8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 
FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): July 22, 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))

Item 8.01. Other Events.

American Realty Capital Properties, Inc., a Maryland corporation, which we refer to as the “company,” “we,” “us” or “our,” recently entered into definitive agreements for, or closed on, as applicable, several significant transactions as described below. The purpose of this Current Report on Form 8-K is to provide our stockholders and the market generally with certain information relating to such transactions and to file such information pursuant to the Securities Exchange Act of 1934, as amended, and allow for incorporation by reference, as applicable, of such information into our registration statements. Such information is provided in Exhibits 99.1, 99.2 and 99.3 attached hereto (which are incorporated by reference herein), and consists of: (i) certain material information related to the impact such recent significant transactions have had or may have on us; and (ii) certain risk factors related to our recent significant transactions. The recent significant transactions include:

· On May 28, 2013, we entered into an Agreement and Plan of Merger (the “CapLease Merger Agreement”) with CapLease, Inc., a Maryland corporation (“CapLease”), Safari Acquisition, LLC, a Delaware limited liability company and our wholly owned subsidiary (“CapLease Merger Sub”), Caplease, LP, a Delaware limited partnership and the operating partnership of CapLease (the “CapLease Operating Partnership”), CLF OP General Partner LLC, a Delaware limited liability company and the sole general partner of the CapLease Operating Partnership, and ARC Properties Operating Partnership, L.P., a Delaware limited partnership and our operating partnership (the “Operating Partnership”). The CapLease Merger Agreement provides for (i) the merger of CapLease with and into CapLease Merger Sub, with CapLease Merger Sub surviving as our wholly owned subsidiary, and (ii) the merger of the CapLease Operating Partnership with and into the Operating Partnership, with the Operating Partnership surviving (both such mergers, the “CapLease Merger”).

· On June 7, 2013, we closed on (i) a previously announced private placement transaction for the sale and issuance of approximately 29.4 million shares of our common stock at a purchase price of $15.47 per share, for an aggregate purchase price of $455 million (the “Common Stock Placement”) and (ii) a previously announced private placement transaction for the sale of approximately 28.4 million shares of a new series of our 5.81% convertible preferred stock designated as Series C Convertible Preferred Stock, at a purchase price of $15.67 per share, for an aggregate purchase price of $445 million (the “Preferred Stock Placement” and together with the Common Stock Placement, the “Placements”).

· On June 27, 2013, we, through the Operating Partnership, purchased the equity interests in the entities which own a real estate portfolio of 447 properties, (which includes three other revenue generating assets) (the “GE Capital Portfolio”), 400 of which are subject to property operating leases and 47 of which are subject to direct financing leases, from certain affiliates of GE Capital Corp., for a contract purchase price of approximately $774 million (exclusive of closing costs) (the “GE Capital Portfolio Acquisition” ).

· On July 1, 2013, we entered into an Agreement and Plan of Merger (the “ARCT IV Merger Agreement”) with American Realty Capital Trust IV, Inc., a Maryland corporation (“ARCT IV”), Thunder Acquisition, LLC, a Delaware limited liability company and our wholly owned subsidiary (“ARCT IV Merger Sub”), American Realty Capital Operating Partnership IV, L.P., a Delaware limited partnership and the operating partnership of ARCT IV (the “ARCT IV Operating Partnership”), and the Operating Partnership. The ARCT IV Merger Agreement provides for (i) the merger of ARCT IV with and into ARCT IV Merger Sub, with ARCT IV Merger Sub surviving as our wholly owned subsidiary, and (ii) the merger of the ARCT IV Operating Partnership with and into the Operating Partnership, with the Operating Partnership surviving (collectively, the “ARCT IV Merger” and together with the CapLease Merger, the “Mergers”).

Forward-Looking Statements

As of the filing of this Current Report on Form 8-K, the company has not acquired CapLease and, although the closing of the CapLease Merger is subject to certain conditions and therefore there can be no assurance that the company will acquire CapLease, the company believes that the completion of the closing of the CapLease Merger is probable. Additionally, as of the filing of this Current Report on Form 8-K, the company has not acquired ARCT IV and, although the closing of the ARCT IV Merger is subject to certain conditions and therefore there can be no assurance that the company will acquire ARCT IV, the company believes that the completion of the closing of the ARCT IV Merger is probable.

Information set forth in this Current Report on Form 8-K (including information included or incorporated by reference herein and the exhibits hereto) contains “forward-looking statements” (as defined in Section 21E of the Securities Exchange Act of 1934, as amended), which reflect the company’s expectations regarding future events. The forward-looking statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those contained in the forward-looking statements. Such forward-looking statements include, but are not limited to, whether and when the transactions contemplated by the CapLease Merger Agreement and the ARCT IV Merger Agreement will be consummated, the company’s plans, market and other expectations, objectives, intentions and other statements that are not historical facts.

The following additional factors, among others, could cause actual results to differ from those set forth in the forward-looking statements: the occurrence of any event, change or other circumstances that could give rise to the termination of the CapLease Merger Agreement or the ARCT IV Merger Agreement; the inability to complete the Mergers due to the failure to satisfy other conditions to completion of the Mergers; unexpected costs or unexpected liabilities that may arise from the Mergers, whether or not consummated; the inability to retain key personnel; continuation or deterioration of current market conditions; future regulatory or legislative actions that could adversely affect the companies; the business plans of the tenants of the respective parties; the outcome of any legal proceedings relating to the CapLease Merger Agreement and/or the ARCT IV Merger Agreement or the transactions contemplated thereby; and risks to consummation of the Mergers, including the risk that one or more Mergers will not be consummated within the expected time period or at all. Additional factors that may affect future results are contained in the company’s filings with the Securities and Exchange Commission (“SEC”), which are available at the SEC’s website at www.sec.gov. The company disclaims any obligation to update and revise statements contained in these materials based on new information or otherwise.

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Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.	Description
99.1	Information About the Company
99.2	Risk Factors
99.3	ARCP Unaudited Pro Forma Consolidated Financials as of March 31, 2013 and for the three months ended March 31, 2013 and year ended December 31, 2013

3

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, thereunto duly authorized.

	AMERICAN REALTY CAPITAL PROPERTIES, INC.
July 22, 2013	By:	/s/ Nicholas S. Schorsch
	Name:	Nicholas S. Schorsch
	Title:	Chief Executive Officer and
		Chairman of the Board of Directors

4

EX-99.1

THE COMPANIES

American Realty Capital Properties, Inc., Safari Acquisition, LLC and Thunder Acquisition, LLC

American Realty Capital Properties, Inc., or ARCP, is a Maryland corporation incorporated in December 2010 that qualified as a real estate investment trust for U.S. federal income tax purposes, or REIT, commencing with its initial taxable year ended December 31, 2011. 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. On February 28, 2013, ARCP merged with American Realty Capital Trust III, Inc., a Maryland corporation, or ARCT III. Following its acquisition of ARCT III and commencing with trading on March 1, 2013, ARCP common stock began trading on the NASDAQ Global Select Market.

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.

ARCP acquires, owns and operates single-tenant, freestanding commercial real estate properties. ARCP has acquired a combination of long-term and medium-term leases and intends to continue to acquire properties with approximately 70% long-term leases and 30% medium-term leases, with an average remaining lease term of 10 to 12 years. ARCP considers properties that are 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. ARCP expects this investment strategy to develop growth potential from below market leases. Additionally, ARCP owns a portfolio that uniquely combines a portfolio of properties with stable income from high credit quality tenants, with properties that have substantial growth opportunities.

As of March 31, 2013, excluding one vacant property classified as held for sale, ARCP owned 701 properties consisting of 16.7 million square feet, 100% leased with a weighted average remaining lease term of 11.1 years. In constructing its portfolio, ARCP is committed to diversification (industry, tenant and geography). As of March 31, 2013, rental revenues derived from investment grade tenants and tenants affiliated with investment grade entities as determined by a major rating agency approximated 79% (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 and long-term lease arrangements.

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 CapLease (as defined and described below) will merge, Safari Acquisition, LLC, or the CapLease Merger Sub, is a Delaware limited liability company and a direct wholly owned subsidiary of ARCP that was formed for the purpose of acquiring CapLease pursuant to the merger agreement with CapLease.

The entity into which ARCT IV (as defined and described below) will merge, Thunder Acquisition, LLC, or the ARCT IV Merger Sub, is a Delaware limited liability company and a direct wholly owned subsidiary of ARCP that was formed for the purpose of acquiring ARCT IV pursuant to the merger agreement with ARCT IV.

CapLease, Inc.

CapLease, Inc., or CapLease, is a REIT that primarily acquires, owns and manages a diversified portfolio of single tenant commercial real estate properties subject to long-term leases to high credit quality tenants. CapLease focuses on properties that are subject to a lease that requires the tenant to pay all or substantially all property operating expenses, such as utilities, real estate taxes, insurance and routine maintenance. CapLease has made an election to qualify, and believes it is operating so as to qualify, as a REIT commencing with its taxable year ended December 31, 2004. In addition to its portfolio of owned properties, CapLease has a modest portfolio of first mortgage loans and other debt investments on single tenant properties.

CapLease conducts its business through a variety of subsidiaries. CapLease owns most of its owned properties through its predecessor and operating partnership, Caplease, LP. CapLease is the indirect sole general partner of, and owns approximately 99.8% of the common equity of, CapLease, LP.

As of March 31, 2013, excluding one vacant property, CapLease owned 70 properties comprised of 12.0 million square feet, which were 96.6% leased with a weighted average remaining lease term of approximately 6.0 years.

CapLease’s principal executive offices are located at 1065 Avenue of the Americas, New York, New York 10018, and its telephone number is (212) 217-6300.

GE Capital Portfolio

On June 27, 2013 ARCP, through the ARCP OP, acquired the equity interests in the entities that own a real estate portfolio comprised of 447 net lease properties, or the GE Capital Portfolio, from certain affiliates of GE Capital Corp., or GE Capital. The 447 properties are subject to 400 property operating leases and 47 direct financing leases. The GE Capital Portfolio contains approximately 2.0 million rentable square feet and consists of 444 restaurants (including three other revenue generating assets) and three retail properties. The purchase price for the GE Capital Portfolio was approximately $774 million exclusive of closing costs.

American Realty Capital Trust IV, Inc.

American Realty Capital Trust IV, Inc., or ARCT IV, is a Maryland corporation incorporated in February 2012 that qualifies as a REIT for U.S. federal income tax proposes commencing with its initial taxable year ended December 31, 2012. ARCT IV is a non-traded REIT. ARCT IV was formed to acquire a diversified portfolio of commercial real estate, which consists primarily of freestanding single tenant properties net leased to investment grade and other credit worthy tenants. In June 2012, ARCT IV commenced an initial public offering on a ‘‘reasonable best efforts’’ basis to sell up to 60.0 million shares of common stock, excluding 10.0 million shares issuable pursuant to a distribution reinvestment plan, offered at a price of $25.00 per share, subject to certain volume and other discounts, which we refer to as the ARCT IV IPO. In September 2012, ARCT IV commenced real estate operations. As of July 2, 2013, ARCT IV had issued 70,219,528 million shares of ARCT IV common stock in connection with the ARCT IV IPO and had issued 885,216 million shares of ARCT IV common stock under its distribution reinvestment plan. As of July 2, 2013, ARCT IV had 71,112,745 shares of common stock outstanding, including unvested restricted shares and shares issued pursuant to ARCT IV’s distribution reinvestment plan.

Substantially all of ARCT IV’s business is conducted through American Realty Capital Operating Partnership IV, L.P., a Delaware limited partnership and the operating partnership of ARCT IV, or the ARCT IV Operating Partnership, of which ARCT IV is the sole general partner.

As of June 30, 2013, ARCT IV owned 585 properties comprised of 6.6 million square feet, which were 100% leased with a weighted average remaining lease term of 11.7 years. Additionally, ARCT IV is party to a purchase and sale agreement with certain affiliates of GE Capital pursuant to which 578 properties remain to be acquired by ARCT IV thereunder. In constructing the portfolio, ARCT IV has been committed to diversification by industry, tenant and geography.

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

ARCT IV and ARCP each were sponsored directly by AR Capital, LLC, or ARC. American Realty Capital Advisors IV, LLC, or the ARCT IV Advisor, is a Delaware limited liability company indirectly wholly owned by ARC and is ARCT IV’s external advisor. 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 IV Advisor and ARCP Manager, provide investment, management and advisory services, as well as certain acquisition and debt capital services to ARCT IV and ARCP, as applicable. ARCT IV and ARCP pay management fees and certain other fees to, and reimburse certain expenses of, the ARCT IV 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., ARC Realty Financial Trust, Inc., American Realty Capital Global Trust, Inc., American Realty Capital Healthcare Trust II, Inc. and American Realty Capital Trust V, Inc. Certain of these ARC-sponsored REITs have investment strategies substantially similar to those of ARCT IV, ARCP and the combined company.

Combination of ARCP, CapLease, the GE Capital Portfolio and ARCT IV

Combination of ARCP and CapLease

As of March 31, 2013, excluding one vacant property classified as held for sale, ARCP’s portfolio was comprised of 701 properties consisting of 16.7 million rentable square feet, 100% leased with a weighted average remaining lease term of 11.1 years. As of March 31, 2013, excluding one vacant property CapLease owned 70 properties comprised of 12.0 million square feet, which were 96.6% leased with a weighted average remaining lease term of approximately 6.0 years.

ARCP and CapLease are each focused on creating a portfolio of primarily net lease properties leased to high credit quality tenants. ARCP focuses on acquiring properties with both medium-term and long-term leases. CapLease’s portfolio, which has a weighted average remaining lease term on a portfolio basis as of March 31, 2013 of 6.0 years, fits within the medium-term lease component of ARCP’s strategy.

Following the CapLease Merger, the combined company will own a portfolio that combines CapLease’s portfolio of properties that are substantially net leased to investment grade tenants as determined by major credit rating agencies (including the attribution of such ratings to affiliates of CapLease’s tenants) which contain growth opportunities with ARCP’s portfolio, which retains a balance of growth opportunities and security and is also substantially leased to investment grade tenants as determined by major credit rating agencies (including the attribution of such ratings to affiliates of ARCP’s tenants). The combined portfolio will be diversified by geography, tenant and industry. The combination will reduce ARCP’s current top ten tenant concentration.

ARCP’s Acquisition of the GE Capital Portfolio

ARCP’s acquisition of the GE Capital Portfolio added 2.0 million rentable square feet to ARCP’s portfolio, which totaled 19.4 million rentable square feet including the GE Capital Portfolio, as of June 30, 2013. The GE Capital Portfolio is highly diversified by tenant and includes 123 distinct tenant groups. The GE Capital Portfolio is highly concentrated in the retail sector, adding to ARCP’s continued focus on building a single tenant net lease portfolio leased to commercial tenants. Annualized rental income as of June 30, 2013 for the GE Capital Portfolio separately, ARCP separately, and ARCP and the GE Capital Portfolio together are approximately $53.2 million, $174.6 million, and $227.8 million, respectively. The acquisition increased ARCP’s current industry diversification by expanding in the restaurant industry.

Combination of ARCP and ARCT IV

As of June 30, 2013, (excluding one vacant property classified as held for sale) ARCP owned 1,181 properties consisting of 19.4 million square feet, 100% leased with a weighted average remaining lease term of 9.9 years. As of June 30, 2013, ARCT IV owned 585 properties comprised of 6.6 million square feet, which were 100% leased with a weighted average remaining lease term of 11.7 years. Additionally, ARCT IV is party to a purchase and sale agreement with certain affiliates of GE Capital pursuant to which 578 properties remain to be acquired by ARCT IV thereunder. No assurance can be given that ARCT IV will acquire such properties. In constructing the portfolio, ARCT IV has been committed to diversification by industry, tenant and geography.

ARCP and ARCT IV are each focused on creating a portfolio of primarily net lease properties leased to high credit quality tenants. ARCP focuses on acquiring properties with both medium-term and long-term leases. ARCT IV’s portfolio, which has a weighted average remaining lease term on a portfolio basis as of June 30, 2013 of 11.7 years, fits within the long-term lease component of ARCP’s strategy.

Following the ARCT IV Merger, the combined company will own a portfolio that combines ARCT IV’s portfolio of properties that are substantially net leased to investment grade tenants as determined by major credit rating agencies (including the attribution of such ratings to affiliates of ARCT IV’s tenants) which are stable with ARCP’s portfolio, which retains a balance of growth opportunities and security and is also substantially leased to investment grade tenants as determined by major credit rating agencies (including the attribution of such ratings to affiliates of ARCP’s tenants). The combined portfolio will be diversified by geography, tenant and industry. The combination will reduce ARCP’s current top ten tenant concentration.

In connection with the ARCT IV Merger, ARCP entered into a letter agreement for proxy solicitation services with RCS Advisory Services, LLC, or RCS, RCS Capital Securities, LLC, or RC Securities, and American National Stock Transfer, LLC, or ANST, pursuant to which it will pay $640,000 for such services. Additionally, in connection with the ARCT IV Merger, ARCP entered into an agreement for financial advisory and strategic services with RC Securities, pursuant to which it will pay RC Securities an amount equal to 0.25% of the transaction value of the ARCT IV Merger. Each of RCS, RC Securities and ANST is an entity directly or indirectly under common control with ARC, the sponsor of ARCP and ARCT IV.

