Real Estate Investments (Tables)

3 Months Ended

Mar. 31, 2014

Mar. 31, 2013

Schedule of Business Acquisitions, by Acquisition

The following table presents the allocation of the fair value of the assets acquired and liabilities assumed during the periods presented (dollar amounts in thousands):



	Three Months Ended March 31,
	2014			2013
Real estate investments, at cost:
Land	$	133,903		$	74,700
Buildings, fixtures and improvements	694,935			291,664
Total tangible assets	828,838			366,364
Acquired intangible assets:
In-place leases	120,421			45,223
Above-market leases	11,559			—
Assumed intangible liabilities:
Below-market leases	(1,156		)	—
Fair value adjustment of assumed notes payable	(23,589		)	—
Total purchase price of assets acquired, net	936,073			411,587
Notes payable assumed	263,217			—
Cash paid for acquired real estate investments	$	672,856		$	411,587
Number of properties acquired	215			112



	Preliminary
	Amounts Previously Recognized as of the CapLease Acquisition Date ⁽¹⁾		Measurement Period Adjustments			Adjusted Amounts Recognized as of the CapLease Acquisition Date
Fair value of consideration given	$	920,697	$	—		$	920,697

Assets purchased, at fair value:
Land	235,843		(2,778		)	233,065
Buildings, fixtures and improvements	1,596,481		(8,147		)	1,588,334
Land and construction in process	12,352		—			12,352
Acquired intangible lease assets	191,964		(1,102		)	190,862
Total real estate investments	2,036,640		(12,027		)	2,024,613
Cash and cash equivalents	41,799		—			41,799
Investment securities	60,730		—			60,730
Loans held for investment	26,457		—			26,457
Restricted cash	29,159		—			29,159
Deferred costs and other assets, net	21,564		—			21,564
Deferred costs	325		—			325
Total identifiable assets purchased	2,216,674		(12,027		)	2,204,647

Liabilities assumed, at fair value:
Mortgage notes payable	1,037,510		—			1,037,510
Secured credit facility	121,000		—			121,000
Other debt	114,208		—			114,208
Below-market leases	57,058		—			57,058
Derivative liabilities	158		—			158
Accounts payable and accrued expenses	46,484		517			47,001
Deferred rent, derivative and other liabilities	8,867		—			8,867
Total liabilities assumed	1,385,285		517			1,385,802

Non-controlling interest retained by third party	567		—			567

Net identifiable assets acquired by Company	830,822		(12,544		)	818,278
Goodwill	$	89,875	$	12,544		$	102,419

The estimated fair value of the consideration transferred at the Cole Acquisition Date totaled approximately $7.5 billion and consisted of the following (in thousands):



	As of Cole Acquisition Date (Preliminary)
Estimated Fair Value of Consideration Transferred:
Cash	$	181,775
Common stock	7,285,868
Total consideration transferred	$	7,467,643

Business Acquisition, Pro Forma Information

The following table presents unaudited pro forma information as if all of the 2014 Acquisitions and the Cole Merger and ARCT IV Merger, as discussed in Note 2 — Mergers and Acquisitions, were completed on January 1, 2013 for each period presented below. These amounts have been calculated after applying the Company’s accounting policies and adjusting the results of acquisitions to reflect the additional depreciation and amortization and interest expense that would have been charged had the acquisitions occurred on January 1, 2013. Additionally, the unaudited pro forma net loss attributable to stockholders was adjusted to exclude acquisition related expenses of $11.9 million and $10.3 million for the three months ended March 31, 2014 and 2013, respectively and merger and other transaction related expenses of $222.2 million and $137.8 million for the three months ended March 31, 2014 and 2013, respectively. These costs were recognized in the pro forma information for the three months ended March 31, 2013 (in thousands):



	Three Months Ended March 31,
	2014			2013
Pro forma revenues	$	413,780		$	44,330
Pro forma net income (loss) attributable to stockholders	$	(20,374	)	$	6,056

Schedule of Future Minimum Rental Payments for Operating Leases

The following table presents future minimum base rental cash payments due to the Company over the next five years and thereafter. These amounts exclude contingent rent payments, as applicable, that may be collected from certain tenants based on provisions related to sales thresholds and increases in annual rent based on exceeding certain economic indexes among other items (in thousands):



	Future Minimum Operating Lease Base Rent Payments		Future Minimum Direct Financing Lease Payments (1)
April 1, 2014 - December 31, 2014	$	921,815	$	3,802
2015	1,152,446		4,757
2016	1,127,440		4,674
2017	1,075,967		4,273
2018	1,021,150		3,183
Thereafter	7,251,560		10,052
Total	$	12,550,378	$	30,741

____________________________________

(1) 47 properties are subject to direct financing leases and, therefore, revenue is recognized as direct financing lease income on the discounted cash flows of the lease payments. Amounts reflected are the cash rent on these respective properties.

Schedule of Future Minimum Lease Payments for Capital Leases

The components of the Company’s net investment in direct financing leases as of March 31, 2014 and December 31, 2013 are as follows (in thousands):



	March 31, 2014			December 31, 2013
Future minimum lease payments receivable	$	31,001		$	33,729
Unguaranteed residual value of property	47,089			46,172
Unearned income	(12,367		)	(13,789		)
Net investment in direct financing leases	$	65,723		$	66,112

Schedule of Annualized Rental Income by Major Tenants

The following table lists the tenants of the Company whose annualized rental income, determined on a straight-line basis, represented greater than 10% of consolidated annualized rental income as of March 31, 2013. Annualized rental income for net leases is rental income as of the period reported, which includes the effect of tenant concessions such as free rent, as applicable. There were no tenants exceeding 10% of consolidated annualized rental income March 31, 2014.



	March 31,
Tenant	2014	2013
Dollar General	*	12.0%
Citizens Bank	*	12.0%

____________________________________

* The tenants’ annualized rental income was not greater than 10% of total consolidated annualized rental income for all portfolio properties as of the period specified.