		$	1,548		$	-		$	9,373
Total revenues		3,175			4,650			1,548						9,373
Operating expenses:
Management fee		-			-			-			300	(5)		300
Acquisition and transaction related		1,875			18						(1,893	)(6)		-
General and administrative		593			82			50			-	(7)		725
Depreciation and amortization		1,612			217			606						2,435
Total operating expenses		4,080			317			656						3,460
Operating income		(905	)		4,333			892						5,913
Interest expense		(924	)		(5,826	)		(2,115	)		6,082	(8)		(2,783	)
Other income		1			-			-						1
Total other expense		(923	)		(5,826	)		(2,115	)					(2,782	)
Net income (loss)		(1,828	)		(1,493	)		(1,223	)					3,131
Net income attributable to non-controlling interests from continuing operations		69			-			-			(243	)(9)		(174	)
Net loss attributable to stockholders from continuing operations		(1,759	)		(1,493	)		(1,223	)					2,957
Discontinued operations:
Loss from operations of held for sale properties		(37	)		(90	)		-						(127	)
Loss on held for sale properties		(815	)		-			-						(815	)
Loss from discontinued operations		(852	)		(90	)		-						(942	)
Loss from discontinued operations attributable to non-controlling interest		36			-			-						36
Loss from discontinued operations attributable to stockholders		(816	)		(90	)		-						(906	)
Net income attributable to American Realty Capital Properties, Inc.		(2,575	)		(1,583	)		(1,223	)					2,051
Per share data:
Weighted average shares outstanding														7,323,434
Earnings per share basic													$	0.40
Weighted average shares fully diluted														7,809,834
Earning per share fully diluted													$	0.38	(10)

(1) Reflects the historical Statement of Operations of American Realty Capital Properties, Inc. for the period indicated.

(2) Reflects the historical Statement of Operations of ARC Income Properties, LLC for the period indicated.

(3) Reflects the historical Statement of Operations of ARC Income Properties III, LLC for the period indicated.

(4) Adjustments and pro forma balances based on the 7.3 million shares of common stock outstanding at December 31, 2011.

(5) Represents management fee of the maximum of 0.50% of unadjusted book value of assets that may be charged by affiliated Manager. The determination of payment of fees to the Manager will be made on a periodic basis based on available cash flow.

(6) Represents the $ 1.9 million of one-time transaction costs incurred by the Company related to the transfer of ownership interests in the predecessor companies and transaction costs related to the purchase of property. These costs are mainly comprised of legal costs, settlement costs and professional fees.

(7) Excludes estimated general and administrative costs primarily for legal fees, audit fees, board of directors fees, insurance, marketing and investor relations fees related to operation as a public company, which are expected to have an ongoing effect on the results of operations of the Company, to be approximately $0.5 million per year, on an ongoing basis.

(8) Represents reversal of interest expense for long-term notes repaid at the closing of the IPO, reversal of interest expense on $82.6 million of mortgage debt which was refinanced by the Company, reversal of related deferred financing costs, amortization, an addition of estimated interest expense for $51.5 million drawn on the new $150.0 million senior secured revolving credit facility (See Note 4 - Senior Secured Revolving Credit Facility), and amortization of deferred financing costs for the new facility. The detail of these amounts are as follows (amounts in thousands):

	Period from December 2, 2010 (Date of Inception) to December 31, 2011
Reversal of interest expense for long-term notes	$	1,994
Reversal of interest expense for $82.6 million mortgage note		3,739
Reversal of deferred financing cost amortization on long-term notes and mortgage to be refinanced		1,677
Interest expense for $51.5 million draw on new senior secured credit facility		(1,086	)
Deferred financing amortization for new $150.0 million senior secured credit facility		(242	)
	$	6,082

(9) Represents the necessary adjustment to reflect value of 310,000 OP Units issued to the owner of the predecessor companies.

(10) Includes the effect of the conversion of 310,000 OP Units to common stock, the exercise of 167,400 unvested restricted shares of common stock issued to the Manager and 9,000 unvested restricted shares of common stock issued to non-executive directors at the closing of the IPO.

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Share-Based Compensation

9 Months Ended

12 Months Ended

Sep. 30, 2012

Dec. 31, 2011

Share-Based Compensation [Abstract]

Share-Based Compensation

Note 13 - Share-Based Compensation

Equity Plan

The Company has adopted the American Realty Capital Properties, Inc. Equity Plan (the "Equity Plan"), which provides for the grant of stock options, restricted shares of common stock, restricted stock units, dividend equivalent rights and other equity-based awards to the Manager, non-executive directors, officers and other employees and independent contractors, including employees or directors of the Manager and its affiliates who are providing services to the Company.

