Real Estate Investments

Excluding the Cole Merger, the ARCT IV Merger and the CCPT Merger, the Company acquired interests in 1,107 commercial properties, including 31 land parcels, for an aggregate purchase price of $3.8 billion during the year ended December 31, 2014 (the “2014 Acquisitions”). During the year ended December 31, 2013, the Company acquired the interests in 1,739 commercial properties, excluding the ARCT III Merger and Caplease Merger for an aggregate purchase price of $3.5 billion. The Company is in the process of obtaining and reviewing the final third party appraisals for some of the 2014 Acquisitions and, as such, the fair values of the related assets acquired and liabilities assumed during the year ended December 31, 2014 are provisionally allocated. The following table presents the preliminary allocation of the fair values of the assets acquired and liabilities assumed during the periods presented (dollar amounts in thousands):



	Year Ended December 31,
	2014			2013
Real estate investments, at cost:
Land	$	808,930		$	883,491
Buildings, fixtures and improvements	2,505,409			2,311,211
Total tangible assets	3,314,339			3,194,702
Acquired intangible assets:
In-place leases	545,389			334,839
Above-market leases	112,484			12,317
Assumed intangible liabilities:
Below-market leases	(107,185		)	(21,446		)
Fair value adjustment of assumed notes payable	(23,589		)	—
Total purchase price of assets acquired, net	3,841,438			3,520,412
Notes payable assumed	(301,532		)	—
Cash paid for acquired real estate investments	$	3,539,906		$	3,520,412
Number of properties acquired	1,107			1,739

The following table presents unaudited pro forma information as if all of the 2014 Acquisitions and the Cole Merger, ARCT IV Merger and CCPT Merger, as discussed in Note 2 – Mergers and Significant Acquisitions and Sales, 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 $38.8 million and $76.1 million for the year ended December 31, 2014 and 2013, respectively, and merger and other non-routine transaction related expenses of $200.5 million and $210.5 million for the year ended December 31, 2014 and 2013, respectively (in thousands).



	Year Ended December 31,
	2014			2013
	(Unaudited)			(Unaudited)
Pro forma revenues	$	1,853,014		$	1,585,511
Pro forma net income (loss) attributable to stockholders	$	(606,549	)	$	(478,093	)

Future Lease Payments

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



	Future Minimum Operating Lease Base Rent Payments		Future Minimum Direct Financing Lease Payments⁽¹⁾
2015	1,245,051		$	4,757
2016	1,239,590		4,674
2017	1,207,816		4,273
2018	1,171,135		3,183
2019	1,130,291		2,397
Thereafter	10,050,096		7,915
Total	$	16,043,979	$	27,199

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(1) 40 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.

Investment in Direct Financing Leases, Net

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



	December 31, 2014			December 31, 2013
Future minimum lease payments receivable	$	27,199		$	33,729
Unguaranteed residual value of property	39,852			46,172
Unearned income	(10,975		)	(13,789		)
Net investment in direct financing leases	$	56,076		$	66,112

Development Activities

During the year ended December 31, 2014, the Company acquired 31 land parcels upon which single-tenant commercial properties will be developed. Based on budgeted construction costs, the remaining costs to complete the buildings is estimated to be $18.4 million in aggregate. The land acquired for an aggregate amount of $12.4 million is included in the accompanying consolidated balance sheet. Of the 31 land parcels acquired during the year ended December 31, 2014, the Company completed 11 of the development projects and placed them in service. In addition, through the CapLease Merger, the Company acquired one land parcel during 2013 to develop an office building, which was completed during the year ended December 31, 2014.

Tenant Concentration

As of December 31, 2014, Red Lobster represents 11.6% of consolidated annualized rental income. As of December 31, 2013, there were no tenants exceeding 10% of consolidated annualized rental income. 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.

Geographic Concentration

For the year ended December 31, 2014 and 2013, properties located in Texas represented 12.7% and 10.7% of consolidated annualized rental income, respectively.