Combination of ARCP, CapLease, the GE Capital Portfolio and ARCT IV

As of June 30, 2013, the combined portfolio of ARCP, CapLease, the GE Capital Portfolio and ARCT IV (including the pending properties to be acquired from GE Capital) totals 2,414 properties containing 40.0 million rentable square feet with a pro forma weighted average lease term of 9.3 years, providing a balance between medium-term and long-term leases. Annualized rental revenues for the portfolios as of June 30, 2013 for ARCP, CapLease and the GE Capital Portfolio together total approximately $508.4 million.

Property Portfolio Information

At June 30, 2013, ARCP, excluding properties owned by CapLease, owned a diversified portfolio:

• of 1,181 properties, excluding one vacant property classified as held for sale;

• with an occupancy rate of 100%;

• leased to 180 different retail and other commercial enterprises doing business in 21 separate industries;

• located in 48 states and Puerto Rico;

• with approximately 19.4 million square feet of leasable space; and

• with an average leasable space per property of approximately 16,400 square feet.

At June 30, 2013, ARCP, including properties owned by CapLease (assuming the CapLease Merger is consummated), on a pro forma basis, owned a diversified portfolio:

• of 1,251 properties, excluding two vacant properties, one of which is classified as held for sale;

• with an occupancy rate of 96%;

• leased to 220 different retail and other commercial enterprises doing business in 29 separate industries;

• located in 48 states and Puerto Rico;

• with approximately 31.4 million square feet of leasable space; and

• with an average leasable space per property of approximately 25,100 square feet.

At June 30, 2013, ARCT IV, excluding properties under contract to be acquired from affiliates of GE Capital, owned a diversified portfolio:

• of 585 properties;

• with an occupancy rate of 100%;

• leased to 172 different retail and other commercial enterprises doing business in five separate industries;

• located in 42 states;

• with approximately 6.6 million square feet of leasable space; and

• with an average leasable space per property of approximately 11,200 square feet.

At June 30, 2013, ARCT IV, including properties under contract to be acquired from GE Capital, on a pro forma basis, owned a diversified portfolio:

• of 1,163 properties;

• with an occupancy rate of 100%;

• leased to 287 different retail and other commercial enterprises doing business in 23 separate industries;

• located in 46 states and the District of Columbia;

• with approximately 8.6 million square feet of leasable space; and

• with an average leasable space per property of approximately 7,400 square feet.

Combined Property Portfolio

As of June 30, 2013, ARCP (assuming the CapLease Merger is consummated) and ARCT IV, on a pro forma basis, owned a portfolio with the following characteristics:

• 1,836 properties, including 1,251 ARCP properties at June 30, 2013 and 585 ARCT IV properties at June 30, 2013;

• occupancy rate of 100%;

• leased to 355 different retail and other commercial enterprises doing business in 32 separate industries;

• located in 49 states and Puerto Rico;

• approximately 38.0 million square feet of leasable space; and

• an average leasable space per property of approximately 20,700 square feet.

As of June 30, 2013, ARCP and ARCT IV, including CapLease and properties under contract to be acquired from GE Capital, on a pro forma basis, owned a portfolio with the following characteristics:

• 2,414 properties, including 1,251 ARCP properties, 585 ARCT IV properties, 70 CapLease properties and 578 properties under contract with GE Capital at June 30, 2013;

• occupancy rate of 97%;

• leased to 454 different retail and other commercial enterprises doing business in 34 separate industries;

• located in 49 states, the District of Columbia and Puerto Rico;

• approximately 40.0 million square feet of leasable space; and

• an average leasable space per property of approximately 16,500 square feet.

There were no 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 IV as of June 30, 2013.

All of the following property portfolio information is provided to illustrate the pro forma combined property portfolio of ARCP and ARCT IV 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 1,251 properties owned, including properties owned by CapLease (which assumes the CapLease Merger is consummated), at June 30, 2013. The ARCT IV information represents quarterly information for the 585 properties owned at June 30, 2013. The ARCT IV (GE Capital) information represents 578 properties remaining to be acquired under ARCT IV’s purchase agreement with GE Capital at June 30, 2013.

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

Industry	ARCP(1)			ARCT IV(2)			CapLease(3)			ARCT IV (GE Capital)(4)			Combined Total
Advertising		0.00	%		—			—			0.01	%		0.00	%
Aerospace		1.10	%		—			—			—			0.49	%
Auto Manufacturing		—			7.36	%		—			—			1.19	%
Auto Retail		2.45	%		0.40	%		2.71	%		—			1.89	%
Auto Services		0.27	%		0.44	%		—			—			0.19	%
Casual Dining		6.84	%		8.92	%		—			33.20	%		8.54	%
Consulting		—			—			3.64	%		—			0.98	%
Consumer Goods		0.28	%		9.87	%		—			—			1.72	%
Consumer Products		10.99	%		3.13	%		8.31	%		—			7.66	%
Discount Retail		10.90	%		5.81	%		4.50	%		—			7.03	%
Diversified Industrial		—			—			8.25	%		—			2.22	%
Family Dining		7.06	%		6.35	%		—			12.30	%		5.68	%
Financial Services		0.56	%					7.51	%		0.10	%		2.28	%
Freight		7.04	%		1.39	%		—			—			3.38	%
Gas/Convenience		3.18	%		1.36	%		—			—			1.65	%
Government Services		2.56	%		—			13.32	%		—			4.73	%
Haircare Services		—			0.03	%		—			—			0.00	%
Healthcare		5.74	%		3.18	%		4.04	%		0.10	%		4.18	%
Home Maintenance		0.99	%		1.01	%		4.38	%		—			1.78	%
Hotel		—			—			2.09	%		—			0.56	%
Insurance		4.75	%		—			13.99	%		0.10	%		5.90	%
Media		—			—			1.97	%		—			0.53	%
Motor Cycle		—			—			—			1.40	%		0.17	%
Oil & Gas		—			—			3.11	%		—			0.84	%
Parking		—			—			—			0.10	%		0.01	%
Pharmacy		8.78	%		1.09	%		0.81	%		—			4.33	%
Publishing		—			—			1.16	%		—			0.31	%
Quick Service Restaurant		12.10	%		26.48	%		—			52.69	%		16.12	%
Retail Banking		9.11	%		15.12	%		1.56	%		—			6.94	%
Specialty Retail		4.59	%		7.98	%		4.53	%		—			4.56	%
Storage Facility		0.19	%		—			—			—			0.09	%
Supermarket		0.52	%		—			4.84	%		—			1.54	%
Telecommunications		—			0.08	%		5.23	%		—			1.42	%
Various		—			—			4.05	%		—			1.09	%
Total		100.0%			100.0%			100.0%			100.0%			100.0%

(1) Includes annualized rental revenue for all properties owned by ARCP at June 30, 2013.

(2) Includes annualized rental revenue for all properties owned by ARCT IV at June 30, 2013.

(3) Includes annualized rental revenue for all properties owned by CapLease at June 30, 2013.

(4) Includes annualized rental revenue for all properties under contract to be acquired by ARCT IV from GE Capital at June 30, 2013.

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		Annualized Rental Revenue		Percentage of Rental Revenue
Retail		1,100		7,609,157		143,757		63.1	%
Office		35		1,992,555		33,275		14.6	%
Distribution		46		9,802,884		50,732		22.3	%
Total		1,181		19,404,596		227,764		100%

ARCT IV

Property Type	Number of Properties		Approximate Leasable Square Feet		Annualized Rental Revenue		Percentage of Rental Revenue
Retail		581		4,139,912		65,342		79.6	%
Distribution		3		2,430,535		16,706		20.4	%
Parking Lot		1		8,400		1		0.0	%
Total		585		6,578,847		82,049		100%

CAPLEASE

Property Type	Number of Properties		Approximate Leasable Square Feet		Annualized Rental Revenue		Percentage of Rental Revenue
Retail		16		1,172,481		13,720		10.0	%
Office		44		6,206,297		101,017		73.9	%
Distribution		10		4,621,011		22,045		16.1	%
Total		70		11,999,789		136,782		100%

ARCT IV (GE Capital)

Property Type	Number of Properties		Approximate Leasable Square Feet		Annualized Rental Revenue		Percentage of Rental Revenue
Retail		572		1,964,827		61,741		99.8	%
Parking Lot		1		17,446		35		0.1	%
Billboard		5		2,463		59		0.1	%
Total		578		1,984,736		61,835		100%

COMBINED

Property Type	Number of Properties		Approximate Leasable Square Feet		Annualized Rental Revenue		Percentage of Rental Revenue
Retail		2,269		14,886,377		284,559		56.0	%
Office		79		8,198,852		134,292		26.4	%
Distribution		59		16,854,430		89,483		17.6	%
Parking Lot		2		25,846		36		0.0	%
Billboard		5		2,463		59		0.0	%
Total		2,414		39,967,968		508,430		100%

Geographic Diversification

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

ARCP

State	Number of Properties		Leasable Square Feet		Annualized Rental Revenue(1)		Percentage of Rental Revenue
Alabama		43		578,951		8,122		3.6	%
Arizona		8		74,227		1,613		0.7	%
Arkansas		18		250,618		3,652		1.6	%
California		16		1,450,328		12,488		5.5	%
Colorado		13		238,886		4,673		2.1	%
Connecticut		10		37,126		1,184		0.5	%
Delaware		4		12,369		286		0.1	%
Florida		36		188,676		5,366		2.4	%
Georgia		64		403,579		8,896		3.9	%
Idaho		8		71,565		1,552		0.7	%
Illinois		42		1,486,911		19,123		8.4	%
Indiana		28		1,762,150		8,288		3.6	%
Iowa		19		671,074		4,810		2.1	%
Kansas		22		1,305,125		4,611		2.0	%
Kentucky		27		263,260		4,629		2.0	%
Louisiana		28		221,238		2,871		1.3	%
Maine		2		146,430		2,819		1.2	%
Maryland		2		11,205		366		0.2	%
Massachusetts		18		435,195		6,157		2.7	%
Michigan		78		677,709		12,674		5.6	%
Minnesota		11		200,487		1,693		0.7	%
Mississippi		36		1,380,764		8,327		3.7	%
Missouri		86		942,859		11,019		4.8	%
Montana		5		55,377		856		0.4	%
Nebraska		3		25,355		409		0.2	%
Nevada		12		100,660		2,414		1.1	%
New Hampshire		10		65,328		1,349		0.6	%
New Jersey		8		85,721		2,640		1.2	%
New Mexico		10		54,475		870		0.4	%
New York		25		326,461		7,522		3.3	%
North Carolina		54		1,123,948		10,840		4.8	%
North Dakota		4		31,318		572		0.3	%
Ohio		63		1,197,640		10,754		4.7	%
Oklahoma		22		370,185		2,882		1.3	%
Oregon		6		25,143		652		0.3	%
Pennsylvania		69		365,231		8,697		3.8	%
Puerto Rico		2		31,050		1,105		0.5	%
Rhode Island		5		23,488		636		0.3	%
South Carolina		30		649,029		6,920		3.0	%
South Dakota		2		49,641		415		0.2	%
Tennessee		48		362,779		6,526		2.9	%
Texas		127		983,549		15,322		6.7	%
Utah		3		14,009		415		0.2%

State	Number of Properties		Leasable Square Feet		Annualized Rental Revenue(1)		Percentage of Rental Revenue
Vermont		4		15,432		335		0.1	%
Virginia		25		150,269		3,395		1.5	%
Washington		5		219,700		3,139		1.4	%
West Virginia		9		57,079		1,434		0.6	%
Wisconsin		7		187,439		1,869		0.8	%
Wyoming		4		23,558		577		0.3	%
Total		1,181		19,404,596		227,764		100.0%

(1) 47 properties are accounted for as direct financing leases and therefore for accounting purposes, revenue is recognized as direct financing lease income on the discounted cash flows of the lease payments. Amount reflected is the cash rent on these properties.

ARCT IV

State/Possession	Number of Properties		Leasable Square Feet		Annualized Rental Revenue(1)			Percentage of Rental Revenue
Alabama		28		102,760		3,513			2.4	%
Alaska		1		2,805		—	(2)		0.0	%
Arizona		11		46,246		806			0.6	%
Arkansas		29		99,978		741			0.5	%
California		10		60,528		1,480			1.0	%
Colorado		2		6,449		176			0.1	%
Connecticut		2		4,718		—	(2)		0.0	%
Florida		56		1,452,488		15,246			10.6	%
Georgia		35		153,206		4,017			2.8	%
Idaho		2		9,586		171			0.1	%
Illinois		33		155,271		3,502			2.4	%
Indiana		15		461,317		7,557			5.3	%
Iowa		5		104,910		821			0.6	%
Kansas		5		39,392		646			0.4	%
Kentucky		16		76,151		1,333			0.9	%
Louisiana		11		33,683		1,238			0.9	%
Maine		3		787,176		1,082			0.8	%
Maryland		8		25,186		1,204			0.8	%
Massachusetts		5		574,467		4,157			2.9	%
Michigan		18		115,803		1,358			0.9	%
Mississippi		5		14,260		598			0.4	%
Missouri		12		73,082		1,170			0.8	%
Nebraska		2		11,980		126			0.1	%
New Hampshire		1		7,316		145			0.1	%
New Jersey		2		4,800		193			0.1	%
New Mexico		5		23,286		205			0.1	%
New York		7		28,837		503			0.3	%
North Carolina		42		219,588		5,340			3.7	%
Ohio		29		915,662		4,634			3.2	%
Oklahoma		3		24,482		382			0.3	%
Pennsylvania		26		142,287		3,183			2.2	%
Rhode Island		6		25,454		829			0.6	%
South Carolina		7		46,847		697			0.5	%
South Dakota		3		34,773		364			0.3%

State/Possession	Number of Properties		Leasable Square Feet		Annualized Rental Revenue(1)		Percentage of Rental Revenue
Tennessee		12		47,545		1,383		1.0	%
Texas		78		445,273		8,166		5.7	%
Utah		2		7,275		245		0.2	%
Virginia		19		78,799		1,776		1.2	%
Washington		4		16,581		538		0.4	%
West Virginia		6		31,209		461		0.3	%
Wisconsin		16		47,889		1,692		1.2	%
Wyoming		3		19,502		371		0.3	%
Total		585		6,578,847		82,049		57.0%

(1) Six properties are accounted for as direct financing leases and therefore for accounting purposes, revenue is recognized as direct financing lease income on the discounted cash flows of the lease payments. Amount reflected is the cash rent on these properties.

(2) Properties under master lease agreements and for which annualized rental revenue has not been allocated to individual properties; leases which only pay rent based on a percentage of sales or other measurement per the lease agreements; and leases that are currently on a month-to-month term, where the lease may be terminated at any time, do not have an annualized rental revenue amount reflected.

CAPLEASE

State/Possession	Number of Properties		Leasable Square Feet		Annualized Rental Revenue		Percentage of Rental Revenue
Alabama		2		131,894		4,097		3.0	%
California		7		1,388,786		12,468		9.1	%
Colorado		3		420,471		7,664		5.6	%
Florida		1		307,275		2,121		1.6	%
Georgia		4		264,165		2,027		1.5	%
Illinois		2		543,750		8,635		6.3	%
Indiana		3		932,542		3,729		2.7	%
Kansas		3		266,644		4,521		3.3	%
Kentucky		6		446,274		2,874		2.1	%
Louisiana		1		133,841		2,314		1.7	%
Maryland		4		430,967		9,584		7.0	%
Massachusetts		1		88,420		758		0.6	%
Nebraska		2		426,399		5,537		4.0	%
New Jersey		2		517,215		9,056		6.6	%
New York		1		98,184		1,312		1.0	%
North Carolina		1		191,681		2,093		1.5	%
Ohio		1		111,776		984		0.7	%
Oklahoma		1		328,545		4,250		3.1	%
Pennsylvania		4		2,153,381		12,986		9.5	%
Puerto Rico		1		56,500		1,300		1.0	%
Tennessee		3		193,983		2,454		1.8	%
Texas		11		1,598,049		22,334		16.3	%
Virginia		4		658,998		8,819		6.4	%
Washington		1		155,200		2,834		2.1	%
Wisconsin		1		154,849		2,031		1.5	%
Total		70		11,999,789		136,782		100%

ARCT IV (GE Capital)

State/Possession	Number of Properties		Leasable Square Feet		Annualized Rental Revenue			Percentage of Rental Revenue
Alabama		23		83,311		3,716			6.0	%
Arizona		9		31,973		839			1.4	%
Arkansas		7		23,279		—	(1)		0.0	%
California		3		12,948		280			0.5	%
Colorado		9		39,185		—	(1)		0.0	%
Connecticut		2		5,060		193			0.3	%
District of Columbia		1		3,210		43			0.1	%
Florida		50		184,504		7,977			12.8	%
Georgia		29		133,800		2,036			3.3	%
Idaho		4		16,296		1,617			2.6	%
Illinois		20		69,021		2,531			4.1	%
Indiana		23		74,501		2,728			4.4	%
Iowa		5		18,554		576			0.9	%
Kansas		3		10,038		359			0.6	%
Kentucky		7		29,832		1,510			2.4	%
Louisiana		15		45,468		1,540			2.5	%
Maryland		1		5,867		292			0.5	%
Massachusetts		1		6,237		143			0.2	%
Michigan		24		97,962		2,388			3.9	%
Minnesota		5		19,686		308			0.5	%
Mississippi		10		28,350		1,113			1.8	%
Missouri		11		31,792		864			1.4	%
Montana		1		2,520		41			0.1	%
Nebraska		5		16,052		409			0.7	%
New Hampshire		1		6,003		112			0.2	%
New Jersey		1		3,840		115			0.2	%
New Mexico		7		23,124		1,973			3.2	%
New York		21		85,279		2,490			4.0	%
North Carolina		6		14,930		716			1.2	%
North Dakota		1		3,536		480			0.8	%
Ohio		51		171,139		4,500			7.2	%
Oklahoma		9		28,911		824			1.3	%
Oregon		6		26,807		—	(1)		0.0	%
Pennsylvania		9		37,619		931			1.5	%
South Carolina		36		89,773		2,385			3.9	%
Tennessee		29		74,906		1,951			3.2	%
Texas		63		223,103		6,501			10.4	%
Utah		1		3,300		30			0.0	%
Virginia		19		51,622		1,395			2.3	%
Washington		3		12,642		1,846			3.0	%
West Virginia		15		45,907		1,445			2.3	%
Wisconsin		32		92,849		2,638			4.3	%
Total		578		1,984,736		61,835			100%

(1) Properties under master lease agreements and for which annualized rental revenue has not been allocated to individual properties; leases which only pay rent based on a percentage of sales or other measurement per the lease agreements; and leases that are currently on a month-to-month term, where the lease may be terminated at any time, do not have an annualized rental revenue amount reflected.