Under the Equity Plan, the Company's compensation committee is authorized to approve grants of equity-based awards to the Manager. Concurrently with the closing of the IPO, the Company granted to the Manager 167,400 restricted shares of common stock, which was equal to 3.0% of the number of shares of common stock sold through the IPO. This award of restricted shares vests ratably on a quarterly basis over a three -year period beginning on October 1, 2011. The Manager is entitled to receive "distribution equivalents" with respect to this restricted stock, whether or not vested, at the same time and in the same amounts as dividends are paid to the common stockholders, commencing on the first anniversary of the date of grant. The Manager will defer any distributions payable to it in connection with the restricted stock that it is granted under the Equity Plan until such time as the Company is covering the payment of distributions to the stockholders based on the criteria in the agreement, for the six immediately preceding months. In June 2012, the Company granted to the Manager an additional 93,683 restricted shares of common stock. In June 2012, the Manager distributed these 93,683 restricted shares of common stock to key personnel of an affiliate of the Manager. These restricted shares will vest annually over three years beginning in January 2013. In addition to these restricted stock grants, the Company may from time to time grant additional equity incentive awards to the Manager pursuant to the Equity Plan. The Manager may, in the future, allocate a portion of these awards or ownership or profits interests in it to officers or any other personnel of the Manager or other personnel of the Manager or its affiliates in order to provide incentive compensation to them. For the three and nine months ended September 30, 2012, compensation expense for restricted shares was $0.4 million and $0.7 million, respectively.

The Company authorized and reserved a total number of shares equal to 10.0% of the total number of issued and outstanding shares of common stock (on a fully diluted basis assuming the redemption of all OP Units for shares of common stock) to be issued at any time under the Equity Plan for equity incentive awards excluding the initial grant to the Manager. All such awards of shares will vest ratably on an annual basis over a three-year period beginning on the first anniversary of the date of grant and shall provide for "distribution equivalents" with respect to this restricted stock, whether or not vested, at the same time and in the same amounts as dividends are paid to the stockholders.

Director Stock Plan

Concurrently with the closing of the IPO, the Company granted 3,000 restricted shares of common stock to each of the Company's three independent directors, each of whom is a non-executive director, pursuant to the Director Stock Plan. Awards of restricted stock will vest ratably over a five-year period following the first anniversary of the date of grant in increments of 20.0% per annum, subject to the director's continued service on the Board of Directors, and shall provide for "distribution equivalents" with respect to this restricted stock, whether or not vested, at the same time and in the same amounts as distributions are paid to the stockholders. At September 30, 2012, a total of 99,000 shares of common stock are reserved for issuance under the Director Stock Plan. As of September 30, 2012 and 2011, there were 16,200 and 9,000 unvested restricted shares (the "Directors' shares"), respectively, issued to independent directors under the Director Stock Plan. For the three and nine months ended September 30, 2012 and 2011, respectively, compensation expense for the vesting of Directors' shares was immaterial.

The following table details the restricted shares activity within the Equity Plan and Director Stock Plan during the nine months ended September 30, 2012:

	Equity Plan					Director Stock Plan
	Number of Common Shares			Weighted-Average Issue Price		Number of Common Shares			Weighted-Average Issue Price
Unvested, December 31, 2011		167,400		$	12.50		9,000		$	12.50
Granted		93,683			10.65		9,000			10.65
Vested		(59,556	)		12.41		(1,800	)		12.50
Unvested, September 30, 2012		201,527		$	12.50		16,200		$	11.47

Note 11 - Share-Based Compensation

Equity Plan

The Company has adopted the American Realty Capital Properties, Inc. Equity Plan (the "Equity Plan"), which provides for the grant of stock options, restricted shares of common stock, restricted stock units, dividend equivalent rights and other equity-based awards to the Manager, non-executive directors, officers and other employees and independent contractors, including employees or directors of the Manager and its affiliates who are providing services to the Company.

Under the Equity Plan, the Company's compensation committee is authorized to approve grants of equity-based awards to the Manager. Concurrently with the closing of the IPO, the Company granted to the Manager 167,400 restricted shares, which is equal to 3.0% of the number of shares of common stock sold through the IPO. This award of restricted shares will vest ratably on a quarterly basis over a three-year period beginning on October 1, 2011. The Manager is entitled to receive "distribution equivalents" with respect to this restricted stock, whether or not vested, at the same time and in the same amounts as dividends are paid to the stockholders, commencing on the first anniversary of the date of grant. The Manager will defer any distributions payable to it in connection with the restricted stock that it is granted under the Equity Plan until such time as the Company is covering the payment of distributions to the stockholders based on the criteria in the agreement, for the six immediately preceding months. In addition to the restricted stock that was granted to the Manager concurrently with the completion of the IPO, the Company may from time to time grant additional equity incentive awards to the Manager pursuant to the Equity Plan. The Manager may, in the future, allocate a portion of these awards or ownership or profits interests in it to officers or any other personnel of the Manager or other personnel of the Manager or its affiliates in order to provide incentive compensation to them. For the year ended December 31, 2011, compensation expense for restricted shares was $0.2 million.

