Related Party Transactions and Arrangements

REI Segment

Ownership by Affiliates

Certain affiliates and executives of the Company have ownership in the Company through ownership of shares of the Company’s common stock, shares of unvested restricted common stock and OP units. As of March 31, 2014 and December 31, 2013, 3.05% and 4.37%, respectively, of the total equity units issued by the Company were owned by affiliates.

Transition to Self-Management

In its transition toward self-management, the Company discontinued certain relationships with affiliates and entities under common ownership with the Company’s Former Manager, an entity wholly owned by ARC, of which certain current officers and/or directors of the Company, are members.

Termination of Management Agreement

In connection with its transition to self-management, on January 8, 2014, the Company terminated the amended and restated management agreement with its Former Manager, pursuant to which the Former Manager managed the Company’s day-to-day operations until such date.

Assumption of RCS Advisory Services, LLC Services Agreement

Pursuant to an Assignment and Assumption Agreement, dated January 8, 2014, between ARC, the parent of our Former Manager, and RCS Advisory Services, LLC, an entity under common ownership with our Former Manager, ARC assigned to the Company, and the Company assumed, the rights and obligation under a Services Agreement (the “Services Agreement”), dated as of June 10, 2013, between ARC and RCS Advisory Services, LLC. Under the Services Agreement, RCS Advisory Services, LLC and its affiliates may provide certain transaction management services to the Company (including, without limitation, offering registration, regulatory advice with respect to the SEC and FINRA registration maintenance, transaction management, marketing support, due diligence advice and related meetings, events training and education and conference management) and other services, employees and other resources. Such services are charged hourly. During the three months ended March 31, 2014, the Company incurred and paid $0.1 million of fees in respect of the Services Agreement, which were included in merger and other transaction related costs in the consolidated statement of operations.

Transition Services Agreement

Pursuant to a Transition Services Agreement, dated October 21, 2013 (the “Transition Services Agreement”), affiliates of the Company’s Former Manager agreed to provide certain transition services to the Company, including accounting support, acquisition support, investor relations support, public relations support, human resources and administration, general human resources duties, payroll services, benefits services, insurance and risk management, information technology, telecommunications and Internet and services relating to office supplies. The Transition Services Agreement was in effect for a 60-day term beginning on January 8, 2014. Fees under the Transition Services Agreement were charged at an hourly rate and, during the 60-day tail period, the Company incurred and paid $10.0 million of fees under the Transition Services Agreement. These fees were included in merger and other transaction related costs in the consolidated statement of operations.

Purchase of Furniture, Fixtures and Equipment

On January 8, 2014, the Company, through the OP, entered into the Asset Purchase and Sale Agreement with its Former Manager (the “Purchase Agreement”), pursuant to which our Former Manager transferred to the Company furniture, fixtures and equipment used by the Company’s Former Manager in connection with the business of the Company, as well as reimbursed the Former Manager for certain unreimbursed expenses. During the three months ended March 31, 2014, pursuant to the Purchase Agreement, the Company paid the Former Manager $10.0 million for the furniture, fixtures and equipment and for certain unreimbursed expenses. The Company paid the full amount under the Purchase Agreement, which substantially related to employee-related expenses, during the three months ended March 31, 2014. These fees were included in merger and other transaction related costs in the consolidated statement of operations.

Fees Paid in Connection with the ARCT IV Merger

The Company entered into an agreement with an entity under common ownership with the Former Manager, Realty Capital Securities, LLC (“RCS”), to provide strategic and financial advisory services to the Company in connection with the ARCT IV Merger. The Company agreed to pay a fee equal to 0.25% of the transaction value upon the consummation of the transaction and reimburse out of pocket expenses. The Company accrued $7.7 million of such fees and $0.6 million of such expense reimbursements as of December 31, 2013 and paid the outstanding balance in January of 2014. No fees were incurred under this agreement during the three months ended March 31, 2014 or 2013.

The Company entered into an agreement with entities under common ownership with the Former Manager, RCS, RCS Advisory Services, LLC, and American National Stock Transfer, LLC (“ANST”), to provide financial advisory and information agent services in connection with the ARCT IV Merger and the related proxy solicitation seeking approval of such merger by the Company’s stockholders. Services provided include facilitation of the preparation, distribution and accumulation and tabulation of proxy materials, stockholder, analyst and financial advisor communications and consultation on materials and communications made to the public and regulatory agencies regarding the ARCT IV Merger. The Company agreed to pay $0.6 million in fees and reimburse out of pocket expenses pursuant to this agreement. This amount was fully accrued as of December 31, 2013 and paid in January 2014. No fees were incurred under this agreement during the three months ended March 31, 2014 or 2013.

In addition, during the three months ended March 31, 2014, the Company reimbursed out of pocket expenses of $0.6 million to ARC Advisory Services, LLC, an affiliate of the Former Manager, in connection with services provided for the ARCT IV Merger.