COMBINED

State/Possession	Number of Properties		Leasable Square Feet		Annualized Rental Revenue(1)			Percentage of Rental Revenue
Alabama		96		896,916		19,447			3.8	%
Alaska		1		2,805		—	(2)		0.0	%
Arizona		28		152,446		3,258			0.6	%
Arkansas		54		373,875		4,393			0.9	%
California		36		2,912,590		26,716			5.3	%
Colorado		27		704,991		12,513			2.5	%
Connecticut		14		46,904		1,377			0.3	%
Delaware		4		12,369		286			0.1	%
District of Columbia		1		3,210		43			0.0	%
Florida		143		2,132,943		30,710			5.9	%
Georgia		132		954,750		16,976			3.3	%
Idaho		14		97,447		3,341			0.7	%
Illinois		97		2,254,953		33,791			6.6	%
Indiana		69		3,230,510		22,301			4.4	%
Iowa		29		794,538		6,207			1.2	%
Kansas		33		1,621,199		10,137			2.0	%
Kentucky		56		815,517		10,346			2.0	%
Louisiana		55		434,230		7,963			1.6	%
Maine		5		933,606		3,901			0.8	%
Maryland		15		473,225		11,446			2.3	%
Massachusetts		25		1,104,319		11,215			2.2	%
Michigan		120		891,474		16,420			3.2	%
Minnesota		16		220,173		2,001			0.4	%
Mississippi		51		1,423,374		10,038			2.0	%
Missouri		109		1,047,733		13,053			2.6	%
Montana		6		57,897		897			0.2	%
Nebraska		12		479,786		6,482			1.3	%
Nevada		12		100,660		2,414			0.5	%
New Hampshire		12		78,647		1,606			0.3	%
New Jersey		13		611,576		12,003			2.4	%
New Mexico		22		100,885		3,048			0.6	%
New York		54		538,761		11,827			2.3	%
North Carolina		103		1,550,147		18,990			3.7	%
North Dakota		5		34,854		1,052			0.2	%
Ohio		144		2,396,217		20,872			4.1	%
Oklahoma		35		752,123		8,339			1.6	%
Oregon		12		51,950		652			0.1	%
Pennsylvania		108		2,698,518		25,797			5.1	%
Puerto Rico		3		87,550		2,405			0.5	%
Rhode Island		11		48,942		1,465			0.3	%
South Carolina		73		785,649		10,002			2.0	%
South Dakota		5		84,414		779			0.2	%
Tennessee		92		679,213		12,315			2.4	%
Texas		279		3,249,974		52,323			10.2	%
Utah		6		24,584		690			0.1	%
Vermont		4		15,432		335			0.1%

State/Possession	Number of Properties		Leasable Square Feet		Annualized Rental Revenue(1)		Percentage of Rental Revenue
Virginia		67		939,688		15,384		3.0	%
Washington		13		404,123		8,356		1.6	%
West Virginia		30		134,195		3,340		0.7	%
Wisconsin		56		483,026		8,230		1.6	%
Wyoming		7		43,060		948		0.2	%
Total		2,414		39,967,968		508,430		100%

(1) 59 properties are accounted for as direct financing leases and, therefore, for accounting purposes, revenue is recognized as direct financing lease income on the discounted cash flows of the lease payments. Amount reflected is the cash rent on these properties.

(2) Properties under master lease agreements and for which annualized rental revenue has not been allocated to individual properties; leases which only pay rent based on a percentage of sales or other measurement per the lease agreements; and leases that are currently on a month-to-month term, where the lease may be terminated at any time, do not have an annualized rental revenue amount reflected.

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 (for properties under direct financing leases, average annual rent amounts represent cash rent on these properties) (dollars in thousands):

ARCP

Total Leases:

Year of Expiration	Number of Leases Expiring		Average Annual Rent		Percentage of Average Annual Rent			Leasable Square Feet
July 1, 2013 through December 31, 2013		7		605		0.27	%		34,936
2014		34		4,358		1.92	%		200,243
2015		46		5,009		2.20	%		278,769
2016		54		6,157		2.71	%		256,987
2017		100		13,117		5.77	%		914,069
2018		121		19,626		8.63	%		1,328,382
2019		71		10,435		4.59	%		461,073
2020		58		7,377		3.24	%		300,376
2021		63		13,635		6.00	%		920,691
2022		124		24,138		10.62	%		4,073,687
2023		70		25,437		11.19	%		2,690,873
Total		748		129,894		57.13%			11,460,086

Operating Leases:

Year of Expiration	Number of Leases Expiring		Average Annual Rent		Percentage of Average Annual Rent			Leasable Square Feet
July 1, 2013 through December 31, 2013		7		605		0.27	%		34,936
2014		33		4,286		1.93	%		197,780
2015		44		4,835		2.17	%		272,071
2016		54		6,157		2.77	%		256,987
2017		93		12,010		5.40	%		883,811
2018		112		18,825		8.47	%		1,298,505
2019		63		9,674		4.35	%		437,626
2020		58		7,377		3.32	%		300,376
2021		62		13,513		6.08	%		917,696
2022		121		23,862		10.73	%		4,061,776
2023		62		24,605		11.06	%		2,653,211
Total		709		125,749		56.55%			11,314,775

Direct Financing Leases:

Year of Expiration	Number of Leases Expiring		Average Annual Rent		Percentage of Average Annual Rent			Leasable Square Feet
July 1, 2013 through December 31, 2013		—		—		0.00	%		—
2014		1		72		1.44	%		2,463
2015		2		174		3.48	%		6,698
2016		—		—		0.00	%		—
2017		7		1,107		22.17	%		30,258
2018		9		801		16.04	%		29,877
2019		8		761		15.24	%		23,447
2020		—		—		0.00	%		—
2021		1		122		2.44	%		2,995
2022		3		276		5.53	%		11,911
2023		8		832		16.66	%		37,662
Total		39		4,145		83.02%			145,311

ARCT IV

Total Leases:

Year of Expiration	Number of Leases Expiring		Average Annual Rent		Percentage of Average Annual Rent			Leasable Square Feet
July 1, 2013 through December 31, 2013		16		593		0.72	%		60,643
2014		14		1,376		1.67	%		63,830
2015		41		1,180		1.43	%		128,737
2016		29		1,622		1.97	%		102,960
2017		87		10,216		12.40	%		431,693
2018		30		2,293		2.78	%		121,094
2019		17		1,603		1.95	%		65,166
2020		17		2,006		2.43	%		70,194
2021		10		573		0.70	%		39,591
2022		24		10,910		13.24	%		1,401,216
2023		23		3,195		3.88	%		209,250
Total		308		35,567		43.16%			2,694,374

Operating Leases:

Year of Expiration	Number of Leases Expiring		Average Annual Rent		Percentage of Average Annual Rent			Leasable Square Feet
July 1, 2013 through December 31, 2013		15		486		0.60	%		57,093
2014		12		1,121		1.38	%		58,433
2015		40		1,057		1.30	%		125,529
2016		29		1,622		1.99	%		102,960
2017		87		10,216		12.56	%		431,693
2018		30		2,293		2.82	%		121,094
2019		15		1,347		1.66	%		56,834
2020		17		2,006		2.47	%		70,194
2021		10		573		0.70	%		39,591
2022		24		10,910		13.42	%		1,401,216
2023		23		3,195		3.93	%		209,250
Total		302		34,826		42.83%			2,673,887

Direct Financing Leases:

Year of Expiration	Number of Leases Expiring		Average Annual Rent		Percentage of Average Annual Rent			Leasable Square Feet
July 1, 2013 through December 31, 2013		1		107		14.44	%		3,550
2014		2		255		34.41	%		5,397
2015		1		123		16.60	%		3,208
2016		0		—		0.00	%		—
2017		0		—		0.00	%		—
2018		0		—		0.00	%		—
2019		2		256		34.55	%		8,332
2020		0		—		0.00	%		—
2021		0		—		0.00	%		—
2022		0		—		0.00	%		—
2023		0		—		0.00	%		—
Total		6		741		100.00%			20,487

CAPLEASE

Year of Expiration	Number of Leases Expiring		Average Annual Rent		Percentage of Average Annual Rent			Leasable Square Feet
July 1, 2013 through December 31, 2013		1		6,723		4.94	%		207,055
2014		3		2,861		2.10	%		223,912
2015		5		10,999		8.08	%		865,703
2016		10		17,527		12.88	%		1,312,058
2017		8		22,569		16.58	%		2,856,984
2018		3		4,305		3.16	%		227,672
2019		4		9,374		6.89	%		422,210
2020		8		16,952		12.46	%		1,049,555
2021		18		22,036		16.19	%		3,097,715
2022		1		3,672		2.70	%		181,160
2023		2		4,091		3.01	%		134,979
Total		63		121,109		89.00%			10,579,003

ARCT IV (GE CAPITAL)

Total Leases:

Year of Expiration	Number of Leases Expiring		Average Annual Rent		Percentage of Average Annual Rent			Leasable Square Feet
July 1, 2013 through December 31, 2013		19		728		1.18	%		48,892
2014		35		2,573		4.16	%		117,590
2015		28		1,323		2.14	%		89,035
2016		28		2,460		3.98	%		96,548
2017		20		1,056		1.71	%		55,258
2018		27		1,598		2.58	%		83,564
2019		20		1,355		2.19	%		52,251
2020		26		2,117		3.42	%		93,779
2021		24		1,990		3.22	%		67,661
2022		12		963		1.56	%		86,617
2023		7		465		0.75	%		24,417
Total		246		16,628		26.89%			815,612

Operating Leases:

Year of Expiration	Number of Leases Expiring		Average Annual Rent		Percentage of Average Annual Rent			Leasable Square Feet
July 1, 2013 through December 31, 2013		18		618		1.01	%		46,074
2014		33		2,382		3.90	%		111,690
2015		28		1,323		2.16	%		89,035
2016		27		2,348		3.84	%		94,239
2017		20		1,056		1.73	%		55,258
2018		26		1,400		2.29	%		78,992
2019		20		1,355		2.22	%		52,251
2020		26		2,117		3.46	%		93,779
2021		24		1,990		3.26	%		67,661
2022		12		963		1.58	%		86,617
2023		7		465		0.76	%		24,417
Total		241		16,017		26.20%			800,013

Direct Financing Leases:

Year of Expiration	Number of Leases Expiring		Average Annual Rent		Percentage of Average Annual Rent			Leasable Square Feet
July 1, 2013 through December 31, 2013		1		110		15.74	%		2,818
2014		2		191		27.32	%		5,900
2015		0		—		0.00	%		—
2016		1		112		16.02	%		2,309
2017		0		—		0.00	%		—
2018		1		198		28.33	%		4,572
2019		0		—		0.00	%		—
2020		0		—		0.00	%		—
2021		0		—		0.00	%		—
2022		0		—		0.00	%		—
2023		0		—		0.00	%		—
Total		5		611		87.41%			15,599

COMBINED

Total Leases:

Year of Expiration	Number of Leases Expiring		Average Annual Rent		Percentage of Average Annual Rent			Leasable Square Feet
July 1, 2013 through December 31, 2013		43		8,649		1.70	%		351,526
2014		86		11,168		2.20	%		605,575
2015		120		18,511		3.65	%		1,362,244
2016		121		27,766		5.47	%		1,768,553
2017		215		46,958		9.25	%		4,258,004
2018		181		27,822		5.48	%		1,760,712
2019		112		22,767		4.48	%		1,000,700
2020		109		28,452		5.60	%		1,513,904
2021		115		38,234		7.53	%		4,125,658
2022		161		39,683		7.82	%		5,742,680
2023		102		33,188		6.54	%		3,059,519
Total		1,365		303,198		59.72%			25,549,075

Operating Leases:

Year of Expiration	Number of Leases Expiring		Average Annual Rent		Percentage of Average Annual Rent			Leasable Square Feet
July 1, 2013 through December 31, 2013		41		8,432		1.68	%		345,158
2014		81		10,650		2.13	%		591,815
2015		117		18,214		3.64	%		1,352,338
2016		120		27,654		5.52	%		1,766,244
2017		208		45,851		9.15	%		4,227,746
2018		171		26,823		5.35	%		1,726,263
2019		102		21,750		4.34	%		968,921
2020		109		28,452		5.68	%		1,513,904
2021		114		38,112		7.61	%		4,122,663
2022		158		39,407		7.87	%		5,730,769
2023		94		32,356		6.46	%		3,021,857
Total		1,315		297,701		59.43%			25,367,678

Direct Financing Leases:

Year of Expiration	Number of Leases Expiring		Average Annual Rent		Percentage of Average Annual Rent			Leasable Square Feet
July 1, 2013 through December 31, 2013		2		217		3.37	%		6,368
2014		5		518		8.05	%		13,760
2015		3		297		4.62	%		9,906
2016		1		112		1.74	%		2,309
2017		7		1,107		17.21	%		30,258
2018		10		999		15.53	%		34,449
2019		10		1,017		15.81	%		31,779
2020		0		—		0.00	%		—
2021		1		122		1.90	%		2,995
2022		3		276		4.29	%		11,911
2023		8		832		12.93	%		37,662
Total		50		5,497		85.45%			181,397

EX-99.2

Risk Factors Relating to the Mergers and the Placements

The consideration for the CapLease Merger is fixed and will not be adjusted in the event of any change in any party’s stock price.

Upon the consummation of the CapLease Merger, each share of CapLease common stock will be converted into the right to receive $8.50 in cash without interest. The CapLease Merger consideration was fixed in the CapLease Merger Agreement, and will not be adjusted for changes in the market price of our common stock or the value of CapLease common stock. 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 CapLease Merger and the prospects of the combined company;

· changes in the business, operations, assets, liabilities and prospects of the company or CapLease;

· changes in market assessments of the business, operations, financial position and prospects of the company or CapLease;

· market assessments of the likelihood that the CapLease Merger will be completed;

· interest rates, general market and economic conditions and other factors generally affecting the price of our common stock and CapLease common stock;

· federal, state and local legislation, governmental regulation and legal developments in the businesses in which the company and CapLease operate; and

· other factors beyond the control of the company and CapLease, including those described or referred to elsewhere in this “Risk Factors” section.

The price of our common stock at the consummation of the CapLease Merger may vary from its price on the date the CapLease Merger Agreement was executed and on the date of this Current Report on Form 8-K. In addition, the value of CapLease’s common stock at the consummation of the CapLease Merger may vary from its value on the date the CapLease Merger Agreement was executed and on the date of this Current Report on Form 8-K. As a result, the market value of CapLease’s common stock could be more or less than the consideration payable by us in connection with the CapLease Merger.

Unless the market price of our common stock is less than $14.94, the exchange ratio in the ARCT IV Merger is fixed and will not be adjusted in the event of any change in either our or ARCT IV’s stock price; if the market price of our common stock is less than $14.94, we would be required to pay additional cash consideration or issue additional shares.

Upon the consummation of the ARCT IV Merger, each share of ARCT IV common stock will be converted into the right to receive, at the election of the holder of such share of ARCT IV common stock, either:

· $30.00 in cash, but in no event will the cash consideration be paid with respect to more than 25 % of the shares of ARCT IV common stock issued and outstanding as of immediately prior to the consummation of the merger, or,

· at our election, either

o a number of shares of our common stock equal to the Exchange Ratio (as defined below) or

o only if the Market Price (as defined below) of our common stock is less than $14.94, 2.05 shares of our common stock plus an amount in cash equal to the product obtained by multiplying the excess of the Exchange Ratio over 2.05 by the Market Price.