The Company authorized and reserved a total number of shares equal to 10.0% of the total number of issued and outstanding shares of common stock (on a fully diluted basis assuming the redemption of all OP Units for shares of common stock) at any time under the Equity Plan for equity incentive awards other than the initial grant to the Manager. All such awards of shares will vest ratably on an annual basis over a three-year period beginning on the first anniversary of the date of grant and shall provide for "distribution equivalents" with respect to this restricted stock, whether or not vested, at the same time and in the same amounts as dividends are paid to the stockholders.

Director Stock Plan

Concurrently with the closing of the IPO, the Company granted 3,000 restricted shares of common stock to each of the Company's three independent directors, each of whom is a non-executive director, pursuant to the Director Stock Plan (the "Director Stock Plan"). Awards of restricted stock will vest ratably over a five-year period following the first anniversary of the date of grant in increments of 20% per annum, subject to the director's continued service on the Board of Directors, and shall provide for "distribution equivalents" with respect to this restricted stock, whether or not vested, at the same time and in the same amounts as distributions are paid to the stockholders. At December 31, 2011, a total of 99,000 shares of common stock are reserved for issuance under the Director Stock Plan. As of December 31, 2011, there were 9,000 restricted shares issued to independent directors under the Director Stock Plan at a fair value of $12.50 per share. For the year ended December 31, 2011, compensation expense for the vesting of directors' shares was immaterial.

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Common Stock

9 Months Ended

12 Months Ended

Sep. 30, 2012

Dec. 31, 2011

Common Stock [Abstract]

Common Stock

Note 9 - Common Stock

On September 7, 2011, the Company closed its IPO and issued 5.6 million shares of common stock. On November 2, 2011, the Company sold 1.5 million common shares in a follow-on offering. On November 7, 2011, the underwriters exercised their option to purchase additional shares of common stock, which totaled 0.1 million shares. On June 18, 2012, the Company sold in a follow-on offering a total of 3.25 million shares of common stock. On July 2, 2012, the underwriters of the follow-on offering exercised their option to purchase an additional 0.5 million shares of common stock, which closed on July 9, 2012.

As of September 30, 2012 and December 31, 2011, the Company had a total of 11.2 million and 7.3 million shares of common stock outstanding, including unvested restricted shares, and had received aggregate proceeds from common stock issuances of $118.9 million and $78.1 million, respectively.

On September 7, 2011, the Company's Board of Directors authorized and the Company declared an annual dividend rate of $0.875 per share payable monthly in cash beginning in October 2011, on the fifteenth day of each month to stockholders of record at the close of business on the eighth day of such month.

On February 27, 2012, the Company's Board of Directors authorized and the Company declared an annual dividend rate of $0.880 per share. Accordingly, on March 15, 2012, the Company paid a dividend of $0.0733 per share to stockholders of record at the close of business on March 8, 2012.

On March 16, 2012, the Company's Board of Directors authorized and the Company declared an increase to the Company's annual dividend rate to $0.885, beginning May 9, 2012. Accordingly, on June 15, 2012, the Company paid a dividend of $0.07375 per share to stockholders of record at the close of business on the June 8, 2012.

On June 27, 2012, the Company's Board of Directors authorized and the Company declared an increase to the Company's annual dividend rate to $0.890, beginning August 9, 2012. Accordingly, on September 15, 2012, the Company paid a dividend of $0.07417 per share to stockholders of record at the close of business on September 8, 2012.

On September 30, 2012, the Company's Board of Directors authorized and the Company declared an increase to the Company's annual dividend rate to $0.895 per share, beginning November 9, 2012. On November 15, 2012, the Company will pay a monthly dividend of $0.07458 per share to stockholders of record at the close of business on November 8, 2012.

Note 7 - Common Stock

On September 7, 2011, the Company's IPO became effective. As of December 31, 2011, the Company had a total of 7.3 million shares of common stock outstanding, including unvested restricted shares, with total net proceeds from common stock issuances of $78.1 million, which includes the effect of recissions. At December 31, 2010, the Company had stock from its initial capitalization of 1,000 shares for proceeds of $10.00.

On September 7, 2011, the Company's Board of Directors authorized and the Company declared an annual dividend rate of $0.875 per share or an annual dividend rate of 7.0% based on the initial common stock price of $12.50, payable in cash monthly, beginning in October 2011, on the fifteenth day of each month to stockholders of record at the close of business on the eighth day of such month.

On February 27 2012, the Company's Board of Directors authorized and the Company declared an annual dividend rate of $0.880 per share. Accordingly, on March 15, 2012, the Company paid a distribution of $0.0733 per share to stockholders of record at the close of business on March 8, 2012.

