10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2016

	OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from _________ to __________

Commission file numbers: 001-35263 and 333-197780

VEREIT, Inc.

VEREIT Operating Partnership, L.P.

(Exact name of registrant as specified in its charter)

Maryland (VEREIT, Inc.)	45-2482685
Delaware (VEREIT Operating Partnership, L.P.)	45-1255683
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
2325 E. Camelback Road, Suite 1100, Phoenix, AZ	85016
(Address of principal executive offices)	(Zip Code)

(800) 606-3610

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. VEREIT, Inc. Yes x No o VEREIT Operating Partnership, L.P. Yes x No o

Indicate by check mark whether the registrant submitted electronically and posted on its corporate Web Site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). VEREIT, Inc. Yes x No o VEREIT Operating Partnership, L.P. Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

VEREIT, Inc.	Large accelerated filer x		Accelerated filer o
	Non-accelerated filer o	(Do not check if a smaller reporting company)	Smaller reporting company o

VEREIT Operating Partnership, L.P.	Large accelerated filer o		Accelerated filer o
	Non-accelerated filer x	(Do not check if a smaller reporting company)	Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

VEREIT, Inc. Yes o No x VEREIT Operating Partnership, L.P. Yes o No x

There were 974,174,176 shares of common stock of VEREIT, Inc. outstanding as of October 31, 2016.

EXPLANATORY NOTE

This report combines the Quarterly Reports on Form 10-Q for the three and nine months ended September 30, 2016 of VEREIT, Inc., a Maryland corporation, and VEREIT Operating Partnership, L.P., a Delaware limited partnership, of which VEREIT, Inc. is the sole general partner. Unless otherwise indicated or unless the context requires otherwise, all references in this report to “we,” “us,” “our,” “VEREIT,” the “Company” or the “General Partner” mean VEREIT, Inc. together with its consolidated subsidiaries, including VEREIT Operating Partnership, L.P., and all references to the “Operating Partnership” or “OP” mean VEREIT Operating Partnership, L.P. together with its consolidated subsidiaries.

As the sole general partner of VEREIT Operating Partnership, L.P., VEREIT, Inc. has the full, exclusive and complete responsibility for the Operating Partnership’s day-to-day management and control.

We believe combining the Quarterly Reports on Form 10-Q of VEREIT, Inc. and VEREIT Operating Partnership, L.P. into this single report results in the following benefits:

• enhancing investors’ understanding of the Company and the Operating Partnership by enabling investors to view the business as a whole in the same manner as management views and operates the business;

• eliminating duplicative disclosure and providing a more streamlined and readable presentation since a substantial portion of the disclosure applies to both the Company and the Operating Partnership; and

• creating time and cost efficiencies through the preparation of one combined report instead of two separate reports.

There are a few differences between the Company and the Operating Partnership, which are reflected in the disclosure in this report. We believe it is important to understand the differences between the Company and the Operating Partnership in the context of how we operate as an interrelated consolidated company. VEREIT, Inc. is a real estate investment trust whose only material asset is its ownership of partnership interests of the Operating Partnership. As a result, VEREIT, Inc. does not conduct business itself, other than acting as the sole general partner of the Operating Partnership, issuing public equity or debt from time to time and guaranteeing certain unsecured debt of the Operating Partnership and certain of its subsidiaries. The Operating Partnership holds substantially all of the assets of the Company and holds the ownership interests in the Company’s joint ventures. The Operating Partnership conducts the operations of the business and is structured as a partnership with no publicly traded equity. Except for net proceeds from public equity issuances by VEREIT, Inc., which are generally contributed to the Operating Partnership in exchange for partnership units, the Operating Partnership generates the capital required by the Company’s business through the Operating Partnership’s operations, by the Operating Partnership’s direct or indirect incurrence of indebtedness or through the issuance of partnership units. To help investors understand the significant differences between VEREIT, Inc. and the Operating Partnership, there are separate sections in this report that separately discuss VEREIT, Inc. and the Operating Partnership, including the consolidated financial statements and certain notes to the consolidated financial statements as well as separate Exhibit 31 and Exhibit 32 certifications. As general partner with control of the Operating Partnership, VEREIT, Inc. consolidates the Operating Partnership for financial reporting purposes. Therefore, the assets and liabilities of VEREIT, Inc. and VEREIT Operating Partnership, L.P. are the same on their respective consolidated financial statements. The separate discussions of VEREIT, Inc. and VEREIT Operating Partnership, L.P. in this report should be read in conjunction with each other to understand the results of the Company on a consolidated basis and how management operates the Company.

VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P.

For the quarterly period ended September 30, 2016

	Page
PART I
Item 1. Financial Statements	2
Consolidated Balance Sheets of VEREIT, Inc. as of September 30, 2016 and December 31, 2015	2
Consolidated Statements of Operations of VEREIT, Inc. for the Three and Nine Months Ended September 30, 2016 and 2015	3
Consolidated Statements of Comprehensive Income (Loss) of VEREIT, Inc. for the Three and Nine Months Ended September 30, 2016 and 2015	4
Consolidated Statements of Changes in Equity of VEREIT, Inc. for the Nine Months Ended September 30, 2016 and 2015	5
Consolidated Statements of Cash Flows of VEREIT, Inc. for the Nine Months Ended September 30, 2016 and 2015	6
Consolidated Balance Sheets of VEREIT Operating Partnership, L.P. as of September 30, 2016 and December 31, 2015	7
Consolidated Statements of Operations of VEREIT Operating Partnership, L.P. for the Three and Nine Months Ended September 30, 2016 and 2015	8
Consolidated Statements of Comprehensive Income (Loss) of VEREIT Operating Partnership, L.P. for the Three and Nine Months Ended September 30, 2016 and 2015	9
Consolidated Statements of Changes in Equity of VEREIT Operating Partnership, L.P. for the Nine Months Ended September 30, 2016 and 2015	10
Consolidated Statements of Cash Flows of VEREIT Operating Partnership, L.P. for the Nine Months Ended September 30, 2016 and 2015	11
Notes to Consolidated Financial Statements	12
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	52
Item 3. Quantitative and Qualitative Disclosures About Market Risk	71
Item 4. Controls and Procedures	73
PART II
Item 1. Legal Proceedings	74
Item 1A. Risk Factors	74
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	74
Item 3. Defaults Upon Senior Securities	74
Item 4. Mine Safety Disclosures	74
Item 5. Other Information	74
Item 6. Exhibits	74
Signatures	75

1

VEREIT, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except for share and per share data) (Unaudited)

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements.

	September 30, 2016			December 31, 2015
ASSETS
Real estate investments, at cost:
Land	$	2,946,105		$	3,120,653
Buildings, fixtures and improvements	10,800,316			11,445,690
Intangible lease assets	2,073,076			2,218,378
Total real estate investments, at cost	15,819,497			16,784,721
Less: accumulated depreciation and amortization	2,188,998			1,778,597
Total real estate investments, net	13,630,499			15,006,124
Investment in unconsolidated entities	24,711			56,824
Investment in direct financing leases, net	40,785			46,312
Investment securities, at fair value	48,098			53,304
Mortgage notes receivable, net	23,014			24,238
Cash and cash equivalents	116,618			69,103
Restricted cash	61,828			59,767
Intangible assets, net	30,849			50,779
Rent and tenant receivables and other assets, net	339,529			303,637
Goodwill	1,602,610			1,656,374
Due from affiliates	20,883			60,633
Real estate assets held for sale, net	118,396			18,771
Total assets	$	16,057,820		$	17,405,866
LIABILITIES AND STOCKHOLDERS’ EQUITY
Mortgage notes payable and other debt, net	$	2,861,210		$	3,111,985
Corporate bonds, net	2,225,157			2,536,333
Convertible debt, net	970,691			962,894
Credit facility, net	496,008			1,448,590
Below-market lease liabilities, net	229,340			251,692
Accounts payable and accrued expenses	139,150			151,877
Deferred rent, derivative and other liabilities	89,154			87,490
Distributions payable	159,415			140,816
Due to affiliates	—			230
Total liabilities	7,170,125			8,691,907
Commitments and contingencies (Note 14)
Preferred stock, $0.01 par value, 100,000,000 shares authorized and 42,834,138 issued and outstanding as of each of September 30, 2016 and December 31, 2015	428			428
Common stock, $0.01 par value, 1,500,000,000 shares authorized and 974,183,819 and 904,884,394 issued and outstanding as of September 30, 2016 and December 31, 2015, respectively	9,742			9,049
Additional paid-in-capital	12,637,049			11,931,768
Accumulated other comprehensive loss	(4,687		)	(2,025		)
Accumulated deficit	(3,933,092		)	(3,415,233		)
Total stockholders’ equity	8,709,440			8,523,987
Non-controlling interests	178,255			189,972
Total equity	8,887,695			8,713,959
Total liabilities and equity	$	16,057,820		$	17,405,866

The accompanying notes are an integral part of these statements.

2

VEREIT, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except for per share data) (Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Revenues:
Rental income	$	303,383		$	333,766		$	928,706		$	1,017,708
Direct financing lease income	494			659			1,598			2,097
Operating expense reimbursements	27,969			22,983			77,862			71,269
Cole Capital revenue	31,069			27,546			94,788			81,569
Total revenues	362,915			384,954			1,102,954			1,172,643
Operating expenses:
Cole Capital reallowed fees and commissions	5,897			3,896			20,940			9,637
Acquisition related	90			1,764			373			5,509
Litigation and other non-routine costs, net of insurance recoveries	4,630			8,032			2,372			41,319
Property operating	34,820			31,950			107,832			95,547
General and administrative	29,761			32,842			92,255			99,906
Depreciation and amortization	195,173			208,542			596,826			645,196
Impairments	6,872			—			176,214			85,341
Total operating expenses	277,243			287,026			996,812			982,455
Operating income	85,672			97,928			106,142			190,188
Other (expense) income:
Interest expense	(79,869		)	(89,530		)	(242,763		)	(275,801		)
(Loss) gain on extinguishment and forgiveness of debt, net	(2,003		)	—			(1,751		)	5,302
Other income, net	1,744			2,368			4,022			10,255
Equity in income and gain on disposition of unconsolidated entities	212			6,837			10,686			8,340
Loss on derivative instruments, net	(2,023		)	(1,420		)	(3,286		)	(2,137		)
Total other expenses, net	(81,939		)	(81,745		)	(233,092		)	(254,041		)
Income (loss) before taxes and real estate dispositions	3,733			16,183			(126,950		)	(63,853		)
Gain (loss) on disposition of real estate, net	28,111			(6,542		)	45,723			(62,584		)
Income (loss) before taxes	31,844			9,641			(81,227		)	(126,437		)
Provision for income taxes	(1,598		)	(1,500		)	(1,374		)	(4,824		)
Net income (loss)	30,246			8,141			(82,601		)	(131,261		)
Net (income) loss attributable to non-controlling interests (1)	(751		)	(612		)	2,156			2,298
Net income (loss) attributable to the General Partner	$	29,495		$	7,529		$	(80,445	)	$	(128,963	)
Basic and diluted net income (loss) per share attributable to common stockholders and limited partners	$	0.01		$	(0.01	)	$	(0.15	)	$	(0.20	)
Distributions declared per common share	$	0.14		$	0.14		$	0.41		$	0.14

_______________________________________________

(1) Represents (income) loss attributable to limited partners and consolidated joint venture partners.

The accompanying notes are an integral part of these statements.

3

VEREIT, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands) (Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Net income (loss)	$	30,246		$	8,141		$	(82,601	)	$	(131,261	)
Other comprehensive income (loss):
Unrealized gain (loss) on interest rate derivatives	3,178			(10,076		)	(9,811		)	(21,057		)
Reclassification of previous unrealized loss on interest rate derivatives into net income (loss)	4,650			2,787			8,668			8,316
Unrealized loss on investment securities, net	(29		)	(918		)	(1,599		)	(232		)
Reclassification of previous unrealized loss on investment securities into net income (loss) as other income, net	—			—			—			110
Total other comprehensive income (loss)	7,799			(8,207		)	(2,742		)	(12,863		)
Total comprehensive income (loss)	38,045			(66		)	(85,343		)	(144,124		)
Comprehensive (income) loss attributable to non-controlling interests (1)	(940		)	(283		)	2,236			2,627
Total comprehensive income (loss) attributable to the General Partner	$	37,105		$	(349	)	$	(83,107	)	$	(141,497	)

_______________________________________________

(1) Represents (income) loss attributable to limited partners and consolidated joint venture partners.

The accompanying notes are an integral part of these statements.

4

VEREIT, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(In thousands, except for share data) (Unaudited)

	Preferred Stock			Common Stock
	Number of Shares	Par Value		Number of Shares		Par Value			Additional Paid-In Capital			Accumulated Other Comprehensive Loss			Accumulated Deficit			Total Stock-holders’ Equity			Non-Controlling Interests			Total Equity
Balance, January 1, 2016	42,834,138	$	428	904,884,394		$	9,049		$	11,931,768		$	(2,025	)	$	(3,415,233	)	$	8,523,987		$	189,972		$	8,713,959
Issuance of common stock, net	—	—		69,000,000		690			701,792			—			—			702,482			—			702,482
Conversion of OP Units to common stock	—	—		15,450		—			159			—			—			159			(159		)	—
Repurchases of common stock to settle tax obligation	—	—		(424,726	)	(4		)	(4,144		)	—			—			(4,148		)	—			(4,148		)
Equity-based compensation, net	—	—		708,701		7			7,090			—			—			7,097			—			7,097
Contributions from non-controlling interest holders	—	—		—		—			—			—			—			—			675			675
Distributions declared on common stock	—	—		—		—			—			—			(382,819		)	(382,819		)	—			(382,819		)
Distributions to non-controlling interest holders	—	—		—		—			—			—			—			—			(9,889		)	(9,889		)
Distributions to participating securities	—	—		—		—			—			—			(400		)	(400		)	—			(400		)
Distributions to preferred shareholders and unitholders	—	—		—		—			—			—			(53,811		)	(53,811		)	(108		)	(53,919		)
Cumulative-effect adjustment for equity-based compensation forfeitures	—	—		—		—			384			—			(384		)	—			—			—
Net loss	—	—		—		—			—			—			(80,445		)	(80,445		)	(2,156		)	(82,601		)
Other comprehensive loss	—	—		—		—			—			(2,662		)	—			(2,662		)	(80		)	(2,742		)
Balance, September 30, 2016	42,834,138	$	428	974,183,819		$	9,742		$	12,637,049		$	(4,687	)	$	(3,933,092	)	$	8,709,440		$	178,255		$	8,887,695

	Preferred Stock			Common Stock
	Number of Shares	Par Value		Number of Shares		Par Value			Additional Paid-In Capital			Accumulated Other Comprehensive Income (loss)			Accumulated Deficit			Total Stock-holders’ Equity			Non-Controlling Interests			Total Equity
Balance, January 1, 2015	42,834,138	$	428	905,530,431		$	9,055		$	11,920,253		$	2,728		$	(2,778,576	)	$	9,153,888		$	228,442		$	9,382,330
Repurchases of common stock to settle tax obligation	—	—		(183,492	)	(1		)	(1,633		)	—			—			(1,634		)	—			(1,634		)
Equity-based compensation, net	—	—		(386,705	)	(4		)	10,193			—			—			10,189			—			10,189
Tax shortfall from equity-based compensation	—	—		—		—			(629		)	—			—			(629		)	—			(629		)
Distributions declared on common stock	—	—		—		—			—			—			(124,225		)	(124,225		)	—			(124,225		)
Distributions to non-controlling interest holders	—	—		—		—			—			—			—			—			(16,879		)	(16,879		)
Distributions to participating securities	—	—		—		—			—			—			(222		)	(222		)	—			(222		)
Distributions to preferred shareholders	—	—		—		—			—			—			(53,920		)	(53,920		)	—			(53,920		)
Disposition of consolidated joint venture interest	—	—		—		—			—			—			—			—			6,339			6,339
Net loss	—	—		—		—			—			—			(128,963		)	(128,963		)	(2,298		)	(131,261		)
Other comprehensive loss	—	—		—		—			—			(12,534		)	—			(12,534		)	(329		)	(12,863		)
Balance, September 30, 2015	42,834,138	$	428	904,960,234		$	9,050		$	11,928,184		$	(9,806	)	$	(3,085,906	)	$	8,841,950		$	215,275		$	9,057,225

The accompanying notes are an integral part of these statements.

5

VEREIT, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands) (Unaudited)

	Nine Months Ended September 30,
	2016			2015
Cash flows from operating activities:
Net loss	$	(82,601	)	$	(131,261	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	610,291			660,715
(Gain) loss on real estate assets and joint venture, net	(55,921		)	55,855
Impairments	176,214			85,341
Equity-based compensation	7,097			10,189
Equity in income of unconsolidated entities	(488		)	(1,611		)
Distributions from unconsolidated entities	3,007			9,578
Loss on derivative instruments	3,286			2,137
(Gain) on investment securities	—			(65		)
Loss (gain) on extinguishment and forgiveness of debt, net	1,751			(5,307		)
Changes in assets and liabilities:
Investment in direct financing leases	1,861			1,503
Rent and tenant receivables and other assets, net	(51,702		)	(59,509		)
Due from affiliates	50			19,141
Accounts payable and accrued expenses	(6,726		)	6,679
Deferred rent, derivative and other liabilities	(1,235		)	(24,939		)
Due to affiliates	(230		)	(318		)
Net cash provided by operating activities	604,654			628,128
Cash flows from investing activities:
Investments in real estate assets	(19,952		)	(10,207		)
Capital expenditures and leasing costs	(15,892		)	(10,880		)
Real estate developments	(6,288		)	(51,863		)
Principal repayments received from borrowers	4,906			6,043
Investments in unconsolidated entities	(2,500		)	—
Proceeds from disposition of real estate and joint venture	615,246			413,270
Investment in leasehold improvements and other assets	(726		)	—
Proceeds from sale of investments and other assets	—			229
Deposits for real estate assets	(11,686		)	(15,105		)
Uses and refunds of deposits for real estate assets	9,753			42,619
Line of credit advances to affiliates	(10,300		)	(10,000		)
Line of credit repayments from affiliates	50,000			10,000
Change in restricted cash	(5,674		)	10,488
Net cash provided by investing activities	606,887			384,594
Cash flows from financing activities:
Proceeds from mortgage notes payable	1,450			1,379
Payments on mortgage notes payable and other debt, including extinguishment costs	(145,802		)	(113,570		)
Proceeds from credit facility	783,000			—
Payments on credit facility	(1,743,000		)	(1,074,000		)
Proceeds from corporate bonds	1,000,000			—
Payments on corporate bonds, including extinguishment costs	(1,311,208		)	—
Payments of deferred financing costs	(19,056		)	(2,412		)
Proceeds from 2016 Term Loan	300,000			—
Repayment of 2016 Term Loan	(300,000		)	—
Repurchases of common stock to settle tax obligations	(4,148		)	(1,634		)
Proceeds from the issuance of Common Stock, net of underwriters’ discount	702,765			—
Payments of equity issuance costs	(274		)	—
Contributions from non-controlling interest holders	675			—
Distributions paid	(428,428		)	(67,537		)
Net cash used in financing activities	(1,164,026		)	(1,257,774		)
Net change in cash and cash equivalents	47,515			(245,052		)
Cash and cash equivalents, beginning of period	69,103			416,711
Cash and cash equivalents, end of period	$	116,618		$	171,659

The accompanying notes are an integral part of these statements.

6

VEREIT OPERATING PARTNERSHIP, L.P.

CONSOLIDATED BALANCE SHEETS

(In thousands, except for unit data) (Unaudited)

	September 30, 2016		December 31, 2015
ASSETS
Real estate investments, at cost:
Land	$	2,946,105	$	3,120,653
Buildings, fixtures and improvements	10,800,316		11,445,690
Intangible lease assets	2,073,076		2,218,378
Total real estate investments, at cost	15,819,497		16,784,721
Less: accumulated depreciation and amortization	2,188,998		1,778,597
Total real estate investments, net	13,630,499		15,006,124
Investment in unconsolidated entities	24,711		56,824
Investment in direct financing leases, net	40,785		46,312
Investment securities, at fair value	48,098		53,304
Mortgage notes receivable, net	23,014		24,238
Cash and cash equivalents	116,618		69,103
Restricted cash	61,828		59,767
Intangible assets, net	30,849		50,779
Rent and tenant receivables and other assets, net	339,529		303,637
Goodwill	1,602,610		1,656,374
Due from affiliates	20,883		60,633
Real estate assets held for sale, net	118,396		18,771
Total assets	$	16,057,820	$	17,405,866
LIABILITIES AND EQUITY
Mortgage notes payable and other debt, net	$	2,861,210	$	3,111,985
Corporate bonds, net	2,225,157		2,536,333
Convertible debt, net	970,691		962,894
Credit facility, net	496,008		1,448,590
Below-market lease liabilities, net	229,340		251,692
Accounts payable and accrued expenses	139,150		151,877
Deferred rent, derivative and other liabilities	89,154		87,490
Distributions payable	159,415		140,816
Due to affiliates	—		230
Total liabilities	7,170,125		8,691,907
Commitments and contingencies (Note 14)
General Partner's preferred equity, 42,834,138 General Partner Preferred Units issued and outstanding as of each of September 30, 2016 and December 31, 2015	871,758		925,569
General Partner's common equity, 974,183,819 and 904,884,394 General Partner OP Units issued and outstanding as of September 30, 2016 and December 31, 2015, respectively	7,837,682		7,598,418
Limited Partner's preferred equity, 86,874 Limited Partner Preferred Units issued and outstanding as of each of September 30, 2016 and December 31, 2015	3,207		3,315
Limited Partner's common equity, 23,748,347 and 23,763,797 Limited Partner OP Units issued and outstanding as of September 30, 2016 and December 31, 2015, respectively	172,625		184,800
Total partners’ equity	8,885,272		8,712,102
Non-controlling interests	2,423		1,857
Total equity	8,887,695		8,713,959
Total liabilities and equity	$	16,057,820	$	17,405,866

The accompanying notes are an integral part of these statements.

7

VEREIT OPERATING PARTNERSHIP, L.P.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except for per unit data) (Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Revenues:
Rental income	$	303,383		$	333,766		$	928,706		$	1,017,708
Direct financing lease income	494			659			1,598			2,097
Operating expense reimbursements	27,969			22,983			77,862			71,269
Cole Capital revenue	31,069			27,546			94,788			81,569
Total revenues	362,915			384,954			1,102,954			1,172,643
Operating expenses:
Cole Capital reallowed fees and commissions	5,897			3,896			20,940			9,637
Acquisition related	90			1,764			373			5,509
Litigation and other non-routine costs, net of insurance recoveries	4,630			8,032			2,372			41,319
Property operating	34,820			31,950			107,832			95,547
General and administrative	29,761			32,842			92,255			99,906
Depreciation and amortization	195,173			208,542			596,826			645,196
Impairments	6,872			—			176,214			85,341
Total operating expenses	277,243			287,026			996,812			982,455
Operating income	85,672			97,928			106,142			190,188
Other (expense) income:
Interest expense	(79,869		)	(89,530		)	(242,763		)	(275,801		)
(Loss) gain on extinguishment and forgiveness of debt, net	(2,003		)	—			(1,751		)	5,302
Other income, net	1,744			2,368			4,022			10,255
Equity in income and gain on disposition of unconsolidated entities	212			6,837			10,686			8,340
Loss on derivative instruments, net	(2,023		)	(1,420		)	(3,286		)	(2,137		)
Total other expenses, net	(81,939		)	(81,745		)	(233,092		)	(254,041		)
Income (loss) before taxes and real estate dispositions	3,733			16,183			(126,950		)	(63,853		)
Gain (loss) on disposition of real estate, net	28,111			(6,542		)	45,723			(62,584		)
Income (loss) before taxes	31,844			9,641			(81,227		)	(126,437		)
Provision for income taxes	(1,598		)	(1,500		)	(1,374		)	(4,824		)
Net income (loss)	30,246			8,141			(82,601		)	(131,261		)
Net (income) loss attributable to non-controlling interests (1)	(12		)	(404		)	23			(1,197		)
Net income (loss) attributable to the OP	$	30,234		$	7,737		$	(82,578	)	$	(132,458	)
Basic and diluted net income (loss) per unit attributable to common unitholders	$	0.01		$	(0.01	)	$	(0.15	)	$	(0.20	)
Distributions declared per common unit	$	0.14		$	0.14		$	0.41		$	0.14

_______________________________________________

(1) Represents (income) loss attributable to consolidated joint venture partners.

The accompanying notes are an integral part of these statements.

8

VEREIT OPERATING PARTNERSHIP, L.P.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands) (Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Net income (loss)	$	30,246		$	8,141		$	(82,601	)	$	(131,261	)
Other comprehensive income (loss):
Unrealized gain (loss) on interest rate derivatives	3,178			(10,076		)	(9,811		)	(21,057		)
Reclassification of previous unrealized loss on interest rate derivatives into net income (loss)	4,650			2,787			8,668			8,316
Unrealized loss on investment securities, net	(29		)	(918		)	(1,599		)	(232		)
Reclassification of previous unrealized loss on investment securities into net income (loss) as other income, net	—			—			—			110
Total other comprehensive income (loss)	7,799			(8,207		)	(2,742		)	(12,863		)
Total comprehensive income (loss)	38,045			(66		)	(85,343		)	(144,124		)
Comprehensive (income) loss attributable to non-controlling interests (1)	(12		)	(404		)	23			(1,197		)
Total comprehensive income (loss) attributable to the OP	$	38,033		$	(470	)	$	(85,320	)	$	(145,321	)

_______________________________________________

(1) Represents (income) loss attributable to consolidated joint venture partners.

The accompanying notes are an integral part of these statements.

9

VEREIT OPERATING PARTNERSHIP, L.P.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(In thousands, except for unit data) (Unaudited)

	Preferred Units								Common Units
	General Partner				Limited Partner				General Partner					Limited Partner
	Number of Units	Capital			Number of Units	Capital			Number of Units		Capital			Number of Units		Capital			Total Partners' Capital			Non-Controlling Interests			Total Capital
Balance, January 1, 2016	42,834,138	$	925,569		86,874	$	3,315		904,884,394		$	7,598,418		23,763,797		$	184,800		$	8,712,102		$	1,857		$	8,713,959
Issuance of common units, net	—	—			—	—			69,000,000		702,482			—		—			702,482			—			702,482
Conversion of Limited Partners' Common OP Units to General Partner's Common OP Units	—	—			—	—			15,450		159			(15,450	)	(159		)	—			—			—
Repurchases of common OP Units to settle tax obligation	—	—			—	—			(424,726	)	(4,148		)	—		—			(4,148		)	—			(4,148		)
Equity-based compensation, net	—	—			—	—			708,701		7,097			—		—			7,097			—			7,097
Contributions from non-controlling interest holders	—	—			—	—			—		—			—		—			—			675			675
Distributions to Common OP Units and non-controlling interest holders	—	—			—	—			—		(383,219		)	—		(9,803		)	(393,022		)	(86		)	(393,108		)
Distributions to Preferred OP Units	—	(53,811		)	—	(108		)	—		—			—		—			(53,919		)	—			(53,919		)
Net loss	—	—			—	—			—		(80,445		)	—		(2,133		)	(82,578		)	(23		)	(82,601		)
Other comprehensive loss	—	—			—	—			—		(2,662		)	—		(80		)	(2,742		)	—			(2,742		)
Balance, September 30, 2016	42,834,138	$	871,758		86,874	$	3,207		974,183,819		$	7,837,682		23,748,347		$	172,625		$	8,885,272		$	2,423		$	8,887,695

	Preferred Units							Common Units
	General Partner				Limited Partner			General Partner					Limited Partner
	Number of Units	Capital			Number of Units	Capital		Number of Units		Capital			Number of Units	Capital			Total Partners' Capital			Non-Controlling Interests			Total Capital
Balance, January 1, 2015	42,834,138	$	996,987		86,874	$	3,375	905,530,431		$	8,157,167		23,763,797	$	201,102		$	9,358,631		$	23,699		$	9,382,330
Repurchases of common OP Units to settle tax obligation	—	—			—	—		(183,492	)	(1,634		)	—	—			(1,634		)	—			(1,634		)
Equity-based compensation, net	—	—			—	—		(386,705	)	10,189			—	—			10,189			—			10,189
Tax shortfall from equity-based compensation	—	—			—	—		—		(629		)	—	—			(629		)	—			(629		)
Distributions to Common OP Units and non-controlling interest holders	—	—			—	—		—		(124,447		)	—	(3,269		)	(127,716		)	(13,610		)	(141,326		)
Distributions to Preferred OP Units	—	(53,920		)	—	—		—		—			—	—			(53,920		)	—			(53,920		)
Disposition of consolidated joint venture interest	—	—			—	—		—		—			—	—			—			6,339			6,339
Net loss	—	—			—	—		—		(128,963		)	—	(3,495		)	(132,458		)	1,197			(131,261		)
Other comprehensive loss	—	—			—	—		—		(12,534		)	—	(329		)	(12,863		)	—			(12,863		)
Balance, September 30, 2015	42,834,138	$	943,067		86,874	$	3,375	904,960,234		$	7,899,149		23,763,797	$	194,009		$	9,039,600		$	17,625		$	9,057,225

The accompanying notes are an integral part of these statements.

