8-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K/A

AMENDMENT NO. 2

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, 2013, 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, 2013, 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.

On January 18, 2013, we filed a Current Report on Form 8-K/A, or the First Amendment, in order 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.

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, as superseded by the risk factors relating to the proposed merger that were filed as Exhibit 99.2 to the First Amendment and (ii) update certain information regarding us and ARCT III as a combined company as of September 30, 2012 that was filed as Exhibit 99.3 to the First Amendment. The updated risk factors relating to the proposed merger are attached as Exhibit 99.1 hereto, and the updated information regarding us and ARCT III as a combined company as of September 30, 2012 is attached as Exhibit 99.3 hereto.

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

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.	Description
99.1	Risk Factors
99.3	Information About the Combined Companies

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 18, 2013	By:	/s/ Nicholas S. Schorsch
	Name:	Nicholas S. Schorsch
	Title:	Chief Executive Officer and
		Chairman of the Board of Directors

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/A, the exchange ratio of 0.95 shares of our common stock represented a market value ranging from a low of $12.10 to a high of $13.39.

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

1

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.

2

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) $1.2 billion of financing, consisting of a $1.0 billion credit facility (under which ARCT III has obtained commitments for $650.0 million, and which contains an “accordion” feature to allow ARCT III, under certain circumstances, to increase the commitments thereunder by $350.0 million), borrowings under which will be subject to borrowing base availability, and a $200.0 million bridge facility (of which $200.0 million is committed but subject to reduction to the extent the committing lender provides a commitment under the credit facility described above). 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.

3

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

4

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.

6

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 $1.2 billion of financing, consisting of a $1.0 billion credit facility (under which ARCT III has obtained commitments for $650.0 million, and which contains an “accordion” feature to allow ARCT III, under certain circumstances, to increase the commitments thereunder by $350.0 million), borrowings under which will be subject to borrowing base availability, and a $200.0 million bridge facility (of which $200.0 million is committed but subject to reduction to the extent the committing lender provides a commitment under the credit facility described above).

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
Dollar General		17.2	%
FedEx		14.3	%
Citizens Bank		13.7	%

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