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Derivatives and Hedging Activities

9 Months Ended

Sep. 30, 2012

Derivatives and Hedging Activities [Abstract]

Derivatives and Hedging Activities

Note 7 - Derivatives and Hedging Activities

Risk Management Objective of Using Derivatives

The Company may use derivative financial instruments, including interest rate swaps, caps, options, floors and other interest rate derivative contracts, to hedge all or a portion of the interest rate risk associated with its borrowings. The principal objective of such arrangements is to minimize the risks and/or costs associated with the Company's operating and financial structure as well as to hedge specific anticipated transactions. The Company does not intend to utilize derivatives for speculative or other purposes other than interest rate risk management. The use of derivative financial instruments carries certain risks, including the risk that the counterparties to these contractual arrangements are not able to perform under the agreements. To mitigate this risk, the Company only enters into derivative financial instruments with counterparties with high credit ratings and with major financial institutions with which the Company and its affiliates may also have other financial relationships. The Company does not anticipate that any of the counterparties will fail to meet their obligations.

Cash Flow Hedges of Interest Rate Risk

The Company's objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps and caps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. Interest rate caps designated as cash flow hedges involve the receipt of variable-rate amounts if interest rates rise above the cap strike rate on the contract.

The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. During 2012, such derivatives were used to hedge the variable cash flows associated with forecasted variable-rate debt. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings. During the three and nine months ended September 30, 2012, the Company recorded no hedge ineffectiveness in earnings.

Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on the Company's variable-rate debt. During the next twelve months, the Company estimates that an additional $13,000 will be reclassified from other comprehensive income as an increase to interest expense.

As of September 30, 2012, the Company had the following outstanding interest rate derivative that was designated as cash flow hedge of interest rate risk (dollar amount in thousands).

Interest Rate Derivative	Number of Instruments		Notional Amount
Interest Rate Cap		1	$	50,000

The table below presents the fair value of the Company's derivative financial instruments as well as their classification on the balance sheet as of September 30, 2012. The Company had no derivatives as of December 31, 2011.

	Balance Sheet Location		September 30, 2012
Derivatives designated as hedging instruments:
Interest Rate Cap		Derivative, at fair value	$	-

The table below details the location in the financial statements of the gain or loss recognized on interest rate derivatives designated as cash flow hedges for the three and nine ended September 30, 2012 (amounts in thousands). The Company had no active derivatives for the three and nine months ended September 30, 2011.

	Three Months Ended				Nine Months Ended
	September 30, 2012		September 30, 2011		September 30, 2012			September 30, 2011
Amount of gain (loss) recognized in accumulated other comprehensive income on interest rate derivatives (effective portion)	$	-	$	-	$	(13	)	$	-
Amount of gain (loss) reclassified from accumulated other comprehensive income into income as interest expense (effective portion)	$	-	$	-	$	-		$	-
Amount of gain (loss) recognized in income on derivative instruments (ineffective portion and amounts excluded from effectiveness testing)	$	-	$	-	$	-		$	-

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Convertible Preferred Stock

9 Months Ended

Sep. 30, 2012

Convertible Preferred Stock [Abstract]

Convertible Preferred Stock

Note 8 - Convertible Preferred Stock

On May 11, 2012, the Company entered into a securities purchase agreement with an unaffiliated third party that is an "accredited investor" (as defined in Rule 501 of Regulation D as promulgated under the Securities Act of 1933, as amended) pursuant to which the Company sold 545,454 shares of the Company's Series A convertible preferred stock for gross proceeds of $6.0 million and aggregate net proceeds of $5.8 million after offering-related fees and expenses.

The Series A convertible preferred stock has a liquidation preference of $11.00 per share, plus accrued and unpaid dividends, and a redemption premium equal to one percent (1%). Commencing on May 31, 2012, the Company has been paying cumulative dividends on the Series A convertible preferred stock monthly in arrears at the annualized rate of $0.77 per share.

The Series A convertible preferred stock is convertible into the Company's common stock, at the option of the holder of the Series A convertible preferred stock, at a conversion price equal to $11.00 per share, beginning one year after the date of issuance. The Company, at its option at any time, may redeem the Series A convertible preferred stock, in whole or in part, at $11.00 per share.

On July 24, 2012, the Company entered into a securities purchase agreement with an unaffiliated third party that is an "accredited investor" (as defined in Rule 501 of Regulation D as promulgated under the Securities Act of 1933, as amended) pursuant to which the Company sold 283,018 shares of the Company's Series B convertible preferred stock for gross proceeds of approximately $3.0 million. After deducting offering-related fees and expenses, the aggregate net proceeds to the Company from the sale of the Series B convertible preferred stock were approximately $3.0 million.

The Series B convertible preferred stock has a liquidation preference of $10.60 per share, plus accrued and unpaid dividends, and a redemption premium equal to one percent (1%). Commencing on August 15, 2012, the Company has been paying cumulative dividends on the Series B convertible preferred stock monthly in arrears at an annualized rate of $0.74 per share.

The Series B convertible preferred stock is convertible into the Company's common stock, at the option of the holder of the Series B convertible preferred stock, at a conversion price equal to $10.60 per share, beginning one year after the date of issuance. The Company, at its option at any time, may redeem the Series B convertible preferred stock, in whole or in part, at $10.60 per share.