10

VEREIT OPERATING PARTNERSHIP, L.P.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands) (Unaudited)

	Nine Months Ended September 30,
	2016			2015
Cash flows from operating activities:
Net loss	$	(82,601	)	$	(131,261	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	610,291			660,715
(Gain) loss on real estate assets and joint venture, net	(55,921		)	55,855
Impairments	176,214			85,341
Equity-based compensation	7,097			10,189
Equity in income of unconsolidated entities	(488		)	(1,611		)
Distributions from unconsolidated entities	3,007			9,578
Loss on derivative instruments	3,286			2,137
(Gain) on investment securities	—			(65		)
Loss (gain) on extinguishment and forgiveness of debt, net	1,751			(5,307		)
Changes in assets and liabilities:
Investment in direct financing leases	1,861			1,503
Rent and tenant receivables and other assets, net	(51,702		)	(59,509		)
Due from affiliates	50			19,141
Accounts payable and accrued expenses	(6,726		)	6,679
Deferred rent, derivative and other liabilities	(1,235		)	(24,939		)
Due to affiliates	(230		)	(318		)
Net cash provided by operating activities	604,654			628,128
Cash flows from investing activities:
Investments in real estate assets	(19,952		)	(10,207		)
Capital expenditures and leasing costs	(15,892		)	(10,880		)
Real estate developments	(6,288		)	(51,863		)
Principal repayments received from borrowers	4,906			6,043
Investments in unconsolidated entities	(2,500		)	—
Proceeds from disposition of real estate and joint venture	615,246			413,270
Investment in leasehold improvements and other assets	(726		)	—
Proceeds from sale of investments and other assets	—			229
Deposits for real estate assets	(11,686		)	(15,105		)
Uses and refunds of deposits for real estate assets	9,753			42,619
Line of credit advances to affiliates	(10,300		)	(10,000		)
Line of credit repayments from affiliates	50,000			10,000
Change in restricted cash	(5,674		)	10,488
Net cash provided by investing activities	606,887			384,594
Cash flows from financing activities:
Proceeds from mortgage notes payable	1,450			1,379
Payments on mortgage notes payable and other debt, including extinguishment costs	(145,802		)	(113,570		)
Proceeds from credit facility	783,000			—
Payments on credit facility	(1,743,000		)	(1,074,000		)
Proceeds from corporate bonds	1,000,000			—
Payments on corporate bonds, including extinguishment costs	(1,311,208		)	—
Payments of deferred financing costs	(19,056		)	(2,412		)
Proceeds from 2016 Term Loan	300,000			—
Repayment of 2016 Term Loan	(300,000		)	—
Repurchases of common units to settle tax obligations	(4,148		)	(1,634		)
Proceeds from the issuance of Common Units, net of underwriters’ discount	702,765			—
Payments of equity issuance costs	(274		)	—
Contributions from non-controlling interest holders	675			—
Distributions paid	(428,428		)	(67,537		)
Net cash used in financing activities	(1,164,026		)	(1,257,774		)
Net change in cash and cash equivalents	47,515			(245,052		)
Cash and cash equivalents, beginning of period	69,103			416,711
Cash and cash equivalents, end of period	$	116,618		$	171,659

The accompanying notes are an integral part of these statements.

11

VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2016 (Unaudited)

Note 1 – Organization

VEREIT^® is a Maryland corporation, incorporated on December 2, 2010, that qualified as a real estate investment trust (“REIT”) for U.S. federal income tax purposes beginning in the taxable year ended December 31, 2011. VEREIT Operating Partnership, L.P. (together with its subsidiaries, the “Operating Partnership” or the “OP”), is a Delaware limited partnership of which the General Partner is the sole general partner. VEREIT’s common stock, par value $0.01 per share (“Common Stock”), and its 6.70% Series F Cumulative Redeemable Preferred Stock, par value $0.01 per share (“Series F Preferred Stock”) trade on the New York Stock Exchange (“NYSE”) under the trading symbols, “VER” and “VER PRF,” respectively. As used herein, the terms the “Company,” “we,” “our” and “us” refer to VEREIT, together with its consolidated subsidiaries, including the OP.

The Company is a full-service real estate operating company with investment management capabilities that operates through two reportable segments, its real estate investment (“REI”) segment and its investment management segment, Cole Capital^® (“Cole Capital”), as further discussed in Note 3 –Segment Reporting. Through the REI segment, the Company owns and actively manages a diversified portfolio of retail, restaurant, office and industrial real estate properties subject to long-term net leases with creditworthy tenants. The Company actively manages its portfolio considering a number of metrics including property type, concentration and key economic factors for appropriate balance and diversity. Through the Cole Capital segment, the Company is responsible for raising capital for and managing the affairs of the Cole REITs^® (as defined in Note 3 –Segment Reporting) on a day-to-day basis, identifying and making acquisitions and investments on the Cole REITs’ behalf, and recommending to the respective board of directors of each of the Cole REITs an approach for providing investors with liquidity. Cole Capital receives compensation and reimbursement for performing these services. To support both reportable segments, the Company employs a shared services model pursuant to which its personnel are integral in providing, among other things, transactional and operational functions to the Company’s owned portfolio and the Cole REITs.

Substantially all of the REI segment’s operations are conducted through the OP. VEREIT is the sole general partner and holder of 97.6% of the common equity interests in the OP as of September 30, 2016 with the remaining 2.4% of the common equity interests owned by unaffiliated investors and certain former directors, officers and employees of ARC Properties Advisors, LLC (the “Former Manager”). Under the limited partnership agreement of the OP, as amended (the “LPA”), after holding units of limited partner interests in the OP (“OP Units”) for a period of one year, unless an earlier redemption is otherwise consented to by VEREIT, holders of OP Units have the right to redeem the OP Units for the cash value of a corresponding number of shares of VEREIT’s Common Stock or, at the option of VEREIT, a corresponding number of shares of VEREIT’s Common Stock. The remaining rights of the holders of OP Units are limited, however, and do not include the ability to replace the General Partner or to approve the sale, purchase or refinancing of the OP’s assets.

Substantially all of the Cole Capital segment’s operations are conducted through Cole Capital Advisors, Inc. (“CCA”), an Arizona corporation and a wholly owned subsidiary of the OP. CCA is treated as a taxable REIT subsidiary (“TRS”) under Section 856 of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”).

The actions of the OP and its relationship with the General Partner are governed by the LPA. The General Partner does not have any significant assets other than its investment in the OP. Therefore, the assets and liabilities of the General Partner and the OP are substantially the same. Additionally, pursuant to the LPA, all administrative expenses and expenses associated with the formation, continuity, existence and operation of the General Partner incurred by the General Partner on the OP’s behalf shall be treated as expenses of the OP. Further, when the General Partner issues any equity instrument that has been approved by the General Partner’s board of directors, the LPA requires the OP to issue to the General Partner equity instruments with substantially similar terms, to protect the integrity of the Company’s umbrella partnership REIT structure, pursuant to which each holder of interests in the OP has a proportionate economic interest in the OP reflecting its capital contributions thereto. OP Units issued to the General Partner are referred to as General Partner OP Units. OP Units issued to parties other than the General Partner are referred to as Limited Partner OP Units. The LPA also provides that the OP issue debt with terms and provisions consistent with debt issued by the General Partner. The LPA will be amended to provide for the issuance of any additional class of equivalent equity instruments to the extent the General Partner’s board of directors authorizes the issuance of any new class of equity securities.

12

VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2016 (Unaudited) – (Continued)

Note 2 –Summary of Significant Accounting Policies

Basis of Accounting

The consolidated financial statements of the Company presented herein include the accounts of the General Partner and its consolidated subsidiaries, including the OP. All intercompany transactions have been eliminated upon consolidation. The financial statements are prepared on the accrual basis of accounting in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”). The information furnished includes all adjustments and accruals of a normal recurring nature, which, in the opinion of management, are necessary for a fair presentation of results for the interim periods. The results of operations for the three and nine months ended September 30, 2016 are not necessarily indicative of the results for the entire year or any subsequent interim period.

These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto as of and for the year ended December 31, 2015 of the Company, which are included in the Company’s Annual Report on Form 10-K filed on February 24, 2016. There have been no significant changes to the Company’s significant accounting policies during the nine months ended September 30, 2016. Information and footnote disclosures normally included in financial statements have been condensed or omitted pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) and U.S. GAAP.

Principles of Consolidation and Basis of Presentation

The consolidated financial statements include the accounts of the Company and its subsidiaries and consolidated joint venture arrangements. The portions of the consolidated joint venture arrangements not owned by the Company are presented as non-controlling interests in VEREIT’s and the OP’s consolidated balance sheets, statements of operations, statements of comprehensive income (loss) and statements of changes in equity. In addition, as described in Note 1 – Organization, certain third parties have been issued OP Units. Holders of OP Units are considered to be non-controlling interest holders in the OP and their ownership interest in the limited partner’s share is presented as non-controlling interests in VEREIT’s consolidated balance sheets, statements of operations, statements of comprehensive income (loss) and statements of changes in equity. Further, a portion of the earnings and losses of the OP are allocated to non-controlling interest holders based on their respective ownership percentages. Upon conversion of OP Units to Common Stock, any difference between the fair value of shares of Common Stock issued and the carrying value of the OP Units converted is recorded as a component of equity. As of September 30, 2016 and December 31, 2015, there were approximately 23.75 million and 23.76 million Limited Partner OP Units outstanding, respectively.

For legal entities being evaluated for consolidation, the Company must first determine whether the interests that it holds and fees it receives qualify as variable interests in the entity. A variable interest is an investment or other interest that will absorb portions of an entity’s expected losses or receive portions of the entity’s expected residual returns. The Company’s evaluation includes consideration of fees paid to the Company where the Company acts as a decision maker or service provider to the entity being evaluated. If the Company determines that it holds a variable interest in an entity, it evaluates whether that entity is a variable interest entity (“VIE”). VIEs are entities where investors lack sufficient equity at risk for the entity to finance its activities without additional subordinated financial support or where equity investors, as a group, lack one of the following characteristics: (a) the power to direct the activities that most significantly impact the entity’s economic performance, (b) the obligation to absorb the expected losses of the entity, or (c) the right to receive the expected returns of the entity.

The Company then qualitatively assesses whether it is (or is not) the primary beneficiary of a VIE, which is generally defined as the party who has a controlling financial interest in the VIE. Consideration of various factors include, but are not limited to, the Company’s ability to direct the activities that most significantly impact the entity’s economic performance and its obligation to absorb losses from or right to receive benefits of the VIE that could potentially be significant to the VIE. The Company consolidates any VIEs when the Company is determined to be the primary beneficiary of the VIE and the difference between consolidating the VIE and accounting for it using the equity method could be material to the Company’s consolidated financial statements. The Company continually evaluates the need to consolidate these VIEs based on standards set forth in U.S. GAAP.

Reclassification

As described below, the following items previously reported have been reclassified to conform with the current period’s presentation.

13

VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2016 (Unaudited) – (Continued)

The land and construction in progress line item from prior periods has been combined into the land caption in the consolidated balance sheets. The gain on forgiveness of debt previously included in other income, net has been combined into the caption (loss) gain on extinguishment and forgiveness of debt, net in the consolidated statements of operations. Additionally, equity in income of unconsolidated joint ventures previously included in other income, net in the consolidated statements of operations has been included in a separate caption entitled equity in income and gain on disposition of unconsolidated entities. Insurance recoveries previously included in other income, net in the consolidated statements of operations has been included in litigation and other non-routine costs, net of insurance recoveries.

Restricted Cash

The Company had $61.8 million and $59.8 million, respectively, in restricted cash as of September 30, 2016 and December 31, 2015. Restricted cash primarily consists of reserves related to lease expirations, as well as maintenance, structural and debt service reserves. In accordance with certain debt agreements, rent from certain of the Company’s tenants is deposited directly into a lockbox account, from which the monthly debt service payments are disbursed to the lender and the excess funds are then disbursed to the Company. Included in restricted cash at September 30, 2016 was $52.2 million in lender reserves and $9.6 million held in restricted lockbox accounts. Included in restricted cash at December 31, 2015 was $47.9 million in lender reserves and $11.9 million held in restricted lockbox accounts.

Revenue Recognition – REI

The Company’s revenues, which primarily consist of rental income and include rents that each tenant pays in accordance with the terms of each lease reported on a straight-line basis over the initial non-cancelable term of the lease, are recognized when earned and collectability is reasonably assured. When the Company acquires a property, the term of each existing lease is considered to commence as of the acquisition date for the purposes of this calculation. Since many of the leases provide for rental increases at specified intervals, straight-line basis accounting requires the Company to record a receivable, and include in revenues, straight-line rent receivables that the Company will only receive if the tenant makes all rent payments required through the expiration of the initial term of the lease. Straight-line rent receivables are included in rent and tenant receivables and other assets, net, in the consolidated balance sheets. See Note 8 – Rent and Tenant Receivables and Other Assets, Net. Cost recoveries from tenants are included in operating expense reimbursements in the consolidated statements of operations in the period the related costs are incurred. The Company defers the revenue related to lease payments received from tenants in advance of their due dates. As of September 30, 2016 and December 31, 2015, the Company had $70.9 million and $67.2 million, respectively, of deferred rental income, which is included in deferred rent, derivative and other liabilities in the consolidated balance sheets.

The Company continually reviews receivables related to rent and unbilled rent receivables and determines collectability 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 the event that the collectability of a receivable is uncertain, the Company will record an increase in the allowance for uncollectible accounts in the consolidated balance sheets and in the consolidated statements of operations as a reduction to rental income. As of September 30, 2016 and December 31, 2015, the Company maintained an allowance for uncollectible accounts of $8.3 million and $6.6 million, respectively.

Revenue Recognition – Cole Capital

Revenue includes securities sales commissions, dealer manager fees, distribution and stockholder servicing fees, real estate acquisition fees, financing coordination fees, property management fees, advisory fees, asset management fees and performance fees for services relating to the Cole REITs’ offerings and the investment and management of their respective assets, in accordance with the respective dealer manager and advisory agreements. The Company records dealer manager fees, excluding those related to INAV (as defined in Note 3 –Segment Reporting), and securities sales commissions as revenue upon the sale of Cole REIT shares. Dealer manager fees from the sale of INAV shares and distribution and stockholder servicing fees are recorded as revenue when the fees are fixed or determinable. The Company records revenue related to acquisition and financing coordination fees upon completion of a transaction and advisory, asset and property management fees as services are performed. The Company is also reimbursed for certain costs incurred in providing these services. Securities sales commissions and dealer manager reimbursements are recorded as revenue as the expenses are incurred, as long as reimbursement is reasonably assured. 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 issued by such participating broker-dealers and the amount of marketing support provided by such participating broker-dealers. The Company also reallows 100% of selling commissions earned to participating broker-dealers. Refer to Note 17 –Related Party Transactions and Arrangements for further discussion. In addition, the Company earns property management, asset management and disposition fees from certain joint ventures and other real estate programs.

14

VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2016 (Unaudited) – (Continued)

Acquisition Related Expenses and Litigation and Other Non-routine Costs

All costs incurred as a result of a business combination are classified as acquisition related expenses or other non-routine transaction related expenses and expensed as incurred. Acquisition related expenses include legal and other transaction related costs incurred in connection with self-originated acquisitions, including purchases of portfolios. In addition, indirect costs, such as internal salaries, that are tracked and documented in a manner that clearly indicates that the activities driving the cost directly relate to activities necessary to complete, or effect, self-originating purchases are classified as acquisition related expenses.

Similar costs incurred in relation to mergers (which are not considered self-originating purchases) and litigation resulting therefrom and other non-routine transactions are included in litigation and other non-routine costs, net of insurance recoveries in the consolidated statements of operations. The Company has also incurred legal fees and other costs associated with the Audit Committee Investigation (defined below) and the litigations and investigations resulting therefrom, which are considered non-routine. The Company has directors’ and officers’ insurance and the insurance carriers have paid certain defense costs subject to standard reservation of rights under the respective policies.

Litigation and other non-routine costs include the following costs (amounts in thousands):

	Three Months Ended September 30,							Nine Months Ended September 30,
	2016			2015				2016			2015
Litigation and other non-routine costs:
Audit Committee Investigation and related matters (1)	$	5,221		$	9,251			$	13,413		$	38,953
Legal fees and expenses	59			(294		)	(2)	155			2,659			(3)
Other fees and expenses	—			—				—			632
Total costs incurred	5,280			8,957				13,568			42,244
Insurance recoveries	(650		)	(925		)		(11,196		)	(925		)
Total	$	4,630		$	8,032			$	2,372		$	41,319

___________________________________

(1) Includes all fees and costs associated with the previously-announced investigation conducted by the audit committee (the “Audit Committee”) of the General Partner’s board of directors (the “Audit Committee Investigation”) and various litigations and investigations prompted by the results of the Audit Committee Investigation, including fees and costs incurred pursuant to the Company’s advancement obligations.

(2) The negative balance for the three months ended September 30, 2015 is a result of estimated costs accrued in prior periods that exceeded actual expenses incurred.

(3) Primarily relates to fees incurred in connection with a legal matter resolved in early 2014.

Income Taxes

The General Partner currently qualifies and has elected to be taxed as a REIT for U.S. federal income tax purposes under Sections 856 through 860 of the Internal Revenue Code. As a REIT, except as discussed below, the General Partner generally is not subject to federal income tax on taxable income that it distributes to its stockholders so long as it distributes at least 90% of its annual taxable income (computed without regard to the deduction for dividends paid and excluding net capital gains). REITs are subject to a number of other organizational and operational requirements. Even if the General Partner maintains its qualification for taxation as a REIT, it may be subject to certain state and local taxes on its income and property, federal income taxes on certain income and excise taxes on its undistributed income.

The OP is classified as a partnership for U.S. federal income tax purposes. As a partnership, the OP is not a taxable entity for U.S. federal income tax purposes. Instead, each partner in the OP is required to take into account its allocable share of the OP’s income, gains, losses, deductions and credits for each taxable year. However, the OP may be subject to certain state and local taxes on its income and property.

As of September 30, 2016, the OP and the General Partner had no material uncertain income tax positions. The tax years subsequent to and including the fiscal year ended December 31, 2011 remain open to examination by the major taxing jurisdictions to which the OP, the General Partner, American Realty Capital Trust III, Inc. (“ARCT III”), CapLease, Inc. (“CapLease”), American Realty Capital Trust IV, Inc., (“ARCT IV”), Cole Real Estate Investments, Inc. (“Cole”) and Cole Credit Property Trust, Inc. are subject.

Under the LPA, the OP is to conduct business in such a manner as to permit the General Partner at all times to qualify as a REIT.

15

VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2016 (Unaudited) – (Continued)

The Company conducts substantially all of its Cole Capital segment business activities through a TRS. A TRS is a subsidiary of a REIT that is subject to corporate federal, state and local income taxes, as applicable. The Company’s use of a TRS enables it to engage in certain business activities while complying with the REIT qualification requirements and to retain any income generated by these businesses for reinvestment without the requirement to distribute those earnings. The Company conducts all of its business in the United States and Canada and, as a result, it files income tax returns in the U.S. federal jurisdiction, the Canadian federal jurisdiction and various state and local jurisdictions. Certain of the Company’s inter-company transactions that have been eliminated in consolidation for financial accounting purposes are also subject to taxation.

The Company provides for income taxes in accordance with current authoritative accounting and tax guidance. The tax provision or benefit related to significant or unusual items is recognized in the quarter in which those items occur. In addition, the effect of changes in enacted tax laws, rates or tax status is recognized in the quarter in which the change occurs. The accounting estimates used to compute the provision for or benefit from income taxes may change as new events occur, additional information is obtained or the tax environment changes.

Recent Accounting Pronouncements

In May 2014, the U.S. Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update, (“ASU”) 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which supersedes the revenue recognition requirements in Revenue Recognition, Accounting Standards Codification (“ASC”) (Topic 605) and requires an entity to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In August 2015, an amendment to ASU 2014-09, ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date (“ASU 2015-14”), was issued to defer the effective date for all entities by one year. For public business entities, certain not-for-profit entities and certain employee benefit plans, the guidance should be applied to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. The Company has identified its revenue streams and is in the process of evaluating the impact on its financial statements and internal accounting processes; however, as the majority of the Company’s revenue is derived from real estate lease contracts, as discussed in relation to ASU 2016-02 Leases (Topic 842) (“ASU 2016-02”), the Company does not expect that the adoption of ASU 2014-09 or related amendments and modifications issued by the FASB will have a material impact on its financial statements.

In January 2016, the FASB issued ASU 2016-01, Financial Instruments(Subtopic 825-10), which requires all equity investments to be measured at fair value with changes in the fair value recognized through net income (other than those accounted for under equity method of accounting or those that result in consolidation of the investee). The amendments in this update also require an entity to present separately in other comprehensive income, the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. In addition, the amendments in this update require separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements. The amendments in this update are effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. The Company is currently evaluating the impact that this new guidance will have on its financial statements.

In February 2016, the FASB issued ASU 2016-02, which will require that a lessee recognize assets and liabilities on the balance sheet for all leases with a lease term of more than 12 months, with the result being the recognition of a right of use asset and a lease liability and the disclosure of key information about the entity's leasing arrangements. ASU 2016-02 retains a distinction between finance leases (i.e., capital leases under current U.S. GAAP) and operating leases. The classification criteria for distinguishing between finance leases and operating leases will be substantially similar to the classification criteria for distinguishing between capital leases and operating leases under current U.S. GAAP. The amendments in ASU 2016-02 are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. A modified retrospective approach is required for existing leases that have not expired upon adoption. The Company is currently evaluating the impact this amendment will have on its consolidated financial statements.

In March 2016, the FASB issued ASU 2016-05, Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships (Topic 815). The amendments in this update clarify that a change in the counterparty to a derivative instrument that has been designated as the hedging instrument does not, in and of itself, require de-designation of that hedging relationship provided that all other hedge accounting criteria continue to be met. These provisions are effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact this amendment will have on its consolidated financial statements.

16

VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2016 (Unaudited) – (Continued)

In March 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation (Topic 718): Improvement to Employee Share-Based Payment Accounting (“ASU 2016-09”), which affects entities that issue share-based payment awards to their employees. ASU 2016-09 is designed to simplify several aspects of accounting for share-based payment award transactions including the income tax consequences, classification of awards as either equity or liabilities, classification on the statement of cash flows and forfeiture rate calculations. The guidance will be effective for annual reporting periods beginning after December 15, 2016 and interim periods within those fiscal years with early adoption permitted. The Company elected to early adopt this guidance during the first quarter of 2016, which did not have a material effect on the Company’s consolidated financial statements. In connection with the adoption, the Company modified the consolidated statement of changes in equity to include the line item cumulative-effect adjustment for equity-based compensation forfeitures, which represents application of the accounting change on a modified retrospective basis.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326) (“ASU 2016-13”). ASU 2016-13 is intended to improve financial reporting by requiring more timely recording of credit losses on loans and other financial instruments that are not accounted for at fair value through net income, including loans held for investment, held-to-maturity debt securities, trade and other receivables, net investment in leases and other such commitments. ASU 2016-13 requires that financial assets measured at amortized cost be presented at the net amount expected to be collected, through an allowance for credit losses that is deducted from the amortized cost basis. The amendments in ASU 2016-13 require the Company to measure all expected credit losses based upon historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the financial assets and eliminates the “incurred loss” methodology in current GAAP. ASU 2016-13 is effective for fiscal years, and interim periods within, beginning after December 15, 2019. Early adoption is permitted for fiscal years, and interim periods within, beginning after December 15, 2018. The Company is currently evaluating the impact this amendment will have on its consolidated financial statements.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”), which is intended to address diversity in practice related to how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The amendments in ASU 2016-15 address eight specific cash flow issues as well as application of the predominance principle (dependence on predominant source or use of receipt or payment) and are effective for public business entities for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years with early adoption permitted. ASU 2016-15 requires retrospective adoption unless it is impracticable to apply, in which case it is to be applied prospectively as of the earliest date practicable. The Company is currently evaluating the impact this amendment will have on its consolidated financial statements.

Note 3 –Segment Reporting

The Company has organized its operations into two segments for management and internal financial reporting purposes, REI and Cole Capital, as further discussed below.

REI – Through its REI segment, the Company owns and actively manages a diversified portfolio of retail, restaurant, office and industrial real estate properties subject to long-term net leases with creditworthy tenants. As of September 30, 2016, the Company owned 4,213 properties comprising 96.9 million square feet of retail and commercial space located in 49 states, Puerto Rico and Canada, which includes properties owned through consolidated joint ventures. The rentable space at these properties was 98.0% leased with a weighted-average remaining lease term of 10.0 years. In addition, as of September 30, 2016, the Company owned eight commercial mortgage-backed securities (“CMBS”) and nine mortgage notes receivable.

Cole Capital – Through its Cole Capital segment, the Company is responsible for managing the day-to-day affairs of Cole Credit Property Trust IV, Inc. (“CCPT IV”); Cole Real Estate Income Strategy (Daily NAV), Inc. (“INAV”); Cole Office & Industrial REIT (CCIT II), Inc. (“CCIT II”); Cole Office & Industrial REIT (CCIT III), Inc. (“CCIT III”), Cole Credit Property Trust V, Inc. (“CCPT V”); and other real estate offerings in registration (collectively with CCPT IV, INAV, CCIT II, CCIT III and CCPT V, the “Cole REITs”), raising capital for those Cole REITs still in offering, identifying and making acquisitions and investments on the Cole REITs’ behalf and recommending to the respective board of directors of each of the Cole REITs an approach for providing investors with liquidity. Cole Capital serves as the dealer manager and distributes shares of common stock for certain Cole 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. Cole Capital receives compensation and reimbursement for services relating to the Cole REITs’ offerings and the investment, management, financing and disposition of their respective assets, as applicable. Cole Capital also develops new REIT offerings and assists in obtaining regulatory approvals from the SEC, the Financial Industry Regulatory Authority, Inc. and various blue sky jurisdictions for such offerings. See Note 17 –Related Party Transactions and Arrangements for further discussion on the Cole REITs.