ARCT IV entered into an agreement with an entity under common ownership with the Former Manager, RCS, to provide strategic and financial advisory services to assist ARCT IV with its alternatives for a potential liquidity event. ARCT IV agreed to pay a fee equal to 0.25% of the transaction value upon the consummation of the transaction, but not less than $2.5 million, and reimburse out of pocket expenses. ARCT IV accrued $7.7 million of such fees and $0.6 million of such expense reimbursements as of December 31, 2013 and paid the outstanding balance in January 2014. No fees were incurred under this agreement during the three months ended March 31, 2014 or 2013.

The Company and ARCT IV entered into agreements with entities under common ownership with the Former Manager, ARC Advisory Services, LLC and RCS Advisory Services, LLC, to provide legal support services, up to the date that ARCT IV entered into the ARCT IV Merger Agreement. In total the Company and ARCT IV agreed to pay $0.5 million pursuant to this agreement. This amount was fully accrued as of December 31, 2013 and paid in January of 2014. No fees were incurred under this agreement during the three months ended March 31, 2014 or 2013.

ARCT IV entered into an agreement with entities under common ownership with the Former Manager, RCS, RCS Advisory Services, LLC, and ANST, to provide advisory and information agent services in connection with the ARCT IV Merger and the related proxy solicitation seeking approval of such merger by ARCT IV’s stockholders. Services provided include facilitation of the preparation, distribution and accumulation and tabulation of proxy materials, stockholder, analyst and financial advisor communications and consultation on materials and communications made to the public and regulatory agencies regarding the ARCT IV Merger. ARCT IV agreed to pay $0.8 million in fees and reimburse out of pocket expenses pursuant to this agreement. As of December 31, 2013, $0.8 million of such fees and $0.2 million of such expense reimbursements were accrued and were paid in January of 2014. No fees were incurred under this agreement during the three months ended March 31, 2014 or 2013.

ARCT IV entered into an agreement with with entities under common ownership with the Former Manager, ARC Advisory Services, LLC and RCS Advisory Services, LLC, to provide support services including legal, accounting, marketing, human resources and information technology, among other services, until the earlier of the potential merger closing date or one year from the effective date of the agreement of July 1, 2013. ARCT IV agreed to pay $2.0 million in fees and reimburse out of pocket expenses pursuant to this agreement. As of December 31, 2013, $2.0 million of such fees and $0.4 million of such expense reimbursements were accrued and were paid in January of 2014. No fees were incurred under this agreement during the three months ended March 31, 2014 or 2013.

ARCT IV entered into the Asset Purchase and Sale Agreement with the ARCT IV Advisor, pursuant to which the ARCT IV Advisor transferred to the Company furniture, fixtures and equipment used by the ARCT IV Advisor and ARCT IV reimbursed the ARCT IV Advisor for certain unreimbursed expenses. In connection with the agreement, during the three months ended March 31, 2014, the Company paid $2.1 million for furniture, fixtures and equipment and other capitalized costs, $1.7 million for offering costs, which were recorded as a reduction to additional paid-in capital on the consolidated balance sheet and $2.0 million for certain unreimbursed expenses, which were recorded in merger and other transaction related costs on the consolidated statement of operations.

Pursuant to ARCT IV’s advisory agreement with the ARCT IV Advisor, ARCT IV agreed to pay the ARCT IV Advisor a brokerage commission on the sale of property in connection with the ARCT IV Merger. At the time of the ARCT IV Merger, ARCT IV paid $8.4 million to the ARCT IV Advisor in connection with such agreement. These commissions were included in merger and other transaction related costs in the consolidated statement of operations. No fees were incurred under this agreement during the three months ended March 31, 2013.

Fees Paid in Connection with the Cole Merger

The Company entered into an agreement with an entity under common ownership with the Former Manager, RCS, to provide strategic and financial advisory services to the Company in connection with the Cole Merger. The Company agreed to pay a fee equal to 0.25% of the transaction value upon the consummation of the transaction and reimburse out of pocket expenses. During the three months ended March 31, 2014, the Company incurred and paid $28.4 million of such fees. These fees were included in merger and other transaction related costs in the consolidated statement of operations. No fees were incurred under this agreement during the three months ended March 31, 2013.

The Company entered into an agreement with entities under common ownership with the Former Manager, RCS, RCS Advisory Services, LLC and ANST, to provide advisory and information agent services in connection with the proposed merger and the related proxy solicitation seeking approval of such merger by the Company’s stockholders. The Company agreed to pay $0.8 million in fees and reimburse out of pocket expenses pursuant to this agreement. During the three months ended March 31, 2014, the Company incurred and paid $0.8 million of such fees and $0.4 million of such expense reimbursements were incurred. These fees were included in merger and other transaction related costs in the consolidated statement of operations. No fees were incurred under this agreement during the three months ended March 31, 2013.