The Series A convertible preferred stock and the Series B convertible preferred stock each ranks senior to the Company's common stock and on parity with each other, and junior to any other preferred stock the Company may issue other than additional series of the Series A convertible preferred stock or Series B convertible preferred stock.

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Commitments and Contingencies

9 Months Ended

12 Months Ended

Sep. 30, 2012

Dec. 31, 2011

Commitments and Contingencies [Abstract]

Commitments and Contingencies

Note 10 - 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 does not own any properties subject to environmental-related issues, 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, in each case, that it believes will have a material adverse effect on the results of operations.

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 does not own any properties, 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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Organization (Details) (USD $) In Thousands, except Share data, unless otherwise specified	9 Months Ended		12 Months Ended		12 Months Ended	22 Months Ended						9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011	Aug. 17, 2012	Dec. 31, 2011 Common Stock [Member]	Sep. 30, 2012 Common Stock [Member]	Jul. 02, 2012 Common Stock [Member]	Jun. 18, 2012 Common Stock [Member]	Nov. 07, 2011 Common Stock [Member]	Nov. 02, 2011 Common Stock [Member]	Sep. 06, 2011 Common Stock [Member]	Sep. 30, 2012 General Partner [Member] ARC Properties Operating Partnership, L.P. [Member]	Sep. 30, 2012 Affiliated Entity [Member] Contributor [Member] ARC Real Estate Partners, LLC [Member]	Sep. 30, 2012 Unaffiliated Third Party [Member]
Operations [Line Items]
Common stock, shares issued	11,163,617		7,323,434				487,500	3,250,000	100,000	1,500,000	5,600,000
Common stock, shares outstanding	11,163,617		7,323,434			11,200,000
Proceeds from Issuance of Common Stock					$ 78,100	$ 118,900
Proceeds from issuances of preferred shares	9,000
Maximum Amount of Offering from Universal Shelf Registration Statement				$ 500,000
Maximum amount of shares convertible into common stock				1,882,248
General partner ownership interest in OP, Percent												92.50%
Limited partner ownership interest in OP, Percent													2.60%	4.90%

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Related Party Transactions and Arrangements (Schedule of Selling Commissions and Dealer Manager Fees) (Details) (Dealer Manager [Member], Realty Capital Securities, LLC [Member], Sales Commissions and Fees [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2012	Sep. 30, 2011
Dealer Manager [Member] | Realty Capital Securities, LLC [Member] | Sales Commissions and Fees [Member]
Schedule of Offering Costs Reimbursements to Related Parties [Line Items]
Related Party Transaction, Expenses from Transactions with Related Party	$ 0	$ 0	$ 919

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Quarterly Results (Unaudited)

12 Months Ended

Dec. 31, 2011

Quarterly Results (Unaudited) [Abstract]

Quarterly Results (Unaudited)

Note 14 - Quarterly Results (Unaudited)

Presented below is a summary of the unaudited quarterly financial information for the year ended December 31, 2011 and the period from December 2, 2010 (date of inception) to December 31, 2010 (in thousands, except share and per share amounts):

	Period from December 2, 2010 (Date of Inception) to December 31, 2010		Quarters Ended
			March 31, 2011			June 30, 2011		September 30, 2011			December 31, 2011
Revenues	$	-	$	-		$	-	$	576		$	2,599
Net loss from continuing operations attributable to stockholders	$	-	$	(16	)	$	-	$	(626	)	$	(1,117	)
Loss from discontinued operations attributable to stockholders	$	-	$	-		$	-	$	(8	)	$	(808	)
Weighted average shares outstanding		1,000		1,000			1,000		1,515,710			6,596,908
Basic and diluted loss per share from continuing operations attributable to stockholders	$	-	$	(16.00	)	$	-	$	(0.41	)	$	(0.17	)
Basic and diluted loss per share attributable to stockholders	$	-	$	(16.00	)	$	-	$	(0.42	)	$	(0.29	)

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Real Estate Investments (Tables)

9 Months Ended

Sep. 30, 2012

Real Estate Investments [Abstract]

Assets and Liabilities Assumed

Real estate investments, at cost:
Land	$	10,228
Buildings, fixtures and improvements		75,360
Total tangible assets		85,588
Acquired intangibles:
In-place leases		13,262
Total assets acquired, net		98,850
OP Units issued to acquire real estate investments		(6,352	)
Cash paid to acquire real estate investments	$	92,498
Number of properties acquired		36

Schedule of Real Estate Properties

No. of Buildings		Square Feet		Base Purchase Price(1)
Total Portfolio - September 30, 2012(2)	124		2,198,877		$	235,723
Acquisitions	2		14,985			2,258
Total portfolio - October 26, 2012(2)	126		2,213,862		$	237,981

(1) Contract purchase price, excluding acquisition and transaction related costs.

(2) Total portfolio excludes one vacant property contributed in September 2011 which was classified as held for sale at September 30, 2012. The aggregate square footage and original base purchase price of this contributed vacant property was 3,200 and $1.2 million, respectively.