17

VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2016 (Unaudited) – (Continued)

The Company allocates certain operating expenses, such as legal fees, employee related costs and benefits and general overhead expenses between its operating segments. The following tables present a summary of the comparative financial results and total assets for each segment (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
REI segment:
Revenues:
Rental income	$	303,383		$	333,766		$	928,706		$	1,017,708
Direct financing lease income	494			659			1,598			2,097
Operating expense reimbursements	27,969			22,983			77,862			71,269
Total real estate investment revenues	331,846			357,408			1,008,166			1,091,074
Operating expenses:
Acquisition related	90			1,690			334			4,976
Litigation and other non-routine costs, net of insurance recoveries	4,630			8,032			2,372			41,319
Property operating	34,820			31,950			107,832			95,547
General and administrative	12,069			15,848			37,998			48,045
Depreciation and amortization	187,897			200,158			574,124			620,068
Impairment of real estate	6,872			—			176,214			85,341
Total operating expenses	246,378			257,678			898,874			895,296
Operating income	85,468			99,730			109,292			195,778
Other (expense) income:
Interest expense	(79,869		)	(89,530		)	(242,763		)	(275,801		)
(Loss) gain on extinguishment and forgiveness of debt, net	(2,003		)	—			(1,751		)	5,302
Other income, net	1,649			1,903			3,433			8,179
Equity in income and gain on disposition of unconsolidated entities	212			6,837			10,686			8,340
Loss on derivative instruments, net	(2,023		)	(1,420		)	(3,286		)	(2,137		)
Total other expenses, net	(82,034		)	(82,210		)	(233,681		)	(256,117		)
Income (loss) before taxes and real estate dispositions	3,434			17,520			(124,389		)	(60,339		)
Gain (loss) on disposition of real estate, net	28,111			(6,542		)	45,723			(62,584		)
Income (loss) before taxes	31,545			10,978			(78,666		)	(122,923		)
Provision for income taxes	(1,539		)	(2,238		)	(4,695		)	(7,211		)
Net income (loss)	$	30,006		$	8,740		$	(83,361	)	$	(130,134	)

18

VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2016 (Unaudited) – (Continued)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Cole Capital segment:
Revenues:
Offering-related fees and reimbursements	$	9,545		$	5,850		$	32,850		$	14,483
Transaction service fees and reimbursements	3,779			7,400			10,639			24,696
Management fees and reimbursements	17,745			14,296			51,299			42,390
Total Cole Capital revenues	31,069			27,546			94,788			81,569
Operating expenses:
Cole Capital reallowed fees and commissions	5,897			3,896			20,940			9,637
Acquisition related	—			74			39			533
General and administrative	17,692			16,994			54,257			51,861
Depreciation and amortization	7,276			8,384			22,702			25,128
Total operating expenses	30,865			29,348			97,938			87,159
Operating income (loss)	204			(1,802		)	(3,150		)	(5,590		)
Total other income, net	95			465			589			2,076
Income (loss) before taxes	299			(1,337		)	(2,561		)	(3,514		)
(Provision for) benefit from income taxes	(59		)	738			3,321			2,387
Net income (loss)	$	240		$	(599	)	$	760		$	(1,127	)
Total Company:
Total revenues	$	362,915		$	384,954		$	1,102,954		$	1,172,643
Total operating expenses	$	(277,243	)	$	(287,026	)	$	(996,812	)	$	(982,455	)
Total other expense, net	$	(81,939	)	$	(81,745	)	$	(233,092	)	$	(254,041	)
Net income (loss)	$	30,246		$	8,141		$	(82,601	)	$	(131,261	)

	Total Assets
	September 30, 2016		December 31, 2015
REI segment	$	15,668,974	$	16,966,729
Cole Capital segment	388,846		439,137
Total Company	$	16,057,820	$	17,405,866

Note 4 – Goodwill and Other Intangibles

Goodwill

In connection with prior mergers, the Company recorded goodwill as a result of the merger consideration exceeding the net assets acquired. The goodwill recorded as a result of the merger of Cole with and into a wholly owned subsidiary of the Company (the “Cole Merger”) was allocated between the Company’s two segments, the REI segment and the Cole Capital segment. The REI segment and the Cole Capital segment each comprise one reporting unit.

In the event the Company disposes of a property that constitutes a business under U.S. GAAP, the Company will allocate a portion of the REI segment’s goodwill to that property in determining the gain or loss on the disposal of the property. The amount of goodwill allocated to the property will be based on the relative fair value of the property to the fair value of the REI segment. Future property acquisitions that constitute a business will be integrated into the REI segment and therefore will also be allocated goodwill upon disposition.

The Company evaluates goodwill for impairment annually or more frequently when an event occurs or circumstances change that indicate the carrying value, by reporting unit, may not be recoverable. The analysis for the annual goodwill test is performed during the fourth quarter. The Company tests goodwill for impairment by first comparing the carrying value of net assets to the fair value of each reporting unit. If the fair value is determined to be less than the carrying value or if qualitative factors indicate that it is more likely than not that goodwill is impaired, a second step is performed to compute the amount of impairment as the difference between the fair value of goodwill and the carrying value. The Company estimates the fair value of the reporting units

19

VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2016 (Unaudited) – (Continued)

using discounted cash flows and relevant competitor multiples. The evaluation of goodwill for potential impairment requires the Company’s management to exercise significant judgment and to make certain assumptions. While the Company believes its assumptions are reasonable, there are no guarantees as to actual results. Changes in assumptions based on actual results may have a material impact on the Company’s financial results.

The fair value of the Cole Capital segment is dependent upon actual results, including, but not limited to, the timing and amount of aggregate capital raised and deployed on behalf of the Cole REITs, which is influenced by the Company’s ability to reinstate certain selling agreements that were suspended as a result of the Audit Committee Investigation and the resulting restatements, as well as regulatory requirements affecting broker-dealers. If the Company is unable to reinstate selling agreements or raise and deploy capital as estimated, the fair values of the Cole Capital segment and intangible assets may be less than the respective carrying value, resulting in an impairment that could have a material effect on the Company’s financial results. In addition, the actual timing of closing an offering or executing a liquidity event on behalf of a Cole REIT or the commencement of operations of newly formed REITs, which are not yet effective, may differ from the Company’s assumptions.

During the nine months ended September 30, 2016 and 2015, management monitored the actual performance of the business segments relative to the fair value assumptions used during the annual goodwill impairment test. For the periods presented, management determined it remains more likely than not that the fair value of the reporting unit is greater than its carrying value.

The following table summarizes the Company’s goodwill activity by segment during the nine months ended September 30, 2016 and 2015 (in thousands):

	REI Segment			Cole Capital Segment		Consolidated
Balance as of December 31, 2015	$	1,410,631		$	245,743	$	1,656,374
Goodwill allocated to dispositions and held for sale assets (1) (2)	(53,764		)	—		(53,764		)
Balance as of September 30, 2016	$	1,356,867		$	245,743	$	1,602,610

	REI Segment			Cole Capital Segment		Consolidated
Balance as of December 31, 2014	$	1,509,396		$	385,398	$	1,894,794
Goodwill allocated to dispositions and held for sale assets (1)	(66,789		)	—		(66,789		)
Balance as of September 30, 2015	$	1,442,607		$	385,398	$	1,828,005

_______________________________________________

(1) Included in gain (loss) on disposition of real estate, net, in the consolidated statement of operations.

(2) Includes $51.5 million of goodwill allocated to the cost basis of properties disposed of and classified as held for sale as discussed in Note 5 –Real Estate Investments and $2.3 million of goodwill allocated to the cost basis of two properties foreclosed upon as discussed in Note 10 –Debt during the nine months ended September 30, 2016.

Intangible Assets

The intangible assets primarily consisted of management and advisory contracts that the Company has with certain Cole REITs, which are subject to an estimated useful life of approximately four years.

The Company evaluates intangible assets for impairment when an event occurs or circumstances change that indicate the carrying value may not be recoverable. The Company tests intangible assets for impairment by first comparing the carrying value of the asset group to the undiscounted future cash flows expected from the use of the assets and their eventual disposition. In the event that such expected undiscounted future cash flows do not exceed the carrying value, the Company will adjust the intangible assets to their respective fair values and recognize an impairment loss.

The Company will estimate the fair value of the intangible assets using a discounted cash flow model specific to the applicable Cole REITs. The evaluation of intangible assets for potential impairment requires the Company’s management to exercise significant judgment and to make certain assumptions. While the Company believes its assumptions are reasonable, there are no guarantees as to actual results. Changes in assumptions based on actual results may have a material impact on the Company’s financial results. There were no events or changes in circumstances that indicated that intangible assets were impaired during the nine months ended September 30, 2016 or 2015.

20

VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2016 (Unaudited) – (Continued)

The Company recorded $6.2 million and $19.9 million of amortization expenses related to the intangible assets for the three and nine months ended September 30, 2016, respectively and $7.5 million and $22.5 million of amortization expense related to the intangible assets for the three and nine months ended September 30, 2015, respectively. The estimated amortization expense is expected to be $6.2 million for the remainder of the year ending December 31, 2016, $16.6 million and $4.0 million for the years ending December 31, 2017 and 2018, respectively, and $3.8 million for the nine months ended September 30, 2019. The intangible assets were $30.8 million and $50.8 million, net of accumulated amortization of $23.3 million and $3.4 million, respectively, as of September 30, 2016 and December 31, 2015.

Intangible Lease Assets and Liabilities

Intangible lease assets and liabilities of the Company consisted of the following as of September 30, 2016 and December 31, 2015 (amounts in thousands, except weighted-average useful life):

	Weighted-Average Useful Life	September 30, 2016		December 31, 2015
Intangible lease assets:
In-place leases, net of accumulated amortization of $469,617 and $398,770, respectively	14.8	$	1,246,392	$	1,458,354
Leasing commissions, net of accumulated amortization of $1,681 and $1,035, respectively	9.5	8,541		4,872
Above-market leases, net of accumulated amortization of $63,952 and $47,041, respectively	16.6	282,893		308,306
Total intangible lease assets, net		$	1,537,826	$	1,771,532
Intangible lease liabilities:
Below-market leases, net of accumulated amortization of $52,027 and $38,340, respectively	18.0	$	229,340	$	251,692

The following table provides the projected amortization expense and adjustments to rental income related to the intangible lease assets and liabilities for the next five years as of September 30, 2016 (amounts in thousands):

	October 1, 2016 - December 31, 2016		2017		2018		2019		2020
In-place leases:
Total projected to be included in amortization expense	$	41,368	$	149,340	$	136,656	$	125,238	$	116,997
Leasing Commissions
Total projected to be included in amortization expense	271		1,167		979		901		850
Above-market lease assets:
Total projected to be deducted from rental income	6,371		24,995		24,460		22,529		22,087
Below-market lease liabilities:
Total projected to be included in rental income	6,629		20,114		19,787		19,049		17,857

21

VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2016 (Unaudited) – (Continued)

Note 5 –Real Estate Investments

The Company acquired controlling financial interests in one commercial property for a purchase price of $20.0 million during the nine months ended September 30, 2016. During the nine months ended September 30, 2015, the Company acquired controlling interests in 14 commercial properties, including nine land parcels, for an aggregate purchase price of $10.2 million.

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

	Nine Months Ended September 30,
	2016		2015
Real estate investments, at cost:
Land	$	4,215	$	4,187
Buildings, fixtures and improvements	14,555		5,258
Total tangible assets	18,770		9,445
Acquired intangible assets:
In-place leases	1,182		717
Above-market leases	—		153
Assumed intangible liabilities:
Below-market leases	—		(108		)
Total purchase price of assets acquired	$	19,952	$	10,207

Future Lease Payments

The following table presents future minimum base rent 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)
October 1, 2016 - December 31, 2016	$	268,066	$	1,001
2017	1,131,536		3,818
2018	1,108,872		3,016
2019	1,068,910		2,397
2020	1,031,688		2,023
Thereafter	7,574,101		5,893
Total	$	12,183,173	$	18,148

____________________________________

(1) 33 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 minimum base rental cash payments due to the Company under the lease agreements on these respective properties.

Investment in Direct Financing Leases, Net

The components of the Company’s net investment in direct financing leases as of September 30, 2016 and December 31, 2015 are as follows (in thousands):

	September 30, 2016			December 31, 2015
Future minimum lease payments receivable	$	18,148		$	21,993
Unguaranteed residual value of property	28,235			31,562
Unearned income	(5,598		)	(7,243		)
Net investment in direct financing leases	$	40,785		$	46,312

22

VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2016 (Unaudited) – (Continued)

Development Activities

As of September 30, 2016 and December 31, 2015, the Company had $8.4 million and $20.0 million, respectively, of land and construction in progress. The Company has contracted with a developer to complete a portfolio of 37 build-to-suit development projects, of which 36 have been completed as of September 30, 2016, for an aggregate cost of $52.3 million. During the nine months ended September 30, 2016 and 2015, the Company capitalized $0.2 million and $1.0 million, respectively, of interest expense associated with development projects.

As of September 30, 2016, there was one remaining development project still in progress and expected to be completed within the next six months, with $1.1 million invested to date and an estimated remaining investment of $0.7 million, for a total investment of $1.8 million. Pursuant to the agreement between the Company and the developer, the Company will pay a fixed construction draw until the project is complete. The Company is contractually committed to fund the developer $0.7 million to complete the remaining build-to-suit development project.

In addition, during the nine months ended September 30, 2016, five development projects were completed and placed into service for an aggregate cost of $14.8 million.

Property Dispositions and Held for Sale Assets

During the nine months ended September 30, 2016, the Company disposed of 223 properties for an aggregate gross sales price of $672.5 million, of which our share was $646.4 million after the profit participation payment related to the disposition of 47 Red Lobster properties. The dispositions resulted in proceeds of $573.0 million after a debt assumption of $55.0 million and closing costs. The Company recorded a gain of $50.7 million related to the sales, which included $28.8 million of goodwill allocated to the cost basis of such properties, which is included in gain (loss) on disposition of real estate, net in the accompanying consolidated statements of operations. During the nine months ended September 30, 2015, the Company disposed of 88 properties and one property owned by a consolidated joint venture for an aggregate gross sales price of $675.9 million, resulting in proceeds of $370.2 million after debt assumptions and closing costs. The Company recorded a loss of $39.3 million, including $48.5 million of goodwill allocation related to the sales. The Company has no continuing involvement with these properties. The dispositions were not classified as discontinued operations for any period presented.

During the nine months ended September 30, 2016, the Company also disposed of one property owned by an unconsolidated joint venture for a gross sales price of $113.5 million, of which our share was $102.1 million based on our ownership interest in the joint venture, resulting in proceeds of $42.3 million after debt repayments of $57.0 million and closing costs. The Company recorded a gain of $10.2 million related to the sale, which is included in equity in income and gain on disposition of unconsolidated entities in the accompanying consolidated statements of operations. During the nine months ended September 30, 2015, the Company also disposed of its interest in one consolidated joint venture, whose only assets were investments in three unconsolidated joint ventures, for an aggregate gross sales price of $77.5 million, resulting in proceeds of $43.0 million after debt repayment and closing costs. The debt obligation of the consolidated joint venture was held by an unconsolidated entity. The Company recorded a gain of $6.7 million related to the sale of the consolidated joint venture, which is included in gain on disposition of interest in joint venture in the accompanying consolidated statements of operations.

As of September 30, 2016, there were 19 properties classified as held for sale which are expected to be sold in the next 12 months as part of the Company’s portfolio management strategy. During the nine months ended September 30, 2016 and 2015, the Company recorded a loss of $5.0 million and $23.3 million, respectively, related to properties classified as held for sale during the respective periods, which included $22.7 million and $18.3 million, respectively, of goodwill allocated to the cost basis of such properties. The loss on properties held for sale is included in gain (loss) on disposition of real estate, net in the accompanying consolidated statements of operations. As of December 31, 2015, there were 17 properties classified as held for sale, all of which were sold during the three months ended March 31, 2016.

23

VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2016 (Unaudited) – (Continued)

Impairment of Real Estate Investments

The Company performs quarterly impairment review procedures, primarily through continuous monitoring of events and changes in circumstances that could indicate the carrying value of its real estate assets may not be recoverable. Impairment indicators that the Company considers include, but are not limited to, decrease in net operating income, bankruptcy or other credit concerns of a property’s major tenant or tenants, such as history of late payments, rental concessions and other factors, as well as significant decreases in a property’s revenues due to lease terminations, vacancies, co-tenancy clauses or reduced lease rates.

When impairment indicators are identified or if a property is considered to have a more likely than not probability of being disposed of within the next 12 to 24 months, the Company assesses the recoverability of the assets by determining whether the carrying value of the assets will be recovered through the undiscounted future cash flows expected from the use of the assets and their eventual disposition. In the event that such expected undiscounted future cash flows do not exceed the carrying value, the Company will adjust the real estate assets to their respective fair values and recognize an impairment loss. Generally, fair value is determined using a discounted cash flow analysis and recent comparable sales transactions.

During the nine months ended September 30, 2016, management identified certain properties for potential sale as part of its portfolio management strategy to reduce exposure to office properties. Additionally, a tenant of 59 restaurant properties filed for bankruptcy during the nine months ended September 30, 2016. As part of the Company’s quarterly impairment review procedures and considering the factors mentioned above, real estate assets with carrying values totaling $655.1 million were deemed to be impaired and their carrying values were reduced to their estimated fair values of $478.9 million resulting in impairment charges of $176.2 million during the nine months ended September 30, 2016. During the nine months ended September 30, 2015, real estate assets with carrying values totaling $319.3 million were deemed to be impaired and their carrying values were reduced to their estimated fair values of $234.0 million, resulting in impairment charges of $85.3 million.

Consolidated Joint Ventures

The Company had interests in two joint ventures that owned two properties as of each of September 30, 2016 and December 31, 2015 (the “Consolidated Joint Ventures”). As of September 30, 2016 and December 31, 2015, the Consolidated Joint Ventures had total assets of $59.6 million and $58.5 million, of which $55.6 million and $55.2 million, respectively, were real estate investments, net of accumulated depreciation and amortization. One property secured a mortgage note payable of $9.9 million, which was non-recourse to the Company. The Company has the ability to control operating and financial policies of the Consolidated Joint Ventures. There are restrictions on the use of these assets as the Company would generally be required to obtain the approval of each partner (the “Partner”) in accordance with the joint venture agreement for any major transactions. The Company and each Partner are subject to the provisions of each joint venture agreement, which includes provisions for when additional contributions may be required to fund certain cash shortfalls. The Partners’ share of the Consolidated Joint Ventures’ income was $12,000 for the three months ended September 30, 2016 and the Partners’ share of the Consolidated Joint Ventures’ loss was $23,000 for the nine months ended September 30, 2016, respectively. The Partners’ share of the Consolidated Joint Ventures’ income or loss is included in net (income) loss attributable to non-controlling interests in the consolidated statements of operations.

The Partners’ share of income from four consolidated joint ventures was $0.4 million and $1.2 million for the three and nine months ended September 30, 2015, respectively, and is included in net (income) loss attributable to non-controlling interests in the consolidated statements of operations. The Company disposed of its interest in two of these consolidated joint ventures on or after June 30, 2015.

24

VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2016 (Unaudited) – (Continued)

Unconsolidated Joint Ventures

The Company’s investment in unconsolidated joint ventures consisted of interests in two joint ventures that owned two properties, which were comprised of 0.5 million square feet of retail space as of September 30, 2016, and interests in three joint ventures that owned three properties, which were comprised of 0.9 million square feet of retail and office space as of December 31, 2015. As of September 30, 2016 and December 31, 2015, the Company owned aggregate equity investments of $18.6 million and $52.8 million, respectively, in unconsolidated joint ventures. The Company accounts for its investments in unconsolidated joint ventures using the equity method of accounting as the Company has the ability to exercise significant influence, but not control, over operating and financial policies of these investments. The equity method of accounting requires the investment to be initially recorded at cost and subsequently adjusted for the Company’s share of equity in earnings and distributions from the joint ventures. As of September 30, 2016, the Company’s maximum exposure to risk was $18.6 million, the carrying value of the investments, which is presented in investment in unconsolidated entities in the consolidated balance sheet. The unconsolidated joint ventures had total debt outstanding of $46.2 million as of September 30, 2016, none of which is recourse to the Company, as discussed in Note 10 –Debt. The Company and the respective unconsolidated joint venture partners are subject to the provisions of the applicable joint venture agreement, which includes provisions for when additional contributions may be required to fund certain cash shortfalls.

The Company records its proportionate share of net income (loss) from the unconsolidated joint ventures in the equity in income and gain on disposition of unconsolidated entities in the consolidated statements of operations. During the three and nine months ended September 30, 2016, the Company recognized $0.2 million and $0.6 million of net income, respectively,  from the unconsolidated joint ventures which owned two and three properties, respectively. During the three and nine months ended September 30, 2015, the Company recognized $0.1 million and $1.5 million of net income, respectively, from unconsolidated joint ventures which owned six properties.

The following is a summary of the Company’s percentage ownership and carrying amount related to each of the unconsolidated joint ventures as of September 30, 2016 (dollar amounts in thousands):

Name of Joint Venture	Partner	Ownership % (1)	Carrying Amount of Investment (2)
Cole/Mosaic JV South Elgin IL, LLC	Affiliate of Mosaic Properties and Development, LLC	50%	$	6,108
Cole/Faison JV Bethlehem GA, LLC	Faison-Winder Investors, LLC	90%	12,501
			$	18,609

_______________________________________________

(1) The Company’s ownership interest in this table reflects its legal ownership interest. Legal ownership may, at times, not equal the Company’s economic interest in the listed properties because of various provisions in certain joint venture agreements regarding distributions of cash flow based on capital account balances, allocations of profits and losses and payments of preferred returns. As a result, the Company’s actual economic interest (as distinct from its legal ownership interest) in certain of the properties could fluctuate from time to time and may not wholly align with its legal ownership interests.

(2) The total carrying amount of the investments is greater than the underlying equity in net assets by $6.5 million. This difference relates to a purchase price allocation of goodwill and a step up in fair value of the investment assets acquired in connection with the Cole Merger. The step up in fair value was allocated to the individual investment assets and is being amortized in accordance with the Company’s depreciation policy.

Note 6 –Investment Securities, at Fair Value

Investment securities are considered available-for-sale and, therefore, increases or decreases in the fair value of these investments are recorded in accumulated other comprehensive income (loss) as a component of equity in the consolidated balance sheets unless the securities are considered to be other-than-temporarily impaired at which time the losses are reclassified to expense.

The following tables detail the unrealized gains and losses on investment securities as of September 30, 2016 and December 31, 2015 (in thousands):

	September 30, 2016
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
CMBS	$	48,509	$	1,556	$	(1,967	)	$	48,098

	December 31, 2015
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
CMBS	$	52,115	$	2,169	$	(980	)	$	53,304

25

VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2016 (Unaudited) – (Continued)

As of September 30, 2016 and December 31, 2015, the Company owned eight and ten CMBS, respectively, with an estimated aggregate fair value of $48.1 million and $53.3 million, respectively. During the nine months ended September 30, 2016, two CMBS with a combined carrying value of less than $0.1 million at December 31, 2015, were paid in full. The Company generally receives monthly payments of principal and interest on the CMBS. As of September 30, 2016, the Company earned interest on the CMBS at rates ranging between 5.88% and 8.95%. As of September 30, 2016, the fair value of six CMBS were below their amortized cost. In estimating other-than-temporary impairment losses, management considers a variety of factors, including: (i) whether the Company has the intent to sell the impaired security, (ii) whether the Company expects to hold the investment for a period of time sufficient to allow for anticipated recovery in fair value, and (iii) whether the company expects to recover the entire amortized cost basis of the security. The Company believes that none of the unrealized losses on investment securities are other-than-temporary as management expects the Company will fully recover the entire amortized cost basis of all securities. As of September 30, 2016, the Company had no other-than-temporary impairment losses.

The scheduled maturity of the Company’s CMBS as of September 30, 2016 are as follows (in thousands):

	September 30, 2016
	Amortized Cost		Fair Value
Due within one year	$	—	$	—
Due after one year through five years	21,489		22,066
Due after five years through 10 years	12,725		10,805
Due after 10 years	14,295		15,227
Total	$	48,509	$	48,098

Note 7 – Mortgage Notes Receivable

As of September 30, 2016, the Company owned nine mortgage notes receivable with a weighted-average interest rate of 6.3% and weighted-average years to maturity of 13.2 years. During the nine months ended September 30, 2016, one note with a carrying value of $0.4 million at December 31, 2015, reached maturity and was paid in full. The following table details the mortgage notes receivable as of September 30, 2016 (dollar amounts in thousands):

Outstanding Balance		Carrying Value		Interest Rate Range				Maturity Date Range
$	24,996	$	23,014	5.9	%	–	7.2%	May 2020	–	January 2033

The Company’s mortgage notes receivable are comprised primarily of fully-amortizing or nearly fully-amortizing first mortgage loans. The Company has one mortgage note receivable where the Company does not receive monthly payments of principal and interest but rather the interest is capitalized into the outstanding balance that is due at maturity. The mortgage notes receivable are primarily on commercial real estate, each leased to a single tenant. Therefore, the Company’s monitoring of the credit quality of its mortgage notes receivable is focused primarily on an analysis of the tenant, including review of tenant quality and ratings, trends in the tenant’s industry and general economic conditions and an analysis of measures of collateral coverage, such as an estimate of the loan-to-value ratio (principal amount outstanding divided by the estimated value of the property) and its remaining term until maturity.

The following table summarizes the scheduled aggregate principal payments due to the Company on the mortgage notes receivable subsequent to September 30, 2016 (in thousands):

	Outstanding Balance
Due within one year	$	1,057
Due after one year through five years	5,357
Due after five years through 10 years	6,919
Due after 10 years(1)	15,523
Total	$	28,856

____________________________________

(1) Includes additional $3.9 million of interest that will be capitalized into the outstanding balance of the mortgage note receivable subsequent to September 30, 2016.

26

VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2016 (Unaudited) – (Continued)

Note 8 – Rent and Tenant Receivables and Other Assets, Net

Rent and tenant receivables and other assets, net consisted of the following as of September 30, 2016 and December 31, 2015 (in thousands):

	September 30, 2016		December 31, 2015
Accounts receivable, net (1)	$	48,682	$	44,798
Straight-line rent receivable	196,669		161,079
Deferred costs, net (2)	18,443		26,110
Prepaid expenses	13,269		9,773
Leasehold improvements, property and equipment, net (3)	16,845		18,180
Restricted escrow deposits	3,123		1,190
Deferred tax asset and tax receivable	27,529		25,287
Program development costs, net (4)	12,268		12,855
Interest rate swap assets, at fair value	—		1,892
Other assets	2,701		2,473
Total	$	339,529	$	303,637

___________________________________

(1) Allowance for doubtful accounts was $8.3 million and $6.6 million as of September 30, 2016 and December 31, 2015, respectively.

(2) Amortization expense for deferred costs related to the revolving credit facility totaled $2.6 million and $7.8 million for the three and nine months ended September 30, 2016, respectively, and $2.6 million and $8.1 million for the three and nine months ended September 30, 2015, respectively. Accumulated amortization for deferred costs related to the revolving credit facility were $27.2 million and $19.4 million as of September 30, 2016 and December 31, 2015, respectively.

(3) Amortization expense for leasehold improvements totaled $0.3 million and $0.9 million for the three and nine months ended September 30, 2016, respectively, and $0.4 million and $1.1 million for the three and nine months ended September 30, 2015, respectively. Accumulated amortization was $3.5 million and $2.6 million as of September 30, 2016 and December 31, 2015, respectively. Depreciation expense for property and equipment totaled $0.6 million and $1.6 million for the three and nine months ended September 30, 2016, respectively, and $0.5 million and $1.5 million for the three and nine months ended September 30, 2015, respectively. Accumulated depreciation was $5.3 million and $3.7 million as of September 30, 2016 and December 31, 2015, respectively.

(4) As of September 30, 2016 and December 31, 2015, the Company had reserves of $18.8 million and $34.8 million, respectively, relating to the program development costs.