When referring to “Exchange Ratio,” we mean (1) if the volume weighted average closing sale price of a share of our common stock over the five (5) consecutive trading days on the NASDAQ Global Select Market, ending on the trading day immediately prior to the closing date of the ARCT IV Merger, as reported in The Wall Street Journal, which we refer to as the Market Price, is equal to or greater than $14.94, then 2.05, and (2) if the Market Price is less than $14.94, then the quotient (rounded to the nearest one-hundredth) obtained by dividing $30.62 by the Market Price. The stock exchange ratio was fixed in the ARCT IV Merger Agreement, and will not be adjusted for changes in the market price of our common stock or the value of ARCT IV common stock, unless the Market Price of our common stock is less than $14.94. If the Market Price of our common stock is less than $14.94, then we would be required to increase the merger consideration either by paying additional cash or by issuing additional shares of our common stock. Changes in the price of our common stock prior to the ARCT IV Merger could affect the market value of the ARCT IV Merger consideration that ARCT IV stockholders electing to receive our common stock will receive on the date of the merger. 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 merger and the prospects of the combined company;

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

· market assessments of the likelihood that the merger will be completed;

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

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

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

The price of our common stock at the consummation of the ARCT IV merger may vary from its price on the date the ARCT IV Merger Agreement was executed, on the date of this Current Report on Form 8-K and on the date of the special meetings of ARCP and ARCT IV. As a result, the market value of the merger consideration represented by the stock exchange ratio also may vary. For example, based on the range of closing prices of our common stock during the period from June 28, 2013, the last trading day before public announcement of the ARCT IV Merger, through July 17, 2013, the exchange ratio of 2.05 shares of our common stock represented a market value ranging from a low of $29.15 to a high of $31.28.

In addition, if the Market Price is less than $14.94, then each share of ARCT IV common stock will be converted into the right to receive, at our election, either:

· the number of shares of our common stock equal to $30.62 divided by the Market Price; or

· 2.05 shares of our common stock plus an amount in cash equal to the product obtained by multiplying the Market Price by the excess of (a) the ratio determined by dividing $30.62 by the Market Price over (b) 2.05.

If the price of ARCP common stock increases between the date the ARCT IV Merger Agreement was signed or the date of our special meeting and the effective time of the merger, ARCT IV stockholders electing to receive ARCP common stock will receive shares of our common stock that have a market value upon completion of the merger that is greater than the market value of such shares calculated pursuant to the stock exchange ratio when the merger agreement was signed or the date of our special meeting, respectively. Therefore, while the number of shares of ARCP common stock to be issued per share of ARCT IV common stock (for which a stock election is made) would be fixed under these circumstances, our stockholders cannot be sure of the market value of the consideration that will be paid to ARCT IV stockholders electing to receive our common stock upon completion of the merger.

If the price of our common stock declines between the date the ARCT IV Merger Agreement was signed or the date of the ARCT IV special meeting and the effective time of the ARCT IV Merger, including for any of the reasons described above, and the Market Price is less than $14.94, then ARCT IV stockholders electing to receive our common stock will receive, at our election, either additional cash or additional shares of our common stock. Under these circumstances, the market value of our common stock comprising the merger consideration, upon completion of the ARCT IV Merger, could be higher or lower than the market value of the shares of ARCP common stock calculated pursuant to the stock exchange ratio on the date the ARCT IV Merger Agreement was signed or on the date of the ARCT IV special meeting, respectively. Therefore, while the number of shares our common stock to be issued per share of ARCT IV common stock (for which a stock election is made) may increase or ARCT IV stockholders may receive additional cash consideration, at our election, the effects on us of our issuance of additional shares or our payment of additional cash merger consideration, cannot be predicted and could adversely affect the market value of our common stock.

If the price of our common stock declines between the date the ARCT IV Merger Agreement was signed or the date of the ARCT IV special meeting and the effective time of the ARCT IV Merger, including for any of the reasons described above, and the Market Price is less than $14.94, then ARCP stockholders cannot be sure of the total number of shares we will issue or the total amount of cash we will be required to pay as merger consideration in order to consummate the merger. The effects on us of our issuance of additional shares or our payment of additional cash merger consideration, cannot be predicted and could adversely affect the market value of our common stock following consummation of the ARCT IV Merger.

In addition, the value of ARCT IV common stock at the consummation of the ARCT IV Merger may vary from its value on the date the ARCT IV Merger Agreement was executed, on the date of this Current Report on Form 8-K and on the date of the special meetings of ARCP and ARCT IV. As a result, the market value of ARCT IV common stock could be more or less than $30.00, which represents the merger consideration payable if an ARCT IV stockholder elects to receive cash.

Each of the Mergers and the related transactions thereto are subject to approval by common stockholders.

In order for the CapLease Merger to be completed, CapLease’s common stockholders must approve the CapLease Merger and the other transactions contemplated by the CapLease Merger Agreement, which requires the affirmative vote of the holders of at least a majority of the outstanding shares of CapLease’s common stock entitled to vote on such proposal. If the required votes are not obtained by February 28, 2014, the CapLease Merger will not be consummated.

Additionally, in order for the ARCT IV Merger to be completed, ARCT IV stockholders must approve the ARCT IV Merger and the other transactions contemplated by the ARCT IV Merger Agreement, which requires the affirmative vote of the holders of at least a majority of the outstanding shares of ARCT IV common stock entitled to vote on such proposal at the ARCT IV special meeting. In addition, while a vote of our stockholders is not required to approve the merger, 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 IV stockholders as part of the merger consideration. Approval of the issuance of shares of ARCP common stock to ARCT IV 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 ARCP common stock entitled to vote on such proposal. If either or both of these required votes is not obtained by December 31, 2013 (subject to the right of each of the ARCP and ARCT IV to extend such date by up to 60 days), the ARCT IV Merger may not be consummated. The failure to achieve expected benefits and unanticipated costs relating to the Mergers could reduce ARCP’s financial performance.

Failure to consummate the Mergers could negatively impact or future business and financial results.

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

· our having to pay certain costs, including unanticipated costs, relating to the Mergers, such as legal, accounting, financial advisory, filing, printing and mailing fees;

· our being required, under certain circumstances, to pay to ARCT IV $5,000,000 in expense reimbursements; 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 consummated, we will not achieve the expected benefits thereof and will be subject to the risks described above, which could materially affect our business, financial results and stock price.

The CapLease Merger Agreement and the ARCT IV Merger Agreement each contains provisions that grant the CapLease or ARCT IV, as applicable, board of directors with a general ability to terminate the CapLease Merger Agreement or the ARCT IV Merger Agreement, as applicable, based on the exercise of the directors’ duties.

CapLease may terminate the CapLease Merger Agreement, subject to the terms thereof, 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 CapLease Merger (and to terminate the CapLease Merger Agreement) would be inconsistent with the directors’ duties under applicable law. Similarly, ARCT IV may terminate the ARCT IV 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 ARCT IV Merger (and to terminate the ARCT IV Merger Agreement) would be inconsistent with the directors’ duties under applicable law. If either Merger is not completed, our ongoing business could be adversely affected and we will be subject to several risks, including the risks described elsewhere in this “Risk Factors” section.

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 CapLease Merger is expected to close during the third quarter of 2013 assuming that all of the conditions in the CapLease Merger Agreement are satisfied or waived. The CapLease Merger Agreement provides that either we or CapLease may terminate the CapLease Merger Agreement if the CapLease Merger has not occurred by February 28, 2014. Additionally, the ARCT IV Merger is expected to close during the third quarter of 2013 assuming that all of the conditions in the ARCT IV Merger Agreement are satisfied or waived. The ARCT IV Merger Agreement provides that either we or ARCT IV may terminate the ARCT IV Merger Agreement if the ARCT IV Merger has not occurred by December 31, 2013 (subject to the right of each of the company and ARCT IV 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 stockholders or satisfying the other closing conditions to which each Merger is subject.

Each Merger is subject to a number of conditions which, if not satisfied or waived, would adversely impact our ability to complete the Mergers.

The CapLease Merger, which is expected to close during the third quarter of 2013, is subject to certain closing conditions, including, among other things, (a) the approval of the CapLease Merger by at least 50% of all the votes entitled to be cast on the matter by the holders of all of CapLease’s outstanding shares of common stock, (b) the accuracy of the other parties’ representations and warranties and compliance with covenants, subject in each case to materiality standards, and (c) delivery of a tax opinion.

Additionally, the ARCT IV Merger, which is expected to close during the third quarter of 2013, is subject to certain closing conditions, including, among other things (a) the effectiveness of a registration statement on Form S-4 containing a joint proxy statement/prospectus, pursuant to which shares of our common stock will be issued, (b) the approval of the merger by at least a majority of all the votes entitled to be cast on the matter by the holders of all of ARCT IV’s outstanding shares of common stock at the ARCT IV special meeting, (c) the approval of the issuance of our common stock to the ARCT IV stockholders by the holders of at least a majority of the votes cast by ARCP stockholders (provided the total number of votes cast constitutes a quorum), (d) the accuracy of the other parties’ representations and warranties and compliance with covenants, subject in each case to materiality standards, (e) delivery of tax opinions and (f) approval by our board of directors of an annual dividend rate of $0.94 per share of our common stock.

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.

Your ownership position in the company will be diluted in connection with the Mergers and the conversion of our Series C Convertible Preferred Stock, which will be exacerbated if the 19.9% Cap Proposals (as defined below) are approved, and the holders of our Series C Convertible Preferred Stock approve the amendment to the Series C articles supplementary.

In connection with the ARCT IV Merger, we expect to issue approximately 109.3 million shares of our common stock to the holders of ARCT IV common stock, assuming 75% of the merger consideration is paid in the form of shares of our common stock. Additionally, we may be required to sell additional common stock in order to fund, in part, the CapLease Merger. Additionally, we may be required to issue up to approximately 3.3 million additional shares of common stock upon the conversion of our Series C Convertible Preferred Stock (under the terms of the current articles supplementary for the Series C Convertible Preferred Stock) or, if our stockholders approve a contemplated proposal to amend the articles supplementary for our Series C Convertible Preferred Stock, to provide an exception to the cap contained therein on the aggregate amount of shares of our common stock that may be issued to the holders of such preferred shares upon conversion thereof (which is currently capped at 19.9% of the shares outstanding immediately prior to the Placements), or the 19.9% Cap Proposal, and holders of our Series C Convertible Preferred Stock approve the amendment to the articles supplementary pursuant to its terms as contemplated by the 19.9% Cap Proposal, up to approximately 28.4 million additional shares of our common stock, assuming a common stock price of $15.67 per share. Such sale and issuances of common stock will be material in amount. Such share issuances will dilute the ownership of the Company by stockholders at the time of issuance. Further, the price at which we may be required to sell our common stock in order to fund the CapLease Merger is uncertain. If, for example, the price of our common stock declines, we will be required to sell more shares of our common stock to generate the proceeds needed to fund the CapLease Merger which, in turn, will exacerbate the dilution stockholders will incur.

An adverse judgment in a lawsuit challenging the CapLease Merger or ARCT IV, if commenced, may prevent the CapLease Merger or the ARCT IV Merger, as applicable, from becoming effective or from becoming effective within the expected timeframe.

A number of lawsuits by CapLease’s stockholders have been filed challenging the CapLease Merger, some of which name us and the Operating Partnership as defendants. Additionally, ARTC IV’s stockholders may file one or more lawsuits challenging the ARCT IV, which may have us or our Operating Partnership. We cannot assure you as to the outcome of such 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 CapLease Merger or ARCT IV Merger on the agreed-upon terms, such an injunction may prevent the completion of the CapLease Merger or ARCT IV Merger in the expected time frame, or may prevent it 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 and CapLease’s or ARCT IV’s businesses.

We are acquiring assets in the CapLease Merger that do not fit within its target assets, which we will seek to divest following closing.

In connection with the CapLease Merger, we are acquiring assets consisting of, as of March 31, 2013, three properties that are currently vacant (or will shortly be vacant), $59.9 million in commercial mortgage-backed securities, at fair value, and $25.3 million in amortized cost of first mortgage loans secured by net leased single tenant properties, none of which fit within our target assets. Following the closing of the CapLease Merger, we will transfer such assets to a direct or indirect subsidiary wholly-owned by the Operating Partnership and the properties will be classified as “held for sale.” We will seek to divest of such assets, which can take the form of a sale, spin-off or other disposition, to maximize value from such assets. There can be no assurance that we will be able to divest of any or all of such assets or, even if we are able to do so, may have to take a loss from the price we paid for such assets. In either case, ARCP’s business, financial condition, results of operations, cash flow, per share trading price of its common stock and ability to make distributions to our stockholders may be materially and adversely affected.

Our Series C Convertible Preferred Stock is subject to conversion or redemption in the short-term, which could result in a cash payment being due to the holders thereof.

On June 7, 2013, we closed on (i) the Common Stock Placement for the sale and issuance of approximately 29.4 million shares of our common stock at a purchase price of $15.47 per share, for an aggregate purchase price of $455 million, and (ii) the Preferred Stock Placement for the sale of approximately 28.4 million shares of our 5.81% convertible preferred stock designated as Series C Convertible Preferred Stock, at a purchase price of $15.67 per share, for an aggregate purchase price of $445 million.

As of July 18, 2013, we had approximately 28.4 million shares of Series C Convertible Preferred Stock outstanding. Within three business days following the earliest to occur of (i) the closing of the CapLease Merger, (ii) the first trading day following (a) an announcement that CapLease has accepted a competing offer (which did not occur during the go shop period under the CapLease Merger Agreement) or (b) the CapLease Merger Agreement is otherwise terminated, and (iii) December 31, 2013, we will have the option to: (A) convert all the shares of Series C Convertible Preferred Stock into such number of shares of our common stock equal to the par value of the shares of Series C Convertible Preferred Stock divided by the lowest of (i) a 2% discount to the volume-weighted average trading price, or VWAP, of ARCP common stock for the 10 prior trading days, (ii) a 2% discount to the closing price of our common stock on the conversion election date and (iii) $15.67, as may be adjusted from time to time, or the Conversion Price, or (B) redeem all shares of the Series C Convertible Preferred Stock in cash at 120% of its par value. Under the current terms of the articles supplementary for our Series C Convertible Preferred Stock, the aggregate number of shares of our common stock that may be issued in connection with the Placements, including upon conversion of the Series C Convertible Preferred Stock, may not exceed approximately 30.8 million shares, which is equal to 19.9% of our common stock outstanding immediately prior to the closing of the Placements. Approximately 29.4 million shares of our common stock were issued in the Common Stock Placement. Accordingly, under the current terms of the articles supplementary for our Series C Convertible Preferred Stock, upon conversion of the Series C Convertible Preferred Stock, we are limited to issuing not more than approximately 3.3 million shares of our common stock, with cash to be paid in respect of the balance of the Series C Convertible Preferred Stock in an amount equal to the greater of the product of such number of excess shares into which the shares of Series C Convertible Preferred Stock would have been convertible and (i) 102% of the liquidation preference, which is $15.67, as may be adjusted from time to time, and (ii) the Conversion Price valued at the one-day VWAP of the common stock on the applicable date.

As a result, if the 19.9% Cap Proposals are not approved and the holders of Series C Convertible Preferred Stock do not approve the proposed amendment to the Series C articles supplementary, we will need to pay cash upon the conversion of the Series C Convertible Preferred Stock in respect of shares in excess of the 19.9% Cap. Since the conversion of the shares of Series C Convertible Preferred Stock will be less expensive for us than redeeming such shares, it is likely that we will elect to convert such number of shares of Series C Convertible Preferred Stock that would allow us to issue the approximately 3.3 million shares (or approximately 28.4 million shares if our ARCP stockholders approve the 19.9% Cap Proposals and the holders of Series C Convertible Preferred Stock do not approve the proposed amendment to the Series C articles supplementary) of ARCP common stock described above. Assuming the Series C Convertible Preferred Stock is converted and 3.3 million shares of our common stock are issued upon conversion thereof, we estimate that approximately $401.1 million (approximately 25.1 million shares of Series C Convertible Preferred Stock at $15.98 per share, which is 102% of the current liquidation preference thereof) would be payable by us in cash to the holders thereof. The amount payable by us upon such conversion may be more or less than approximately $401.1 million depending on any required adjustments to the liquidation preference pursuant to the terms of the articles supplementary for the Series C Convertible Preferred Stock or the one-day VWAP of the our common stock on the applicable date, both of which are currently impossible to calculate with any degree of certainty.

Further, our credit facility imposes limitations on our ability to make certain restricted payments, which includes payments upon cancellation of our capital stock. Payment of cash consideration to the holders of shares of Series C Convertible Preferred Stock upon their conversion would constitute a restricted payment under our credit facility. The credit agreement for our credit facility provides that, in order to make such a restricted payment, there must not be a continuing default under the credit facility at the time of payment or a default resulting from such payment and the amount of such payment, when added with all other restricted payments (including, among others, dividends and other distributions in respect of our capital stock) for fiscal year 2013, cannot exceed 110% of ARCP’s FFO for fiscal year 2013 (assuming such payment is made on or prior to December 31, 2013). When this obligation in respect of the Series C Convertible Preferred Stock becomes payable, we may be unable to satisfy the conditions required to make such a restricted payment under the credit facility and, therefore, may be unable to fund such an obligation from borrowings under the credit facility or at all without the approval of the lenders thereunder. Further, if we make such a restricted payment to repay this obligation, our ability to make other restricted payments, including dividends and other distributions in respect of its common stock, will be further constrained.

As a result, we may not be able to finance this obligation on favorable terms or at all, especially if, at the time, there is a limitation on the availability of credit and related adverse conditions in the global financial markets. If we are unable to finance this obligation prior to the conversion/redemption date, then we may be forced to seek liquidity through a variety of options, including, but not limited to, the sale of properties, which may be at below market prices, or the issuance of additional equity. If we are unable to pay this obligation, we would be in default of our obligations pursuant to the terms of the articles supplementary for the Series C Convertible Preferred Stock, which would cause a cross-default on our credit facility and any other loan with cross-default provisions and our business, financial condition, results of operations, cash flow, per share trading price of our common stock and ability to make distributions to our stockholders will be materially and adversely affected. In addition, if any foreclosure on our properties results, this could create taxable income without accompanying cash proceeds, which could adversely affect our ability to meet the REIT distribution requirements imposed by the Internal Revenue Code of 1986, as amended.