The Company entered into an agreement with an entity under common ownership with the Former Manager, RCS Advisory Services, LLC, to provide support services, including legal, accounting, marketing, human resources and information technology. The Company agreed to pay $2.9 million in fees and reimburse out of pocket expenses pursuant to this agreement. During the three months ended March 31, 2014, the Company incurred and paid $2.9 million of such fees and $1.3 million of such expense reimbursements were incurred. These fees were included in merger and other transaction related costs in the consolidated statement of operations. No fees were incurred under this agreement during the three months ended March 31, 2013.

Also in connection with the Cole Merger, during the three months ended March 31, 2014, the Company reimbursed an entity under common ownership with the Former Manager, ARC Advisory Services, LLC, $0.7 million for services and out of pocket expenses incurred in relation to the Cole Merger. These fees were included in merger and other transaction related costs in the consolidated statement of operations. No fees were incurred under this agreement during the three months ended March 31, 2013.

Fees Paid in Connection with the ARCT III Merger

ARCT III entered into an agreement with an entity under common ownership with the Former Manager, ARC Advisory Services, LLC, to provide legal support services up to the date that ARCT III entered into the ARCT III Merger Agreement and until the ARCT III Merger was consummated for $0.5 million. This amount was fully accrued as of December 31, 2012 and was paid in February 2013 in conjunction with the consummation of the ARCT III Merger.

ARCT III entered into an agreement with an entity under common ownership with the Former Manager, ARC Advisory Services, LLC, to provide support services including legal, accounting, marketing, human resources and information technology, among other services, until the earlier of the ARCT III Merger closing date or one year from the date of the agreement for $2.0 million. The Company recorded $1.7 million in expense for the three months ended March 31, 2013, in addition to the $0.3 million that was accrued as of December 31, 2012, and paid the full amount in conjunction with the consummation of the ARCT III Merger in February 2013.

ARCT III entered into an agreement with entities under common ownership with the Former Manager, RCS and ARC Advisory Services, LLC, to provide financial advisory and information agent services related to the proxy solicitation seeking approval of the ARCT III Merger by ARCT III’s stockholders for $0.6 million. Services provided included facilitation of the preparation, distribution and accumulation and tabulation of proxy materials, stockholder, analyst and financial advisor communications and consultation on materials and communications made to the public and regulatory agencies regarding the ARCT III Merger. The Company recorded $0.5 million in expense for the three months ended March 31, 2013 in addition to the $0.1 million that was accrued as of December 31, 2012 and paid the full amount in conjunction with the consummation of the ARCT III Merger in February of 2013.

The Company, through the OP, entered into an Asset Purchase and Sale Agreement with American Realty Capital Advisors III, LLC (“the ARCT III Advisor") pursuant to which, concurrently with the closing of the ARCT III Merger and in connection with the internalization by the Company of certain property level management and accounting activities, the ARCT III Advisor sold to the OP certain furniture, fixtures, equipment and other assets used by the ARCT III Advisor in connection with managing the property level business and operations and accounting functions of the Company and the OP, included at the cost of such assets, for an aggregate price of $5.8 million, which included the reimbursement of certain costs and expenses incurred by the ARCT III Advisor in connection with the ARCT III Merger. The Company paid the total full amount of the agreement during the three months ended March 31, 2013. In relation to the agreement, the Company acquired fixed assets with a carryover basis of $1.0 million from the the ARCT III Advisor; the consideration paid to the ARCT III Advisor in excess of the carryover basis was approximately $3.0 million.

On February 28, 2013, the OP entered into a Contribution and Exchange Agreement (the “ARCT III Contribution and Exchange Agreement”) with the ARCT III OP and ARCT III Special Limited Partner, the holder of the special limited partner interest in the ARCT III OP. The ARCT III Special Limited Partner was entitled to receive certain distributions from the ARCT III OP, including the subordinated distribution of net sales proceeds resulting from an “investment liquidity event” (as defined in the agreement of limited partnership of the ARCT III OP). The ARCT III Merger constituted an “investment liquidity event,” as a result of which the ARCT III Special Limited Partner, in connection with management’s successful attainment of the 6.0% performance hurdle and the return to ARCT III’s stockholders of approximately $557.3 million in addition to their initial investment, was entitled to receive a subordinated distribution of net sales proceeds from the ARCT III OP equal to approximately $98.4 million. Pursuant to the ARCT III Contribution and Exchange Agreement, the ARCT III Special Limited Partner contributed its interest in the ARCT III OP, inclusive of the subordinated distribution proceeds received, to the ARCT III OP in exchange for 7.6 million ARCT III OP Units. Upon consummation of the ARCT III Merger on February 28, 2013, these ARCT III OP Units were immediately converted to 7.3 million OP Units after application of the ARCT III Exchange Ratio. In conjunction with the ARCT III Merger Agreement, the Special Limited Partner agreed to a minimum one year holding period for these OP Units before converting them to shares of Company common stock.