Note 9 – Fair Value Measures

The Company determines fair value based on quoted prices when available or through the use of alternative approaches, such as discounting the expected cash flows using market interest rates commensurate with the credit quality and duration of the investment. U.S. GAAP guidance defines three levels of inputs that may be used to measure fair value:

Level 1 – Quoted prices in active markets for identical assets and liabilities that the reporting entity has the ability to access at the measurement date.

Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset and liability or can be corroborated with observable market data for substantially the entire contractual term of the asset or liability.

Level 3 – Unobservable inputs reflect the entity’s own assumptions about the assumptions that market participants would use in the pricing of the asset or liability and are consequently not based on market activity, but rather through particular valuation techniques.

The determination of where an asset or liability falls in the hierarchy requires significant judgment and considers factors specific to the asset or liability. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company evaluates its hierarchy disclosures each quarter and depending on various factors, it is possible that an asset or liability may be classified differently from quarter to quarter. Changes in the type of inputs may result in a reclassification for certain assets. There were no transfers between Level 1, Level 2 or Level 3 of the fair value hierarchy during the nine months ended September 30, 2016. The Company expects that changes in classifications between levels will be infrequent.

27

VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2016 (Unaudited) – (Continued)

Items Measured at Fair Value on a Recurring Basis

The following tables present information about the Company’s assets and liabilities measured at fair value on a recurring basis, based on market rates of the Company’s positions and other observable interest rates as discussed in Note 6 –Investment Securities, at Fair Value andNote 11 –Derivatives and Hedging Activities, as of September 30, 2016 and December 31, 2015, aggregated by the level in the fair value hierarchy within which those instruments fall (in thousands):

	Level 1		Level 2			Level 3		Balance as of September 30, 2016
Assets:
CMBS	$	—	$	—		$	48,098	$	48,098
Liabilities:
Derivative liabilities	$	—	$	(8,194	)	$	—	$	(8,194	)
	Level 1		Level 2			Level 3		Balance as of December 31, 2015
Assets:
CMBS	$	—	$	—		$	53,304	$	53,304
Derivative assets	—		1,892			—		1,892
Total assets	$	—	$	1,892		$	53,304	$	55,196
Liabilities:
Derivative liabilities	$	—	$	(6,922	)	$	—	$	(6,922	)

CMBS – The Company’s CMBS are carried at fair value and are valued using Level 3 inputs. The Company used estimated non-binding quoted market prices from the trading desks of financial institutions that are dealers in such securities for similar CMBS tranches that actively participate in the CMBS market. Broker quotes are only indicative of fair value and may not necessarily represent what the Company would receive in an actual trade for the applicable instrument. Management determines that the prices are representative of fair value through its knowledge of and experience in the market. The significant unobservable input used in valuing the CMBS is the discount rate or market yield used to discount the estimated future cash flows expected to be received from the underlying investment, which include both future principal and interest payments. Significant increases or decreases in the discount rate or market yield would result in a decrease or increase in the fair value measurement. The following risks are included in the consideration and selection of discount rates or market yields: risk of default, rating of the investment and comparable company investments.

Derivative Assets and Liabilities –The Company’s derivative financial instruments relate to interest rate swaps, discussed in Note 11 –Derivatives and Hedging Activities. The valuation of derivative instruments is determined using a discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, as well as observable market-based inputs, including interest rate curves and implied volatilities. In addition, credit valuation adjustments are incorporated into the fair values to account for the Company’s potential nonperformance risk and the performance risk of the counterparties.

Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with those derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by the Company and its counterparties. However, as of September 30, 2016, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of the Company’s derivatives. As a result, the Company has determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy.

The fair value of short-term financial instruments such as cash and cash equivalents, restricted cash, due to affiliates and accounts payable approximate their carrying value in the accompanying consolidated balance sheets due to their short-term nature and are classified as Level 1 under the fair value hierarchy.

28

VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2016 (Unaudited) – (Continued)

The following are reconciliations of the changes in assets and liabilities with Level 3 inputs in the fair value hierarchy for the nine months ended September 30, 2016 and 2015 (in thousands):

	CMBS
Beginning balance, December 31, 2015	$	53,304
Total gains and losses:
Unrealized loss included in other comprehensive income, net	(1,599		)
Purchases, issuances, settlements and amortization:
Principal payments received	(3,786		)
Amortization included in net income	179
Ending Balance, September 30, 2016	$	48,098

	CMBS
Beginning balance, December 31, 2014	$	58,646
Total gains and losses:
Unrealized loss included in other comprehensive income, net	(232		)
Purchases, issuances, settlements and amortization:
Principal payments received	(4,055		)
Amortization included in net income	96
Ending Balance, September 30, 2015	$	54,455

The fair values of the Company’s financial instruments that are not reported at fair value in the consolidated balance sheets are reported below (dollar amounts in thousands):

	Level	Carrying Amount at September 30, 2016		Fair Value at September 30, 2016		Carrying Amount at December 31, 2015		Fair Value at December 31, 2015
Assets:
Mortgage notes receivable	3	$	23,014	$	31,963	$	24,238	$	31,842
Liabilities (1):
Mortgage notes payable and other debt, net	2	$	2,878,774	$	2,972,148	$	3,133,005	$	3,240,153
Corporate bonds, net	2	2,247,893		2,334,291		2,547,255		2,580,786
Convertible debt, net	2	985,866		1,010,722		982,217		1,007,042
Credit facility	2	500,000		496,814		1,460,000		1,536,264
Total liabilities		$	6,612,533	$	6,813,975	$	8,122,477	$	8,364,245

_______________________________________________

(1) Current and prior period liabilities’ carrying and fair values exclude net deferred financing costs.

Mortgage notes receivable – The fair value of the Company’s fixed-rate loan portfolio is estimated with a discounted cash flow analysis, utilizing scheduled cash flows and discount rates estimated by management to approximate market interest rates.

Debt – The fair value is estimated by an independent third party using a discounted cash flow analysis, based on management’s estimates of observable market interest rates. Corporate bonds and convertible debt are valued using quoted market prices in active markets with limited trading volume when available.

29

VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2016 (Unaudited) – (Continued)

Items Measured at Fair Value on a Non-Recurring Basis

Certain financial and nonfinancial assets and liabilities are measured at fair value on a nonrecurring basis and are subject to fair value adjustments in certain circumstances, such as when there is evidence of impairment.

Real Estate Assets

As discussed in Note 5 –Real Estate Investments, during the nine months ended September 30, 2016, real estate assets related to 139 properties were deemed to be impaired and their carrying values were reduced to their estimated fair value of $478.9 million, resulting in impairment charges of $176.2 million. During the nine months ended September 30, 2015, $85.3 million of impairment charges were recorded. The Company estimates fair values using Level 3 inputs and using a combined income and market approach, specifically using discounted cash flow analysis and recent comparable sales transactions. The evaluation of real estate assets for potential impairment requires the Company’s management to exercise significant judgment and to make certain key assumptions, including, but not limited to, the following: (1) capitalization rate; (2) discount rates; (3) number of years property will be held; (4) property operating expenses; and (5) re-leasing assumptions including number of months to re-lease, market rental income and required tenant improvements. There are inherent uncertainties in making these estimates such as market conditions and performance and sustainability of the Company’s tenants. For our impairment tests for the real estate assets during the nine months ended September 30, 2016, we used a range of discount rates from of 6.7% to 9.0% with a weighted-average rate of 8.0% and capitalization rates from 7.0% to 12.5% with a weighted-average rate of 7.9%.

The following table presents the impairment charges by asset class recorded during the nine months ended September 30, 2016 (dollar amounts in thousands):

	Nine Months Ended September 30, 2016
Properties impaired (1)	139
Asset classes impaired:
Investment in real estate assets, net	$	176,635
Below-market lease liabilities, net	(421		)
Total impairment loss	$	176,214

_______________________________________________

(1) Includes 35 properties disposed of during the nine months ended September 30, 2016.

30

VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2016 (Unaudited) – (Continued)

Note 10 –Debt

As of September 30, 2016, the Company had $6.6 billion of debt outstanding, including net premiums and net deferred financing costs, with a weighted-average years to maturity of 4.5 years and a weighted-average interest rate of 4.3%. The following table summarizes the carrying value of debt as of September 30, 2016 and December 31, 2015, and the debt activity for the nine months ended September 30, 2016 (in thousands):

					Nine Months Ended September 30, 2016
		Balance as of December 31, 2015			Debt Issuances			Repayments, Extinguishment and Assumptions				(Accretion) and Amortization			Balance as of September 30, 2016
Mortgage notes payable:
	Outstanding balance	$	3,039,882		$	1,450		$	(227,503	)	(1)	$	—		$	2,813,829
	Net premiums (2)	59,402			—			(1,364		)	(1)	(16,229		)	41,809
	Deferred costs	(21,020		)	(27		)	510			(1)	2,973			(17,564		)
Other debt:
	Outstanding balance	33,463			—			(10,453		)		—			23,010
	Premium (2)	258			—			—				(132		)	126
Mortgages and other debt, net		3,111,985			1,423			(238,810		)		(13,388		)	2,861,210
Corporate bonds:
	Outstanding balance	2,550,000			1,000,000			(1,300,000		)		—			2,250,000
	Discount (3)	(2,745		)	—			73				565			(2,107		)
	Deferred costs	(10,922		)	(17,128		)	1,898				3,416			(22,736		)
Corporate bonds, net		2,536,333			982,872			(1,298,029		)		3,981			2,225,157
Convertible debt:
	Outstanding balance	1,000,000			—			—				—			1,000,000
	Discount (3)	(17,779		)	—			—				3,645			(14,134		)
	Deferred costs	(19,327		)	—			—				4,152			(15,175		)
Convertible debt, net		962,894			—			—				7,797			970,691
Credit facility:
	Outstanding balance	1,460,000			783,000			(1,743,000		)		—			500,000
	Deferred costs (4)	(11,410		)	—			4,314				3,104			(3,992		)
Credit facility, net		1,448,590			783,000			(1,738,686		)		3,104			496,008
2016 Term Loan:
	Outstanding balance	—			300,000			(300,000		)		—			—
	Deferred costs	—			(2,764		)	2,588				176			—
2016 Term Loan, net		—			297,236			(297,412		)		176			—
Total debt		$	8,059,802		$	2,064,531		$	(3,572,937	)		$	1,670		$	6,553,066

____________________________________

(1) Includes $83.5 million of notes repaid prior to maturity, resulting in a loss on extinguishment of debt of $0.6 million due to the write-off of the unamortized net premiums and prepayment penalties of $0.3 million and $0.9 million, respectively. Additionally, a $55.0 million note was assumed by the buyer in a real estate disposition resulting in a write-off of the unamortized premium of $1.1 million and the unamortized deferred financing costs of $0.3 million, which are included in gain (loss) on disposition of real estate, net.

(2) Net premiums on mortgage notes payable and other debt were recorded upon the assumption of the respective debt instruments in relation to the various mergers and acquisitions. Amortization of these net premiums is recorded as a reduction to interest expense over the remaining term of the respective debt instruments using the effective-interest method.

(3) Discounts on the corporate bonds and convertible debt were recorded based upon the fair value of the respective debt instruments as of the respective issuance dates. Amortization of these discounts is recorded as an increase to interest expense over the remaining term of the respective debt instruments using the effective-interest method.

(4) Deferred costs relate to the term portion of the credit facility.

31

VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2016 (Unaudited) – (Continued)

Mortgage Notes Payable

The Company’s mortgage notes payable consisted of the following as of September 30, 2016 (dollar amounts in thousands):

	Encumbered Properties	Gross Carrying Value of Collateralized Properties (1)		Outstanding Balance		Weighted-Average Interest Rate (2)		Weighted-Average Years to Maturity
Fixed-rate debt (3)	642	$	5,484,499	$	2,804,142	5.01	%	4.6
Variable-rate debt	1	26,454		9,687		3.79	%	0.9
Total (4)	643	$	5,510,953	$	2,813,829	5.01	%	4.6

____________________________________

(1) Gross carrying value is gross real estate assets, including investment in direct financing leases, net of gross real estate liabilities.

(2) Weighted-average interest rate for variable-rate debt represents the interest rate in effect as of September 30, 2016.

(3) Includes $242.4 million of variable-rate debt fixed by way of interest rate swap arrangements. 

(4) The table above does not include loan amounts associated with the unconsolidated joint ventures of $46.2 million, none of which is recourse to the Company. These loans represent secured fixed and variable rates ranging from 2.93% to 5.20% and maturities ranging from October 2016 to July 2021, with a weighted-average interest rate of 3.93% and a weighted-average years to maturity of 2.1 years as of September 30, 2016.

The Company’s mortgage loan agreements generally restrict corporate guarantees and require the maintenance of financial covenants, including maintenance of certain financial ratios (such as specified debt to equity and debt service coverage ratios). The mortgage loan agreements contain no dividend restrictions except in the event of default or when a distribution would drive liquidity below the applicable thresholds. At September 30, 2016, the Company believes it was in compliance with the debt covenants under the mortgage loan agreements and had no restrictions on the payment of dividends.

On January 13, 2015, a substantially vacant office building in Bethesda, Maryland was foreclosed upon after the Company elected to stop making debt service payments on the related non-recourse loan with an outstanding balance of $53.8 million as of December 31, 2014. As a result of the foreclosure, the Company forfeited its right to the property and was relieved of all obligations on the non-recourse loan. During the nine months ended September 30, 2015, the Company recorded a gain on the forgiveness of debt of $4.9 million, which is included in (loss) gain on extinguishment and forgiveness of debt, net in the accompanying consolidated statements of operations.

On March 6, 2015, the Company received a notice of default from the lender of a non-recourse loan secured by two properties, which had an outstanding balance of $38.1 million on the notice date, due to the Company’s election not to make a reserve payment required per the loan agreement. The foreclosure sale of the first property securing the loan occurred during the three months ended June 30, 2016. As the loan was outstanding upon the foreclosure of the first property, the Company recorded a loss of $3.4 million in gain (loss) on disposition of real estate, net in the accompanying consolidated statements of operations for the nine months ended September 30, 2016. The foreclosure proceedings on the second property that secured the loan were completed during the three months ended September 30, 2016. As a result of the foreclosure sale and deed transfer of both properties securing the loan, the Company recognized a gain on forgiveness of debt of $19.1 million, which is included in (loss) gain on extinguishment and forgiveness of debt, net in the accompanying consolidated statements of operations.

The following table summarizes the scheduled aggregate principal repayments due on mortgage notes subsequent to September 30, 2016 (in thousands):

	Total
October 1, 2016 - December 31, 2016	$	49,767
2017	420,662
2018	209,229
2019	229,516
2020	282,190
Thereafter	1,622,465
Total	$	2,813,829

32

VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2016 (Unaudited) – (Continued)

Other Debt

As of September 30, 2016, the Company had a secured term loan from KBC Bank, N.V. with an outstanding principal balance of $23.0 million and remaining unamortized premium of $0.1 million (the “KBC Loan”). The interest coupon on the KBC Loan is fixed at 5.81% annually until its maturity in January 2018. The KBC Loan is non-recourse to the Company, subject to limited non-recourse exceptions. The KBC Loan provides for monthly payments of both principal and interest. The scheduled principal repayments subsequent to September 30, 2016 are $2.0 million, $7.7 million and $13.3 million for the years ended December 31, 2016, 2017 and 2018, respectively.

The KBC Loan is secured by various investment assets held by the Company. The following table is a summary of the outstanding balance and carrying value of the collateral by asset type as of September 30, 2016 (in thousands):

	Outstanding Balance		Collateral Carrying Value
Mortgage notes receivable	$	7,279	$	19,457
Intercompany mortgage loans	1,754		4,212
CMBS	13,977		34,356
Total	$	23,010	$	58,025

Corporate Bonds

As of September 30, 2016, the OP had $2.25 billion aggregate principal amount of senior unsecured notes (the “Senior Notes”) outstanding comprised of the following (dollar amounts in thousands):

	Outstanding Balance September 30, 2016		Interest Rate		Maturity Date
2019 Senior Notes	750,000		3.000	%	February 6, 2019
2021 Senior Notes	400,000		4.125	%	June 1, 2021
2024 Senior Notes	500,000		4.600	%	February 6, 2024
2026 Senior Notes	600,000		4.875	%	June 1, 2026
Total balance and weighted-average interest rate	$	2,250,000	4.056	%

On June 2, 2016, the Company closed its senior note offering, consisting of (i) $0.4 billion aggregate principal amount of 4.125% Senior Notes due June 1, 2021 (the “2021 Senior Notes”) and (ii) $0.6 billion aggregate principal amount of 4.875% Senior Notes due June 1, 2026 (the “2026 Senior Notes”) (the offering of the 2021 Senior Notes, collectively with the 2026 Senior Notes, the “2016 Bond Offering”).

On July 5, 2016, the Company redeemed the $1.3 billion aggregate principal amount of 2.000% Senior Notes due February 6, 2017 (the “2017 Senior Notes”), plus accrued and unpaid interest thereon and the required make-whole premium. Upon consummation of these transactions, the Company had no 2017 Senior Notes outstanding. The Company recorded a loss related to the early extinguishment of $13.2 million which is included in (loss) gain on extinguishment and forgiveness of debt, net in the accompanying consolidated statements of operations.

The Senior Notes are guaranteed by the General Partner. The OP may redeem all or a part of any series of the Senior Notes at any time, at its option, for the redemption prices set forth in the indenture governing the Senior Notes. With respect to the 2019 Senior Notes and the 2024 Senior Notes, if such Senior Notes are redeemed on or after January 6, 2019 with respect to the 2019 Senior Notes, or November 6, 2023 with respect to the 2024 Senior Notes, the redemption price will equal 100% of the principal amount of the Senior Notes of the applicable series to be redeemed, plus accrued and unpaid interest on the amount being redeemed to, but excluding, the applicable redemption date. The Senior Notes are registered under the Securities Act of 1933, as amended, (the “Securities Act”) and are freely transferable. The Company believes it was in compliance with the covenants pursuant to the indenture governing the Senior Notes as of September 30, 2016.

33

VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2016 (Unaudited) – (Continued)

Convertible Debt

On July 29, 2013, the Company issued $300.0 million aggregate principal amount of convertible senior notes due 2018 (the “2018 Convertible Notes”) and, pursuant to an over-allotment exercise by the underwriters of such 2018 Convertible Notes offering, issued an additional $10.0 million aggregate principal amount of its 2018 Convertible Notes on August 1, 2013. On December 10, 2013, the Company issued an additional $287.5 million of the 2018 Convertible Notes by reopening the indenture governing the 2018 Convertible Notes. Also on December 10, 2013, the Company issued $402.5 million aggregate principal amount of convertible senior notes due 2020 (the “2020 Convertible Notes” and, together with the 2018 Convertible Notes, the “Convertible Notes”). As of September 30, 2016, the outstanding aggregate balance of the Convertible Notes was $1.0 billion. The OP has issued corresponding identical convertible notes to the General Partner. The following table presents each of the 2018 Convertible Notes and the 2020 Convertible Notes listed below with their respective terms (dollar amounts in thousands):

	Outstanding Balance (1)		Interest Rate		Conversion Rate (2)	Maturity Date
2018 Convertible Notes	$	597,500	3.00	%	60.5997	August 1, 2018
2020 Convertible Notes	402,500		3.75	%	66.7249	December 15, 2020
Total balance and weighted-average interest rate	$	1,000,000	3.30	%

____________________________________

(1) Excludes the carrying value of the conversion options recorded within additional paid-in capital of $28.6 million and the unamortized discount of $14.1 million as of September 30, 2016. The discount will be amortized over the remaining term of 2.8 years.

(2) Conversion rate represents the amount of the General Partner OP Units per $1,000 principal amount of Convertible Notes converted as of September 30, 2016, as adjusted in accordance with the applicable indentures as a result of cash dividend payments.

The 2018 Convertible Notes may be converted into cash, shares of the Company’s common stock or a combination thereof in limited circumstances prior to February 1, 2018 and may be converted into such consideration at any time on or after February 1, 2018. The 2020 Convertible Notes may be converted into cash, shares of the Company’s common stock or a combination thereof, in limited circumstances prior to June 15, 2020, and may be converted into such consideration at any time on or after June 15, 2020. There were no changes to the terms of the Convertible Notes and the Company believes it was in compliance with the covenants pursuant to the indenture governing the Convertible Notes as of September 30, 2016.

Credit Facility

The General Partner, as guarantor, and the OP, as borrower, are parties to an unsecured credit facility (the “Credit Facility”) pursuant to a credit agreement, dated as of June 30, 2014, as amended, with Wells Fargo Bank, National Association (“Wells Fargo”), as administrative agent and other lenders party thereto (the “Credit Agreement”).

As of September 30, 2016, the Credit Facility allowed for maximum borrowings of $2.8 billion, consisting of a $0.5 billion term loan facility (the “Credit Facility Term Loan”) and a $2.3 billion revolving credit facility. The maximum aggregate dollar amount of letters of credit that may be outstanding at any one time under the Credit Facility is $25.0 million. During the three months ended September 30, 2016, the Company repaid all of the outstanding borrowings under its revolving credit facility. Additionally, the Company repaid $0.5 billion of the Credit Facility Term Loan, resulting in the write-off of unamortized deferred financing costs of $4.3 million, which is included in (loss) gain on extinguishment and forgiveness of debt, net in the accompanying consolidated statements of operations. As discussed in Note 11 –Derivatives and Hedging Activities, in connection with the early repayment of a portion of the Credit Facility Term Loan, the Company terminated two of its interest rate swaps, resulting in the reclassification of $3.3 million in other comprehensive income to earnings, which is included in loss on derivative instruments, net in the accompanying consolidated statements of operations. The remaining outstanding balance on the Credit Facility Term Loan of $0.5 billion is, in effect, fixed through the use of derivative instruments used to hedge interest rate volatility. Including the spread, which can vary based on the General Partner’s credit rating, the interest rate on this portion was 3.25% at September 30, 2016. As of September 30, 2016, a maximum of $2.3 billion was available to the OP for future borrowings, subject to borrowing availability.

The revolving credit facility generally bears interest at an annual rate of LIBOR plus 1.00% to 1.80% or Base Rate plus 0.00% to 0.80% (based upon the General Partner’s then current credit rating). “Base Rate” is defined as the highest of the prime rate, the federal funds rate plus 0.50% or a floating rate based on one month LIBOR, determined on a daily basis. The Credit Facility Term Loan generally bears interest at an annual rate of LIBOR plus 1.15% to 2.05%, or Base Rate plus 0.15% to 1.05% (based upon the General Partner’s then current credit rating). In addition, the Credit Agreement provides the flexibility for interest rate auctions, pursuant to which, at the Company’s election, the Company may request that lenders make competitive bids to provide revolving loans, which competitive bids may be at pricing levels that differ from the foregoing interest rates.

34

VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2016 (Unaudited) – (Continued)

The Credit Agreement provides for monthly interest payments under the Credit Facility. In the event of default, at the election of a majority of the lenders (or automatically upon a bankruptcy event of default with respect to the OP or the General Partner), the commitments of the lenders under the Credit Facility will mature, and payment of any unpaid amounts in respect of the Credit Facility will be accelerated. The revolving credit facility and the Credit Facility Term Loan both terminate on June 30, 2018, in each case, unless extended in accordance with the terms of the Credit Agreement. The Credit Agreement provides for a one-year extension option with respect to each of the revolving credit facility and the Credit Facility Term Loan, exercisable at the Company’s election and subject to certain customary conditions, as well as certain customary “amend and extend” provisions. At any time, upon timely notice by the OP and subject to any breakage fees, the OP may prepay borrowings under the Credit Facility (subject to certain limitations applicable to the prepayment of any loans obtained through an interest rate auction, as described above). The OP incurs a fee equal to 0.15% to 0.25% per annum (based upon the General Partner’s then current credit rating) multiplied by the commitments (whether or not utilized) in respect of the revolving credit facility. In addition, the OP incurs customary administrative agent, letter of credit issuance, letter of credit fronting, extension and other fees.

The Credit Facility requires restrictions on corporate guarantees, as well as the maintenance of financial covenants, including the maintenance of certain financial ratios (such as specified debt to equity and debt service coverage ratios) and the maintenance of a minimum net worth. The key financial covenants in the Credit Facility, as defined and calculated per the terms of the Credit Agreement, include maintaining (i) a maximum leverage ratio less than or equal to 60%, (ii) a minimum fixed charge coverage ratio of at least 1.5x, (iii) a secured leverage ratio less than or equal to 45%, (iv) a total unencumbered asset value ratio less than or equal to 60%, (v) a minimum tangible net worth covenant of at least $5.5 billion, (vi) a minimum unencumbered interest coverage ratio of at least 1.75x and (vii) a minimum unencumbered asset value of at least $8.0 billion (up to 35% of which may be comprised of restaurant properties from June 30, 2016 to December 30, 2016 and up to 30% of which may be comprised of restaurant properties from December 31, 2016 on). The Company believes it was in compliance with the Credit Agreement and is not restricted from accessing any borrowing availability under the Credit Facility as of September 30, 2016.

2016 Term Loan

On June 2, 2016, the General Partner as guarantor, and the OP, as borrower, entered into a $300.0 million senior secured term loan facility (the “2016 Term Loan”), pursuant to a credit agreement (the “2016 Term Loan Agreement”) with JPMorgan Chase Bank, N.A., as the administrative agent, and certain other lenders party thereto. During the three months ended September 30, 2016, the Company borrowed $300.0 million on the 2016 Term Loan and subsequently repaid the balance prior to September 30, 2016. In connection with the prepayment, the Company wrote-off the remaining unamortized deferred financing costs resulting in a loss of $2.6 million which is included in (loss) gain on extinguishment and forgiveness of debt, net in the accompanying consolidated statements of operations.

Note 11 –Derivatives and Hedging Activities

Risk Management Objective of Using Derivatives

The Company may use derivative financial instruments, including interest rate swaps, caps, options, floors and other interest rate derivative contracts, to hedge all or a portion of the interest rate risk associated with its borrowings. The principal objective of such arrangements is to minimize the risks and/or costs associated with the Company’s operating and financial structure as well as to hedge specific anticipated transactions. The Company does not intend to utilize derivatives for purposes other than interest rate risk management. The use of derivative financial instruments carries certain risks, including the risk that the counterparties to these contractual arrangements are not able to perform under the agreements. To mitigate this risk, the Company only enters into derivative financial instruments with counterparties with high credit ratings and with major financial institutions with which the Company and its affiliates may also have other financial relationships. The Company does not anticipate that any of the counterparties will fail to meet their obligations.

Cash Flow Hedges of Interest Rate Risk

The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish these objectives, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.

35

VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2016 (Unaudited) – (Continued)

The effective portion of changes in the fair value of derivatives designated that qualify as cash flow hedges is recorded in accumulated other comprehensive income and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. During the nine months ended September 30, 2016 and 2015, such derivatives were used to hedge the variable cash flows associated with variable-rate debt. During the three and nine months ended September 30, 2016, the Company reclassified $1.2 million and $5.1 million, respectively, from accumulated other comprehensive income into interest expense as a result of the hedged forecasted transactions affecting earnings.

The ineffective portion of the change in fair value of the derivatives designated that qualify as cash flow hedges is recognized directly in earnings. During the three and nine months ended September 30, 2016, the Company recorded a gain of $1.0 million and $1.1 million, respectively, in earnings related to the ineffective portion of the change in fair value of derivatives designated that qualify as cash flow hedges.

During the three months ended September 30, 2016, the Company terminated two of its interest rate swaps in connection with the early repayment of a portion of the Credit Facility Term Loan, as discussed in Note 10 –Debt, and accelerated the reclassification of a portion of the amounts in other comprehensive income to earnings as a result of a portion of the hedged forecasted transactions becoming probable not to occur. A loss of $3.3 million was recorded in relation to the acceleration, which is included in loss on derivative instruments, net in the accompanying consolidated statements of operations.

Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. During the next twelve months, the Company estimates that an additional $2.3 million will be reclassified from other comprehensive income as an increase to interest expense.

As of September 30, 2016, the Company had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk (dollar amounts in thousands):

Interest Rate Swaps	September 30, 2016
Number of Instruments	14
Notional Amount	$	691,016

The table below presents the fair value of the Company’s derivative financial instruments as well as their classification in the consolidated balance sheets as of September 30, 2016 and December 31, 2015 (in thousands):

Derivatives Designated as Hedging Instruments	Balance Sheet Location	September 30, 2016			December 31, 2015
Interest rate swaps	Rent and tenant receivables and other assets, net	$	—		$	1,794
Interest rate swaps	Deferred rent, derivative and other liabilities	$	(7,471	)	$	(6,922	)

In January 2014, the Company entered into an interest rate lock agreement with a notional amount of $250.0 million (the “Treasury Lock Agreement”). The Treasury Lock Agreement, which had an original maturity date of February 12, 2014, was entered into to hedge part of the Company’s interest rate exposure associated with the variability in future cash flows attributable to changes in the 10-year U.S. treasury rates related to the planned issuance of debt securities in conjunction with the merger of Cole Capital with and into a wholly owned subsidiary of the Company. In connection with the Company’s offering of Senior Notes in February 2014, the Company settled the Treasury Lock Agreement for $3.9 million, which was accounted for as a cash flow hedge, recorded to other comprehensive loss and will be amortized into earnings over the 10-year term of the Treasury Lock. The Company recognized $0.1 million and $0.3 million of interest expense for the three and nine months ended September 30, 2016, respectively, related to the Treasury Lock Agreement.

Derivatives Not Designated as Hedging Instruments

Derivatives not designated as hedges are not speculative and are used to manage the Company’s exposure to interest rate movements and other identified risks but do not meet the requirements to be classified as hedging instruments. A gain of $0.3 million and a loss of $1.1 million related to the change in the fair value of derivatives not designated as hedging instruments was recorded in loss on derivative instruments, net in the accompanying consolidated statements of operations for the three and nine months ended September 30, 2016, respectively. The Company recorded a loss of $0.9 million and $1.5 million for the three and nine months ended September 30, 2015, respectively.

36

VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2016 (Unaudited) – (Continued)

As of September 30, 2016, the Company had the following outstanding interest rate derivative that was not designated as a qualifying hedging relationship (dollar amounts in thousands):

Interest Rate Swap	September 30, 2016
Number of Instruments	1
Notional Amount	$	51,400

The table below presents the fair value of the Company’s derivative financial instrument not designated as a hedge as well as its classification in the consolidated balance sheets as of September 30, 2016 and December 31, 2015 (in thousands):

Derivatives Not Designated as Hedging Instruments	Balance Sheet Location	September 30, 2016			December 31, 2015
Interest rate swaps	Rent and tenant receivables and other assets, net	$	—		$	98
Interest rate swaps	Deferred rent, derivative and other liabilities	$	(723	)	$	—

Tabular Disclosure of Offsetting Derivatives

The table below details a gross presentation, the effects of offsetting and a net presentation of the Company’s derivatives as of September 30, 2016 and December 31, 2015 (in thousands). The net amounts of derivative assets or liabilities can be reconciled to the tabular disclosure of fair value.

	Offsetting of Derivative Assets and Liabilities
	Gross Amounts of Recognized Assets		Gross Amounts of Recognized Liabilities			Gross Amounts Offset in the Consolidated Balance Sheets		Net Amounts of Assets Presented in the Consolidated Balance Sheets		Net Amounts of Liabilities Presented in the Consolidated Balance Sheets			Financial Instruments		Cash Collateral Received		Net Amount
September 30, 2016	$	—	$	(8,194	)	$	—	$	—	$	(8,194	)	$	—	$	—	$	(8,194	)
December 31, 2015	$	1,892	$	(6,922	)	$	—	$	1,892	$	(6,922	)	$	—	$	—	$	(5,030	)

Credit Risk Related Contingent Features

The Company has agreements with each of its derivative counterparties that contain a provision specifying that if the Company either defaults or is capable of being declared in default on any of its indebtedness, the Company could also be declared in default on its derivative obligations.

As of September 30, 2016, the fair value of the interest rate derivatives in a net liability position, including accrued interest but excluding any adjustment for nonperformance risk related to these agreements, was $9.4 million. As of September 30, 2016, the Company has not posted any collateral related to these agreements and was not in breach of any provisions in these agreements. If the Company had breached any of these provisions, it could have been required to settle its obligations under the agreements at their aggregate termination value of $9.4 million at September 30, 2016.

37

VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2016 (Unaudited) – (Continued)

Note 12 – Supplemental Cash Flow Disclosures

Supplemental cash flow information was as follows for the nine months ended September 30, 2016 and 2015 (in thousands):

	Nine Months Ended September 30,
	2016		2015
Supplemental Disclosures:
Cash paid for interest	$	246,602	$	280,659
Cash paid for income taxes	$	18,822	$	10,205
Non-cash investing and financing activities:
Accrued capital expenditures and real estate developments	$	3,556	$	4,363
Accrued deferred financing costs	$	860	$	164
Distributions declared and unpaid	$	146,118	$	130,648
Accrued equity issuance costs	$	9	$	—
Mortgage note payable relieved by foreclosure	$	38,050	$	53,798
Mortgage notes payable assumed in real estate disposition	$	55,000	$	300,720

Note 13 – Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses consisted of the following as of September 30, 2016 and December 31, 2015 (in thousands):

	September 30, 2016		December 31, 2015
Accrued interest	$	42,915	$	56,273
Accrued real estate taxes	42,812		47,319
Accrued legal fees	14,214		9,212
Accounts payable	6,223		2,868
Accrued other	32,986		36,205
Total	$	139,150	$	151,877

Note 14 –Commitments and Contingencies

Litigation

The Company is involved in various routine legal proceedings and claims incidental to the ordinary course of its business. There are no material legal proceedings pending against the Company, except as follows:

Government Investigations and Litigation Relating to the Audit Committee Investigation

As previously reported, on October 29, 2014, the Company filed a Current Report on Form 8-K (the “October 29 8-K”) reporting the Audit Committee’s conclusion, based on the preliminary findings of its investigation, that certain previously issued consolidated financial statements of the Company, including those included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013 and Quarterly Reports on Form 10-Q for the quarters ended March 31, 2014 and June 30, 2014, and related financial information should no longer be relied upon. The Company also reported that the Audit Committee had based its conclusion on the preliminary findings of its investigation into concerns regarding accounting practices and other matters that were first reported to the Audit Committee in early September 2014 and that the Audit Committee believed that an error in the calculation of adjusted funds from operations for the first quarter of 2014 had been identified but intentionally not corrected when the Company reported its financial results for the three and six months ended June 30, 2014. Prior to the filing of the October 29 8-K, the Audit Committee previewed for the SEC the information contained in the filing. Subsequent to that filing, the SEC provided notice that it had commenced a formal investigation and issued subpoenas calling for the production of various documents. In addition, the United States Attorney’s Office for the Southern District of New York contacted counsel for the Audit Committee and counsel for the Company with respect to this matter, and the Secretary of the Commonwealth of Massachusetts issued a subpoena calling for the production of various documents. The Audit Committee and the Company have been cooperating with these regulators in their investigations.

38

VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2016 (Unaudited) – (Continued)

In connection with these investigations, on September 8, 2016, the United States Attorney’s Office for the Southern District of New York announced the filing of criminal charges against the Company’s former Chief Financial Officer and former Chief Accounting Officer (the “Criminal Action”), as well as the fact that the former Chief Accounting Officer has pleaded guilty to the charges filed. That same day, the SEC announced the filing of a civil complaint against the same two individuals in the United States District Court for the Southern District of New York (the “SEC Civil Action”). On October 12, 2016, the United States Attorney for the Southern District of New York filed a motion to intervene in and stay the SEC Civil Action until the conclusion of the Criminal Action. On November 1, 2016, the Court granted the motion to stay with respect to all witness related discovery.

As discussed below, the Company and certain of its former officers and current and former directors have been named as defendants in a number of lawsuits filed following the October 29 8-K, including class actions, derivative actions, and individual actions seeking money damages and other relief under the federal securities laws and state laws in both federal and state courts in New York, Maryland and Arizona.

Between October 30, 2014 and January 20, 2015, the Company and certain of its former officers and current and former directors, among other individuals and entities, were named as defendants in ten securities class action complaints filed in the United States District Court for the Southern District of New York. The court consolidated these actions under the caption In re American Realty Capital Properties, Inc. Litigation, No. 15-MC-00040 (AKH) (the “SDNY Consolidated Securities Class Action”). The plaintiffs filed a second amended class action complaint on December 11, 2015, which asserted claims for violations of Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. Certain defendants, including the Company and the OP, filed motions to dismiss the second amended class action complaint (or portions thereof), which were granted in part and denied in part by the court at oral argument on June 1, 2016. The Company and the OP filed an answer to the second amended class action complaint on July 29, 2016. On September 8, 2016, the Court issued an order directing plaintiffs to file a third amended complaint to reflect certain prior rulings by the court. The third amended complaint was filed on September 30, 2016 and the defendants are not required to file new answers. In the September 8, 2016 order, the court also directed that document production should be substantially complete by December 15, 2016, and scheduled a status conference on January 10, 2017.

The Company, certain of its former officers and current and former directors, and the OP, among others, have also been named as defendants in additional individual securities fraud actions filed in the United States District Court for the Southern District of New York: Jet Capital Master Fund, L.P. v. American Realty Capital Properties, Inc., et al., No. 15-cv-307 (the “Jet Capital Action”); Twin Securities, Inc. v. American Realty Capital Properties, Inc., et al., No. 15-cv-1291; HG Vora Special Opportunities Master Fund, Ltd v. American Realty Capital Properties, Inc., et al., No. 15-cv-4107; BlackRock ACS US Equity Tracker Fund, et al. v. American Realty Capital Properties, Inc. et al., No. 15-cv-08464; PIMCO Funds: PIMCO Diversified Income Fund, et al. v. American Realty Capital Properties, Inc. et al., No. 15-cv-08466; Clearline Capital Partners LP, et al. v. American Realty Capital Properties, Inc. et al., No. 15-cv-08467; Pentwater Equity Opportunities Master Fund Ltd., et al. v. American Realty Capital Properties, Inc. et al., No. 15-cv-08510; Archer Capital Master Fund, et al. v. American Realty Capital Properties, Inc. et al, No. 16-cv-05471 (the “Archer Capital Action”); and Atlas Master Fund et al. v. American Realty Capital Properties, Inc. et al., No. 16-cv-05475 (the “Atlas Action”) (collectively, the “Opt-Out Actions”). The Opt-Out Actions assert claims arising out of allegedly false and misleading statements in connection with the purchase or sale of the Company’s securities. The Company filed an answer to the complaint in the Jet Capital Action in December 2015. The Company filed answers to the complaints in all of the other Opt-Out Actions in July 2016 or in October 2016. Document production in the Opt-Out Actions is being coordinated with production in the SDNY Consolidated Securities Class Action.

On October 27, 2015, the Company and certain of its former officers, among others, were named as defendants in an individual securities fraud action filed in the United States District Court for the District of Arizona, captioned Vanguard Specialized Funds, et al. v. VEREIT, Inc. et al., No. 15-cv-02157 (the “Vanguard Action”). The Vanguard Action asserts claims arising out of allegedly false and misleading statements in connection with the purchase or sale of the Company’s securities. On January 21, 2016, the Company filed a motion to transfer the Vanguard Action to the United States District Court for the Southern District of New York and a motion to dismiss the complaint. On September 29, 2016, the court entered an order denying the Company’s motion to transfer and granting in part and denying in part the Company’s motion to dismiss. The Company is required to file an answer to the complaint by November 4, 2016.

The Company was also named as a nominal defendant, and certain of its former officers and current and former directors were named as defendants, in shareholder derivative actions filed in the United States District Court for the Southern District of New York: Witchko v. Schorsch, et al., No. 15-cv-06043 (the “Witchko Action”); and Serafin, et al. v. Schorsch, et al., No. 15-cv-08563 (the “Serafin Action”). The court consolidated the Witchko Action and the Serafin Action (together “the SDNY Derivative Action”) and the plaintiffs designated the complaint filed in the Witchko Action as the operative complaint in the SDNY Derivative Action. The SDNY Derivative Action seeks money damages and other relief on behalf of the Company for alleged breaches of fiduciary

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2016 (Unaudited) – (Continued)

duty, among other claims. On February 12, 2016, the Company and other defendants filed a motion to dismiss the SDNY Derivative Action due to plaintiffs’ failure to plead facts demonstrating that the Board’s decision to refuse plaintiffs’ pre-suit demands was wrongful and not a protected business judgment. Other defendants also filed motions to dismiss for failure to state a claim. On June 9, 2016, the court granted in part and denied in part the Company’s and other defendants’ motions to dismiss. Plaintiffs filed an amended complaint on June 30, 2016, and the Company and other defendants filed answers to the amended complaint on July 22, 2016. On September 1, 2016, the Company filed a motion to stay the Witchko Action. On September 8, 2016, the court issued an order denying the Company’s motion. Document production in the Witchko Action is being coordinated with production in the SDNY Consolidated Securities Class Action.

On December 3, 2015, the Company was named as a nominal defendant and certain of its former officers and directors were named as defendants in a shareholder derivative action filed in the Circuit Court for Baltimore City in Maryland, captioned Frampton v. Schorsch, et al., No. 24-C-15-006269 (the “Frampton Action”). The Frampton Action seeks money damages and other relief on behalf of the Company for, among other things, alleged breaches of fiduciary duty and contribution and indemnification. The Company filed a motion to stay the Frampton Action on March 7, 2016. That motion is fully briefed and pending before the court and a conference is scheduled on November 3, 2016.

On June 10, 2016, the Company was named as a nominal defendant, and certain of its former officers and directors, among others, were named as defendants, in a shareholder derivative action filed in the Supreme Court of the State of New York, captioned Kosky v. Schorsch, et al., No. 653093/2016 (the “Kosky Action”). The Kosky Action seeks money damages and other relief on behalf of the Company for, among other things, alleged breaches of fiduciary duty, negligence, and breach of contract. On October 6, 2016, the parties filed a stipulation staying the Kosky Action until final resolution of the SDNY Consolidated Securities Class Action.

On October 6, 2016, the Company was named as a nominal defendant, and certain of its former officers and directors, among others, were named as defendants, in a shareholder derivative action filed in United States District Court for the District of Maryland, captioned Meloche v. Schorsch, et al., 16-cv-03366 (the “Meloche Action”). The Meloche Action seeks money damages and other relief on behalf of the Company for alleged breaches of fiduciary duty and negligence. The Company is required to respond to the complaint by January 13, 2017.

The Company has not reserved amounts for any of the litigation or investigation matters above either because it has not concluded that a loss is probable in the matter or because it believes that any probable loss or reasonably possible range of loss is not reasonably estimable at this time. The Company is currently unable to reasonably estimate a range of reasonably possible loss because these matters involve significant uncertainties, including the complexity of the facts and the legal theory and the nature of the claims.

CapLease Litigation Matters

Following the announcement of the merger agreement with CapLease in May 2013, a number of lawsuits were filed by CapLease stockholders, the following of which remain pending:

On June 25, 2013, a putative class action and derivative lawsuit was filed in the Circuit Court for Baltimore City against the Company, the OP, CapLease, and members of the CapLease board of directors, among others, captioned Tarver v. CapLease, Inc., et al., No. 24-C-13-004176 (the “Tarver Action”). The complaint alleged, among other things, that the merger agreement was the product of breaches of fiduciary duty by the CapLease directors because the transaction purportedly did not provide for full and fair value for the CapLease shareholders and was not the result of a competitive bidding process, the merger agreement allegedly contained coercive deal protection measures and the merger was purportedly approved as a result of improper self-dealing by certain defendants who would receive certain alleged employment compensation benefits and continued employment pursuant to the merger agreement. In August 2013, counsel in the Tarver Action filed a motion for a stay in the Baltimore Court, informing the court that the plaintiff had agreed to join and participate in the prosecution of other actions concerning the CapLease transaction then pending in a New York court (which were subsequently dismissed). The stay was granted by the Baltimore Court and the parties have engaged in no subsequent activity in the Tarver Action.

In October 2013, a putative class action lawsuit was filed in the Circuit Court for Baltimore City against the Company, the OP, CapLease, and members of the CapLease board of directors, among others, captioned Poling v. CapLease, Inc., et al., No. 24-C-13-006178 (the “Poling Action”). The complaint alleged that the merger agreement breached the terms of the CapLease 8.375% Series B Cumulative Redeemable Preferred Stock (“Series B”) and the terms of the 7.25% Series C Cumulative Redeemable Preferred Stock (“Series C”) and was in violation of the Series B Articles Supplementary and the Series C Articles Supplementary. The complaint alleged claims for breach of contract and breach of fiduciary duty.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2016 (Unaudited) – (Continued)

In December 2013, all Defendants filed a motion to dismiss the Poling Action, which was granted by the court in May 2015. Plaintiff appealed the decision to the Court of Special Appeals of Maryland, which affirmed the trial court’s order on May 3, 2016. A petition seeking further appellate review was subsequently denied by the Maryland Court of Appeals on August 22, 2016.

Cole Litigation Matter

In December 2013, Realistic Partners filed a putative class action lawsuit against the Company and the then-members of its board of directors in the Supreme Court for the State of New York, captioned Realistic Partners v. American Realty Capital Partners, et al., No. 654468/2013. Cole was later added as a defendant. The plaintiff alleged, among other things, that the board of the Company breached its fiduciary duties in connection with the transactions contemplated under the Cole Merger Agreement (in connection with the merger between a wholly owned subsidiary of Cole and Cole Holdings Corporation) and that Cole aided and abetted those breaches. In January 2014, the parties entered into a memorandum of understanding regarding settlement of all claims asserted on behalf of the alleged class of the Company’s stockholders. The proposed settlement terms required the Company to make certain additional disclosures related to the Cole Merger, which were included in a Current Report on Form 8-K filed by the Company with the SEC on January 17, 2014. The memorandum of understanding also contemplated that the parties would enter into a stipulation of settlement, which would be subject to customary conditions, including confirmatory discovery and court approval following notice to the Company’s stockholders, and provided that the defendants would not object to a payment of up to $625,000 for attorneys’ fees. If the parties enter into a stipulation of settlement, which has not occurred, a hearing will be scheduled at which the court will consider the fairness, reasonableness and adequacy of the settlement. There can be no assurance that the parties will ultimately enter into a stipulation of settlement, that the court will approve any proposed settlement, or that any eventual settlement will be under the same terms as those contemplated by the memorandum of understanding.

Contractual Lease Obligations

The following table reflects the minimum base rent payments due from the Company over the next five years and thereafter for certain ground lease obligations, which are substantially reimbursable by our tenants, and office lease obligations (in thousands):

	Future Minimum Base Rent Payments
	Ground Leases		Office Leases
October 1, 2016 - December 31, 2016	$	3,722	$	1,189
2017	14,651		4,727
2018	14,370		4,704
2019	14,223		4,769
2020	13,586		4,798
Thereafter	224,662		14,089
Total	$	285,214	$	34,276

Purchase Commitments

Cole Capital enters into purchase and sale agreements and deposits funds into escrow towards the purchase of real estate assets, most of which are expected to be assigned to one of the Cole REITs at or prior to the closing of the respective acquisition. As of September 30, 2016, Cole Capital was a party to nine purchase and sale agreements with unaffiliated third-party sellers to purchase a 100% interest in 13 properties, subject to meeting certain criteria, for an aggregate purchase price of $290.0 million, exclusive of closing costs. As of September 30, 2016, Cole Capital had $3.1 million of property escrow deposits held by escrow agents in connection with these future property acquisitions, which may be forfeited if the transactions are not completed under certain circumstances. Cole Capital will be reimbursed by the assigned Cole REIT for amounts escrowed when the property is assigned to the respective Cole REIT.

Environmental Matters

In connection with the ownership and operation of real estate, the Company may potentially be liable for costs and damages related to environmental matters. The Company has not been notified by any governmental authority of any non-compliance, liability or other claim, and is not aware of any other environmental condition, in each case, that it believes will have a material adverse effect on the results of operations.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2016 (Unaudited) – (Continued)

Note 15 – Equity

Common Stock and General Partner OP Units

The General Partner is authorized to issue up to 1.5 billion shares of Common Stock. As of September 30, 2016, the General Partner had approximately 974.2 million shares of Common Stock issued and outstanding.

Additionally, the Operating Partnership had approximately 974.2 million General Partner OP Units issued and outstanding as of September 30, 2016, corresponding to the General Partner’s outstanding shares of Common Stock.

Common Stock Offering

On August 10, 2016, the Company issued 69.0 million shares of Common Stock in a public offering for net proceeds, after underwriting discounts and offering costs, of $702.5 million which were used in part to repay the 2016 Term Loan and amounts under the Credit Facility.

Common Stock Continuous Offering Program

On September 19, 2016, the Company registered a continuous equity offering program (the “Program”) pursuant to which the Company can offer and sell, from time to time through September 19, 2019 in “at-the-market” offerings or certain other transactions, shares of Common Stock with an aggregate gross sales price of up to $750.0 million, through its sales agents. The Company intends to use the proceeds from any sale of shares for general corporate purposes, which may include funding potential acquisitions and repurchasing or repaying outstanding indebtedness. As of September 30, 2016, no shares of Common Stock have been issued pursuant to the Program.

Preferred Stock and Preferred OP Units

Series F Preferred Stock

On January 3, 2014, in connection with the merger of American Realty Capital Trust IV, Inc. with and into a subsidiary of the OP (the “ARCT IV Merger”), 42.2 million shares of Series F Preferred Stock were issued by the Company, resulting in the Operating Partnership concurrently issuing 42.2 million General Partner Series F preferred units (“General Partner Series F Preferred Units”) to the General Partner, and 700,000 Series F Preferred Units (“Limited Partner Series F Preferred Units”) to holders of each outstanding unit of American Realty Capital Operating Partnership IV, L.P. (the “ARCT IV Operating Partnership”) (each, an “ARCT IV OP Unit”). As of September 30, 2016, there were approximately 42.8 million shares of Series F Preferred Stock (and approximately 42.8 million corresponding General Partner Series F Preferred Units) and 86,874 Limited Partner Series F Preferred Units issued and outstanding.

The Series F Preferred Stock pays cumulative cash dividends at the rate of 6.70% per annum on their liquidation preference of $25.00 per share (equivalent to $1.675 per share on an annual basis). The Series F Preferred Stock is not redeemable by the Company before the fifth anniversary of the date on which such Series F Preferred Stock was issued (the “Initial Redemption Date”), except under circumstances intended to preserve the General Partner’s status as a REIT for federal and/or state income tax purposes and except upon the occurrence of a change of control. On and after the Initial Redemption Date, the General Partner may, at its option, redeem shares of the Series F Preferred Stock, in whole or from time to time in part, at a redemption price of $25.00 per share plus, subject to exceptions, any accrued and unpaid dividends thereon to the date fixed for redemption. The shares of Series F Preferred Stock have no stated maturity, are not subject to any sinking fund or mandatory redemption and will remain outstanding indefinitely unless the General Partner redeems or otherwise repurchases them or they become convertible and are converted into Common Stock (or, if applicable, alternative consideration). The Series F Preferred Stock trades on the NYSE under the symbol “VER PRF”. The Series F Preferred Units contain the same terms as the Series F Preferred Stock.

Limited Partner OP Units

As of September 30, 2016, the Operating Partnership had approximately 23.75 million Limited Partner OP Units outstanding, following the redemption of 15,450 Limited Partner OP Units, owned by a party unaffiliated with the Former Manager, for shares of the Company's Common Stock pursuant to the terms of the LPA. As of December 31, 2015, the Operating Partnership had approximately 23.76 million Limited Partner OP Units outstanding.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2016 (Unaudited) – (Continued)

As of September 30, 2016, the Company has received redemption requests totaling approximately 13.1 million Limited Partner OP Units from certain affiliates of the Former Manager, which would have been redeemable for a corresponding number of common shares. The Company believes it has potential claims against recipients of those OP Units and has engaged in discussions with affiliates of the Former Manager regarding the redemption requests. Pending any resolution, the Company does not currently intend to satisfy any of the redemption requests. In light of the potential claims, since October 15, 2015, the OP has not paid distributions in respect of a substantial portion of the outstanding Limited Partner OP Units when the Common Stock dividends were otherwise paid.

Common Stock Dividends

On August 1, 2016, the Company’s board of directors declared a quarterly cash dividend of $0.1375 per share of common stock (equaling an annualized dividend rate of $0.55 per share) for the third quarter of 2016 to stockholders of record as of September 30, 2016, which was paid on October 17, 2016. An equivalent distribution by the Operating Partnership is applicable per OP unit.

Common Stock Repurchases

Under the General Partner’s Equity Plan (defined below), individuals have the option to have the General Partner repurchase shares vesting from awards made under the Equity Plan in order to satisfy the minimum federal and state tax withholding obligations. During the nine months ended September 30, 2016, the General Partner repurchased 424,726 shares to satisfy the federal and state tax withholding on behalf of employees.

Note 16 – Equity-based Compensation

Equity Plan

The General Partner has adopted an equity plan (the “Equity Plan”), which provides for the grant of stock options, stock appreciation rights, restricted shares of Common Stock (“Restricted Shares”), restricted stock units (“Restricted Stock Units”), dividend equivalent rights and other stock-based awards to the General Partner’s and its affiliates’ non-executive directors, officers and other employees and advisors or consultants who are providing services to the General Partner or its affiliates. To date, the General Partner has granted fully vested shares of Common Stock, Restricted Shares, Restricted Stock Units and Deferred Stock Units (defined below) under the Equity Plan. Restricted Shares provide for rights identical to those of Common Stock. Restricted Stock Units do not provide for any rights of a common stockholder prior to the vesting of such Restricted Stock Units. In accordance with U.S. GAAP, Restricted Shares are considered issued and outstanding. As is the case when fully vested shares of Common Stock are issued from the Equity Plan, for each Restricted Share awarded under the Equity Plan, the Operating Partnership issues a General Partner OP Unit to the General Partner with identical terms. Upon vesting of Restricted Stock Units, the Operating Partnership issues a General Partner OP Unit to the General Partner for each share of Common Stock issued as a result of such vesting.

The General Partner has authorized and reserved a total number of shares equal to 10.0% of the total number of issued and outstanding shares of Common Stock (on a fully diluted basis assuming the redemption of all OP Units for shares of Common Stock) to be issued at any time under the Equity Plan for equity incentive awards. As of September 30, 2016, the General Partner had cumulatively awarded under its Equity Plan approximately 4.1 million Restricted Shares, net of the forfeiture of 3.6 million Restricted Shares through that date, 3.4 million Restricted Stock Units, net of the forfeiture of 0.5 million Restricted Stock Units through that date, and 0.2 million Deferred Stock Units, collectively representing approximately 7.7 million shares of Common Stock. Accordingly, as of such date, approximately 92.1 million additional shares were available for future issuance.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2016 (Unaudited) – (Continued)

Restricted Shares

The Company has issued Restricted Shares to certain employees and non-executive directors beginning in 2011. In addition, the Company issued Restricted Shares to employees of affiliates of the Former Manager prior to 2015. The fair value of the Restricted Shares granted to employees under the Equity Plan is generally determined using the closing stock price on the grant date and is expensed over the requisite service period on a straight-line basis. The fair value of Restricted Shares granted to non-executive directors and employees of affiliates of the Former Manager under the Equity Plan was measured based upon the fair value of goods or services received or the equity instruments granted, whichever was more reliably determinable, and was expensed in full at the date of grant.