Schedule of Future Minimum Rental Payments for Operating Leases

Future Minimum Base Rent Payments
October 1, 2012 - December 31, 2012	$	4,980
2013		20,228
2014		20,416
2015		20,246
2016		19,858
Thereafter		72,222
	$	157,950

Schedule of Annualized Rental Income by Major Tenants

Tenant	September 30, 2012			September 30, 2011
Citizens Bank		33.4	%		75.0	%
John Deere		11.7	%		-	%
GSA		11.4	%		-	%
Home Depot		11.2	%		25.0	%

Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas

State	September 30, 2012			September 30, 2011
Michigan		14.2	%		22.7	%
South Carolina		12.4	%		25.0	%
Ohio		11.8	%		20.0	%
Iowa		11.7	%		*
New York		10.4	%		11.7	%

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Common Stock (Details) (USD $) In Thousands, except Share data, unless otherwise specified	0 Months Ended										12 Months Ended	22 Months Ended
	Nov. 16, 2012	Sep. 30, 2012	Sep. 16, 2012	Jun. 30, 2012	Jun. 08, 2012	Mar. 17, 2012	Mar. 15, 2012	Feb. 27, 2012	Sep. 07, 2011	Dec. 31, 2011	Dec. 31, 2011 Common Stock [Member]	Sep. 30, 2012 Common Stock [Member]	Jul. 02, 2012 Common Stock [Member]	Jun. 18, 2012 Common Stock [Member]	Nov. 07, 2011 Common Stock [Member]	Nov. 02, 2011 Common Stock [Member]	Sep. 06, 2011 Common Stock [Member]
Class of Stock [Line Items]
Common stock, shares issued		11,163,617								7,323,434			487,500	3,250,000	100,000	1,500,000	5,600,000
Common stock, shares outstanding		11,163,617								7,323,434		11,200,000
Proceeds from Issuance of Common Stock											$ 78,100	$ 118,900
Dividends declared, in dollars per share		$ 0.895		$ 0.89		$ 0.885		$ 0.88	$ 0.875
Dividends paid per share	$ 0.07458		$ 0.07417		$ 0.07375		$ 0.0733

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Mortgage Note Payable (Schedule of Mortgage Notes Payable) (Details) (USD $) In Thousands, unless otherwise specified	1 Months Ended	12 Months Ended
	Sep. 30, 2012	Dec. 31, 2011
Debt Instrument [Line Items]
Outstanding Loan Amount	$ 35,760	$ 30,260
Mortgages [Member]
Debt Instrument [Line Items]
Encumbered Properties, in properties	29	28
Outstanding Loan Amount	$ 35,760	$ 30,260
Weighted Average Effective Interest Rate	4.52%	4.67%
Debt Weighted Average Maturity Term	3 years 9 months 7 days	4 years 3 months 26 days
Minimum [Member] | Mortgages [Member]
Debt Instrument [Line Items]
Effective Interest Rate	3.68%	3.80%
Maximum [Member] | Mortgages [Member]
Debt Instrument [Line Items]
Effective Interest Rate	5.32%	5.32%

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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (USD $) In Thousands, except Share data	Total	Common Stock [Member]	Convertible Preferred Stock [Member]	Convertible Preferred Stock [Member]	Convertible Preferred Stock [Member]	Common Stock [Member]	Common Stock [Member]	Additional Paid-In Capital [Member]	Additional Paid-In Capital [Member] Common Stock [Member]	Additional Paid-In Capital [Member] Convertible Preferred Stock [Member]	Accumulated Other Comprehensive Loss [Member]	Accumulated Other Comprehensive Loss [Member] Common Stock [Member]	Accumulated Other Comprehensive Loss [Member] Convertible Preferred Stock [Member]	Accumulated Deficit [Member]	Accumulated Deficit [Member] Common Stock [Member]	Accumulated Deficit [Member] Convertible Preferred Stock [Member]	Total Stockholders' Equity [Member]	Total Stockholders' Equity [Member] Common Stock [Member]	Total Stockholders' Equity [Member] Convertible Preferred Stock [Member]	Non-Controlling Interests [Member]	Non-Controlling Interests [Member] Common Stock [Member]	Non-Controlling Interests [Member] Convertible Preferred Stock [Member]
Balance at Dec. 31, 2010	$ 0					$ 0		$ 0			$ 0						$ 0			$ 0
Balance, shares at Dec. 31, 2010						1,000
Stock Issued During Period, Value, New Issues	83,931					71		83,860									83,931
Shares Issued (in shares)						7,146,034
Offering costs, commissions and dealer manager fees	(5,812)							(5,812)									(5,812)
Share based compensation	182					2		180									182
Share based compensation (in shares)						176,400
Distributions Declared	(1,450)										(1,450)						(1,450)
Contribution transaction	(16,771)							(16,771)									(16,771)
Contribution from non-controlling interest holder	0							(3,875)									(3,875)			3,875
Distributions to non-controlling interest holders	(68)																			(68)
Net loss	(2,680)																(2,575)			(105)
Balance at Dec. 31, 2011	57,332					73		57,582						(4,025)			53,630			3,702
Balance, shares at Dec. 31, 2011						7,323,434
Stock Issued During Period, Value, New Issues		34,935	9,000		8		38		34,897	8,992								34,935	9,000
Shares Issued (in shares)					828,472		3,737,500
Offering costs, commissions and dealer manager fees	(937)							(937)									(937)
Share based compensation	792					1		791									792
Share based compensation (in shares)						102,683
Distributions Declared	(5,796)													(5,796)			(5,796)
Contribution from non-controlling interest holder	6,352																			6,352
Distributions to non-controlling interest holders	(376)																			(376)
Accumulated other comprehensive (loss) - derivatives	(13)										(13)						(13)
Net loss	(3,639)													(3,474)			(3,474)			(165)
Balance at Sep. 30, 2012	$ 97,650			$ 8		$ 112		$ 101,325			$ (13)			$ (13,295)			$ 88,137			$ 9,513
Balance, shares at Sep. 30, 2012				828,472		11,163,617