Fees Paid in Connection with the ARCenters spin-off

The Company entered into an agreement with an entity under common ownership with the Former Manager, RCS, to provide strategic and financial advisory services to the Company in connection with the ARCenters spin-off. During the three months ended March 31, 2014, the Company incurred $1.8 million of such fees, which are included in accounts payable and accrued expenses in the accompanying balance sheet as of March 31, 2014. No fees were incurred under this agreement during the three months ended March 31, 2013.

Fees Paid in Connection with the Operations of the Company

Each of the Company, ARCT III and ARCT IV paid the Company’s Former Manager, the ARCT III Advisor and the ARCT IV Advisor, as applicable, an acquisition fee equal to 1.0% of the contract purchase price, inclusive of assumed indebtedness, of each property the Company, ARCT III or ARCT IV, as applicable, acquired. The acquisition fee was payable in cash at the closing of each acquisition. In conjunction with the ARCT III Merger, it was agreed that these fees would no longer be paid by either the Company or ARCT III. In conjunction with the ARCT IV Merger, it was agreed that these fees would no longer be paid by ARCT IV. Acquisition fees are recorded in Acquisition related costs in the accompanying consolidated statements of operations.

Each of the Company, ARCT III and ARCT IV paid the Company’s Former Manager, the ARCT III Advisor and the ARCT IV Advisor, as applicable, a financing consideration fee equal to 0.75% of the amount available under any secured mortgage financing or refinancing that the Company, ARCT III or ARCT IV, as applicable, obtained and used for the acquisition of properties that was arranged by the Company’s Former Manager, ARCT III Advisor or ARCT IV Advisor, as applicable. The financing coordination fee was payable in cash at the closing of each financing. In conjunction with the ARCT III Merger, it was agreed that these fees would no longer be paid to either the Company or ARCT III. In conjunction with the ARCT IV Merger, it was agreed that these fees would no longer be paid by ARCT IV.

Prior to the termination of the amended and restated management agreement, the Company was required to pay its Former Manager a quarterly incentive fee, calculated based on 20% of the excess Company annualized core earnings (as defined in the management agreement with its Former Manager) over the weighted average number of shares multiplied by the weighted average price per share of common stock. One half of each quarterly installment of the incentive fee will be payable in shares of common stock. The remainder of the incentive fee will be payable in cash. No such incentive fees were incurred or paid to the Company’s Former Manager since inception through January 8, 2014.

Prior to January 8, 2014, the Company paid its Former Manager an annual base management fee equal to 0.50% per annum of the average unadjusted book value of the Company’s real estate assets, calculated and payable monthly in advance. The management fee was payable in cash. In conjunction with the ARCT III Merger, the base management fee was reduced to 0.40% per annum for the unadjusted book value of assets over $3.0 billion. The amount of base management fee incurred by the Company during the period ended March 31, 2014 prior to the terminating the amended and restated management agreement was not significant. In addition, as of December 31, 2013, the Company had accrued $5.0 million in base management fees. In lieu of cash, on January 21, 2014, the Company’s Former Manager agreed to settle all outstanding balances in stock, resulting in the Company issuing 388,461 shares of common stock to our Former Manager. The fair value of the shares issued approximated the amount of accrued asset management fees at the date of settlement.

The Company also pays fees for transfer agent services to an entity under common ownership with the Former Manager, ANST. During the three months ended March 31, 2014, the Company incurred and paid $0.3 million in relation to transfer agent services.

Until July 1, 2012, ARCT III paid the ARCT III Advisor an asset management fee of 0.75% per annum of the cost of its assets (cost includes the purchase price, acquisition expenses, capital expenditures and other customarily capitalized costs, but excludes acquisition fees) plus costs and expenses incurred by the ARCT III Advisor in providing asset management services; provided, however, that the asset management fee was reduced by any amounts payable to ARCT III’s property manager as an oversight fee, such that the aggregate of the asset management fee and the oversight fee did not exceed 0.75% per annum of the cost of ARCT III’s assets plus costs and expenses incurred by the ARCT III Advisor in providing asset management services. Prior to July 1, 2012, this fee was payable in monthly installments at the discretion of ARCT III’s board of directors in cash, common stock or restricted stock grants, or any combination thereof. Asset management fees, if accrued, are recorded in Operating fees to affiliates in the consolidated statements of operations and comprehensive loss.

Effective July 1, 2012, the payment of asset management fees in monthly installments in cash, shares or restricted stock grants, or any combination thereof to the ARCT III Advisor was eliminated. Instead, ARCT III issued (subject to periodic approval by its board of directors) to the ARCT III Advisor performance-based restricted partnership units of the ARCT III OP designated as “ARCT III Class B units,” which were intended to be profits interests and to vest, and no longer be subject to forfeiture, at such time as: (x) the value of the ARCT III OP’s assets plus all distributions made equal or exceeded the total amount of capital contributed by investors plus a 6.0% cumulative, pre-tax, non-compounded annual return thereon (the “economic hurdle”); and (y) a liquidity event has occurred.