During the three and nine months ended September 30, 2016, the Company recorded $0.4 million and $1.3 million, respectively, of compensation expense related to the Restricted Shares, which is recorded in general and administrative expense in the accompanying consolidated statements of operations.

The following table details the activity of the Restricted Shares during the nine months ended September 30, 2016:

	Restricted Shares		Weighted-Average Grant Date Fair Value
Unvested shares, December 31, 2015	1,239,662		$	13.86
Vested	(434,004	)	$	14.19
Forfeited	(89,955	)	$	14.08
Unvested shares, September 30, 2016	715,703		$	13.64

Time-Based Restricted Stock Units

Under the Equity Plan, the Company may award Restricted Stock Units to employees that will vest if the recipient maintains his/her employment over the requisite service period (the “Time-Based Restricted Stock Units”). The fair value of the Time-Based Restricted Stock Units granted to employees under the Equity Plan is generally determined using the closing stock price on the grant date and is expensed over the requisite service period on a straight-line basis, which is generally three years. During the three and nine months ended September 30, 2016, the Company recorded $0.9 million and $2.5 million, respectively, of compensation expense related to the Time-Based Restricted Stock Units, which is recorded in general and administrative expense in the accompanying consolidated statements of operations.

Deferred Stock Units

The Company may award Deferred Stock Units to non-executive directors under the Equity Plan (the “Deferred Stock Units”). Each Deferred Stock Unit represents the right to receive one share of Common Stock. The Deferred Stock Units provide for immediate vesting on the grant date and will be settled with Common Stock either on the earlier of the date on which the respective director separates from the Company or the third anniversary of the grant date, or if granted pursuant to the director’s voluntary election to participate in the director’s deferred compensation program, on the date the director separates from the Company. The fair value of the Deferred Stock Units is determined using the closing stock price on the grant date and is expensed over the requisite service period or on the grant date for awards with no requisite service period. During the three and nine months ended September 30, 2016, the Company recorded $34,000 and $0.7 million of expense related to Deferred Stock Units, which is recorded in general and administrative expense in the accompanying consolidated statements of operations.

The following table details the activity of the Time-Based Restricted Stock Units and Deferred Stock Units during the nine months ended September 30, 2016.

	Time-Based Restricted Stock Units		Weighted-Average Grant Date Fair Value		Deferred Stock Units		Weighted-Average Grant Date Fair Value
Unvested units, December 31, 2015	589,138		$	9.61	—		$	—
Granted	736,427		7.82		79,208		9.18
Vested	(184,455	)	9.70		(79,208	)	9.18
Forfeited	(35,377	)	8.71		—		—
Unvested units, September 30, 2016	1,105,733		$	8.43	—		$	—

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VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2016 (Unaudited) – (Continued)

Market-Based Restricted Stock Units

During the year ended December 31, 2015, the General Partner awarded Restricted Stock Units to certain employees under the Equity Plan that were contingent upon the Common Stock reaching a certain market price (the “Market-Based Restricted Stock Units”). The Market-Based Restricted Stock Units were contingent upon the closing price of the Common Stock equaling or exceeding $10 per share for 20 consecutive trading days (the “Market Condition”) and the grantee’s continued employment as of such date on which the Market Condition was met. On July 28, 2016, 610,839 Market-Based Restricted Stock Units vested, of which 199,858 shares were withheld to cover grantees’ tax withholding obligations, resulting in 410,981 shares being issued.

The fair value and derived service period of the Market-Based Restricted Stock Units as of their grant date was determined using a Monte Carlo simulation, which took into account multiple input variables that determine the probability of satisfying the Market Condition. The method required the input of assumptions, including the future dividend yield and expected volatility of the Common Stock. Compensation expense was recognized on a straight-line basis over the derived service period regardless of whether the Market Condition was satisfied, provided that the requisite service condition had been achieved. The Market-Based Restricted Stock Units were fully expensed during the year ended December 31, 2015, however the Company recorded contra-expense due to the forfeiture of such awards. During the three and nine months ended September 30, 2016, the Company recorded contra-expense of $0.1 million and $0.8 million, respectively, related to forfeitures of the Market-Based Restricted Stock Units which is recorded in general and administrative expense in the accompanying consolidated statements of operations.

Long-Term Incentive Awards

The General Partner may award long-term incentive-based Restricted Stock Units (the “LTI Target Awards”) to employees under the Equity Plan. Vesting of the LTI Target Awards is based upon the General Partner’s level of achievement of total stockholder return (“TSR”), including both share price appreciation and Common Stock dividends, as measured equally against a market index and against a peer group generally over a three year period.

The fair value and derived service period of the LTI Target Awards as of their grant date is determined using a Monte Carlo simulation which takes into account multiple input variables that determine the probability of satisfying the required TSR, as outlined in the award agreements. This method requires the input of assumptions, including the future dividend yield, the expected volatility of the Common Stock and the expected volatility of the market index constituents and the peer group. Compensation expense is recognized on a straight-line basis over the derived service period regardless of whether the necessary TSR is attained, provided that the requisite service condition has been achieved. During the three and nine months ended September 30, 2016, the Company recorded $1.3 million and $3.3 million, respectively, of expense related to the LTI Target Awards, which is recorded in general and administrative expense in the accompanying consolidated statements of operations.

The following table details the activity of the unvested Market-Based Restricted Stock Units and the LTI Target Awards during the nine months ended September 30, 2016.

	Market-Based Restricted Stock Units		Weighted-Average Grant Date Fair Value		LTI Target Awards		Weighted-Average Grant Date Fair Value
Unvested units, December 31, 2015	704,804		$	8.58	731,448		$	11.38
Granted	—		—		855,471		7.14
Vested	(610,839	)	8.58		(3,362	)	11.77
Forfeited	(93,965	)	8.58		(52,109	)	11.24
Unvested units, September 30, 2016	—		$	—	1,531,448		$	9.01

Note 17 –Related Party Transactions and Arrangements

Cole Capital

Cole Capital is contractually responsible for managing the Cole REITs’ affairs on a day-to-day basis, identifying and making acquisitions and investments on the Cole REITs’ behalf, and recommending to the respective board of directors of each of the Cole REITs an approach for providing investors with liquidity. In addition, the Company distributes the shares of common stock for certain Cole 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 Cole REITs’ offerings and the investment, management and disposition of their respective assets, as applicable.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2016 (Unaudited) – (Continued)

Offering-Related Revenue

The Company generally receives a selling commission, dealer manager fee and/or a distribution and stockholder servicing fee based on the gross offering proceeds related to the sale of shares of the Cole REITs’ common stock in their primary offerings. The Company has reallowed 100% of selling commissions earned to participating broker-dealers. 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 issued 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 issued under the respective Cole REIT’s distribution reinvestment plan, under which the stockholders may elect to have distributions reinvested in additional shares.

All other organization and offering expenses associated with the sale of the Cole REITs’ common stock are paid for in advance by the Company and subject to reimbursement by the Cole REITs, up to certain limits in accordance with their respective advisory agreements and charters. As these costs are incurred, they are recorded as reimbursement revenue, up to the respective limit, and are included in offering-related revenues in the financial results for Cole Capital. Expenses paid on behalf of the Cole REITs in excess of these limits that are expected to be collected based on future estimated offering proceeds are recorded as program development costs, which are included in rent and tenant receivables and other assets, net in the accompanying consolidated balance sheets. The Company assesses the collectability of the program development costs, considering the offering period and historical and forecasted sales of shares under the Cole REITs’ respective offerings and reserves for any balances considered not collectible. Additional reserves are generally recorded if actual proceeds raised from the offerings and corresponding program development costs incurred differ from management’s assumptions. As of September 30, 2016 and December 31, 2015, the Company had organization and offering costs recorded as program development costs, included in rent and tenant receivables and other assets, net in the consolidated balance sheets, of $12.3 million and $12.9 million, respectively, which were net of reserves of $18.8 million and $34.8 million, respectively.

The following table shows the offering fee summary information for the Cole REITs as of September 30, 2016:

Program	Selling Commissions (1)	Dealer Manager Fees (2)		Annual Distribution and Stockholder Servicing Fee (2)
Open Programs (3)
CCPT V
Class A Shares	7%	2%		—%
Class T Shares (4)	3%	2%		0.8%	(5) (6)
INAV (7)
Wrap Class Shares	—%	0.55%	(6)	—%
Advisor Class Shares	up to 3.75%	0.55%	(6)	0.5%	(6)
Institutional Class Shares	—%	0.25%	(6)	—%
CCIT III (8)
Class A Shares	7%	2%		—%
Class T Shares	3%	2%		1%	(6)

_______________________________________________

(1) The Company reallowed 100% of selling commissions earned to participating broker-dealers during the three and nine months ended September 30, 2016 and 2015.

(2) The Company may reallow all or a portion of its dealer manager fee and/or a distribution and stockholder servicing fee to participating broker-dealers as a marketing and due diligence expense reimbursement.

(3) CCIT II closed its offering during the three months ended September 30, 2016. The program’s fee structure was similar to that of CCPT V.

(4) Commencing on April 29, 2016, CCPT V began offering Class T shares of common stock in addition to the class of shares of common stock previously offered (now referred to as Class A shares).

(5) Subsequent to September 30, 2016, the distribution and stockholder servicing fee was amended to be 1.0%.

(6) Fees are accrued daily in the amount of 1/365^th of a percentage of the estimated per share NAV and payable monthly in arrears. The maximum amount of the distribution and stockholder servicing fee with respect to sales of Class T shares is 4.0% of the gross offering proceeds for CCPT V and CCIT III.

(7) In connection with the INAV offering, the Company receives selling commissions, an asset-based dealer manager fee and/or an asset-based distribution and stockholder servicing fee, all based on the net asset value for each class of common stock.

(8) On September 22, 2016, the registration statement for the initial public offering of CCIT III was declared effective by the SEC, consisting of Class A shares of common stock and Class T shares of common stock.

46

VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2016 (Unaudited) – (Continued)

Transaction Service Revenue

The Company earns acquisition fees related to the acquisition, development or construction of properties on behalf of certain of the Cole 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 Cole REIT and other affiliates.

The following table shows the transaction-related fees for the Cole REITs and other real estate programs as of September 30, 2016:

Program	Acquisition Fees (1)	Disposition Fees	Performance Fees (2)	Financing Coordination Fee (3)
Open Programs
CCPT V	2%	1%	15%	—
INAV	—	—	—	—
CCIT III	2%	1%	15%	1%
Closed Programs
CCIT II	2%	1%	15%	—
CCPT IV	2%	1%	15%	—
Other Programs	Various	Various	Various	—

_______________________________________________

(1) Percent taken on gross purchase price.

(2) Performance fee paid only under the following circumstances: (i) if shares are listed on a national securities exchange; (ii) if the respective Cole REIT is sold or the assets are liquidated; or (iii) upon termination of the advisory agreement. In connection with such events, the performance fee will only be earned upon the return to investors of their net capital invested and a 6% annual cumulative, non-compounded return (8% in the case of CCIT II and CCPT IV).

(3) Financing coordination fee payable for services in connection with the origination, assumption, or refinancing for any debt (other than loans advanced by the Company) to acquire properties or make other permitted investments.

Management Service Revenue

The Company earns advisory and asset and property management fees from certain Cole REITs and other real estate programs. The Company may also be reimbursed for expenses incurred in providing advisory and asset and property management services, subject to certain limitations. In addition, the Company earns a performance fee relating to INAV for any year in which the total return on stockholders’ capital exceeds 6% per annum on a calendar year basis.

The following table shows the management fees for the Cole REITs as of September 30, 2016:

Program	Asset Management / Advisory Fees (1)	Performance Fees (2)
Open Programs
CCPT V	0.65% - 0.75%	—
INAV	0.90%	25%
CCIT III	0.65% - 0.75%	—
Closed Programs
CCIT II	0.65% - 0.75%	—
CCPT IV	0.65% - 0.75%	—
Other Programs	Various	—

_______________________________________________

(1)    Annualized fee based on the average monthly invested assets or net asset value, if available.

(2)    The performance fee is limited to 10% of the aggregate total return, for each class, for any individual year.

47

VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2016 (Unaudited) – (Continued)

The table below reflects the revenue earned from the Cole REITs (including closed programs, as applicable) and joint ventures for the three and nine months ended September 30, 2016 and 2015 (in thousands).

	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
Offering-related fees and reimbursements
Selling commissions (1)	$	5,008	$	3,328	$	18,112	$	8,345
Dealer manager and distribution fees (2)	2,237		1,258		7,292		3,143
Reimbursement revenue	2,300		1,264		7,446		2,995
Offering-related fees and reimbursements	9,545		5,850		32,850		14,483
Transaction service fees and reimbursements
Acquisition fees	2,813		6,233		8,273		14,913
Disposition fees (3)	—		—		—		4,350
Reimbursement revenues	686		403		2,024		1,594
Transaction service fees and reimbursements	3,499		6,636		10,297		20,857
Management fees and reimbursements
Asset and property management fees and leasing fees	53		108		159		332
Advisory and performance fee revenue	13,011		10,998		37,621		32,674
Reimbursement revenues	4,430		2,882		12,803		8,503
Management fees and reimbursements	17,494		13,988		50,583		41,509
Interest income on Affiliate Lines of Credit	—		306		308		967
Total related party revenues(4)	$	30,538	$	26,780	$	94,038	$	77,816

___________________________________

(1) The Company reallowed 100% of selling commissions earned to participating broker-dealers during the three and nine months ended September 30, 2016 and 2015.

(2) During the three and nine months ended September 30, 2016, the Company reallowed $0.9 million and $2.8 million, respectively, of dealer manager fees and/or distribution and stockholder servicing fees to participating broker dealers as a marketing and due diligence expense reimbursement. During the three and nine months ended September 30, 2015, the Company reallowed $0.6 million and $1.3 million, respectively, of such fees.

(3) The Company earned a disposition fee of $4.4 million on behalf of CCIT when CCIT merged with Select Income REIT on January 29, 2015.

(4) Total related party revenues excludes fees earned from 1031 real estate programs of $0.5 million and $1.1 million for the three and nine months ended September 30, 2016, respectively and fees earned from 1031 real estate programs of $1.1 million and $4.7 million for the three and nine months ended September 30, 2015, respectively.

Investment in the Cole REITs

As of September 30, 2016 and December 31, 2015, the Company owned aggregate equity investments of $6.1 million and $4.1 million, respectively, in the Cole REITs and other affiliated offerings. The Company accounts for these investments using the equity method of accounting which requires the investment to be initially recorded at cost and subsequently adjusted for the Company’s share of equity in the respective Cole REIT’s earnings and distributions. The Company records its proportionate share of net income from the Cole REITs in equity in income and gain on disposition of unconsolidated entities in the consolidated statements of operations. During the three and nine months ended September 30, 2016, the Company recognized $1,000 and $128,000 of net loss, respectively, from the Cole REITs. During the three and nine months ended September 30, 2015, the Company recognized $27,000 of net loss and $63,000 of net income, respectively, from the Cole REITs.

48

VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2016 (Unaudited) – (Continued)

The table below presents certain information related to the Company’s investments in the Cole REITs as of September 30, 2016 (carrying amount in thousands):

	September 30, 2016
Cole REIT	% of Outstanding Shares Owned	Carrying Amount of Investment
CCPT V	1.00%	$	1,448
INAV	0.09%	143
CCIT II	0.44%	1,299
CCIT III	100%	2,697
CCPT IV	0.01%	115
Funds not yet in offering	N/A	400
		$	6,102

Due to Affiliates

Due to affiliates, as reported in the accompanying consolidated balance sheets, was $0.2 million as of December 31, 2015, related to amounts due to the Cole REITs for expense reimbursements. As of September 30, 2016, there was no such balance due to affiliates.

Due from Affiliates

As of each of September 30, 2016 and December 31, 2015, $10.6 million was expected to be collected from affiliates, excluding balances from the Cole REITs’ lines of credit, discussed below, related to services provided by the Company and expenses subject to reimbursement by the Cole REITs in accordance with their respective advisory and property management agreements.

On September 23, 2016, the Company entered into a $30.0 million revolving line of credit (the “Subordinate Promissory Note”) with Cole Corporate Income Operating Partnership III, LP (“CCI III OP”), the operating partnership of CCIT III (the “Subordinate Promissory Note Agreement”) . The Subordinate Promissory Note bears variable interest rates of one-month LIBOR plus the Credit Facility Margin (as defined in the Subordinate Promissory Note Agreement), which ranges from 2.20% to 2.75%, plus 1.75% and matures on September 22, 2017. As of September 30, 2016, the Subordinate Promissory Note had an interest rate of 5.05% and $10.3 million was outstanding.

As of December 31, 2015, the Company had revolving line of credit agreements in place with CCIT II and CCPT V (the “Affiliate Lines of Credit”) that provided for maximum borrowings of $60.0 million to each of CCIT II and CCPT V and bore variable interest rates of one-month LIBOR plus 2.20%. As of December 31, 2015, there was $50.0 million outstanding on the Affiliate Lines of Credit. During the nine months ended September 30, 2016, the Affiliate Lines of Credit had matured and no amounts were outstanding as of September 30, 2016.

Note 18 – Net Income (Loss) Per Share/Unit

The General Partner’s unvested Restricted Shares contain non-forfeitable rights to dividends and are considered to be participating securities in accordance with U.S. GAAP and, therefore, are included in the computation of earnings per share under the two-class computation method. Under the two-class computation method, net losses are not allocated to participating securities unless the holder of the security has a contractual obligation to share in the losses. The unvested Restricted Shares are not allocated losses as the awards do not have a contractual obligation to share in losses of the General Partner. The two-class computation method is an earnings allocation formula that determines earnings per share for each class of shares of Common Stock and participating securities according to dividends declared (or accumulated) and participation rights in undistributed earnings.

49

VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2016 (Unaudited) – (Continued)

Net Income (Loss) Per Share

The following is a summary of the basic and diluted net loss per share computation for the General Partner for the three and nine months ended September 30, 2016 and 2015 (dollar amounts in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Net income (loss) attributable to the General Partner	$	29,495		$	7,529		$	(80,445	)	$	(128,963	)
Dividends to preferred shares and units	(17,973		)	(17,974		)	(53,919		)	(53,920		)
Net income (loss) available to the General Partner	11,522			(10,445		)	(134,364		)	(182,883		)
Earnings allocated to participating securities	(154		)	(217		)	(400		)	(222		)
Income attributable to limited partners	739			—			—			—
Net Income (loss) attributable to common stockholders and limited partners used in basic and diluted net income (loss) per share	$	12,107		$	(10,662	)	$	(134,764	)	$	(183,105	)
Weighted average number of common stock outstanding - basic	943,480,170			903,461,323			917,233,898			903,267,282
Effect of Limited Partner OP Units and dilutive securities	25,206,373			—			—			—
Weighted average number of common stock outstanding - diluted	968,686,543			903,461,323			917,233,898			903,267,282
Basic and diluted net income (loss) per share attributable to common stockholders and limited partners	$	0.01		$	(0.01	)	$	(0.15	)	$	(0.20	)

For the nine months ended September 30, 2016, diluted net loss per share attributable to common stockholders excludes approximately 0.9 million of unvested Restricted Shares and Restricted Stock Units and approximately 23.8 million OP Units as the effect would have been antidilutive.

For the three and nine months ended September 30, 2015, diluted net loss attributable to common stockholders excludes approximately 2.2 million and 2.3 million, respectively, of unvested Restricted Shares and Restricted Stock Units and approximately 23.8 million OP Units as the effect would have been antidilutive.

Net Income (Loss) Per Unit

The following is a summary of the basic and diluted net loss per unit attributable to common unitholders, which includes all common general partner unitholders and limited partner unitholders. The computation for the OP for the three and nine months ended September 30, 2016 and 2015 (dollar amounts in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Net income (loss) attributable to the Operating Partnership	$	30,234		$	7,737		$	(82,578	)	$	(132,458	)
Dividends to preferred units	(17,973		)	(17,974		)	(53,919		)	(53,920		)
Net income (loss) available to the Operating Partnership	12,261			(10,237		)	(136,497		)	(186,378		)
Earnings allocated to participating units	(154		)	(217		)	(400		)	(222		)
Net Income (loss) attributable to common unitholders used in basic and diluted net income (loss) per unit	$	12,107		$	(10,454	)	$	(136,897	)	$	(186,600	)
Weighted average number of common units outstanding - basic	967,237,921			927,225,120			940,995,665			927,031,079
Effect of dilutive securities	1,448,622			—			—			—
Weighted average number of common units outstanding - diluted	968,686,543			927,225,120			940,995,665			927,031,079
Basic and diluted net income (loss) per unit attributable to common unitholders	$	0.01		$	(0.01	)	$	(0.15	)	$	(0.20	)

For the nine months ended September 30, 2016, diluted net loss per unit attributable to common unitholders excludes approximately 0.9 million of unvested Restricted Shares and Restricted Stock Units as the effect would have been antidilutive.

For the three and nine months ended September 30, 2015, diluted net loss attributable to common unitholders excludes approximately 2.2 million and 2.3 million, respectively, of unvested Restricted Shares and Restricted Stock Units as the effect would have been antidilutive.

50

VEREIT, INC. and VEREIT OPERATING PARTNERSHIP, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2016 (Unaudited) – (Continued)

Note 19 – Income Taxes

As a REIT, the General Partner generally is not subject to federal income tax, with the exception of its TRS entities. However, the General Partner, including its TRS entities, and the Operating Partnership are still subject to certain state and local income and franchise taxes in the various jurisdictions in which they operate.

Cole Capital Income Taxes

Based on the above, Cole Capital’s business, substantially all of which is conducted through a TRS, recognized a provision of$0.1 million and a benefit of$3.3 million for the three and nine months ended September 30, 2016, respectively, which are included in provision for income taxes in the accompanying consolidated statements of operations. A benefit of$0.7 million and $2.4 million was recognized for the three and nine months ended September 30, 2015, respectively.

REI Income Taxes

The REI segment recognized a provision of$1.5 million and $4.7 million for the three and nine months ended September 30, 2016, respectively, and a provision of$2.2 million and $7.2 million for the three and nine months ended September 30, 2015, respectively, which are included in provision for income taxes in the accompanying consolidated statements of operations.

The Company had no unrecognized tax benefits as of or during the nine months ended September 30, 2016 and 2015. Any interest and penalties related to unrecognized tax benefits would be recognized in provision for income taxes in the accompanying consolidated statements of operations. The Company files income tax returns in the U.S. federal jurisdiction, Canadian federal jurisdiction and various state and local jurisdictions, and is subject to routine examinations by the respective tax authorities. With few exceptions, the Company is no longer subject to federal or state examinations by tax authorities for years before 2011.

Note 20 – Subsequent Events

The following events occurred subsequent to September 30, 2016:

Real Estate Investment Activity

From October 1, 2016 through October 28, 2016, the Company sold nine properties for an aggregate gross sales price of $57.2 million, of which our share was $54.8 million and an estimated gain of $3.0 million.

Common Stock Dividend

On November 1, 2016, the Company’s board of directors declared a quarterly cash dividend of $0.1375 per share of common stock (equaling an annualized dividend rate of $0.55 per share) for the fourth quarter of 2016 to stockholders of record as of December 30, 2016, which will be paid on January 17, 2017. An equivalent distribution by the Operating Partnership is applicable per OP unit.

Preferred Stock Dividend

On November 1, 2016, the Company’s board of directors declared a monthly cash dividend to holders of the Series F Preferred Stock for January 2017 through March 2017 in respect to the periods included in the table below. The corresponding record and payment dates for each month's Series F Preferred Stock dividend are also shown in the table below.  The dividend for the Series F Preferred Stock accrues daily on a 360-day annual basis equal to an annualized dividend rate of $1.675 per share, or $0.1395833 per 30-day month.

Period	Record Date	Payment Date
December 15, 2016 - January 14, 2017	January 1, 2017	January 17, 2017
January 15, 2017 - February 14, 2017	February 1, 2017	February 15, 2017
February 15, 2017 - March 14, 2017	March 1, 2017	March 15, 2017

51

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis should be read in conjunction with the accompanying consolidated financial statements and notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q. We make statements in this section that are forward-looking statements within the meaning of the federal securities laws. Certain risks may cause our actual results, performance or achievements to differ materially from those expressed or implied by the following discussion. For a complete discussion of such risk factors, see the Company’s Annual Report on Form 10-K for the year ended December 31, 2015. Capitalized terms used herein, but not otherwise defined, shall have the meaning ascribed to those terms in the “Part I – Financial Information,” including the notes to the consolidated financial statements contained therein.

Forward-Looking Statements

This Quarterly Report on Form 10-Q includes “forward-looking statements” (within the meaning of the federal securities laws, Section 27A of the Securities Act, and Section 21E of the Exchange Act of 1934, as amended (the “Exchange Act”)) that reflect our expectations and projections about our future results, performance, prospects and opportunities. We have attempted to identify these forward-looking statements by the use of words such as “may,” “will,” “seek,” “expects,” “anticipates,” “believes,” “targets,” “intends,” “should,” “estimates,” “could,” “continue,” “assume,” “projects,” “plans” or similar expressions. These forward-looking statements are based on information currently available to us and are subject to a number of known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. These factors include, among other things, those discussed below. We intend for all such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act and Section 21E of the Exchange Act, as applicable by law. We do not undertake publicly to update or revise any forward-looking statements, whether as a result of changes in underlying assumptions or new information, future events or otherwise, except as may be required to satisfy our obligations under federal securities law.

The following are some, but not all, of the assumptions, risks, uncertainties and other factors that could cause our actual results to differ materially from those presented in our forward-looking statements:

• We may be unable to renew leases, lease vacant space or re-lease space as leases expire on favorable terms or at all.

• We are subject to risks associated with tenant, geographic and industry concentrations with respect to our properties.

• Our properties, goodwill and intangible assets and other assets may be subject to impairment charges.

• We could be subject to unexpected costs or unexpected liabilities that may arise from potential dispositions and may be unable to dispose of properties on advantageous terms.

• We are subject to competition in the acquisition and disposition of properties and in the leasing of our properties and we may be unable to acquire, dispose of, or lease properties on advantageous terms.

• We could be subject to risks associated with bankruptcies or insolvencies of tenants or from tenant defaults generally.

• We may be affected by risks associated with pending government investigations relating to the findings of the Audit Committee Investigation and related litigation.

• We have substantial indebtedness, which may affect our ability to pay dividends, and expose us to interest rate fluctuation risk and the risk of default under our debt obligations.

• Our overall borrowing and operating flexibility may be adversely affected by the terms and restrictions within the indenture governing the Senior Notes, and the terms of the Credit Facility.

• Our access to capital and terms of future financings may be affected by adverse changes to our credit rating.

• We may be affected by the incurrence of additional secured or unsecured debt.

• We may not be able to achieve and maintain profitability.

• We may not generate cash flows sufficient to pay our dividends to stockholders or meet our debt service obligations.

• We may be affected by risks resulting from losses in excess of insured limits.

• We may fail to remain qualified as a REIT for U.S. federal income tax purposes.

• Compliance with the REIT annual distribution requirements may limit our operating flexibility.

• We may be unable to fully reestablish the financial network which previously supported Cole Capital^® and its Cole REITs and/or regain the prior level of transaction and capital raising volume of Cole Capital.

• Our Cole Capital operations are subject to extensive governmental regulation.

• We are subject to conflicts of interest relating to Cole Capital’s investment management business.

• We may be unable to retain or hire key personnel.

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All forward-looking statements should be read in light of the risks identified in Part I, Item 1A. Risk Factors within our Annual Report on Form 10-K for the year ended December 31, 2015.

We use certain defined terms throughout this Quarterly Report on Form 10-Q that have the following meanings:

When we refer to “annualized rental income,” we mean the rental revenue under our leases on operating properties owned at the respective reporting date on a straight-line basis, which includes the effect of rent escalations and any tenant concessions, such as free rent, and excludes any bad debt allowances and any contingent rent, such as percentage rent. Management uses annualized rental income as a basis for tenant, industry and geographic concentrations and other metrics within the portfolio. Annualized rental income is not indicative of future performance.