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Senior Secured Revolving Credit Facility

9 Months Ended

12 Months Ended

Sep. 30, 2012

Dec. 31, 2011

Senior Secured Revolving Credit Facility [Abstract]

Senior Secured Revolving Credit Facility

Note 4 - Senior Secured Revolving Credit Facility

On September 7, 2011, the Company closed on a senior secured revolving credit facility with RBS Citizens, N.A. Through an "accordion feature," subject to certain conditions, the Company may increase its total commitments under the credit facility to $150.0 million. The proceeds of advances made under the credit agreement may be used to finance the acquisition of net leased, investment or non-investment grade leased properties and for other permitted corporate purposes. Up to $10.0 million of the facility is available for letter of credits. The credit agreement has a term of 36 months and matures on September 7, 2014, subject to the Company's right to a 24-month extension.

Any advance made under the credit facility will bear floating interest at per annum rates equal to the one-month London Interbank Offered Rate ("LIBOR") plus 2.15% to 2.90% depending on the Company's loan to value ratio as specified in the credit agreement. In the event of a default, the lender has the right to terminate its obligations under the credit agreement, including the funding of future advances, and to accelerate the payment on any unpaid principal amounts outstanding. The credit facility requires a fee of 0.15% on the unused balance if amounts outstanding under the facility are 50% or more of the total facility amount and 0.25% on the unused balance if amounts outstanding under the facility are less than 50% of the total facility amount.

As of September 30, 2012, there was $91.1 million outstanding on this facility, which bore an interest rate of 2.7%, collateralized by 95 properties. Additional borrowings may become available under this facility based upon the availability of additional collateral, among other factors. In September 2012, the Company expanded the facility to allow for additional future acquisitions. As a result, there was $18.9 million available for future acquisitions at September 30, 2012. As of December 31, 2011, there was $42.4 million outstanding on this facility with an interest rate of 3.17%, collateralized by 59 properties.

The Company's sources of recourse financing generally require 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 a minimum net worth. As of September 30, 2012, the Company was in compliance with the debt covenants under the senior secured revolving credit facility agreement.

Note 4 - Senior Secured Revolving Credit Facility

On September 7, 2011, the Company closed on a $150.0 million senior secured revolving credit facility. The OP is the borrower, and the Company and the OP's subsidiaries are the guarantors under this facility. The proceeds of loans made under the credit agreement may be used to finance the acquisition of net leased, investment or non-investment grade occupied properties and for other permitted corporate purposes. Up to $10.0 million of the facility is available for letter of credits. The initial term of the credit agreement is 36 months.

Any loan made under the credit facility shall bear floating interest at per annum rates equal to the one month London Interbank Offered Rate ("LIBOR") plus 2.15% to 2.90% depending on the Company's loan to value ratio as specified in the agreement. In the event of a default, the lender has the right to terminate its obligations under the credit agreement, including the funding of future loans, and to accelerate the payment on any unpaid principal amount of all outstanding loans. The line of credit requires a fee of 0.15% on the unused balance if amounts outstanding under the facility are 50% or more of the total facility amount and 0.25% on the unused balance if amounts outstanding under the facility are 50% or less of the total facility amount.

As of December 31, 2011, there was $42.4 million outstanding on this facility which bore an interest rate of 3.17%. As of December 31, 2011, this facility was collateralized by 59 properties. Availability of additional borrowings under this facility are based upon the availability of sufficient collateral, among other factors. At December 31, 2011, based on the collateral available, there was $53.0 million of maximum borrowing capacity under this facility, with $10.6 million available and unused.

The Company's sources of recourse financing generally require 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 a minimum net worth. As of December 31, 2011, the Company was in compliance with the debt covenants under the senior secured revolving credit facility agreement.