The ARCT III Advisor received distributions on unvested ARCT III Class B units equal to the distribution rate received on ARCT III common stock. Such distributions on issued ARCT III Class B units were included as general and administrative expense in the consolidated statements of operations and comprehensive loss until the performance condition is considered probable to occur. 145,022 ARCT III Class B units were approved by ARCT III’s board of directors as of December 31, 2012. During January and February 2013, ARCT III’s board of directors approved, and ARCT III issued, 603,599 ARCT III Class B units to the ARCT III Advisor for its asset management services provided. As of December 31, 2012, ARCT III did not consider achievement of the performance condition to be probable as the shareholder vote for the ARCT III Merger, which would allow vesting of these ARCT III Class B Units, was not completed. The performance condition related to these ARCT III Class B units was satisfied upon the completion of the ARCT III Merger and expense of $9.9 million was recorded at that time. The ARCT III Class B units then converted to ARCT III OP units which converted to 711,190 OP Units after the application of the ARCT III Exchange Ratio. These expenses were recorded in merger and other transaction related in the consolidated statements of operations and comprehensive loss.

In connection with the asset management services provided by the ARCT IV Advisor, ARCT IV issued (subject to periodic approval by the board of directors) to the ARCT IV Advisor performance-based restricted partnership units of the ARCT IV OP designated as “ARCT IV Class B Units,” which were intended to be profit interests and to vest, and no longer be subject to forfeiture, at such time as: (x) the value of the ARCT IV OP’s assets plus all distributions made equals or exceeds the total amount of capital contributed by investors plus a 6.0% cumulative, pre-tax, non-compounded annual return thereon (the “economic hurdle”); (y) any one of the following occurs: (1) the termination of the advisory agreement by an affirmative vote of a majority of the Company’s independent directors without cause; (2) a listing; or (3) another liquidity event; and (z) the ARCT IV Advisor was still providing advisory services to ARCT IV.

The calculation of the ARCT IV asset management fees was equal to: (i) 0.1875% of the cost of ARCT IV’s assets; divided by (ii) the value of one share of ARCT IV common stock as of the last day of such calendar quarter. When approved by the board of directors, the ARCT IV Class B Units were issued to the ARCT IV Advisor quarterly in arrears pursuant to the terms of the ARCT IV OP agreement.

During the year ended December 31, 2013, the board of directors approved the issuance of 492,483 ARCT IV Class B Units to the ARCT IV Advisor in connection with this arrangement. As of December 31, 2013, ARCT IV did not consider achievement of the performance condition to be probable and no expense was recorded at that time. The ARCT IV Advisor received distributions on unvested ARCT IV Class B Units equal to the distribution rate received on the ARCT IV common stock. Such distributions on ARCT IV Class B Units were included in general and administrative expense in the consolidated statements of operations until the performance condition was considered probable to occur. The performance condition related to the 498,857 ARCT IV Class B Units, which includes units issued for the period of January 1, 2014 through the ARCT IV Merger Date, was satisfied upon the completion of the ARCT IV Merger. These ARCT IV Class B Units immediately converted into OP Units at the 2.3961 exchange ratio discussed in Note 2 — Mergers and Acquisitions and the Company recorded an expense of $13.9 million based on the fair value of the ARCT IV Class B Units at that time.

ARCT III paid an affiliate of ARC, unless it contracted with a third party, a property management fee of up to 2% of gross revenues from ARCT III’s stand-alone single-tenant net leased properties and 4% of gross revenues from its multi-tenant properties, plus, in each case, market-based leasing commissions applicable to the geographic location of the property. ARCT III also reimbursed the affiliate for property level expenses. If ARCT III contracted directly with third parties for such services, it paid them customary market fees and paid the affiliated property manager, an oversight fee of up to 1% of the gross revenues of the property managed. Property management fees are recorded in Operating fees to affiliates in the accompanying consolidated statements of operations.

Effective March 1, 2013, ARCT IV entered into an agreement with RCS to provide strategic advisory services and investment banking services required in the ordinary course of ARCT IV’s business, such as performing financial analysis, evaluating publicly traded comparable companies and assisting in developing a portfolio composition strategy, a capitalization structure to optimize future liquidity options and structuring operations. Strategic advisory fees were amortized over the term of the ARCT IV IPO and included in acquisition and transaction related expense on the consolidated statements of operations. RCS and its affiliates also provide transfer agent services, as well as transaction management and other professional services. Those fees are included in general and administrative expenses on the consolidated statement of operations during the period the service was provided.

The Company reimburses certain affiliates for out-of-pocket costs actually incurred by its those affiliates, including without limitation, legal fees and expenses, due diligence fees and expenses, other third party fees and expenses, costs of appraisals, travel expenses, nonrefundable option payments and deposits on properties not acquired, accounting fees and expenses, title insurance premiums and other closing costs, personnel costs and miscellaneous expenses relating to the selection, acquisition and due diligence of properties. The Company’s reimbursement obligation is not subject to any dollar limitation. Expenses are typically reimbursed in cash on a monthly basis following the end of each month. Reimbursements are recorded based on the related activity to which the expense relates. Other than those reimbursements incurred and discussed above, the Company did not incur any reimbursement expenses during the three month period ended March 31, 2014.