The contingent value rights, issued to the investors in connection with the Placements may result in a cash payment being due to the holders thereof.

In connection with the closing of the Common Stock Placement, we entered into contingent value rights agreements, or the Common Stock CVR Agreements, with each of the investors in the Common Stock Placement. Pursuant to each Common Stock CVR Agreement, we issued to each investor an amount of contingent value rights, or CVRs and the CVRs issued pursuant to the Common Stock CVR Agreement, the Common Stock CVRs, equal to the number of shares of common stock purchased by each such investor. On the 61st trading day, or the Common CVR Test Date, following the closing of the Common Stock Placement, we will calculate the VWAP for our common stock for the 30th – 60th trading days following the closing of the Common Stock Placement, or the Common CVR Period VWAP. Within five business days after the Common CVR Test Date, we will pay to each holder of Common Stock CVRs, in immediately available funds, an amount equal to (a) the number of Common Stock CVRs held by the holder on the Common CVR Test Date multiplied by (b) the amount, not to exceed $1.50, equal to the difference between $15.47, as may be adjusted from time to time, and the Common CVR Period VWAP.

Additionally, in connection with the closing of the Preferred Stock Placement, we entered into contingent value rights agreements, or the Convertible Preferred Stock CVR Agreements, with each of the investors in the Preferred Stock Placement. Pursuant to each Convertible Preferred Stock CVR Agreement, we issued to the investors an amount of CVRs, or the Convertible Preferred Stock CVRs, equal to the number of shares of Series C Convertible Preferred Stock purchased by each such investor. In the event that we convert (regardless of whether such shares are actually converted) shares of Series C Convertible Preferred Stock into shares of our common stock in accordance with the terms of the articles supplementary for the Series C Convertible Preferred Stock, on the 121st trading day following such conversion election date, or the Preferred CVR Test Date, we will calculate the VWAP for the common stock for the 90th – 120th trading days following the conversion election date, or the Preferred CVR Period VWAP. Within five business days after the Preferred CVR Test Date, we will pay to each holder of Convertible Preferred Stock CVRs, in immediately available funds, the amount, if any, with respect to each share of our common stock into which shares of Series C Convertible Preferred Stock were converted (regardless of whether any such shares are actually converted) held by such holder (and/or its assignees) on the Preferred CVR Test Date equal to: (i) the number of such shares of common stock at the close of business on the Preferred CVR Test Date multiplied by (ii) the amount, not to exceed $2.00, equal to the difference between (A) the lowest of (i) a 2% discount to the VWAP of the common stock for the 10 trading days prior to the conversion election date, (ii) a 2% discount to the closing price of the common stock on the date of the conversion election date and (iii) $15.67, as may be adjusted from time to time, and (B) the Preferred CVR Period VWAP.

As a result, we may need cash, which could be significant in amount, in connection with our payment obligations under the Common Stock CVR Agreements and/or the Preferred Stock CVR Agreements. If we do not have adequate cash on hand or capacity under our credit facility to finance such obligations, we will be required to seek alternative financing sources. We may not be able to finance this obligation on favorable terms or at all, especially if, at the time, there is a limitation on the availability of credit and related adverse conditions in the global financial markets. If we are unable to finance this obligation prior to the due date, then we may be forced to seek liquidity through a variety of options, including, but not limited to, the sale of properties, which may be at below market prices, or the issuance of additional equity. If we are unable to pay this obligation, our business, financial condition, results of operations, cash flow, per share trading price of our common stock and ability to make distributions to its stockholders will be materially and adversely affected. In addition, if any foreclosure on our properties results, this could create taxable income without accompanying cash proceeds, which could adversely affect ARCP’s ability to meet the REIT distribution requirements imposed by the Code.

We expect to incur substantial expenses related to the Mergers.

We expect to incur substantial expenses in connection with consummating the Mergers and integrating the business, operations, networks, systems, technologies, policies and procedures we are acquiring with our own, including unanticipated costs and assumption of liabilities. 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 its 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 expects 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.

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

Following the Mergers, the combined company will have an expanded portfolio and operations and 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 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 Mergers.

The market price of our common stock may decline as a result of the Mergers if we do 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, if the Mergers are consummated, our stockholders will own interests in a company operating an expanded business with a different mix of properties, risks and liabilities. Current stockholders may not wish to continue to invest in us if the Mergers are consummated, or for other reasons may wish to dispose of some or all of their shares of our common stock. If, following the consummation 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.

Counterparties to certain significant agreements with us, ARCT IV and/or CapLease may have consent rights in connection with the Mergers.

Each of ARCP’s, ARCT IV and CapLease 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 CapLease Merger or ARCT IV Merger, as applicable, may constitute a “change in control” and, therefore, the counterparty may assert its rights in connection with the Merger. 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 the agreements and, thereby, trigger rights of the counterparties to such other agreements, including termination rights where available.

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

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

If we elect to pay for a portion of the costs of the Mergers through our credit facility and such credit facility transactions do not close, we will need to replace the funding that will be used to finance such portion of the costs of the Mergers.

We may elect to pay a portion of the costs of the Mergers through financing under our $1.45 billion credit facility (under which we have undrawn commitments of $850 million and which contains an “accordion” feature to allow us, under certain circumstances, to increase the commitments thereunder by $1.05 billion), borrowings under which will be subject to borrowing base availability. The funding of the existing commitments under the credit facility are subject to customary conditions, including (a) the bring-down of our representations and warranties, (b) no default existing, (c) timely notice by us and (d) borrowing base availability. If additional commitments are obtained in connection with our exercise of the “accordion” feature under the credit facility, such commitments likely will be subject to customary conditions, which may include, without limitation, (1) the completion of due diligence review of the assets, liabilities and properties of us and our subsidiaries, (2) the absence of any change, occurrence or development that has had, or could reasonably be expected to result in, (x) a material adverse change in, or a material adverse effect on, the operations, business, assets, properties or liabilities of our and our subsidiaries, or (y) a material impairment of the rights and remedies of the credit facility lenders and agents under the credit agreement for the credit facility and (3) 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 facility.

There can be no assurance that we will receive the fundings under the credit facility 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 costs of the Mergers. If the funding transactions are not consummated, we will need to finance a portion of the cash consideration and other costs of the Mergers 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 costs of the Mergers, we will be unable to consummate one or more of the Mergers.

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 may assume certain indebtedness of CapLease and ARCT IV, as a result of which we 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 June 30, 2013, we had indebtedness of $1.3 billion. Taking into account our existing indebtedness, the incurrence of additional indebtedness in connection with the Mergers, and the expected assumption of indebtedness in the Mergers, our pro forma consolidated indebtedness as of June 30, 2013, after giving effect to the Mergers, would be up to approximately $4.2 billion.

Our increased indebtedness could have important consequences to holders of our common 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 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 may lose the properties securing these loans as a result.

Risk Factors Following the Mergers and our Operations Generally

As a result of becoming a public company, we implemented additional financial and accounting systems, procedures and controls which are applicable to such companies, which has increased our costs and requires substantial management time and attention; if we fail to manage our planned growth effectively or maintain an effective system of internal controls over financial reporting, we may not be able to accurately report our financial results and our business may be adversely affected.

As a public company, we have incurred, and in the future will continue to incur, significant legal, accounting and other expenses, including costs associated with public company reporting requirements and corporate governance requirements, including requirements under the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act. As an example, in order to comply with such reporting requirements, we are evaluating our internal control systems in order to allow management to report on, and, when required, our independent registered public accounting firm to attest to, our internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act.

We also have achieved expected growth in a relatively short period of time and anticipate to continue to experience growth in the future. Our growth, and in particular our recent acquisitions, have placed, and will continue to place, a demand on our personnel and administrative, operational and financial systems. In high growth periods companies must invest in infrastructure to perform the functions of a larger company and increase the capacity to manage the larger company on a day to day basis. If we fail to implement proper overall business controls, including as required to integrate the property subsidiaries and support our growth, our results of operations could be harmed or we could fail to meet our reporting obligations. In addition, if we identify significant deficiencies or material weaknesses in our internal control over financial reporting that we cannot remediate in a timely manner, or if we are unable to receive an unqualified report from our independent registered public accounting firm with respect to our internal control over financial reporting when required, investors and others may lose confidence in the reliability of our financial statements and the trading price of our common stock and our ability to obtain any necessary equity or debt financing could suffer.

Furthermore, the design and effectiveness of our disclosure controls and procedures and internal control over financial reporting may not prevent all errors, misstatements, or misrepresentations. Although management will continue to review the effectiveness of our disclosure controls and procedures and internal control over financial reporting, there can be no guarantee that our internal control over financial reporting will be effective in accomplishing all control objectives all of the time. Deficiencies, including any material weaknesses, in our internal control over financial reporting which may occur in the future could result in misstatements of our results of operations, restatements of our financial statements, a decline in the trading price of our common stock, or otherwise materially adversely affect our business, reputation, results of operations, financial condition, or liquidity.

We may be unable to integrate the recently acquired GE Capital Portfolio (as defined below) into our existing portfolio or CapLease’s and ARCT IV’s business with our business successfully and realize the anticipated synergies and related benefits of the Mergers and acquisition of the GE Capital Portfolio or do so within the anticipated timeframe.

Our consummation of each Merger would involve the combination of two companies that, prior to the consummation thereof, operated as independent companies. Additionally, we recently acquired the GE Capital Portfolio. ARCP may be required to devote significant management attention and resources to integrating our business practices and operations with those of CapLease and ARCT IV and the acquired GE Capital Portfolio. Potential difficulties we may encounter in the integration process include the following:

· the inability to successfully combine our business with CapLease’s or ARCT IV’s business or the GE Capital Portfolio into our own portfolio, in each case in a manner that permits the combined company to achieve the anticipated cost savings, which would result in the anticipated benefits of the Mergers and the acquisition of the GE Capital Portfolio not being realized in the timeframe anticipated or at all;

· the complexities associated with managing the combined business out of several different locations and integrating personnel from the two companies;

· the additional complexities of combining companies with different histories, cultures, potential regulatory restrictions, markets and tenant bases;

· the failure to retain key employees of either of ARCP, ARCT IV or CapLease;

· the inability to divest certain CapLease assets;

· potential unknown liabilities and unforeseen increased expenses, delays or regulatory conditions associated with the combinations; and

· performance shortfalls as a result of the diversion of management’s attention caused by completing the Mergers and acquisition of the GE Capital Portfolio and integrating operations.

For all these reasons, you should be aware that it is possible that the integration process following the Mergers or acquisition of the GE Capital Portfolio 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 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 achieve the anticipated benefits of such transactions, or could otherwise adversely affect the business and financial results of the combined company.

The ARCT IV Advisor will only provide support for a limited period of time under the ARCT IV Advisory Agreement.

The Amended and Restated Advisory Agreement, dated as of November 12, 2012, by and among ARCI IV, the ARCT IV Advisor, and American Realty Operating Partnership IV, L.P., or ARCT IV OP, referred to as ARCT IV Advisory Agreement, which requires the ARCT IV Advisor to provide certain services to ARCT IV, including asset management, advisory services, and other essential services, has been terminated and will expire 60 days following the consummation of the ARCT IV Merger, which we anticipate will occur during the third 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.

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

Following the Mergers, the combined company may 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 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 property portfolio of the combined company has a high concentration of properties in the quick service restaurant industry, making the combined company more vulnerable economically than if its investments were less focused on quick service restaurant-related assets.

Of our combined property portfolio following the Mergers, over 15% of total rental revenue will come from properties in the quick service restaurant industry. As a result, the combined company may be particularly subject to risks inherent in the quick service restaurant industry. A downturn in the commercial real estate industry generally could significantly adversely affect the value of the combined company’s properties. A downturn in the quick service restaurant industry could particularly negatively affect lessees’ ability to make lease payments to us and the combined company’s ability to make distributions to its stockholders. These adverse effects could be more pronounced than if we further diversified our investments outside of real estate or if their combined portfolio did not have as high a concentration in quick service restaurant-related assets.

The property portfolio of the combined company has a high concentration of properties in Texas. The combined company’s properties may be adversely affected by economic cycles and risks inherent to the state of Texas.

Of our combined property portfolio following the Mergers, over 10% of total revenue will come from properties located in Texas. Any adverse situation that disproportionately affects Texas, may have a magnified adverse effect on the portfolio of the combined company. Real estate markets are subject to economic downturns, as they have been in the past, and the combined company cannot predict how economic conditions will impact this market in both the short and long term. Declines in the economy or a decline in the real estate market in the state of Texas could hurt our financial performance and the value of our properties. Factors that may negatively affect economic conditions in Texas include:

· business layoffs or downsizing;

· industry slowdowns;

· relocations of businesses;

· changing demographics;

· increased telecommuting and use of alternative work places;

· infrastructure quality;

· any oversupply of, or reduced demand for, real estate;

· concessions or reduced rental rates under new leases for properties where tenants defaulted; and

· increased insurance premiums.

Increases in interest rates would increase our debt service costs, may adversely affect any future refinancing of our debt and our ability to incur additional debt, and could adversely affect our financial condition, cash flow and results of operations.

Certain of our borrowings bear interest at variable rates, and we may incur additional debt in the future. Increases in interest rates would result in higher interest expenses on our existing unhedged variable rate debt, and increase the costs of refinancing existing debt or incur new debt. Additionally, increases in interest rates may result in a decrease in the value of our real estate and decrease the market price of its common stock and could accordingly adversely affect our financial condition, cash flow and results of operations.

Payment of fees to the ARCP Manager and the ARCT IV Advisor reduces cash available for investment and distribution.

The ARCP Manager will perform services for the combined company in connection with the selection, acquisition, financing, leasing and management of the combined company and its properties. The ARCP Manager will be paid substantial fees for these services, which reduce the amount of cash available for investment in properties or distribution to stockholders. Such fees and reimbursements include: (i) a management fee payable to the ARCP Manager equal to 0.50% per annum of its average unadjusted book value of the combined company’s real estate assets up to $3.0 billion, plus 0.40% per annum of such average unadjusted book value in excess of $3.0 billion, calculated and payable monthly in advance; and (ii) incentive fees equal to the difference between (1) the product of (x) 20% and (y) the difference between (I) the combined company’s Core Earnings (as defined below) for the previous 12-month period, and (II) the product of (A) the weighted average of the issue price per share of the combined company’s common stock of all of the combined company’s public offerings of common stock multiplied by the weighted average number of all shares of the combined company’s common stock outstanding (including any restricted shares of common stock and other shares of common stock underlying awards granted under one or more of the combined company’s equity incentive plans) in the previous 12-month period, and (B) 8.00%, and (2) the sum of any incentive fee paid to the ARCP Manager with respect to the first three calendar quarters of such previous 12-month period; provided, however, that no incentive fee is payable with respect to any calendar quarter unless Core Earnings for the 12 most recently completed calendar quarters is greater than zero. For the purpose of calculating incentive fees, “Core Earnings” means the net income (loss), computed in accordance with Accounting Principles Generally Accepted in the United States of America, or U.S. GAAP, excluding (i) non-cash equity compensation expense, (ii) incentive compensation, (iii) acquisition fees, (iv) financing fees, (v) depreciation and amortization, (vi) any unrealized gains or losses or other non-cash items that are included in net income for the applicable reporting period, regardless of whether such items are included in other comprehensive income or loss, or in net income, and (vii) one-time events pursuant to changes in U.S. GAAP and certain non-cash charges, in each case after discussions between the ARCP Manager and the independent directors and approved by a majority of the Independent Directors.

Additionally, pursuant to a side letter agreement entered into in connection with the ARCT II Merger Agreement, the ARCT IV Advisor and the ARCT IV OP agreed that the ARCT IV Advisory Agreement will be extended for a 60 day period following the closing date of the merger. During such time, the ARCT IV Advisor will be entitled to receive certain fees, which reduce the amount of cash available for investment in properties or distribution to stockholders.

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, our stockholders may not receive the same dividends following the merger for various reasons, including the following:

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

· ARCP may not have enough cash to pay such dividends due to changes in ARCP’s 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 the ARCP board of directors, which reserves the right to change ARCP’s dividend practices at any time and for any reason;

· ARCP may desire to retain cash to maintain or improve its credit ratings; and

· the amount of dividends that ARCP’s subsidiaries may distribute to ARCP 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.

ARCP’s stockholders have no contractual or other legal right to dividends that have not been declared.

REITs are subject to a range of complex organizational and operational requirements.

In order to qualify as a REIT, ARCP must distribute to its stockholders with respect to each taxable year at least 90% of its REIT taxable income (which does not equal net income, as calculated in accordance with U.S. GAAP), without regard to the deduction for dividends paid and excluding net capital gain. A REIT must also meet certain requirements with respect to the nature of its income and assets, and the ownership of its stock. For any taxable year that ARCP fails to qualify as a REIT, it will not be allowed a deduction for dividends paid to its stockholders in computing taxable income and thus would become subject to U.S. federal income tax as if it were a regular taxable corporation. In such an event, ARCP could be subject to potentially significant tax liabilities. Unless entitled to relief under certain statutory provisions, ARCP would also be disqualified from treatment as a REIT for the four taxable years following the year in which it lost its qualification. If ARCP failed to qualify as a REIT, the market price of ARCP common stock may decline, and ARCP may need to reduce substantially the amount of distributions to its stockholders because of its potentially increased tax liability.