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Subsequent Events (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012 2012 Acquisitons [Member] sqft	Oct. 26, 2012 October Acquisitions [Member] sqft	Oct. 26, 2012 Subsequent Event [Member] sqft	Sep. 30, 2012 Vacant [Member]	Dec. 31, 2011 Vacant [Member]	Sep. 30, 2012 Vacant [Member] Real Estate [Member] sqft	Dec. 31, 2011 Vacant [Member] Real Estate [Member]
Subsequent Event [Line Items]
Number of Real Estate Properties	124	2	126	1	2	1	2
Square feet of acquired property	2,198,877	14,985	2,213,862			3,200
Purchase price of acquired property	$ 235,723	$ 2,258	$ 237,981			$ 1,200

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Mortgage Notes Payable (Tables)

9 Months Ended

Sep. 30, 2012

Notes Payable [Abstract]

Schedule of Mortgage Notes Payable

Encumbered Properties		Outstanding Loan Amount			Weighted Average Effective Interest Rate(1)		Weighted Average Maturity(2)
September 30, 2012	29		$	35,760		4.52	%	3.77
December 31, 2011	28		$	30,260		4.67	%	4.32

(1) Mortgage notes payable have fixed rates. Effective interest rates range from 3.68% to 5.32% at September 30, 2012 and 3.80% to 5.32% at December 31, 2011.

(2) Weighted average remaining years until maturity as of September 30, 2012 and December 31, 2011, respectively.

Schedule of Aggregate Principal Payments of Mortgages

	Total
October 1, 2012 - December 31, 2012	$	-
2013		74
2014		189
2015		13,767
2016		11,760
Thereafter		9,970
Total	$	35,760

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Real Estate Investments (Schedule of Annualized Rental Income by Major Tenants) (Details)	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Citizens Bank [Member]
Revenue, Major Customer [Line Items]
Annualized Rental Income	33.40%	75.00%
John Deere [Member]
Revenue, Major Customer [Line Items]
Annualized Rental Income	11.70%	0.00%
Home Depot [Member]
Revenue, Major Customer [Line Items]
Annualized Rental Income	11.20%	25.00%
GSA [Member]
Revenue, Major Customer [Line Items]
Annualized Rental Income	11.40%	0.00%

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Net Loss Per Share

9 Months Ended

12 Months Ended

Sep. 30, 2012

Dec. 31, 2011

Net Loss Per Share [Abstract]

Net Loss Per Share

Note 14 - 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 (dollars in thousands, expect for shares and per share data):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Net loss from continuing operations attributable to stockholders	$	(763	)	$	(625	)	$	(3,034	)	$	(641	)
Less: dividends declared on preferred shares		(140	)		-			(210	)
Net loss from continuing operations attributable to common stockholders		(903	)		(625	)		(3,244	)		(641	)
Net loss from discontinued operations attributable to stockholders		(41	)		(9	)		(440	)		(9	)
Net loss attributable to common stockholders, net of dividends on preferred shares	$	(944	)	$	(634	)	$	(3,684	)	$	(650	)
Weighted average common shares outstanding		10,846,432			1,515,710			8,543,365			511,452
Basic and diluted net loss per share from continuing operations attributable to common stockholders	$	(0.08	)	$	(0.41	)	$	(0.38	)	$	(1.25	)
Basic and diluted net loss per share from discontinued operations attributable to stockholders	$	-		$	(0.01	)	$	(0.05	)	$	(0.02	)
Basic and diluted net loss per share attributable to common stockholders	$	(0.09	)	$	(0.42	)	$	(0.43	)	$	(1.27	)

As of September 30, 2012, the Company had 886,376 OP Units issued, which are convertible to an equal number of shares of the Company's common stock, 217,727 shares of unvested restricted stock outstanding, 545,454 shares of the Company's Series A preferred convertible stock outstanding and 283,018 shares of the Company's Series B preferred convertible stock outstanding, which were excluded from the calculation of diluted loss per share as the effect would have been antidilutive.

Note 12 - Net Loss Per Share

The following is a summary of the basic and diluted net loss per share computation for the year ended December 31, 2011. The Company had no income or loss for the period from December 2, 2010 (date of inception) to December 31, 2010 (dollars in thousands, expect for per share data):

	Year Ended December 31, 2011
Net loss from continuing operations attributable to stockholders	$	(1,759	)
Loss from discontinued operations attributable to stockholders		(816	)
Net loss attributable to stockholders	$	(2,575	)
Weighted average common shares outstanding		2,045,320
Basic and diluted net loss per share from continuing operations attributable to stockholders	$	(0.86	)
Basic and diluted net loss per share attributable to stockholders	$	(1.26	)

As of December 31, 2011, the Company had 310,000 OP Units outstanding, which are convertible to common stock, and 176,400 shares of unvested restricted stock outstanding which were excluded from the calculation of diluted loss per share as the effect would have been antidilutive.