In order to facilitate the smooth transition of property management services following the consummation of the ARCT III Merger, the Company, the OP and ARC agreed that the Property Management and Leasing Agreement would be extended for a 60-day period following the consummation of the ARCT III Merger for which the Company paid ARC $2.3 million. These fees were recorded in merger and transaction related in the consolidated statements of operations and comprehensive loss.

In connection with providing strategic advisory services related to certain portfolio acquisitions, from time to time, ARCT IV entered into arrangements in which the investment banking division of RCS receives a transaction fee of 0.25% of the transaction value for such portfolio acquisition transactions. No such arrangements were entered during the three months ended March 31, 2014.

The following table details amounts incurred by the Company, ARCT III or ARCT IV, other than those incurred for the ARCT IV Merger, the Cole Merger, the ARCT III Merger and the ARCenters spin-off, and contractually due to ARC, the ARCT III Advisor, the ARCT IV Advisor or the Company’s Former Manager and forgiven in connection with the operations related services described above (in thousands):



	Three Months Ended March 31,								Payable as of
	2014				2013				March 31,		December 31,
	Incurred		Forgiven		Incurred		Forgiven		2014		2013
One-time fees:
Acquisition fees ⁽¹⁾	$	—	$	—	$	7,054	$	—	$	—	$	—
Financing fees and related cost reimbursements	—		—		7,500		—		—		—
Other expense reimbursements	—		—		54		—		—		—
Transaction fees	—		—		—		—		—		3,455
On-going fees:
Base management fees ⁽²⁾	—		—		2,654		370		—		5,654
Transfer agent fees	344		—		799		—		—		57
Property management and leasing fees ⁽²⁾	—		—		—		—		—		217
Strategic advisory fees	—		—		920		—		—		—
Distributions on Class B Units	—		—		2		—		—		—
Total operational fees and reimbursements	$	344	$	—	$	18,983	$	370	$	—	$	9,383

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(1) In conjunction with the ARCT III Merger, the payment of acquisition fees was terminated, except with respect to properties that were in ARCP’s or ARCT III’s pipeline at the ARCT III Merger date; any fees that were paid because the Company’s Former Manager or the ARCT III Advisor had sourced and negotiated the purchase price prior to the ARCT III Merger.

(2) The amounts incurred and paid were recognized in merger and other transaction related costs during the three months ended March 31, 2013 as they relate to the ARCT III Merger. The amounts incurred during the quarter ended March 31, 2013 and payable as of March 31, 2013 were accrued through January 7, 2014, the date prior to transition to self-management.

Upon consummation of the ARCT III Merger, the Company entered into the OPP with its Former Manager, whereby its Former Manager was able to potentially earn compensation upon the attainment of stockholder value creation targets. Pursuant to previous authorization of the Company’s board of directors, as a result of the termination of the Management Agreement, all LTIP Units issued to the Former Manager under the OPP became fully earned and vested and were earned upon the consummation of the Company’s transition to self-management on January 8, 2014. On October 21, 2013, the Company approved the New OPP, to be effective as of the Company’s transition to self-management. Under the New OPP, individual agreements are entered into between the Company and selected participants that set forth the participant’s participation percentage in the New OPP and the number of LTIP Units subject to the participant’s award. Under the OPP Agreements, the participants will be eligible to earn performance-based bonus awards equal to the Participant’s participation percentage of a pool that will be funded up to a maximum award opportunity. See Note 18 — Equity Based Compensation for a more detailed description of these plans.

Fees Paid in Connection with Common Stock Offerings

RCS served as the dealer manager of the ARCT III and ARCT IV IPOs. RCS received fees and compensation in connection with the sale of ARCT III’s and ARCT IV’s common stock in the respective IPOs. RCS received a selling commission of up to 7% of gross offering proceeds before reallowance of commissions earned by participating broker-dealers in each of the IPOs. In addition, RCS received up to 3% of the gross proceeds from the sale of common stock, before reallowance to participating broker-dealers, as a dealer-manager fee in each of the IPOs. RCS was permitted to reallow its dealer-manager fee to such participating broker-dealers, based on such factors as the volume of shares sold by respective participating broker-dealers and marketing support incurred as compared to those of other participating broker-dealers. RCS has also received compensation for various other Company equity transactions.