When we refer to a “creditworthy tenant,” we mean a tenant that has entered into a lease that we determine is creditworthy and may include tenants with an investment grade or below investment grade credit rating, as determined by major credit rating agencies, or unrated tenants. To the extent we determine that a tenant is a “creditworthy tenant” even though it does not have an investment grade credit rating, we do so based on our management’s determination that a tenant should have the financial wherewithal to honor its obligations under its lease with us. As explained further below, this determination is based on our management’s substantial experience performing credit analysis and is made after evaluating all of a tenant’s due diligence materials that are made available to us, including financial statements and operating data.

When we refer to a “direct financing lease,” we mean a lease that requires specific treatment due to the significance of the lease payments from the inception of the lease compared to the fair value of the property, term of the lease, a transfer of ownership, or a bargain purchase option. These leases are recorded as a net asset on the balance sheet. The amount recorded is calculated as the fair value of the remaining lease payments on the leases and the estimated fair value of any expected residual property value at the end of the lease term.

When we refer to properties that are net leased on a “long term basis,” we mean properties with remaining primary lease terms of generally seven to 10 years or longer on average, depending on property type.

Under a “net lease,” the tenant occupying the leased property (usually as a single tenant) does so in much the same manner as if the tenant were the owner of the property. There are various forms of net leases, most typically classified as triple net or double net. Triple net leases typically require the tenant pay all expenses associated with the property (e.g., real estate taxes, insurance, maintenance and repairs). Double net leases typically require that the tenant pay all operating expenses associated with the property (e.g., real estate taxes, insurance and maintenance), but excludes some or all major repairs (e.g., roof, structure and parking lot). Accordingly, the owner receives the rent “net” of these expenses, rendering the cash flow associated with the lease predictable for the term of the lease. Under a net lease, the tenant generally agrees to lease the property for a significant term and agrees that it will either have no ability or only limited ability to terminate the lease or abate rent prior to the expiration of the term of the lease as a result of real estate driven events such as casualty, condemnation or failure by the landlord to fulfill its obligations under the lease.

Overview

We are a full-service real estate operating company that operates through two business segments, our real estate investment segment, REI, and our investment management segment, Cole Capital, as further discussed in “Note 3 –Segment Reporting” to our consolidated financial statements. Through our REI segment, we own and actively manage a diversified portfolio of 4,213 retail, restaurant, office and industrial real estate properties with an aggregate of 96.9 million square feet, of which 98.0% was leased as of September 30, 2016, with a weighted-average remaining lease term of 10.0 years. Through our Cole Capital segment, we are responsible for raising capital for and managing the affairs of the Cole REITs on a day-to-day basis, identifying and making acquisitions and investments on behalf of the Cole REITs, and recommending to the respective board of directors of each of the Cole REITs an approach for providing investors with liquidity. Cole Capital receives compensation and reimbursement for performing these services. As of September 30, 2016, the Cole REITs and other real estate programs’ assets under management were $7.1 billion.

We seek to lease space and/or acquire properties leased to creditworthy tenants that meet our underwriting and operating guidelines. Prior to entering into any transaction, our corporate credit analysis and underwriting professionals conduct a review of a tenant’s credit quality. In addition, we consistently monitor the credit quality of our portfolio by actively reviewing the creditworthiness of certain tenants, focusing primarily on those tenants representing the greatest concentration of our portfolio. This review primarily includes an analysis of the tenant’s financial statements either quarterly, or as frequently as the lease permits. We also consider tenant credit quality when assessing our portfolio for strategic dispositions. When we assess tenant credit quality, we: (i) review relevant financial information, including financial ratios, net worth, revenue, cash flows, leverage and liquidity; (ii) evaluate the depth and experience of the tenant’s management team; and (iii) assess the strength/growth of the tenant’s industry. On an on-going basis, we evaluate the need for an allowance for doubtful accounts arising from estimated losses that could result

53

from the tenant’s inability to make required current rent payments and an allowance against accrued rental income for future potential losses that we deem to be unrecoverable over the term of the lease. The factors considered in determining the credit risk of our tenants include, but are not limited to: payment history; credit status and change in status (credit ratings for public companies are used as a primary metric); change in tenant space needs (i.e., expansion/downsize); tenant financial performance; economic conditions in a specific geographic region; and industry specific credit considerations. We are of the opinion that the credit risk of our portfolio is largely mitigated by the high quality of our existing tenant base, reviews of prospective tenants’ risk profiles prior to lease execution and consistent monitoring of our portfolio to identify potential problem tenants.

Operating Highlights and Key Performance Indicators

2016 Activity

• Disposed of 223 properties and one property owned by an unconsolidated joint venture for an aggregate sales price of $786.0 million, of which our share was $748.6 million, resulting in consolidated proceeds of $615.2 million after closing costs, $55.0 million of debt assumptions and $57.0 million of debt repayments by the unconsolidated joint venture.

• Closed on a public offering to sell 69.0 million shares of Common Stock for net proceeds, after underwriting discounts and offering costs, of $702.5 million.

• Registered a continuous offering program allowing for the issuance of up to $750.0 million in shares of Common Stock over three years.

• Closed 2016 Bond Offering of $1.0 billion and entered into a $300.0 million 2016 Term Loan, which was subsequently repaid.

• Total debt decreased by $1.5 billion, from $8.1 billion to $6.6 billion, comprised of unsecured bonds of $0.3 billion, unsecured Credit Facility of $1.0 billion, and secured debt of $0.2 billion.

• Declared a quarterly dividend of $0.1375 per share of common stock for the fourth quarter of 2016, representing an annualized dividend rate of $0.55 per share.

Real Estate Portfolio Metrics

In managing our portfolio, we are committed to diversification by property type, tenant, geography and industry. Below is a summary of our property type diversification and our top ten concentrations as of September 30, 2016, based on annualized rental income of $1.2 billion.

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Our financial performance is influenced by the timing of acquisitions and dispositions and the operating performance of our real estate properties. The following table shows the property statistics of our real estate assets, excluding properties owned through our unconsolidated joint ventures as of September 30, 2016 and 2015:

	September 30, 2016	September 30, 2015
Portfolio Metrics
Properties owned	4,213	4,572
Rentable square feet (in millions)	96.9	100.9
Economic occupancy rate (1)	98.0%	98.3%
Investment-grade tenants (2)	41.5%	43.5%

____________________________________

(1) Economic occupancy rate equals the sum of square feet leased (including space subject to month-to-month agreements) divided by total square feet.

(2) Investment-grade tenants are those with a credit rating of BBB- or higher by Standard & Poor’s Rating Services or a credit rating of Baa3 or higher by Moody’s Investor Service, Inc. The ratings may reflect those assigned by Standard & Poor’s Rating Services or Moody’s Investor Service, Inc. to the lease guarantor or the parent company, as applicable.

The following table shows the economic metrics of our real estate assets, excluding properties owned through our unconsolidated joint ventures, as of September 30, 2016 and 2015:

	September 30, 2016	September 30, 2015
Economic Metrics
Weighted-average lease term (in years) (1)	10.0	11.1
Lease rollover (1)(2):
Annual average	4.0%	3.4%
Maximum for a single year	5.5%	4.3%

____________________________________

(1) Based on annualized rental income of our real estate portfolio as of September 30, 2016.

(2) Through the end of the next five years as of the respective reporting date.

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Operating Performance

In addition, management uses the following financial metrics of our business segments to assess our operating performance (dollar amounts in thousands, except per share amounts).

	Three Months Ended September 30,					Nine Months Ended September 30,
	2016		2015			2016			2015
Financial Metrics
REI Segment
Revenues	$	331,846	$	357,408		$	1,008,166		$	1,091,074
Operating income	$	85,468	$	99,730		$	109,292		$	195,778
Net income (loss)	$	30,006	$	8,740		$	(83,361	)	$	(130,134	)
Funds from operations (“FFO”) attributable to common stockholders and limited partners (1)	$	179,232	$	192,161		$	559,115		$	581,670
Adjusted funds from operations (“AFFO”) attributable to common stockholders and limited partners (1)	$	182,371	$	191,419		$	545,498		$	581,862
AFFO attributable to common stockholders and limited partners per diluted share (1)	$	0.19	$	0.21		$	0.58		$	0.63
Cole Capital Segment
Revenues	$	31,069	$	27,546		$	94,788		$	81,569
Operating income (loss)	$	204	$	(1,802	)	$	(3,150	)	$	(5,590	)
Net income (loss)	$	240	$	(599	)	$	760		$	(1,127	)
FFO attributable to common stockholders and limited partners (1)	$	240	$	(599	)	$	760		$	(1,127	)
AFFO attributable to common stockholders and limited partners (1)	$	15,737	$	5,009		$	25,392		$	17,039
AFFO attributable to common stockholders and limited partners per diluted share (1)	$	0.02	$	0.01		$	0.03		$	0.02
Consolidated
Revenues	$	362,915	$	384,954		$	1,102,954		$	1,172,643
Operating income	$	85,672	$	97,928		$	106,142		$	190,188
Net income (loss)	$	30,246	$	8,141		$	(82,601	)	$	(131,261	)
FFO attributable to common stockholders and limited partners (1)	$	179,472	$	191,562		$	559,875		$	580,543
AFFO attributable to common stockholders and limited partners (1)	$	198,108	$	196,428		$	570,890		$	598,901
Net income (loss) attributable to common stockholders per diluted share (2)	$	0.01	$	(0.01	)	$	(0.15	)	$	(0.20	)
AFFO attributable to common stockholders and limited partners per diluted share (1)	$	0.20	$	0.21		$	0.61		$	0.64

____________________________________

(1) See the “Non-GAAP Measures” section below for descriptions of our non-GAAP measures and reconciliations to the most comparable U.S. GAAP measure.

(2) See “Note 18 – Net Income (Loss) Per Share/Unit” for calculation of net loss per share.

The following table presents the total assets of the Company, by segment (in thousands):

	Total Assets
	September 30, 2016		December 31, 2015
REI segment	$	15,668,974	$	16,966,729
Cole Capital segment	388,846		439,137
Total	$	16,057,820	$	17,405,866

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Results of Operations

Revenues

The table below sets forth, for the periods presented, certain revenue information and the dollar amount change year over year (dollar amounts in thousands):

	Three Months Ended September 30,							Nine Months Ended September 30,
	2016		2015		2016 vs 2015 Increase/(Decrease)			2016		2015		2016 vs 2015 Increase/(Decrease)
Revenues:
Rental income	$	303,383	$	333,766	$	(30,383	)	$	928,706	$	1,017,708	$	(89,002	)
Direct financing lease income	494		659		(165		)	1,598		2,097		(499		)
Operating expense reimbursements	27,969		22,983		4,986			77,862		71,269		6,593
Cole Capital revenue:
Offering-related fees and reimbursements	9,545		5,850		3,695			32,850		14,483		18,367
Transaction service fees and reimbursements	3,779		7,400		(3,621		)	10,639		24,696		(14,057		)
Management fees and reimbursements	17,745		14,296		3,449			51,299		42,390		8,909
Total Cole Capital revenue	31,069		27,546		3,523			94,788		81,569		13,219
Total revenues	$	362,915	$	384,954	$	(22,039	)	$	1,102,954	$	1,172,643	$	(69,689	)

Rental Income

The decrease of $30.4 million and $89.0 million during the three and nine months ended September 30, 2016, respectively, as compared to the same periods in 2015 was primarily due to the disposition of 451 consolidated properties subsequent to January 1, 2015 and an increase in tenant vacancies, particularly Ovation Brands, Inc., which filed for chapter 11 bankruptcy on March 7, 2016.

Cole Capital Revenue

Cole Capital’s results of operations are primarily impacted by capital raised on behalf of the Cole REITs in offerings as well as the timing and extent of real estate asset acquisitions, dispositions and assets under management, which are driven by the Cole REITs’ capital raised, cash flows provided by operations and available proceeds from debt financing.

Offering-Related Fees and Reimbursements

Offering-related fees and reimbursementsinclude selling commissions, dealer manager fees and/or distribution and stockholder servicing fees earned from selling securities in the Cole REITs. The Company reallows 100% of selling commissions and may reallow all or a portion of our dealer manager and distribution and stockholder servicing fees to 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. The following table represents offering-related fees and reimbursements as well as amounts reallowed during the three and nine months ended September 30, 2016 and 2015 (in thousands).

	Three Months Ended September 30,						Nine Months Ended September 30,
	2016		2015		2016 vs 2015 Increase/(Decrease)		2016		2015		2016 vs 2015 Increase/(Decrease)
Offering-related fees and commissions	$	7,245	$	4,586	$	2,659	$	25,404	$	11,488	$	13,916
Offering-related reimbursements	2,300		1,264		1,036		7,446		2,995		4,451
Less: reallowed fees and commissions	5,897		3,896		2,001		20,940		9,637		11,303
Offering-related fees and reimbursements, net of reallowed	$	3,648	$	1,954	$	1,694	$	11,910	$	4,846	$	7,064

The increase in offering-related fees and reimbursements, net of reallowed fees and commissions of $1.7 million and $7.1 million during the three and nine months ended September 30, 2016 was a direct result of a $69.8 million and $265.1 million increase in capital raise, respectively, from $66.6 million to $136.4 million and from $154.6 million to $419.7 million, respectively, as compared to the same periods in 2015, during which time certain selling agreements for the Cole REITs in their offering stages were suspended, as a result of the Audit Committee Investigation, defined in “Note 2 –Summary of Significant Accounting Policies” to our consolidated financial statements. The increase in capital raise was due to new broker-dealer relationships, as well as certain broker-dealers lifting the suspension of their selling agreements.

57

Transaction Service Fees and Reimbursements

Transaction service fees and reimbursementrevenue consist primarily of acquisition and disposition fees earned from acquiring and selling properties on behalf of the Cole REITs and other real estate programs. The decrease of $3.6 million and $14.1 million during the three and nine months ended September 30, 2016, respectively, was primarily due to a decrease in property acquisitions from $315.3 million during the three months ended September 30, 2015 to $173.9 million during the three months ended September 30, 2016 and a decrease from $755.8 million in property acquisitions during the nine months ended September 30, 2015 as compared to $487.1 million for the nine months ended September 30, 2016.

Management Fees and Reimbursements

Management fees and reimbursementrevenue represents advisory, asset and property management fees for operating, leasing and managing the portfolios of the Cole REITs and other real estate programs. The increase of $3.4 million for the three months ended September 30, 2016 as compared to the same period in 2015 is primarily due to an increase in the average assets under management from $6.4 billion for the three months ended September 30, 2015 to $7.1 billion for the three months ended September 30, 2016 and an increase in reimbursement revenue of $1.5 million for the three months ended September 30, 2016 as compared to the same period in 2015.

The increase of $8.9 million for the nine months ended September 30, 2016 as compared to the same period in 2015 is primarily due to an increase in the average assets under management, excluding assets owned by CCIT, as CCIT merged with Select Income REIT on January 29, 2015, from $6.2 billion for the nine months ended September 30, 2015 to $6.9 billion for the nine months ended September 30, 2016 and an increase in reimbursement revenue of $4.3 million for the nine months ended September 30, 2016 as compared to the same period in 2015.

Operating Expenses

The table below sets forth, for the periods presented, certain operating expense information and the dollar amount change year over year (dollar amounts in thousands):

	Three Months Ended September 30,							Nine Months Ended September 30,
	2016		2015		2016 vs 2015 Increase/(Decrease)			2016		2015		2016 vs 2015 Increase/(Decrease)
Operating expenses:
Cole Capital reallowed fees and commissions	$	5,897	$	3,896	$	2,001		$	20,940	$	9,637	$	11,303
Acquisition related expenses	90		1,764		(1,674		)	373		5,509		(5,136		)
Litigation and other non-routine costs, net of insurance recoveries	4,630		8,032		(3,402		)	2,372		41,319		(38,947		)
Property operating expenses	34,820		31,950		2,870			107,832		95,547		12,285
General and administrative expenses	29,761		32,842		(3,081		)	92,255		99,906		(7,651		)
Depreciation and amortization expenses	195,173		208,542		(13,369		)	596,826		645,196		(48,370		)
Impairments	6,872		—		6,872			176,214		85,341		90,873
Total operating expenses	$	277,243	$	287,026	$	(9,783	)	$	996,812	$	982,455	$	14,357

Acquisition Related Expenses

Acquisition related expenses primarily consisted of legal, deed transfer and other costs related to real estate purchase transactions, including costs incurred for deals that were not consummated. The Company acquired an interest in one commercial property for a purchase price of $20.0 million during the nine months ended September 30, 2016 as compared with the acquisition of 14 properties for an aggregate purchase price of $10.2 million during the nine months ended September 30, 2015. The decrease in acquisition related expenses of $1.7 million and $5.1 million during the three and nine months ended September 30, 2016, respectively, as compared to the same periods in 2015 is due to a decrease in costs incurred for deals that were not consummated and lower acquisition volume in 2016.

Litigation and Other Non-Routine Costs, Net of Insurance Recoveries

The decrease of $3.4 million and $38.9 million during the three and nine months ended September 30, 2016, respectively, as compared to the same periods in 2015 was primarily due to a decrease in legal fees incurred related to the Audit Committee Investigation and related litigation and investigations. Additionally, the Company recognized insurance recoveries of $11.2 million during the nine months ended September 30, 2016 as compared to the same period in 2015 in which the Company recognized $0.9

58

million of insurance recoveries, as discussed in “Note 2 –Summary of Significant Accounting Policies” to our consolidated financial statements.

Property Operating Expenses and Operating Expense Reimbursement

The table below sets forth, for the periods presented, the property operating expenses, net of operating expense reimbursements, and the dollar amount change year over year (dollar amounts in thousands):

	Three Months Ended September 30,							Nine Months Ended September 30,
	2016		2015		2016 vs 2015 Increase/(Decrease)			2016		2015		2016 vs 2015 Increase/(Decrease)
Property operating expenses	$	34,820	$	31,950	$	2,870		$	107,832	$	95,547	$	12,285
Less: Operating expense reimbursements	27,969		22,983		4,986			77,862		71,269		6,593
Property operating expenses, net of operating expense reimbursements	$	6,851	$	8,967	$	(2,116	)	$	29,970	$	24,278	$	5,692

Property operating expenses such as taxes, insurance, ground rent and maintenance include both reimbursable and non-reimbursable property expenses. Operating expense reimbursement revenue represents reimbursements for such costs that are reimbursable by the tenants per their respective leases. The decrease in net property operating expenses of $2.1 million during the three months ended September 30, 2016 as compared to the same period in 2015 was due to the disposition of vacant properties and certain properties subject to double-net or modified gross leases and an increase in reimbursable property expenses as a percentage of total expenses, offset by an increase in tenant vacancies. The net increase of $5.7 million during the nine months ended September 30, 2016 as compared to the same period in 2015 was primarily due to an increase in tenant vacancies.

General and Administrative Expenses

The decrease of $3.1 million during the three months ended September 30, 2016 as compared to the same period in 2015 was primarily due to a decrease in consulting and other professional fees of $2.5 million, equity-based compensation of $1.4 million, and fees for legal and accounting services of $1.4 million. These decreases were partially offset by an increase to the reserve related to the collectability of program development costs of $2.5 million.

The decrease of $7.7 million during the nine months ended September 30, 2016 as compared to the same period in 2015 was primarily due to a decrease of $7.4 million in consulting and other professional fees in 2016 as well as a decrease in equity-based compensation of $3.1 million primarily due to certain awards which were fully expensed during 2015. Additionally, accounting fees decreased $1.8 million and legal fees decreased $1.5 million during the nine months ended September 30, 2016 as compared to the same period in 2015, primarily due to the work performed during the first quarter of 2015 in connection with the restatements. These decreases were partially offset by an increase in the amount reserved related to the collectability of program development costs of $6.6 million during the nine months ended September 30, 2016 as compared to the same period in 2015.

Depreciation and Amortization Expenses

The decrease of $13.4 million and $48.4 million during the three and nine months ended September 30, 2016, respectively, as compared to the same periods in 2015 primarily related to the disposition of 451 consolidated properties subsequent to January 1, 2015. The Company also recorded $176.2 million and $85.3 million of impairment charges, respectively, on real estate investments during the nine months ended September 30, 2016 and 2015, which reduced the carrying value being depreciated and amortized.

Impairments

The Company recorded impairment charges of $6.9 million related to seven properties during the three months ended September 30, 2016. There were no impairments of real estate properties during the three months ended September 30, 2015.

The increase in impairments of $90.9 million during the nine months ended September 30, 2016 as compared to the same period in 2015 was primarily due to management identifying certain properties for potential sale as part of its portfolio management strategy to reduce exposure to office properties, as well as a tenant of 59 restaurant properties filing for bankruptcy during the first quarter of 2016.

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Other (Expense) Income and Income Tax Provision

The table below sets forth, for the periods presented, certain financial information and the dollar amount change year over year (dollar amounts in thousands):

	Three Months Ended September 30,									Nine Months Ended September 30,
	2016			2015			2016 vs 2015 Increase/(Decrease)			2016			2015			2016 vs 2015 Increase/(Decrease)
Other (expense) income and tax benefit (provision):
Interest expense	$	(79,869	)	$	(89,530	)	$	(9,661	)	$	(242,763	)	$	(275,801	)	$	(33,038	)
(Loss) gain on extinguishment and forgiveness of debt, net	(2,003		)	—			(2,003		)	(1,751		)	5,302			(7,053		)
Other income, net	1,744			2,368			(624		)	4,022			10,255			(6,233		)
Equity in income and gain on disposition of unconsolidated entities	212			6,837			(6,625		)	10,686			8,340			2,346
Loss on derivative instruments, net	(2,023		)	(1,420		)	(603		)	(3,286		)	(2,137		)	(1,149		)
Gain (loss) on disposition of real estate, net	28,111			(6,542		)	34,653			45,723			(62,584		)	108,307
Provision for income taxes	(1,598		)	(1,500		)	98			(1,374		)	(4,824		)	(3,450		)

Interest Expense

The decrease of $9.7 million and $33.0 million during the three and nine months ended September 30, 2016 as compared to the same periods in 2015 was primarily a result of a decrease in the total outstanding debt balance from $8.9 billion as of September 30, 2015 to $6.6 billion as of September 30, 2016, largely due to the repayment of all outstanding borrowings under the revolving credit facility, repayment of $0.5 billion of the Credit Facility Term Loan, as well as reducing secured debt with proceeds from the public equity offering and property dispositions.

(Loss) Gain on Extinguishment and Forgiveness of Debt, Net

During the three and nine months ended September 30, 2016, the Company recorded a loss of $2.0 million and $1.8 million, respectively, in relation to the write-off of deferred financing costs and net premiums consisting of losses relating to the early extinguishment of our 2017 Senior Notes of $13.2 million, the prepayment of a portion of the Credit Facility Term Loan of $4.3 million as well as the 2016 Term Loan of $2.6 million and the repayment of mortgage loans payable prior to maturity of $0.6 million, as discussed in “Note 10 –Debt” to our consolidated financial statements. These losses were partially offset by a gain on forgiveness of debt of $19.1 million related to a property foreclosed upon.

During the nine months ended September 30, 2015, the Company recorded a gain of $5.3 million which primarily related to a gain on forgiveness of debt of $4.9 million as a result of the foreclosure of the office building in Bethesda, Maryland as discussed in “Note 10 –Debt” to our consolidated financial statements. The Company also wrote off $0.4 million of deferred financing costs and net premiums during the nine months ended September 30, 2015. No such amounts were recorded during the three months ended September 30, 2015.

Other Income, Net

The decrease of $0.6 million during the three months ended September 30, 2016 as compared to the same period in 2015 was primarily a result of lower interest income relating to investment securities, including CMBS and mortgage notes receivable, which is partially attributable to a mortgage note and two CMBS reaching maturity and being paid in full subsequent to December 31, 2015.

Other income, net decreased$6.2 million during the nine months ended September 30, 2016 as compared to the same period in 2015. During the nine months ended September 30, 2015, the Company determined certain accrued liabilities recorded in connection with mergers and large portfolio acquisitions completed in 2013 and 2014 were no longer obligations of the Company.  The Company also recorded post-closing adjustments during the nine months ended September 30, 2016 related to a multi-tenant asset portfolio sale completed in 2014. Interest income relating to investment securities was also lower in 2016 as compared to 2015.

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Equity in Income and Gain on Disposition of Unconsolidated Entities

The decrease of $6.6 million during the three months ended September 30, 2016 as compared to the same period in 2015 is primarily the result of the disposition of two unconsolidated joint ventures owning four properties on or after June 30, 2015.

The increase of $2.3 million during the nine months ended September 30, 2016 as compared to the same period in 2015 is primarily due to a gain of $10.2 million related to the disposition of one property owned by an unconsolidated joint venture during the nine months ended September 30, 2016 as compared to a gain of $6.7 million recorded during the nine months ended September 30, 2015 related to the disposition of our interest in one consolidated joint venture.

Loss on Derivative Instruments, Net

The decrease during the three and nine months ended September 30, 2016, is due to the termination of two interest rate swaps in connection with the early repayment of a portion of the Credit Facility Term Loan, as discussed in “Note 10 –Debt” to our consolidated financial statements, which resulted in a loss of $3.3 million, offset by an increase in the fair value of the Company’s interest rate swaps.

Gain (Loss) on Disposition of Real Estate, Net

During the three months ended September 30, 2016, the change of $34.7 million from a $6.5 million loss on dispositions of real estate, net to a $28.1 million gain as compared to the same period in 2015, is due to the Company’s disposition of 78 properties for an aggregate sales price of $291.2 million, which resulted in a gain of $28.5 million. During the same period in 2015, the Company’s loss primarily related to the disposal of a portfolio of 68 CVS properties.

During the nine months ended September 30, 2016, the change of $108.3 million from a loss on dispositions of real estate, net to a gain as compared to the same period in 2015, is due to the Company’s disposition of 223 properties for an aggregate sales price of $672.5 million, which resulted in an aggregate gain of $50.7 million, as compared to the disposal of 88 properties for an aggregate sales price of $675.9 million during the same period in 2015 for a loss of $39.3 million. During the nine months ended September 30, 2016, the Company also recorded a loss of $5.0 million related to assets classified as held for sale, as compared to a loss of $23.3 million during the same period in 2015.

Provision for Income Taxes

The consolidated provision for income taxes of $1.6 million and $1.4 million for the three and nine months ended September 30, 2016 as compared to a provision of $1.5 million and $4.8 million for the same periods in 2015, respectively, reflect an overall decrease in expense primarily related to a lower state income tax rate applicable to the Cole Capital segment in 2016, and a higher state tax expense in the REI segment in 2015, which were partially offset by lower net loss in the Cole Capital segment in 2016, and an increase to federal tax expense due to a return-to-provision true-up in 2016.

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Non-GAAP Measures

Our results are presented in accordance with U.S. GAAP. We also disclose certain non-GAAP measures, as discussed further below. Management uses these non-GAAP financial measures in our internal analysis of results and believes these measures are useful to investors for the reasons explained below. These non-GAAP financial measures should not be considered as substitutes for any measures derived in accordance with U.S. GAAP.

Funds from Operations and Adjusted Funds from Operations

Due to certain unique operating characteristics of real estate companies, as discussed below, the National Association of Real Estate Investment Trusts, Inc. (“NAREIT”), an industry trade group, has promulgated a supplemental performance measure known as FFO, which we believe to be an appropriate supplemental performance measure to reflect the operating performance of a REIT. FFO is not equivalent to our net income or loss as determined under U.S. GAAP.

NAREIT defines FFO as net income or loss computed in accordance with U.S. GAAP, excluding gains or losses from disposition of property, depreciation and amortization of real estate assets and impairment write-downs on real estate including the pro rata share of adjustments for unconsolidated partnerships and joint ventures. We calculated FFO in accordance with NAREIT’s definition described above.