EX-99.3

INDEX OF UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL INFORMATION

	Page
Introduction		F-2
Unaudited Pro Forma Consolidated Balance Sheet as of March 31, 2013		F-4
Unaudited Pro Forma Consolidated Statement of Operations for the Three Months Ended March 31, 2013		F-11
Unaudited Pro Forma Consolidated Statement of Operations for the Year Ended December 31, 2012		F-13
Notes to Unaudited Pro Forma Condensed Consolidated Financial Information		F-15

F-1

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

The following unaudited pro forma Consolidated Balance Sheet is presented as if American Realty Capital Properties, Inc. (“the Company” or “ARCP”) had acquired the following on March 31, 2013: (i) a portfolio of 447 properties (including three other revenue generating assets), 400 of which are subject to property leases and 47 of which are subject to direct financing leases, from certain affiliates of GE Capital Corp. (“GE Capital Portfolio”), (ii) CapLease, Inc. (“CapLease”), (iii) American Realty Capital Trust IV, Inc. (“ARCT IV”), including ARCT IV's acquisition of a portfolio of 955 properties to be acquired from affiliates of GE Capital, 943 of which are subject to property leases and 12 of which are subject to direct financing leases (“ARCT IV GE Capital Portfolio”) and (iv) the individual properties purchased by ARCP and ARCT IV from April 1, 2013 to June 30, 2013, including the related financing thereon. In conjunction with the merger with CapLease, the Company will redeem all the outstanding shares of CapLease’s preferred stock for $25.00 per share as well as exchange all of the outstanding shares of CapLease’s common stock including common stock equivalents (partnership units and restricted shares) for $8.50 per share in exchange for all of the assets and liabilities of CapLease (“CapLease Merger”). In conjunction with the purchase of the GE Capital Portfolio, the Company paid $774 million, exclusive of closing costs, in exchange for the 447 properties (including three other revenue generating assets). In conjunction with the merger of ARCP with ARCT IV (the “ARCT IV Merger”), the Company will exchange up to 25% of the outstanding shares of ARCT IV's common stock for $30.00 in cash and each remaining share will be exchanged for either (A) a number of shares of the ARCP common stock equal to the Exchange Ratio (as defined below), the (“Stock Consideration”), or (B) only if the Market Price (as defined below) is less than $14.94, and subject to certain conditions, 2.05 shares of ARCP’s common stock and an amount in cash equal to the product obtained by multiplying the excess of the Exchange Ratio over 2.05 by the Market Price, (the “Alternative Stock Consideration”). The “Exchange Ratio” means (1) if the volume weighted average closing sale price of a share of ARCP’s common stock over the five (5) consecutive trading days on the NASDAQ Global Select Market (the “NASDAQ”), ending on the trading day immediately prior to the closing date of the ARCT IV Merger (as defined below), as reported in The Wall Street Journal (the “Market Price”), is equal to or greater than $14.94, then 2.05, and (2) if the Market Price is less than $14.94, then the quotient (rounded to the nearest one-hundredth) obtained by dividing $30.62 by the Market Price.

The GE Capital Portfolio purchase closed on June 27, 2013. Therefore, the GE Capital Portfolio information presented in the unaudited pro forma Consolidated Balance Sheet and the unaudited pro forma Consolidated Statements of Operations reflects the final purchased portfolio.

The CapLease Merger is expected to close in the third quarter of 2013. However, as of July 18, 2013, the consummation of the CapLease Merger has not yet occurred and, although the Company believes that the completion of the CapLease Merger is probable, the closing of the CapLease Merger is subject to a vote by the CapLease common stockholders and other customary conditions, and therefore there can be no assurance that the CapLease Merger will be consummated. Accordingly, the Company cannot assure that the CapLease Merger as presented in the unaudited pro forma Consolidated Balance Sheet and unaudited pro forma Consolidated Statements of Operations will be completed based on the terms of the CapLease Merger or at all.

ARCP and ARCT IV are considered to be entities under common control. Both Companies’ advisors are wholly owned subsidiaries of the Companies’ sponsor, AR Capital, LLC. The sponsor and its related parties have 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 are 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 agreements, which qualifies them as affiliated companies under common control in accordance with Accounting Principles Generally Accepted in the United States of America, 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.

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The ARCT IV Merger is expected to close in the third quarter of 2013. However, as of July 18, 2013, the consummation of the ARCT IV Merger has not yet occurred and although the Company believes that the completion of the ARCT IV Merger is probable, the closing of the ARCT IV Merger is subject to a vote by the common stockholders of each of the Company and ARCT IV and other customary conditions, and therefore there can be no assurance that the ARCT IV Merger will be consummated. Accordingly, the Company cannot assure that the ARCT IV Merger as presented in the unaudited pro forma Consolidated Balance Sheet and unaudited pro forma Consolidated Statements of Operations will be completed based on the terms of the ARCT IV Merger or at all.

As of July 18, 2013, ARCT IV has acquired 377 properties of the ARCT IV GE Capital Portfolio, 371 of which are subject to property leases and six of which are subject to direct financing leases, for an aggregate purchase price of $528.2 million. The remainder of the ARCT IV GE Capital Portfolio is expected to close in the third quarter of 2013. The purchase and sale agreement, however, includes provisions that allow the Company to exclude certain properties based on criteria related to issues with obtaining clear title to the property and properties exceeding certain delinquency thresholds among other provisions. Therefore, the Company cannot assure that all 955 properties in the GE Capital Portfolio presented in the accompanying Unaudited Pro Forma Consolidated Balance Sheet or the Unaudited Pro Forma Consolidated Statements of Operations will be included in the final purchased portfolio. Additionally, as of July 18, 2013, ARCT IV has not acquired all of the properties and, although the closing of the remainder of the acquisition is subject to certain conditions, including the completion of due diligence, there can be no assurance that ARCT IV will acquire any or all of the remaining 578 properties, however, ARCT IV believes that the completion of such acquisitions is probable.

This financial statement should be read in conjunction with the unaudited pro forma Consolidated Statement of Operations and the Company’s historical financial statements and notes thereto. The pro forma Consolidated Balance Sheet is unaudited and is not necessarily indicative of what the actual financial position would have been had the Company acquired the individual properties, the GE Capital Portfolio, CapLease, or ARCT IV, including the ARCT IV GE Capital Portfolio, as of March 31, 2013, nor does it purport to present the future financial position of the Company.

F-3

American Realty Capital Properties, Inc.
Unaudited Pro Forma Consolidated Balance Sheet
March 31, 2013
(In thousands)

	ARCP Historical (1)			Subsequent Activity Adjustments (2)			GE Capital Portfolio (3)			ARCP as Adjusted			CapLease Historical (4)			CapLease Merger Related Adjustments (5)			ARCP as Adjusted with CapLease Pro Forma			ARCT IV Historical (6)			ARCT IV Subsequent Activity Adjustments (7)			ARCT IV GE Capital Portfolio (8)			ARCT IV Merger Related Adjustments (9)			ARCP Pro Forma
Assets
Real estate investments, at cost:
Land	$	298,280		$	14,670	(10)	$	193,052	(10)	$	506,002		$	223,544		$	1,503	(10)	$	731,049		$	39,326		$	66,699	(10)	$	387,667	(10)	$	—		$	1,224,741
Buildings, fixtures and improvements		1,521,505			74,672	(10)		450,456	(10)		2,046,633			1,452,218			9,761	(10)		3,508,612			161,868			275,598	(10)		904,557	(10)		—			4,850,635
Construction in progress		—			—			—			—			19,309			—			19,309			—			—			—			—			19,309
Acquired intangible lease assets		241,501			14,989	(10)		62,946	(10)		319,436			171,393			1,152	(10)		491,981			24,875			45,498	(10)		125,247	(10)		—			687,601
Total real estate investments, at cost		2,061,286			104,331			706,454			2,872,071			1,866,464			12,416			4,750,951			226,069			387,795			1,417,471			—			6,782,286
Less: accumulated depreciation and amortization		(81,207	)		—			—			(81,207	)		(324,495	)		324,495	(11)		(81,207	)		(1,954	)		—			—			—			(83,161	)
Total real estate investments, net		1,980,079			104,331			706,454			2,790,864			1,541,969			336,911			4,669,744			224,115			387,795			1,417,471			—			6,699,125
Cash and cash equivalents		52,412			751,669			(787,258	)		16,823			71,869			(19,210	)		69,482			1,067,095			(383,949	)		(702,158	)		(5,800	)(24)		44,670
Investment in direct financing leases, net		—			—			67,518	(10)		67,518			—			—			67,518			—			—			3,900			—			71,418
Investment securities, at fair value		4			—			—			4			59,929			—			59,933			61,600			—			—			—			121,533
Loans held for investment, net		—			—			—			—			25,334			4,053 (12)			29,387			—			—			—			—			29,387
Restricted cash		1,287			—			—			1,287			449			—			1,736			—			—			—			—			1,736
Prepaid expenses and other assets		15,397			—			—			15,397			74,684			(32,023	)(13)		58,058			6,129			—			—			1,070 (24)			65,257
Deferred costs, net		38,244			—			—			38,244			10,022			(10,022	)(14)		38,244			—			—			—			—			38,244
Assets held for sale		679			—			—			679			—			—			679			—			—			—			—			679
Receivable for issuance of common stock		—			—			—			—			—			—			—			169,097			—			—			—			169,097
Goodwill and other intangible assets		—			—			—			—			—			105,574	(15)		105,574			—			—			—			—			105,574
Total assets	$	2,088,102		$	856,000		$	(13,286	)	$	2,930,816		$	1,784,256		$	385,283		$	5,100,355		$	1,528,036		$	3,846		$	719,213		$	(4,730	)	$	7,346,720

F-4

American Realty Capital Properties, Inc.
Unaudited Pro Forma Consolidated Balance Sheet — (continued)
March 31, 2013
(In thousands)

	ARCP Historical (1)			Subsequent Activity Adjustments (2)			GE Capital Portfolio (3)			ARCP as Adjusted			CapLease Historical (4)			CapLease Merger Related Adjustments (5)			ARCP as Adjusted with CapLease Pro Forma			ARCT IV Historical (6)			ARCT IV Subsequent Activity Adjustments (7)		ARCT IV GE Capital Portfolio (8)			ARCT IV Merger Related Adjustments (9)			ARCP Pro Forma
Liabilities and Equity
Mortgage notes payable	$	265,118		$	—		$	—		$	265,118		$	1,020,207		$	65,428	(14)	$	1,350,753		$	—		$	2,124	$	—		$	—		$	1,352,877
Secured term loan		—			—			—			—			66,485			(3,363	)(14)		63,122			—			—		—			—			63,122
Secured credit agreements		—			—			—			—			57,009			—			57,009			—			—		739,112			—			796,121
Unsecured credit facility		640,000			(40,000	)		—			600,000			—			801,903	(16)		1,401,903			—			—		—			558,346	(25)		1,960,249
Convertible senior notes		—			—			—			—			19,210			(19,210	)(17)		—			—			—		—			—			—
Other long-term debt		—			—			—			—			30,930			(4,173	)(14)		26,757			—			—		—			—			26,757
Convertible obligation to preferred investors		—			452,652			—			452,652			—			(452,652	)(18)		—			—			—		—			—			—
Derivatives, at fair value		5,012			—			—			5,012			—			—			5,012			—			—		—			—			5,012
Accounts payable, accrued expenses and other liabilities		6,589			—			—			6,589			57,780			(99	)(13)		64,270			16,579			—		—			—			80,849
Deferred rent		5,270			—			—			5,270			—			—			5,270			148			—		—			—			5,418
Distributions payable		92			—			—			92			9,683			—			9,775			6,619			—		—			—			16,394
Total liabilities		922,081			412,652			—			1,334,733			1,261,304			387,834			2,983,871			23,346			2,124		739,112			558,346			4,306,799
Preferred stock		8			—			—			8			171,110			(171,110	)(19)		8			—			—		—			—			8
Common stock		1,543			294			—			1,837			795			(795	)(19)		1,837			694			17		—			1,093	(26)		3,641
Additional paid-in capital		1,335,863			443,054			—			1,778,917			350,425			196,976	(20)		2,326,318			1,522,650			1,705		—			(532,299	)(26)		3,318,374
Accumulated other comprehensive loss		(5,018	)		—			—			(5,018	)		(399	)		399	(21)		(5,018	)		335			—		—			—			(4,683	)
Accumulated deficit		(290,484	)		—			(13,286	)		(303,770	)		—			(27,000	)(22)		(330,770	)		(18,989	)		—		(19,899	)		(107,268	)(22)		(476,926	)
Total stockholders' equity		1,041,912			443,348			(13,286	)		1,471,974			521,931			(1,530	)		1,992,375			1,504,690			1,722		(19,899	)		(638,474	)		2,840,414
Non-controlling interests		124,109			—			—			124,109			1,021			(1,021	)(23)		124,109			—			—		—			75,398	(27)		199,507
Total equity		1,166,021			443,348			(13,286	)		1,596,083			522,952			(2,551	)		2,116,484			1,504,690			1,722		(19,899	)		(563,076	)		3,039,921
Total liabilities and equity	$	2,088,102		$	856,000		$	(13,286	)	$	2,930,816		$	1,784,256		$	385,283		$	5,100,355		$	1,528,036		$	3,846	$	719,213		$	(4,730	)	$	7,346,720

F-5

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

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

(2)  Reflects adjustments to best reflect the current portfolio, debt balances and capital structure including adjustments to:

(i) Reflect ARCP property acquisitions from April 1, 2013 to June 30, 2013.

(ii) Reflect adjustments for the issuance on June 7, 2013, pursuant to private placement transactions for which definitive agreements were entered into on June 4, 2013, of (i) 29.4 million shares of common stock for aggregate gross proceeds of $455.0 million and (ii) 28.4 million shares of Series C Convertible Preferred Stock for aggregate gross proceeds of $445.0 million (fees and closing costs incurred in connection with raising these funds aggregated $4.0 million). The Series C Convertible Preferred Stock will pay a 5.81% dividend. Within three business days following the earliest to occur of (A) the closing of the Company’s merger with CapLease, Inc. (“CapLease”), (B) the first trading day following (a) an announcement that CapLease has accepted a competing offer (which did not occur within the time specified in the CapLease merger agreement) or (b) the Company’s merger agreement with CapLease is otherwise terminated, and (C) December 31, 2013, the Company will have the option to: (I) convert all shares of Series C Convertible Preferred Stock into such number of shares of the Company’s common stock equal to the par value of the Company’s Series C Convertible Preferred Stock divided by the lowest of (i) a 2% discount to the volume-weighted average trading price (“VWAP”) of the Company’s common stock for the 10 prior trading days, (ii) a 2% discount to the closing price on such date and (iii) $15.67, as adjusted from time to time (the “Conversion Price”) or (II) redeem all shares of the Company’s Series C Convertible Preferred Stock in cash at 120% of its par value.

Due to the unconditional obligation to convert into a variable number of common shares predominantly based on a fixed monetary amount or redeem the preferred shares, the preferred securities are classified as an obligation under US GAAP. In addition, ARCP is limited to the issuance of no more than approximately 3.3 million shares of the Company’s common stock on the issuance date in common stock, by rules imposed by NASDAQ regarding private placements of common stock. As a result the Company is limited, after consideration of the previously issued 29.4 million shares of common stock in the private placement, to the issuance of an additional 3.3 million shares of its common stock, with the balance of the Series C Convertible Preferred Stock to be cancelled in exchange for cash in lieu of such common stock in an amount equal to the greater of the product of such number of excess shares into which the shares of Series C Convertible Preferred Stock would have been convertible and (i) 102% of the liquidation preference, which is $15.67, as may be adjusted from time to time, and (ii) the Conversion Price valued at the one-day volume-weighted average trading price of the common stock on the applicable date. Therefore upon conversion, a portion of the shares can be converted to common stock and the remaining shares will be redeemed for cash at a premium as specified in the agreement. The preferred shares liability is recorded at fair value at issuance, which includes a $7.6 million adjustment for the fair value of the estimated amount to be paid upon conversion.

In connection with the private placement transactions described above, on June 7, 2013, the Company issued to the common stock investors 29.4 million contingent value rights and to the Series C Convertible Preferred Stock investors 28.4 million contingent value rights, which may entitle the holders of common contingent value rights to a cash payment of up to $1.50 per contingent value right and the holders of Series C Convertible Preferred contingent value rights to a cash payment of up to $2.00 per contingent value right in the future depending on the future performance of the Company's common stock, subject to certain limits. Payments to the common and Series C Convertible Preferred contingent value rights holders will be based a comparison of the issuance price of each class of security to the the volume weighted average trading price of ARCP’s common stock for 30 trading days beginning on thirtieth trading day after the issuance of the common stock on June 7, 2013 for the common stockholder, and for the Series C Convertible

F-6

Preferred stockholders, the payment will be based on the volume weighted average trading price of ARCP’s common stock for 30 trading days beginning on ninetieth trading day after the earliest to occur of: (i) the closing of the CapLease Merger; (ii) the trading day after (a) the date of an announcement that CapLease, Inc. has accepted a competing offer (which did not occur) or (b) the CapLease Acquisition is otherwise terminated; and (iii) December 31, 2013. This Pro Forma Balance Sheet excludes liabilities for any potential cash payments in respect of the contingent value rights. Depending on the volume weighted average stock price during the respective measurement periods described above, the amount to be paid out for the contingent value rights, if any, could be up to a maximum of $100.9 million. The final determination of the amount to be paid, if any, will not be known until the end of the measurement period.