The following table details the results of such activities related to RCS, which are recorded as offering costs on the consolidated statement of changes in equity (amounts in thousands):



	Three Months Ended March 31,				Payable as of
	2014		2013		March 31, 2014		December 31, 2013
Total commissions and fees paid to RCS	$	—	$	139,961	$	—	$	—

The Company, ARCT III and ARCT IV reimbursed its Former Manager, the ARCT III Advisor, the ARCT IV Advisor and RCS, as applicable, for services relating to the ARCT III IPO, the ARCT IV IPO and other significant transactions such as the Company’s at-the-market equity program. The following table details the results of such activities related to offering and other significant transactions costs reimbursed to the Company’s Former Manager, the ARCT III Advisor, the ARCT IV Advisor and RCS (amounts in thousands):



	Three Months Ended March 31,				Payable as of
	2014		2013		March 31, 2014		December 31, 2013
Offering expense and other significant transactions reimbursements	$	1,865	$	12,077	$	—	$	—

Cole Capital

Cole Capital is contractually responsible for managing the Managed REITs’ affairs on a day-to-day basis, identifying and making acquisitions and investments on the Managed REITs’ behalf, and recommending to each of the Managed REIT’s respective board of directors an approach for providing investors with liquidity. In addition, the Company distributes the shares of common stock for certain Managed REITs and advises them regarding offerings, manages relationships with participating broker-dealers and financial advisors and provides assistance in connection with compliance matters relating to the offerings. The Company receives compensation and reimbursement for services relating to the Managed REITs’ offerings and the investment, management and disposition of their respective assets, as applicable.

Offerings

The Company generally receives a selling commission of up to 7.0% of gross offering proceeds related to the sale of shares of CCPT IV, CCIT II and CCPT V common stock in their primary offerings, before reallowance of commissions earned by participating broker-dealers. The Company has and intends to continue to reallow 100% of selling commissions earned to participating broker-dealers. In addition, the Company generally receives 2.0% of gross offering proceeds in the primary offerings, before reallowance to participating broker-dealers, as a dealer manager fee in connection with the sale of CCPT IV, CCIT II and CCPT V shares of common stock. The Company, in its sole discretion, may reallow all or a portion of its dealer manager fee to such participating broker-dealers as a marketing and due diligence expense reimbursement, based on factors such as the volume of shares sold by such participating broker-dealers and the amount of marketing support provided by such participating broker-dealers. No selling commissions or dealer manager fees are paid to the Company or other broker-dealers with respect to shares sold under the respective Managed REIT’s distribution reinvestment plans, under which the stockholders may elect to have distributions reinvested in additional shares.

In connection with the sale of INAV shares of common stock, the Company receives an asset-based dealer manager fee that is payable in arrears on a monthly basis and accrues daily in an amount equal to (i) 1/365th of 0.55% of the net asset value (“NAV”) for Wrap Class shares of common stock (“W Shares”) for such day, (ii) 1/365th of 0.55% of the NAV for Advisor Class shares of common stock (“A Shares”) for such day and (iii) 1/365th of 0.25% of the NAV for Institutional Class shares of common stock (“I Shares”) for such day. The Company, in its sole discretion, may reallow a portion of its dealer manager fee received on W Shares, A Shares and I Shares to participating broker-dealers. In addition, the Company receives a selling commission on A Shares sold in the primary offering of up to 3.75% of the offering price per share for A Shares. The Company has and intends to continue to reallow 100% of selling commissions earned to participating broker-dealers. The Company also receives an asset-based distribution fee for A Shares that is payable in arrears on a monthly basis and accrues daily in an amount equal to 1/365th of 0.50% of the NAV for A Shares for such day. The Company, in its sole discretion, may reallow a portion of the distribution fee to participating broker-dealers. No selling commissions are paid to the Company or other broker-dealers with respect to W Shares or I Shares or on shares of any class of INAV common stock sold pursuant to INAV’s distribution reinvestment plan, under which the stockholders may elect to have distributions reinvested in additional shares, and no distribution fees are paid to the Company or other broker-dealers with respect to W Shares or I Shares.

All other organization and offering expenses associated with the sale of the Managed REITs’ common stock (excluding selling commissions, if applicable, and the dealer manager fee) are paid for in advance by the Company and subject to reimbursement by the Managed REITs, up to certain limits per the respective advisory agreement. As these costs are incurred, they are recorded as reimbursement revenue, up to the respective limit, and are included in dealer manager fees, selling commissions and offering reimbursements in the financial results for Cole Capital in Note 5 — Segment Reporting. Expenses paid on behalf of the Managed REITs in excess of these limits that are expected to be collected are recorded as program development costs. As of March 31, 2014, the Company had $3.6 million of organization and offering costs paid on behalf of the Managed REITs in excess of the limits that have not been reimbursed, which are expected to be reimbursed by the Managed REITs as they raise additional proceeds from the respective offering. The program development costs are included in deferred costs and other assets, net in the accompanying consolidated unaudited balance sheets. Subsequent to March 31, 2014, the Company had incurred $28.7 thousand of additional organization and offering costs and no costs had been reimbursed from the Managed REITs.

The Company recorded commissions, fees and expense reimbursements as shown in the table below for services provided to the Managed REITs (as described above) during the period from the Cole Acquisition Date to March 31, 2014 (in thousands). As the Company did not commence operations for Cole Capital until the Cole Acquisition Date, comparative financial data is not presented for the three months ended March 31, 2013.