(iii) Reflect adjustment to repay the revolving portion of the Company’s unsecured line of credit from proceeds from the issuance of common and preferred stock. This repaid amount consisted of 100% of the outstanding floating-rate debt of the Company.

(3)  Reflects the properties purchased by the Company from GE Capital, which closed on June 27, 2013, including $13.3 million of closing costs on the purchase of these properties. Funding for the purchased properties was from available cash balances.

(4)  Reflects the historical Balance Sheet of CapLease for the period indicated. Balances exclude the subsequent issuance of 9.4 million shares of CapLease’s common stock for net proceeds of $53.8 million. Proceeds of $17.9 million were used by CapLease to repay its mortgage debt. These CapLease shares will be exchanged for $79.9 million in cash in conjunction with the CapLease Merger. Certain balances reported in CapLease’s previously issued financial statements have been reclassified to conform to ARCP’s presentation.

(5)  Reflects pro forma adjustments to record the assets and liabilities of CapLease at their fair values and to record cash consideration of $869.7 million to be paid to the CapLease’s shareholders and estimated CapLease Merger related costs of $27.0 million incurred in the CapLease Merger transaction.

(6)  Reflects the historical Balance Sheet of ARCT IV for the period indicated.

(7)  Reflects adjustments to record ARCT IV property acquisitions from April 1, 2013 to June 30, 2013, and related cash payments and mortgage note borrowings used to fund the acquisitions.

(8)  Reflects pro forma adjustments for the ARCT IV GE Capital Portfolio including anticipated funding on the Company’s line of credit facility at an assumed annualized interest rate of 2.40%. To date, 377 properties were acquired on June 27, 2013 by ARCT IV and 578 properties are anticipated to be acquired prior to the closing of the ARCT IV Merger.

(9)  Adjustments and pro forma balances based on the repurchase of 25% of the outstanding shares of ARCT IV's common stock for cash at $30.00 per share, which is the maximum permitted in the ARCT IV Merger agreement and the offering of 2.05 shares of ARCP’s common stock for every remaining share of ARCT IV’s common stock. If the market price of ARCP’s common stock is less than $14.94 on the ARCT IV Merger date, the ARCT IV common stockholders will be eligible for additional cash consideration for the difference between the value of ARCP’s common stock and $14.94. The pro forma balances are preliminary as the actual amounts paid in cash will not be known until the closing of the ARCT IV Merger. As the acquisition of ARCT IV by the Company will be accounted for on the carryover basis of accounting, no adjustments have been made to the fair value of the assets or liabilities.

The preliminary purchase price allocation to assets acquired and liabilities assumed is provided throughout these notes.

(10)  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, land improvements, buildings, fixtures 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. Amounts allocated to land, land improvements, buildings, fixtures, and tenant improvements are based on cost segregation studies performed by independent third-parties or the Company's analysis of comparable properties in its portfolio. Identifiable intangible assets include amounts allocated to acquire leases for above- and below-market lease rates and the value of in-place leases. Depreciation is computed using the straight-line method over the estimated lives of forty years for

F-7

buildings, fifteen years for land improvements, five years for 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 in the 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 is estimated to be nine months. Estimates of costs to execute similar leases including leasing commissions, legal and other related expenses are also utilized. The value of in-place leases is amortized to expense over the initial term of the respective lease, which ranges from six to 13 years. If a tenant terminates its lease, the unamortized portion of the in-place lease value and intangible is charged to expense.

Above-market and below-market in-place lease values, if any, 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-cancellable 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.

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 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 Pro Forma Consolidated Balance Sheet are substantially complete; however, there are certain items that will be finalized once additional information is received. 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 its financial position or results of operations.

(11)  Reflects the elimination of CapLease’s historical accumulated depreciation and amortization upon acquisition.

(12)  Reflects an adjustment to the fair value for loans held by CapLease for investment based upon discounted cash flows and estimates of current interest rates for loans with similar terms.

(13)  Reflects the elimination of CapLease’s existing straight-line rent adjustments.

(14)  Reflects an adjustment to the fair value of debt assumed in the CapLease Merger based on discounted cash flows and estimates of current interest rates for similar debt instruments, and write-off of the related unamortized balance of deferred financing costs incurred by CapLease on the assumed debt.

(15) Reflects preliminary adjustment to record goodwill and other intangible assets including intangibles for customer relationships. Amount is preliminary and will be finalized once the purchase price allocation to the assets and liabilities acquired is finalized.

(16) Reflects additional borrowings on the Company’s existing unsecured line of credit at an estimated annualized rate of 2.40%. Borrowings of approximately $400.0 million will be used for the acquisition of CapLease, and borrowings of approximately $402.0 million will be used in connection with the Company’s payment obligation related to the conversion and cancellation of the Company’s Series C Convertible Preferred Stock. The Company has commitments on its unsecured credit facility (including

F-8

revolving and term loans) for total borrowings of $1.45 billion with an accordion feature of up to $2.5 billion, subject to borrowing base availability among other conditions.

(17) Reflects the required redemption of CapLease’s Convertible Senior Notes subject to the CapLease Merger Agreement.

(18) Reflects the required conversion, including an assumed cash settlement, of the Series C Convertible Preferred Stock upon consummation of the CapLease Merger.

(19) Reflects the elimination of CapLease’s capital balances.

(20) Reflects the elimination of CapLease’s capital balance of $350.4 million, the hypothetical issuance of $496.7 million of the Company’s common stock for the purchase of CapLease and the hypothetical issuance of $50.7 million of the Company’s common stock for the required conversion of the Series C Convertible Preferred Stock at an assumed stock price of $15.25. Should ARCP’s common stock price be $0.50 higher or lower on the closing date of the CapLease Merger, the Company would be required to issue approximately 1.0 million fewer or more shares of common stock, respectively. A change in the number of shares of common stock of this magnitude would have no effect on earnings per share. The actual issuance of common stock will be based on a number of factors, including market conditions, the availability of capital under the Company’s existing line of credit, availability of capital with new borrowing instruments or the opportunity to further issue preferred securities.

(21) Reflects adjustment for the elimination of CapLease’s accumulated other comprehensive income balance.

(22) Reflects estimated costs of the respective merger. For the ARCT IV Merger, amount includes estimated costs of the issuance of operating partnership units described in Note 27 below.

(23) Reflects an adjustment for the elimination of CapLease’s non-controlling interests related to partnership units, which will be canceled and converted to the right to receive $8.50 per partnership unit.

(24) The Company entered into an asset purchase agreement whereby they agreed to purchase assets from their external advisor, with a cost basis of $1.1 million in addition to the reimbursement of certain expenses related to the ARCT IV Merger and issuance of common stock for a total of $5.8 million.

(25) Reflects additional borrowings on the Company’s existing unsecured line of credit at an estimated annualized rate of 2.40%. Borrowings of approximately $533.3 million represent the assumed maximum cash payment to ARCT IV common stock holders of $30.00 per share for up to 25% of the outstanding shares, or 17.8 million shares, on the closing date of the ARCT IV Merger. Balance also reflects approximately $25.0 million of borrowings that will be used for closing costs of the ARCT IV Merger. The Company has commitments on its unsecured credit facility (including revolving and term loans) for total borrowings of $1.45 billion with an accordion feature of up to $2.5 billion, subject to borrowing base availability among other conditions.

(26) Reflects the issuance of 109.3 million shares of ARCP common stock at $15.25 per share to the stockholders of ARCT IV’s common stock. Assuming the stockholders of ARCT IV common stock request the maximum permitted amount of 25% of common shares to be redeemed in cash, approximately 53.3 million shares of ARCT IV common stock will be exchanged for shares of ARCP common stock at a ratio of 1:2.05 shares. If the market price of ARCP’s common stock is less than $14.94 on the closing date of the ARCT IV Merger, the ARCT IV common stockholders will be eligible for additional cash consideration for the difference between the value of ARCP’s common stock and $14.94. The pro forma balances are preliminary as the actual amounts paid in cash will not be known until the closing of the ARCT IV Merger. The following table details the components of the adjustment:

Exchange of 25% of the outstanding shares of ARCT IV for cash	$	533,392
Par value of ARCP shares exchanged for ARCT IV shares		(1,093	)
	$	532,299

(27) Reflects 0.1 million operating partnership units of ARCT IV that will convert to 0.2 million operating partnership units of ARCP upon consummation of the ARCT IV Merger at an assumed value of $15.25 per share. In addition, the sponsor of ARCT IV is entitled to a fee based compensation on the achievement of certain total return to the ARCT IV shareholders, as applicable. This estimated calculation is based on the number of shares of ARCT IV outstanding and an assumed common stock price of $15.25 per share on the merger date. Should the stock price on the merger date be $0.50 higher or lower, the fee could be approximately $10.9 million and $10.7 million higher or lower, respectively, and result in an increase, in the case of a higher stock price in the number of operating partnership units outstanding, or decrease, in the case of a lower stock price in the number of operating partnership units

F-9

outstanding of approximately 0.7 million units. The actual amount to be paid will not be known until the ARCT IV Merger date. The fee will be paid in OP units in ARCP’s operating partnership which represent equity interests in the Company’s consolidated operating partnership.

F-10

American Realty Capital Properties, Inc.
Unaudited Pro Forma Consolidated Statement of Operations
For the Three Months Ended March 31, 2013
(In thousands)

	ARCP Historical (1)			Subsequent Activity Adjustments (2)			GE Capital Portfolio (3)		GE Capital Portfolio Acquisition Adjustments (4)			ARCP as Adjusted			CapLease Historical (5)			CapLease Merger Related Adjustments (6)			ARCP as Adjusted with CapLease Pro Forma			ARCT IV Historical (7)			ARCT IV Subsequent Activity Adjustments (8)			ARCT IV GE Capital Portfolio (9)		ARCT IV GE Capital Portfolio Acquisiton Adjustments (10)			ARCT IV Merger Related Adjustments (11)			ARCP Pro Forma
Revenues:
Rental income	$	38,378		$	5,271		$	13,660	$	279	(12)	$	57,588		$	35,299		$	814	(12)	$	93,701		$	2,555		$	9,666		$	24,932	$	695	(12)	$	—		$	131,549
Direct financing lease income		—			—			790		—			790			—			—			790			—			—			112		—			—			902
Operating expense reimbursements		1,822			—			155		—			1,977			5,990			—			7,967			142			—			83		—			—			8,192
Other revenues		—			—			34		—			34			2,063			—			2,097			—			—			34		—			—			2,131
Total revenues		40,200			5,271			14,639		279			60,389			43,352			814			104,555			2,697			9,666			25,161		695			—			142,774
Operating expenses:
Acquisition related		5,582			—			—		—			5,582			—			—			5,582			4,745			—			—		—			—			10,327
Merger and other transaction related		137,769			—			—		—			137,769			—			—			137,769			—			—			—		—			—			137,769
Property operating		2,404			—			315		—			2,719			9,073			—			11,792			145			—			265		—			—			12,202
General and administrative		1,307			—			—		—			1,307			3,144			—			4,451			152			—			—		—			—			4,603
Equity-based compensation		876			—			—		—			876			775			(775	)(16)		876			—			—			—		—			—			876
Depreciation and amortization		25,109			8,399			—		7,929	(13)		41,437			12,026			6,514	(13)		59,977			1,644			7,432			—		15,924	(13)		—			84,977
Operating fees to affiliates		—			—			—		706	(14)		706			—			1,911	(14)		2,617			—			—			—		—			2,031	(14)		4,648
Total operating expenses		173,047			8,399			315		8,635			190,396			25,018			7,650			223,064			6,686			7,432			265		15,924			2,031			255,402
Operating income (loss)		(132,847	)		(3,128	)		14,324		(8,356	)		(130,007	)		18,334			(6,836	)		(118,509	)		(3,989	)		2,234			24,896		(15,229	)		(2,031	)		(112,628	)
Other income (expenses):
Interest expense		(6,202	)		(6,941	)		—		—			(13,143	)		(16,297	)		(1,565	)(17)		(31,005	)		—			(18	)		—		(3,880	)(17)		(3,200	)(17)		(38,103	)
Income from investment securities		218			—			—		—			218			—			—			218			633			—			—		—			—			851
Gain on sale of investment securities		451			—			—		—			451			—			—			451			—			—			—		—			—			451
Loss on derivative instruments		(5	)		—			—		—			(5	)		—			—			(5	)		—			—			—		—			—			(5	)
Other income (expense)		35			—			—		—			35			—			—			35			113			—			—		—			—			148
Total other expenses		(5,503	)		(6,941	)		—		—			(12,444	)		(16,297	)		(1,565	)		(30,306	)		746			(18	)		—		(3,880	)		(3,200	)		(36,658	)
Income (loss) from continuing operations		(138,350	)		(10,069	)		14,324		(8,356	)		(142,451	)		2,037			(8,401	)		(148,815	)		(3,243	)		2,216			24,896		(19,109	)		(5,231	)		(149,286	)

F-11

American Realty Capital Properties, Inc.
Unaudited Pro Forma Consolidated Statement of Operations — (continued)
For the Three Months Ended March 31, 2013
(In thousands)

	ARCP Historical (1)			Subsequent Activity Adjustments (2)			GE Capital Portfolio (3)		GE Capital Portfolio Acquisition Adjustments (4)			ARCP as Adjusted			CapLease Historical (5)			CapLease Merger Related Adjustments (6)			ARCP as Adjusted with CapLease Pro Forma			ARCT IV Historical (7)			ARCT IV Subsequent Activity Adjustments (8)		ARCT IV GE Capital Portfolio (9)		ARCT IV GE Capital Portfolio Acquisiton Adjustments (10)			ARCT IV Merger Related Adjustments (11)			ARCP Pro Forma
Net income (loss) from continuing operations attributable to non-controlling interests		432			503			—		(298	)(15)		637			3			268	(15)		908			—			—		—		—			20	(15)		928
Net income (loss) from continuing operations attributable to stockholders		(137,918	)		(9,566	)		14,324		(8,654	)		(141,814	)		2,040			(8,133	)		(147,907	)		(3,243	)		2,216		24,896		(19,109	)		(5,211	)		(148,358	)
Discontinued operations:
Income (loss) from operations of held for sale properties		(16	)		—			—		—			(16	)		—			—			(16	)		—			—		—		—			—			(16	)
Loss on held for sale properties		14			—			—		—			14			—			—			14			—			—		—		—			—			14
Net loss from discontinued operations		(2	)		—			—		—			(2	)		—			—			(2	)		—			—		—		—			—			(2	)
Net from discontinued operations attributable to non-controlling interests		—			—			—		—			—			—			—			—			—			—		—		—			—			—
Net from discontinued operations attributable to stockholders		(2	)		—			—		—			(2	)		—			—			(2	)		—			—		—		—			—			(2	)
Net income (loss)		(138,352	)		(10,069	)		14,324		(8,356	)		(142,453	)		2,037			(8,401	)		(148,817	)		(3,243	)		2,216		24,896		(19,109	)		(5,231	)		(149,288	)
Dividends allocable to preferred shares		—			—			—		—			—			(3,538	)		3,538	(18)		—			—			—		—		—			—			—
Net income (loss) attributable to non-controlling interests		432			503			—		(298	)(15)		637			3			268	(15)		908			—			—		—		—			20	(15)		928
Net income (loss) attributable to stockholders	$	(137,920	)	$	(9,566	)	$	14,324	$	(8,654	)	$	(141,816	)	$	(1,498	)	$	(4,595	)	$	(147,909	)	$	(3,243	)	$	2,216	$	24,896	$	(19,109	)	$	(5,211	)	$	(148,360	)
Earnings per share:
Basic	$	(0.90	)									$	(0.78	)							$	(0.68	)														$	(0.45	)
Fully diluted	$	(0.90	)									$	(0.78	)							$	(0.68	)														$	(0.45	)
Weighted average common shares:
Basic and diluted(19)		153,339			29,412								182,751						35,842			218,593													109,336			327,929

F-12

American Realty Capital Properties, Inc.
Unaudited Pro Forma Consolidated Statement of Operations
For the Year Ended December 31, 2012
(In thousands)