	Period from the Cole Acquisition Date to March 31, 2014
	CCPT IV		CCPT V		CCIT II		INAV		Total
Offering:
Selling commission revenue	$	29,125	$	—	$	371	$	21	$	29,517
Selling commissions reallowance expense	$	29,125	$	—	$	371	$	21	$	29,517
Dealer manager and distribution fee revenue	$	8,773	$	—	$	114	$	65	$	8,952
Dealer manager fees reallowance expense	$	4,864	$	—	$	53	$	2	$	4,919
Other expense reimbursement revenue	$	3,767	$	50	$	114	$	53	$	3,984

Operations

The Company earns acquisition fees related to the acquisition, development or construction of properties on behalf of certain of the Managed REITs. In addition, the Company is reimbursed for acquisition expenses incurred in the process of acquiring properties up to certain limits per the respective advisory agreement. The Company is not reimbursed for personnel costs in connection with services for which it receives acquisition fees or real estate commissions. In addition, the Company may earn disposition fees related to the sale of one or more properties, including those held indirectly through joint ventures, on behalf of a Managed REIT. Acquisition and disposition fees and reimbursements, as applicable, are included in transaction service fees in the financial results for Cole Capital in Note 5 — Segment Reporting.

The Company earns advisory and asset and property management fees from certain Managed REITs and other affiliates. In addition, the Company may be reimbursed for expenses incurred in providing advisory and asset and property management services, subject to certain limitations. In connection with services provided by the Company related to the origination or refinancing of any debt financing obtained by certain Managed REITs that is used to acquire properties or to make other permitted investments, or that is assumed, directly or indirectly, in connection with the acquisition of properties, the Company is reimbursed for financing expenses incurred, subject to certain limitations. Advisory fees, asset and property management fees and reimbursements of expenses are included in management fees and reimbursements in the financial results for Cole Capital in Note 5 — Segment Reporting.

The Company recorded fees and expense reimbursements as shown in the table below for services provided primarily to the Managed REITs (as described above) during the period from the Cole Acquisition Date to March 31, 2014 (in thousands). As the Company did not commence operations for Cole Capital until the Cole Acquisition Date, comparative financial data is not presented for the three months ended March 31, 2013.



	Period from the Cole Acquisition Date to March 31, 2014
	CCPT IV		CCPT V		CCIT		CCIT II		INAV		Other		Total
Operations:
Acquisition fee revenue	$	3,998	$	66	$	495	$	—	$	—	$	—	$	4,559
Asset management fee revenue	$	—	$	—	$	—	$	—	$	—	$	151	$	151
Property management and leasing fee revenue	$	—	$	—	$	—	$	—	$	—	$	100	$	100
Operating expense reimbursement revenue	$	1,065	$	17	$	429	$	—	$	—	$	—	$	1,511
Advisory and performance fee revenue	$	2,564	$	—	$	2,595	$	26	$	108	$	—	$	5,293

Investment in the Managed REITs

As of March 31, 2014, the Company owned aggregate equity investments of $5.1 million in the Managed REITs, which is included in investment in unconsolidated entities in the accompanying consolidated balance sheet. The table below presents certain information related to the Company’s investments in the Managed REITs as of March 31, 2014 (carrying amount in thousands):



	March 31, 2014
Managed REIT	% of Outstanding Shares Owned		Carrying Amount of Investment
CCPT	0.01	%	$	5
CCPT IV	0.01	%	140
CCPT V	100.00	%	2,517
CCIT	0.01	%	97
CCIT II	33.14	%	2,139
INAV	0.28	%	163
			$	5,061

Due from Affiliates

As of March 31, 2014, $5.4 million was expected to be collected from the Managed REITs for services provided by the Company and expenses subject to reimbursement by the Managed REITs in accordance with their respective advisory and property management agreements and was included in due from affiliates on the accompanying consolidated balance sheet. In connection with the Cole Merger, the Company acquired two secured revolving line of credit agreements that provide for an aggregate of $2.9 million of available borrowings to CCPT, and a revolving line of credit agreement that provides for $10.0 million of available borrowings to CCIT II. In addition, during the three months ended March 31, 2014, the Company entered into a revolving line of credit agreement that provides for $10.0 million of available borrowings to CCPT V. The CCPT line of credit agreements each bear a fixed interest rate of 5.75%, mature in March 2015 and are secured by a single retail property. The CCIT II and CCPT V line of credit agreements each bear an interest rate equal to the one-month LIBOR plus 2.20% and mature in January 2015 and March 2015, respectively. During the three months ended March 31, 2014, CCPT borrowed $300,000 on one of the lines of credit, and CCIT II and CCPT V borrowed $1.9 million and $1.0 million, respectively, on their lines of credit. These borrowings are included in due from affiliates in the accompanying consolidated balance sheet.