	ARCP Historical (1)			Subsequent Activity Adjustments (2)			GE Capital Portfolio (3)		GE Capital Portfolio Acquisition Adjustments (4)			ARCP as Adjusted			CapLease Historical (5)			CapLease Merger Related Adjustments (6)			ARCP as Adjusted with CapLease Pro Forma			ARCT IV Historical (7)			ARCT IV Subsequent Activity Adjustments (8)			ARCT IV GE Capital Portfolio (9)		ARCT IV GE Capital Portfolio Acquisiton Adjustments (10)			ARCT IV Merger Related Adjustments (11)			ARCP Pro Forma
Revenues:
Rental income	$	64,791		$	109,803		$	49,246	$	891	(12)	$	224,731		$	137,126		$	7,582	(12)	$	369,439		$	378		$	48,505		$	95,564	$	1,195	(12)	$	—		$	515,081
Direct financing lease income		—			—			2,947		—			2,947			—			—			2,947			—			—			584		—			—			3,531
Operating expense reimbursements		2,002			—			302		—			2,304			16,287			—			18,591			36			—			128		—			—			18,755
Other revenues		—			—			350		—			350			8,629			—			8,979			—			—			230		—			—			9,209
Total revenues		66,793			109,803			52,845		891			230,332			162,042			7,582			399,956			414			48,505			96,506		1,195			—			546,576
Operating expenses:
Acquisition related		42,761			—			—		—			42,761			—			—			42,761			2,309			—			—		—			—			45,070
Merger and other transaction related		2,603			—			—		—			2,603			—			—			2,603			—			—			—		—			—			2,603
Property operating		3,484			—			1,135		—			4,619			27,798			—			32,417			38			—			662		—			—			33,117
General and administrative		3,912			—			—		—			3,912			12,643			—			16,555			320			—			—		—			—			16,875
Equity-based compensation		1,180			—			—		—			1,180			3,200			(3,200	)(16)		1,180			—			—			—		—			—			1,180
Depreciation and amortization		40,700			93,334			—		31,720	(13)		165,754			48,189			74,161	(13)		288,104			303			36,001			—		63,696	(13)		—			388,104
Operating fees to affiliates		212			—			—		2,826	(14)		3,038			—			7,643	(14)		10,681			—			—			—		—			8,125	(14)		18,806
Total operating expenses		94,852			93,334			1,135		34,546			223,867			91,830			78,604			394,301			2,970			36,001			662		63,696			8,125			505,755
Operating income (loss)		(28,059	)		16,469			51,710		(33,655	)		6,465			70,212			(71,022	)		5,655			(2,556	)		12,504			95,844		(62,501	)		(8,125	)		40,821
Other income (expenses):
Interest expense		(11,856	)		(27,783	)		—		—			(39,639	)		(67,137	)		(6,261	)(17)		(113,037	)		—			(72	)		—		(15,521	)(17)		(12,800	)(17)		(141,430	)
Income from investment securities		534			—			—		—			534			1,009			—			1,543			—			—			—		—			—			1,543
Gain on Extinguishment of debt		—			—			—		—			—			10,790			—			10,790			—			—			—		—			—			10,790
Loss on derivative instruments		—			—			—		—			—			—			—			—			—			—			—		—			—			—
Other income (expense)		426			—			—		—			426			—			—			426			19			—			—		—			—			445
Total other expenses		(10,896	)		(27,783	)		—		—			(38,679	)		(55,338	)		(6,261	)		(100,278	)		19			(72	)		—		(15,521	)		(12,800	)		(128,652	)
Income (loss) from continuing operations		(38,955	)		(11,314	)		51,710		(33,655	)		(32,214	)		14,874			(77,283	)		(94,623	)		(2,537	)		12,432			95,844		(78,022	)		(20,925	)		(87,831	)
Net income (loss) from continuing operations attributable to non-controlling interests		255			472			—		(753	)(15)		(26	)		27			2,208	(15)		2,209			—			—			—		—			(255	)(15)		1,954

F-13

American Realty Capital Properties, Inc.
Unaudited Pro Forma Consolidated Statement of Operations — (continued)
For the Year Ended December 31, 2012
(In thousands)

	ARCP Historical (1)			Subsequent Activity Adjustments (2)			GE Capital Portfolio (3)		GE Capital Portfolio Acquisition Adjustments (4)			ARCP as Adjusted			CapLease Historical (5)			CapLease Merger Related Adjustments (6)			ARCP as Adjusted with CapLease Pro Forma			ARCT IV Historical (7)			ARCT IV Subsequent Activity Adjustments (8)		ARCT IV GE Capital Portfolio (9)		ARCT IV GE Capital Portfolio Acquisiton Adjustments (10)			ARCT IV Merger Related Adjustments (11)			ARCP Pro Forma
Net income (loss) from continuing operations attributable to stockholders		(38,700	)		(10,842	)		51,710		(34,408	)		(32,240	)		14,901			(75,075	)		(92,414	)		(2,537	)		12,432		95,844		(78,022	)		(21,180	)		(85,877	)
Discontinued operations:
Income (loss) from operations of discontinued opeartions		(145	)		—			—		—			(145	)		(16,601	)		—			(16,746	)		—			—		—		—			—			(16,746	)
Loss on held for sale properties		(600	)		—			—		—			(600	)		—			—			(600	)		—			—		—		—			—			(600	)
Net loss from discontinued operations		(745	)		—			—		—			(745	)		(16,601	)		—			(17,346	)		—			—		—		—			—			(17,346	)
Net from discontinued operations attributable to non-controlling interests		46			—			—		—			46			—			801			847			—			—		—		—			—			847
Net from discontinued operations attributable to stockholders		(699	)		—			—		—			(699	)		(16,601	)		801			(16,499	)		—			—		—		—			—			(16,499	)
Net income (loss)		(39,700	)		(11,314	)		51,710		(33,655	)		(32,959	)		(1,727	)		(77,283	)		(111,969	)		(2,537	)		12,432		95,844		(78,022	)		(20,925	)		(105,177	)
Dividends allocable to preferred shares		—			—			—		—			—			(10,003	)		10,003	(18)		—			—			—		—		—			—			—
Net income (loss) attributable to non-controlling interests		301			472			—		(753	)(15)		20			27			3,009	(15)		3,056			—			—		—		—			(255	)(15)		2,801
Net income (loss) attributable to stockholders	$	(39,399	)	$	(10,842	)	$	51,710	$	(34,408	)	$	(32,939	)	$	(11,703	)	$	(64,271	)	$	(108,913	)	$	(2,537	)	$	12,432	$	95,844	$	(78,022	)	$	(21,180	)	$	(102,376	)
Earnings per share:
Basic	$	(0.39	)									$	(0.25	)							$	(0.65	)														$	(0.37	)
Fully diluted	$	(0.39	)									$	(0.25	)							$	(0.65	)														$	(0.37	)
Weighted average common shares:
Basic and diluted (19)		102,514			29,412								131,926						35,821			167,747													109,336			277,083

F-14

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

(1) Reflects the historical Statement of Operations of the Company for the period indicated. The balances for the year ended December 31, 2012 reflect the effect of the February 2013 merger of the Company and American Realty Capital Trust III, Inc. (“ARCT III”) as presented in the Current Report on Form 8-K/A filed with the Securities and Exchange Commission on May 8, 2013.

(2) Adjustments reflect the annualization of certain ARCP lease rental income, lease asset depreciation and amortization and interest expense on additional financing used for acquisitions for ARCP property acquisitions made in 2012 and up to June 30, 2013 as if they were made at the beginning of each period presented.

(3) Reflects the historical balances of the GE Capital Portfolio. Excludes $13.3 million of closing costs incurred in connection with the purchase of these properties.

(4) Adjustments reflect the annualization of the GE Capital Portfolio’s lease rental income and lease asset depreciation and amortization expense as if the acquisition was completed at the beginning of each period.

(5) Reflects the historical Statement of Operations of CapLease for the periods indicated. Certain balances reported in CapLease’s previously issued financial statements have been reclassified to conform to ARCP’s presentation.

(6) Adjustments and pro forma balances reflect adjustments related to the acquisition of CapLease by the Company. Excludes estimated closing costs of $27.0 million expected to be incurred for the CapLease Merger.

(7) Reflects the historical Statement of Operations of ARCT IV for the period indicated.

(8) Adjustments reflect the annualization of certain ARCT IV lease rental income, lease asset depreciation and amortization expense and interest expense on additional financing used for ARCT IV’s property acquisitions made in 2012 and up to June 30, 2013 as if they were made at the beginning of each period.

(9) Reflects the historical balances of the ARCT IV GE Capital Portfolio.

(10) Adjustments reflect the annualization of the ARCT IV GE Capital Portfolio’s lease rental income and lease asset depreciation and amortization expense as if the acquisition was completed at the beginning of each period.

(11) Adjustments and pro forma balances reflect adjustments related to the acquisition of ARCT IV by the Company. As the acquisition of ARCT IV by the Company will be accounted for on the carryover basis of accounting, no adjustments have been made to the fair value of the assets or liabilities, therefore there are no adjustment such as recalculation of the straight-lining of rent or depreciation and amortization expense. Excludes estimated closing costs of approximately $25.0 million and estimated fees to be paid to the ARCT IV sponsor and ARCT IV advisor of $75.4 million, expected to be incurred in connection with the ARCT IV Merger.

(12) Adjustment reflects an adjustment to straight-line rent for each portfolio of properties as if the properties had been acquired at the beginning of each period.

(13) Adjustment reflects the depreciation and amortization expense that would have been recorded if each portfolio of properties had been acquired as of the beginning of each period based on the estimated fair values assigned to each asset class.

(14) Adjustment reflects recognition of full contractual asset management fees due to the Company’s affiliated external manager, as if the Company had owned the properties and the external manager had charged these fees for the entirety of each period. Fees are 0.50% annually for average unadjusted book value of real estate assets up to $3.0 billion and 0.40% annually for assets in excess of $3.0 billion.

(15) Adjustment represents the allocation to ARCP non-controlling interests for the net effect of the each respective merger, acquisition of the GE Capital Portfolio as well as adjustments related thereto based on the percentage of non-controlling interests ownership after each transaction.

(16) Adjustment represents expenses of CapLease's equity compensation plan for outstanding restricted shares. As part of the CapLease Merger agreement, all unamortized restricted shares will become fully vested and therefore this expense will no longer be recognized.

(17) Adjustment reflects interest expense related to borrowings expected to be incurred on the Company’s existing unsecured credit facility at an assumed annual interest rate of 2.40% for each transaction. In the

F-15

case of CapLease increases in interest expense are offset by the reduction in interest for the write-off of deferred financing costs of $0.5 million and $2.0 million for the three months ended March 31, 2013 and year ended December 31, 2012, respectively, and amortization of increases in the fair value of the debt of $2.8 million and $11.0 million for the three months ended March 31, 2013 and year ended December 31, 2012, respectively.

(18) Adjustment reflects the reduction of expense related to the redemption of CapLease’s preferred stock as required by the CapLease Merger agreement.

(19) Weighted average shares include the pro forma effect of certain transactions which occurred in conjunction with the Company's merger with ARCT III in February 2013, including the repurchase of 27.7 million shares of common stock, based on the conversion ratio of 0.95 share of ARCP common stock to one share of ARCT III common stock in conjunction with the merger of ARCP and ARCT III in February 2013. Excludes the effect of restricted shares and partnership equity units convertible to common stock as the effect would be anti-dilutive.

F-16

American Realty Capital Properties, Inc.
Unaudited Supplementary Information
(In thousands except per share data)

The following unaudited supplementary information presents certain information related to management's intentions to repay certain obligations of CapLease upon the consumation of the merger and its effect on Net income and funds from operations and adjusted funds from operations, managments estimates of the expected cost savings for general and administrative expense resulting from the elimination of duplicative costs and processes. These adjustments are not required by the Merger agreement but were contemplated by management when entering into the Merger agreement. In addition the schedule below presents the annualized effect of acquisitions and financing thereon in ARCP and ARCT IV's pipeline which are expected to close prior to the end 2013. There can be no assurances that management will satisfy the obligations or that the Company will realize the expected costs savings detailed below once the Merger is comsumated, nor can their be any assurance of the timing of the Company's satisfaction of these obligations or implementation of costs saving strategies or acquisition purchases or that the financing on such stratigies will be under the terms assumed below.

	Three Months Ended March 31, 2013												Year Ended December 31, 2012
	ARCP Historical			ARCP Including Subsequent Activity Adjustments and GE Capital Portfolio			ARCP Pro Forma Including Subsequent Adjustments, GE Capital Portfolio and Caplease			ARCP Pro Forma Including Subsequent Adjustments, GE Capital Portfolio, Caplease and ARCT IV With Adjustments			ARCP Historical			ARCP Including Subsequent Activity Adjustments and GE Capital Portfolio			ARCP Pro Forma Including Subsequent Adjustments, GE Capital Portfolio and Caplease			ARCP Pro Forma Including Subsequent Adjustments, GE Capital Portfolio, Caplease and ARCT IV With Adjustments
Unaudited pro forma net loss attributable to stockholders	$	(137,920	)	$	(141,816	)	$	(147,909	)	$	(148,360	)	$	(39,399	)	$	(32,939	)	$	(108,913	)	$	(102,376	)
General and administrative expense savings		—			—			2,830			2,966			—			—			11,379			11,667
Expense savings from the early termination of $609.2 million of CapLease debt		—			—			8,399			8,399			—			—			33,595			33,595
Adjustment for reduced amortization of CapLease fair value adjustments		—			—			(1,176	)		(1,176	)		—			—			(4,704	)		(4,704	)
Expected interest expense on $257.3 million additional borrowing on the Company's unsecuredcredit facility used to fund debt and preferred stock repayments		—			—			(1,544	)		(1,544	)		—			—			(6,175	)		(6,175	)
Rental income from pipeline properties expected to close in 2013		14,038			14,038			14,038			21,628			56,153			56,153			56,153			86,513
Interest expense for financing of pipeline properties		(4,770	)		(4,770	)		(4,770	)		(6,440	)		(19,078	)		(19,078	)		(19,078	)		(25,756	)
Amount attributed to minority interests		(391	)		(391	)		(750	)		(1,005	)		(1,563	)		(1,563	)		(3,001	)		(4,012	)
Adjusted net loss attributable to stockholders	$	(129,043	)	$	(132,939	)	$	(130,882	)	$	(125,532	)	$	(3,887	)	$	2,573		$	(40,744	)	$	(11,248)

F-17

	Three Months Ended March 31, 2013												Year Ended December 31, 2012
	ARCP Historical			ARCP Including Subsequent Activity Adjustments and GE Capital Portfolio			ARCP Pro Forma Including Subsequent Adjustments, GE Capital Portfolio and Caplease			ARCP Pro Forma Including Subsequent Adjustments, GE Capital Portfolio, Caplease and ARCT IV With Adjustments			ARCP Historical			ARCP Including Subsequent Activity Adjustments and GE Capital Portfolio			ARCP Pro Forma Including Subsequent Adjustments, GE Capital Portfolio and Caplease			ARCP Pro Forma Including Subsequent Adjustments, GE Capital Portfolio, Caplease and ARCT IV With Adjustments
Unaudited Pro Forma Funds From Operations and Adjusted Funds From Operations
Adjusted net loss attributable to stockholders	$	(129,043	)	$	(132,939	)	$	(130,882	)	$	(125,532	)	$	(3,887	)	$	2,573		$	(40,744	)	$	(11,248	)
Merger and other transaction costs		137,769			137,769			137,769			137,769			2,603			2,603			2,603			2,603
Loss on held for sale properties		(14	)		(14	)		(14	)		(14	)		600			600			600			600
Realized gain/losses on sale of securities and early extinguishment of debt		(451	)		(451	)		(2,463	)		(2,463	)		—			—			(10,790	)		(10,790	)
Depreciation and amortization		25,109			41,437			59,977			84,977			40,700			165,754			288,104			388,104
Total Funds from Operations (FFO)		33,370			45,802			64,387			94,737			40,016			171,530			239,773			369,269
Acquisition related		5,582			5,582			5,582			10,327			42,761			42,761			42,761			45,070
Core FFO		38,952			51,384			69,969			105,064			82,777			214,291			282,534			414,339
AFFO adjustments:
Amortization of above and below-market lease asset		63			63			(406	)		(411	)		117			117			(722	)		(723	)
Amortization of deferred financing costs		1,108			1,108			1,332			1,332			841			841			1,507			1,507
Straight-line rent		(1,370	)		(2,076	)		231			(2,125	)		(2,008	)		(8,302	)		(2,062	)		(11,485	)
Non-cash equity compensation expense		876			876			876			876			1,180			1,180			1,180			1,180
AFFO	$	39,629		$	51,355		$	72,002		$	104,736		$	82,907		$	208,127		$	282,437		$	404,818
Weighted average common shares (1):
Basic		153,339			182,751			242,966			352,302			151,238			180,650			240,865			350,201
Fully Diluted		154,322			212,132			243,949			353,285			152,289			210,099			241,916			351,252
FFO per share:
Basic	$	0.22		$	0.25		$	0.27		$	0.27		$	0.26		$	0.95		$	1.00		$	1.05
Diluted	$	0.22		$	0.22		$	0.26		$	0.27		$	0.26		$	0.82		$	0.99		$	1.05
Core FFO per share
Basic	$	0.25		$	0.28		$	0.29		$	0.30		$	0.55		$	1.19		$	1.17		$	1.18
Diluted	$	0.25		$	0.24		$	0.29		$	0.30		$	0.54		$	1.02		$	1.17		$	1.18
AFFO per share:
Basic	$	0.26		$	0.28		$	0.30		$	0.30		$	0.55		$	1.15		$	1.17		$	1.16
Diluted	$	0.26		$	0.24		$	0.30		$	0.30		$	0.54		$	0.99		$	1.17		$	1.15

(1) Weighted average shares include the pro forma effect of the repurchase of 27.7 million shares of common stock, based on the conversion ratio of 0.95 share of ARCP common stock to one share of ARCT III common stock in conjunction with the merger of ARCP and ARCT III in February 2013, as well as the hypotentical issuance of an additional 24.4 million shares of common stock at $15.25 per share to fund the anticipated early termination of debt and repayment of preferred stock detailed in the adjustments detailed above.

The actual issuance of common stock will be based on a number of factors including the availability of capital under the Company's existing line of credit, availability of capital with new borrowing instruments, and the opportunity to further issue preferred securities.

F-18