In addition to FFO, we use AFFO as a non-GAAP supplemental financial performance measure to evaluate the operating performance of the Company. AFFO, as defined by the Company, excludes from FFO non-routine items such as acquisition related costs, litigation and other non-routine costs, gains or losses on sale of investment securities or mortgage notes receivable, insurance recoveries and legal settlements. We also exclude certain non-cash items such as impairments of goodwill or intangible assets, straight-line rental revenue, unrealized gains or losses on derivatives, reserves for loan loss, gains or losses on the extinguishment or forgiveness of debt, non-current portion of the tax benefit or expense, equity-based compensation, amortization of intangible assets, deferred financing costs, above-market lease assets and below-market lease liabilities. Management believes that excluding these costs from FFO provides investors with supplemental performance information that is consistent with the performance models and analysis used by management, and provides investors a view of the performance of our portfolio over time. AFFO allows for a comparison of the performance of our operations with other publicly-traded REITs, as AFFO, or an equivalent measure, is routinely reported by publicly traded REITs, and we believe often used by analysts and investors for comparison purposes.

For all of these reasons, we believe FFO and AFFO, in addition to net income (loss), as defined by U.S. GAAP, are helpful supplemental performance measures and useful in understanding the various ways in which our management evaluates the performance of the Company over time. However, not all REITs calculate FFO and AFFO the same way, so comparisons with other REITs may not be meaningful. FFO and AFFO should not be considered as alternatives to net income (loss) and are not intended to be used as a liquidity measure indicative of cash flow available to fund our cash needs. Neither the SEC, NAREIT, nor any other regulatory body has evaluated the acceptability of the exclusions used to adjust FFO in order to calculate AFFO and its use as a non-GAAP financial performance measure.

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The table below presents FFO and AFFO for the three and nine months ended September 30, 2016 and 2015 (in thousands, except share and per share data).

	Three Months Ended September 30,						Nine Months Ended September 30,
Consolidated	2016			2015			2016			2015
Net income (loss)	$	30,246		$	8,141		$	(82,601	)	$	(131,261	)
Dividends on non-convertible preferred stock	(17,973		)	(17,974		)	(53,919		)	(53,920		)
(Gain) loss on real estate assets and interest in joint venture, net	(28,111		)	(187		)	(55,921		)	55,855
Depreciation and amortization of real estate assets	187,898			200,159			574,125			620,061
Impairment of real estate	6,872			—			176,214			85,341
Proportionate share of adjustments for unconsolidated entities	540			1,423			1,977			4,467
FFO attributable to common stockholders and limited partners	179,472			191,562			559,875			580,543
Acquisition related	90			1,764			373			5,509
Litigation and other non-routine costs, net of insurance recoveries	4,630			8,032			2,372			41,319
Legal settlements	—			—			—			(1,250		)
Gain on investment securities	—			(4		)	—			(65		)
Loss on derivative instruments, net	2,023			1,420			3,286			2,137
Amortization of premiums and discounts on debt and investments, net	(3,553		)	(4,920		)	(12,009		)	(14,076		)
Amortization of above-market lease assets and deferred lease incentives, net of amortization of below-market lease liabilities	1,632			1,152			4,176			3,223
Net direct financing lease adjustments	571			507			1,720			1,493
Amortization and write-off of deferred financing costs	6,878			11,320			21,646			26,677
Amortization of management contracts	6,240			7,510			19,931			22,530
Deferred tax expense (benefit) (1)	6,941			(5,701		)	(933		)	(13,547		)
Loss (gain) on extinguishment and forgiveness of debt, net	2,003			—			1,751			(5,302		)
Straight-line rent, net of bad debt expense related to straight-line rent	(12,319		)	(21,705		)	(41,027		)	(64,809		)
Equity-based compensation	2,588			4,016			7,097			10,189
Other amortization and non-cash charges	929			781			2,423			2,300
Proportionate share of adjustments for unconsolidated entities	(17		)	694			209			2,030
AFFO attributable to common stockholders and limited partners	$	198,108		$	196,428		$	570,890		$	598,901
Weighted-average shares of common stock outstanding - basic	943,480,170			903,461,323			917,233,898			903,267,282
Effect of Limited Partner OP Units and dilutive securities(2)	25,206,373			25,995,886			24,663,667			26,109,180
Weighted-average shares of common stock outstanding - diluted (3)	968,686,543			929,457,209			941,897,565			929,376,462
AFFO attributable to common stockholders and limited partners per diluted share	$	0.20		$	0.21		$	0.61		$	0.64

____________________________________

(1) This adjustment represents the non-current portion of the provision for or benefit from income taxes in order to show only the current portion of the provision for or benefit from income taxes as an impact to AFFO.

(2) Dilutive securities include unvested restricted shares of common stock and unvested restricted stock units.

(3) Weighted-average shares for all periods presented exclude the effect of the convertible debt as the Company would expect to settle the debt with cash.

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The table below presents FFO and AFFO for the REI segment for the three and nine months ended September 30, 2016 and 2015 (in thousands, except share and per share data).

	Three Months Ended September 30,						Nine Months Ended September 30,
REI segment:	2016			2015			2016			2015
Net income (loss)	$	30,006		$	8,740		$	(83,361	)	$	(130,134	)
Dividends on non-convertible preferred stock	(17,973		)	(17,974		)	(53,919		)	(53,920		)
(Gain) loss on real estate assets and interest in joint venture, net	(28,111		)	(187		)	(55,921		)	55,855
Depreciation and amortization of real estate assets	187,898			200,159			574,125			620,061
Impairment of real estate	6,872			—			176,214			85,341
Proportionate share of adjustments for unconsolidated entities	540			1,423			1,977			4,467
FFO attributable to common stockholders and limited partners	179,232			192,161			559,115			581,670
Acquisition related	90			1,690			334			4,976
Litigation and other non-routine costs, net of insurance recoveries	4,630			8,032			2,372			41,319
Legal settlements	—			—			—			(1,250		)
Gain on investment securities	—			(4		)	—			(65		)
Loss on derivative instruments, net	2,023			1,420			3,286			2,137
Amortization of premiums and discounts on debt and investments, net	(3,553		)	(4,920		)	(12,009		)	(14,076		)
Amortization of above-market lease assets and deferred lease incentives, net of amortization of below-market lease liabilities	1,632			1,152			4,176			3,223
Net direct financing lease adjustments	571			507			1,720			1,493
Amortization and write-off of deferred financing costs	6,878			11,320			21,646			26,677
Loss (gain) on extinguishment and forgiveness of debt, net	2,003			—			1,751			(5,302		)
Straight-line rent, net of bad debt expense related to straight-line rent	(12,319		)	(21,705		)	(41,027		)	(64,809		)
Equity-based compensation	1,201			1,073			3,925			3,832
Other amortization and non-cash charges	—			(1		)	—			7
Proportionate share of adjustments for unconsolidated entities	(17		)	694			209			2,030
AFFO attributable to common stockholders and limited partners	$	182,371		$	191,419		$	545,498		$	581,862
Weighted-average shares of common stock outstanding - basic	943,480,170			903,461,323			917,233,898			903,267,282
Effect of Limited Partner OP Units and dilutive securities(1)	25,206,373			25,995,886			24,663,667			26,109,180
Weighted-average shares of common stock outstanding - diluted (2)	968,686,543			929,457,209			941,897,565			929,376,462
AFFO attributable to common stockholders and limited partners per diluted share	$	0.19		$	0.21		$	0.58		$	0.63

____________________________________

(1) Dilutive securities include unvested restricted shares of common stock and unvested restricted stock units.

(2) Weighted-average shares for all periods presented exclude the effect of the convertible debt as the Company would expect to settle the debt with cash.

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The table below presents FFO and AFFO for the Cole Capital segment for the three and nine months ended September 30, 2016 and 2015 (in thousands, except share and per share data).

	Three Months Ended September 30,					Nine Months Ended September 30,
Cole Capital segment:	2016		2015			2016			2015
Net income (loss)	$	240	$	(599	)	760			$	(1,127	)
FFO attributable to common stockholders and limited partners	240		(599		)	760			(1,127		)
Acquisition related	—		74			39			533
Amortization of Management Contracts	6,240		7,510			19,931			22,530
Deferred tax expense (benefit) (1)	6,941		(5,701		)	(933		)	(13,547		)
Equity-based compensation	1,387		2,943			3,172			6,357
Other amortization and non-cash charges	929		782			2,423			2,293
AFFO attributable to common stockholders and limited partners	$	15,737	$	5,009		$	25,392		$	17,039
Weighted-average shares of common stock outstanding - basic	943,480,170		903,461,323			917,233,898			903,267,282
Effect of Limited Partner OP Units and dilutive securities(2)	25,206,373		25,995,886			24,663,667			26,109,180
Weighted-average shares of common stock outstanding - diluted (3)	968,686,543		929,457,209			941,897,565			929,376,462
AFFO attributable to common stockholders and limited partners per diluted share	$	0.02	$	0.01		$	0.03		$	0.02

_________________________________

(1) This adjustment represents the non-current portion of the provision for or benefit from income taxes in order to show only the current portion of the provision for or benefit from income taxes as an impact to AFFO.

(2) Dilutive securities include unvested restricted shares of common stock and unvested restricted stock units.

(3) Weighted-average shares for all periods presented exclude the effect of the convertible debt as the Company would expect to settle the debt with cash.

Liquidity and Capital Resources

General

Our principal liquidity needs for the next twelve months and beyond are to:

• fund normal recurring expenses;

• meet debt service and principal repayment obligations, including balloon payments on maturing debt;

• pay dividends;

• fund capital expenditures, tenant improvements and leasing costs;

• pay litigation expenses; and

• fund possible property acquisitions.

We expect to be able to satisfy these obligations using one or more of the following sources:

• cash flow from operations;

• proceeds from real estate dispositions;

• utilization of existing line of credit;

• cash and cash equivalents balance; and

• issuance of VEREIT debt and equity securities.

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Universal Shelf Registration

In May 2016, we filed a shelf registration statement with the SEC, which is effective for a term of three years. In accordance with SEC rules, the amount of securities to be issued pursuant to this shelf registration statement was not specified when it was filed and there is no specific dollar limit. The securities covered by this registration statement include (i) common stock, (ii) preferred stock, (iii) debt securities, (iv) depositary shares representing fractional interests in shares of preferred stock, (v) warrants to purchase debt securities, common stock, preferred stock, or depositary shares, and (vi) any combination of these securities. We may periodically offer one or more of these securities in amounts, prices and on terms to be announced when and if these securities are offered. The specifics of any future offerings, along with the use of proceeds of any securities offered, will be described in detail in a prospectus supplement, or other offering materials, at the time of any offering.

Common Stock Offering

On August 10, 2016, the Company issued 69.0 million shares of Common Stock in a public offering for net proceeds, after underwriting discounts and offering costs, of $702.5 million which were used in part to repay amounts under the Credit Facility.

Common Stock Continuous Offering Program

On September 19, 2016, the Company registered a continuous equity offering program (the “Program”) pursuant to which the Company can offer and sell, from time to time through September 19, 2019 in “at-the-market” offerings or certain other transactions, shares of Common Stock with an aggregate gross sales price of up to $750.0 million, through its sales agents. The Company intends to use the proceeds from any sale of shares for general corporate purposes, which may include funding potential acquisitions and repurchasing or repaying outstanding indebtedness. As of September 30, 2016, no shares of Common Stock have been issued pursuant to the Program.

2016 Bond Offering

On June 2, 2016, the Operating Partnership closed its senior note offering, consisting of (i) $0.4 billion aggregate principal amount of 4.125% Senior Notes due June 1, 2021 and (ii) $0.6 billion aggregate principal amount of 4.875% Senior Notes due June 1, 2026. On July 5, 2016, the Company redeemed all of the $1.3 billion aggregate principal amount of our outstanding 2.000% Senior Notes due February 2017, plus accrued and unpaid interest thereon and the required make-whole premium.

Disposition Activity

As part of our effort to optimize our real estate portfolio by focusing on holding core assets, during the nine months ended September 30, 2016, we disposed of 223 properties and one property owned by an unconsolidated joint venture for an aggregate sales price of $786.0 million, of which our share was $748.6 million, resulting in consolidated proceeds of $615.2 million after disposition fees and debt assumptions. We expect to continue to explore opportunities to sell additional properties as we pay off outstanding debt and reduce our borrowings under the Credit Facility, which will reduce our overall leverage and provide us further financial flexibility.

Credit Facility

Summary and Obligations

We, as guarantor, and the Operating Partnership, as borrower, are parties to the Credit Facility with Wells Fargo Bank, National Association, as administrative agent, and the other lenders party thereto.

The Credit Facility allows for maximum borrowings of $2.8 billion, consisting of a $0.5 billion Credit Facility Term Loan and a $2.3 billion revolving credit facility. As of September 30, 2016, a maximum of $2.3 billion was available to the Operating Partnership for future borrowings, subject to borrowing availability.

As of September 30, 2016, our outstanding balance under the Credit Facility was $0.5 billion, following our net repayment of amounts under the revolving portion of the Credit Facility during the nine months ended September 30, 2016 of $960.0 million. Upon this repayment, there were no outstanding borrowings under our revolving credit facility. The remaining outstanding balance on the Credit Facility of $0.5 billion is fixed through the use of derivative instruments used to hedge interest rate volatility. Including the spread, which can vary based on our credit rating, the interest rate on this portion was 3.25% at September 30, 2016.

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The revolving credit facility generally bears interest at an annual rate of London Inter-Bank Offer Rate (“LIBOR”) plus 1.00% to 1.80% or Base Rate plus 0.00% to 0.80% (based upon our then current credit rating). “Base Rate” is defined as the highest of the prime rate, the federal funds rate plus 0.50% or a floating rate based on one month LIBOR, determined on a daily basis. The Credit Facility Term Loan generally bears interest at an annual rate of LIBOR plus 1.15% to 2.05%, or Base Rate plus 0.15% to 1.05% (based upon our then current credit rating). In addition, the Credit Agreement provides the flexibility for interest rate auctions, pursuant to which, at the Company’s election, the Company may request that lenders make competitive bids to provide revolving loans, which competitive bids may be at pricing levels that differ from the foregoing interest rates.

The Credit Agreement provides for monthly interest payments under the Credit Facility. In the event of default, at the election of a majority of the lenders (or automatically upon a bankruptcy event of default with respect to the OP or the General Partner), the commitments of the lenders under the Credit Facility will mature, and payment of any unpaid amounts in respect of the Credit Facility will be accelerated. The revolving credit facility and the Credit Facility Term Loan both terminate on June 30, 2018, in each case, unless extended in accordance with the terms of the Credit Agreement. The Credit Agreement provides for a one-year extension option with respect to each of the revolving credit facility and the Credit Facility Term Loan, exercisable at the Company’s election and subject to certain customary conditions, as well as certain customary “amend and extend” provisions. At any time, upon timely notice by the OP and subject to any breakage fees, the OP may prepay borrowings under the Credit Facility (subject to certain limitations applicable to the prepayment of any loans obtained through an interest rate auction, as described above). The OP incurs a fee equal to 0.15% to 0.25% per annum (based upon the General Partner’s then current credit rating) multiplied by the commitments (whether or not utilized) in respect of the revolving credit facility. In addition, the OP incurs customary administrative agent, letter of credit issuance, letter of credit fronting, extension and other fees.

Credit Facility Covenants

The Credit Facility requires restrictions on corporate guarantees, as well as the maintenance of certain financial covenants. The key financial covenants in the Credit Facility, as defined and calculated per the terms of the Credit Agreement include maintaining the following:

Unsecured Credit Facility Key Covenants	Required
Minimum tangible net worth	≥ $5.5 B
Ratio of total indebtedness to total asset value	≤ 60%
Ratio of adjusted EBITDA to fixed charges	≥ 1.5x
Ratio of secured indebtedness to total asset value	≤ 45%
Ratio of unsecured indebtedness to unencumbered asset value	≤ 60%
Ratio of unencumbered adjusted NOI to unsecured interest expense	≥ 1.75x
Minimum unencumbered asset value	≥ $8.0 B

For the purposes of determining unencumbered asset value, the Company is permitted to include restaurant properties representing more than 30% of its unencumbered asset value in such calculation such that: (i) from July 1, 2015 to June 29, 2016, up to 40% of the Unencumbered Asset Value may be comprised of restaurant properties; and (ii) from June 30, 2016 to December 30, 2016, up to 35% of the unencumbered asset value may be comprised of restaurant properties. From December 31, 2016 on, the maximum percentage of unencumbered asset value attributable to restaurant properties will be reduced back down to 30%.

The Company believes that it was in compliance with the Credit Agreement and is not restricted from accessing any borrowing availability under the Credit Facility as of September 30, 2016.

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Corporate Bonds

Summary and Obligations

On June 2, 2016, the OP closed its 2016 Bond Offering. The indenture governing the Senior Notes requires that the Company be in compliance with certain key financial covenants, including maintaining the following:

Corporate Bond Key Covenants	Required
Limitation on incurrence of total debt	≤ 65%
Limitation on incurrence of secured debt	≤ 40%
Debt service coverage ratio	≥ 1.5x
Maintenance of total unencumbered assets	≥ 150%

There were no changes to the covenants of our existing Senior Notes during the nine months ended September 30, 2016. The covenants of our new Senior Notes are materially the same as our existing Senior Notes. As of September 30, 2016, the Company believes that it was in compliance with these covenants based on the covenant limits and calculations in place at that time.

Convertible Debt

Summary and Obligations

On July 29, 2013, the Company issued $300.0 million aggregate principal amount of convertible senior notes due 2018 (the “2018 Convertible Notes”) and, pursuant to an over-allotment exercise by the underwriters of such 2018 Convertible Notes offering, issued an additional $10.0 million aggregate principal amount of its 2018 Convertible Notes on August 1, 2013. On December 10, 2013, the Company issued an additional $287.5 million of the 2018 Convertible Notes by reopening the indenture governing the 2018 Convertible Notes. Also on December 10, 2013, the Company issued $402.5 million aggregate principal amount of convertible senior notes due 2020 (the “2020 Convertible Notes and, together with the 2018 Convertible Notes, the “Convertible Notes”). The 2018 Convertible Notes have a weighted average interest rate of 3.00%, a conversion rate of 60.5997 and mature on August 1, 2018 and the 2020 Convertible Notes have a weighted average interest rate of 3.75%, a conversion rate of 66.7249 and mature on December 15, 2020. The Convertible Notes are convertible into cash or shares of the Company’s Common Stock at the Company’s option. There were no changes to the terms of our Convertible Notes during the nine months ended September 30, 2016.

Mortgage Notes Payable and Other Debt

Summary and Obligations

As of September 30, 2016, we had non-recourse mortgage indebtedness of $2.8 billion, which was collateralized by 643 properties, reflecting a decrease from December 31, 2015 of $227.5 million derived primarily from our disposition activity during the nine months ended September 30, 2016. Our mortgage indebtedness bore interest at the weighted-average rate of 5.01% per annum and had a weighted-average maturity of 4.6 years. We may in the future incur additional mortgage debt on the properties we currently own or use long-term non-recourse financing to acquire additional properties.

The payment terms of our loan obligations vary. In general, only interest amounts are payable monthly with all unpaid principal and interest due at maturity. Some of our loan agreements require that we comply with specific reporting and financial covenants mainly related to debt coverage ratios and loan-to-value ratios. Each loan that has these requirements has specific ratio thresholds that must be met. As of September 30, 2016, the Company believes that it was in compliance with the debt covenants under its respective loan agreements, except for a loan in default with a principal balance of $38.1 million that is described below.

On March 6, 2015, the Company received a notice of default from the lender of a non-recourse loan secured by two properties, which had an outstanding balance of $38.1 million on the notice date, due to the Company’s election not to make a reserve payment required per the loan agreement. The foreclosure sale of the first property securing the loan occurred during the three months ended June 30, 2016. As the loan was outstanding upon the foreclosure of the first property, the Company recorded a loss of $3.4 million in gain (loss) on disposition of real estate, net in the accompanying consolidated statements of operations for the nine months ended September 30, 2016. The foreclosure proceedings on the second property that secured the loan were completed during the three months ended September 30, 2016. As a result of the foreclosure sale and deed transfer of both properties securing the loan, the Company recognized a gain on forgiveness of debt of $19.1 million, which is included in (loss) gain on extinguishment and forgiveness of debt, net in the accompanying consolidated statements of operations.

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Restrictions on Loan Covenants

Our mortgage loan obligations generally restrict corporate guarantees and require the maintenance of financial covenants, including maintenance of certain financial ratios (such as specified debt to equity and debt service coverage ratios), as well as the maintenance of a minimum net worth. The mortgage loan agreements contain no dividend restrictions except in the event of default or when a distribution would drive liquidity below the applicable thresholds. At September 30, 2016, the Company believes that it was in compliance with the debt covenants under the mortgage loan agreements, except for a loan in default as described above and in “Note 10 –Debt” to our consolidated financial statements.

Other Debt

As of September 30, 2016, the Company had a secured term loan from KBC Bank, N.V. with an outstanding principal balance of $23.0 million and remaining unamortized premium of $0.1 million (the “KBC Loan”). The interest coupon on the KBC Loan is fixed at 5.81% annually until its maturity in January 2018. The KBC Loan is non-recourse to the Company, subject to limited non-recourse exceptions. The KBC Loan provides for monthly payments of both principal and interest. The scheduled principal repayments subsequent to September 30, 2016 are $2.0 million, $7.7 million and $13.3 million for the years ended December 31, 2016, 2017 and 2018, respectively.

Dividends

On August 2, 2016, the Company’s board of directors declared a quarterly cash dividend of $0.1375 per share of Common Stock (equaling an annualized dividend rate of $0.55 per share) for the third quarter of 2016 to stockholders of record as of September 30, 2016, which was paid on October 17, 2016. An equivalent distribution was made by the Operating Partnership per OP unit.

Our Series F Preferred Stock, as discussed in “Note 15 – Equity” to our consolidated financial statements, will pay cumulative cash dividends at the rate of 6.70% per annum on their liquidation preference of $25.00 per share (equivalent to $1.675 per share on an annual basis). As of September 30, 2016, there were approximately 42.8 million shares of Series F Preferred Stock(and approximately 42.8 million corresponding Series F Preferred Units that were issued to the General Partner) and 86,874 Limited Partner Series F Preferred Units that were issued and outstanding.

Contractual Obligations

The following is a summary of our contractual obligations as of September 30, 2016 (in thousands):

	Total		Less than 1 year		1-3 years		4-5 years		More than 5 years
Principal payments - mortgage notes and other debt	$	2,836,839	$	437,879	$	401,905	$	679,476	$	1,317,579
Interest payments - mortgage notes and other debt (1) (2)	615,500		126,953		212,628		166,793		109,126
Principal payments - Credit Facility	500,000		—		500,000		—		—
Interest payments - Credit Facility (1) (2)	28,222		16,461		11,761		—		—
Principal payments - corporate bonds	2,250,000		—		750,000		400,000		1,100,000
Interest payments - corporate bonds	581,549		91,250		167,813		132,000		190,486
Principal payments - convertible debt	1,000,000		—		597,500		402,500		—
Interest payments - convertible debt	96,341		33,019		45,125		18,197		—
Operating and ground lease commitments	319,490		4,911		38,452		37,376		238,751
Build-to-suit commitments	747		747		—		—		—
Total	$	8,228,688	$	711,220	$	2,725,184	$	1,836,342	$	2,955,942

____________________________________

(1) As of September 30, 2016, we had $242.4 million of variable rate mortgage notes and $0.5 billion of variable rate debt on the Credit Facility effectively fixed through the use of interest rate swap agreements. We used the effective interest rates fixed under our swap agreements to calculate the debt payment obligations in future periods.

(2) Interest payments due in future periods on the $9.7 million of variable rate debt payment obligations were calculated using a forward LIBOR curve.

Cash Flow Analysis

Operating Activities –During the nine months ended September 30, 2016, net cash provided by operating activities decreased$23.5 million to $604.7 million from $628.1 million during the same period in 2015. The decrease was primarily due to a decrease in rental receipts related to the disposition of 451 consolidated properties and two unconsolidated joint ventures subsequent to January 1, 2015. This decrease was partially offset by a decrease in interest payments and payments related to the Audit Committee Investigation and related litigation, net of insurance recoveries.

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Investing Activities –Net cash provided by investing activities for the nine months ended September 30, 2016increased$222.3 million to $606.9 million from $384.6 million during the same period in 2015. The increase in cash flow is primarily related to an increase in cash proceeds from the disposition of real estate assets of $202.0 million as part of the Company’s portfolio management strategy, a decrease in development payments of $45.6 million, and the receipt of $50.0 million on the Affiliate Lines of Credit, as compared to $10.0 million in 2015.

Financing Activities –Net cash used in financing activities of $1.2 billion decreased $93.7 million during the nine months ended September 30, 2016 from $1.3 billion during the same period in 2015. The decrease was primarily related to net proceeds received from the Common Stock Offering, after underwriting discounts and offering costs, of $702.5 million, partially offset by an increase in net debt repayments of $229.4 million and an increase in distributions paid of $360.9 million.

Election as a REIT

The General Partner elected to be taxed as a REIT for U.S. federal income tax purposes under Sections 856 through 860 of the Internal Revenue Code commencing with the taxable year ended December 31, 2011. As a REIT, except as discussed below, the General Partner generally is not subject to federal income tax on taxable income that it distributes to its stockholders so long as it distributes at least 90% of its annual taxable income (computed without regard to the deduction for dividends paid and excluding net capital gains). REITs are subject to a number of other organizational and operational requirements. Even if the General Partner maintains its qualification for taxation as a REIT, it may be subject to certain state and local taxes on its income and property, federal income taxes on certain income and excise taxes on its undistributed income. We believe we are organized and operating in such a manner as to qualify to be taxed as a REIT for the taxable year ended December 31, 2016.

The Operating Partnership is classified as a partnership for U.S. federal income tax purposes. As a partnership, the Operating Partnership is not a taxable entity for U.S. federal income tax purposes. Instead, each partner in the Operating Partnership is required to take into account its allocable share of the Operating Partnership’s income, gains, losses, deductions and credits for each taxable year. However, the Operating Partnership may be subject to certain state and local taxes on its income and property. Under the LPA, the Operating Partnership is required to conduct business in such a manner as to permit the General partner at all times to qualify as a REIT.

The Company conducts substantially all of its Cole Capital segment business activities through a TRS. A TRS is a subsidiary of a REIT that is subject to corporate federal, state and local income taxes, as applicable. The Company’s use of a TRS enables it to engage in certain business activities while complying with the REIT qualification requirements and to retain any income generated by these businesses for reinvestment without the requirement to distribute those earnings. The Company conducts all of its business in the United States and Canada and, as a result, it files income tax returns in the U.S. federal jurisdiction, the Canadian federal jurisdiction and various state and local jurisdictions. Certain of the Company’s inter-company transactions that have been eliminated in consolidation for financial accounting purposes are also subject to taxation.

Inflation

We may be adversely impacted by inflation on any leases that do not contain indexed escalation provisions. However, net leases that require the tenant to pay its allocable share of operating expenses, including common area maintenance costs, real estate taxes and insurance, may reduce our exposure to increases in costs and operating expenses resulting from inflation.

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Related Party Transactions and Agreements

There have been no related party transactions to report during the nine months ended September 30, 2016 aside from those with the Cole REITs, as further described below.

We are contractually responsible for managing the Cole REITs’ affairs on a day-to-day basis, identifying and making acquisitions and investments on the Cole REITs’ behalf, and recommending to each of the Cole REIT’s respective board of directors an approach for providing investors with liquidity. In addition, we distribute the shares of common stock for certain of the Cole REITs and advise them regarding offerings, manage relationships with participating broker-dealers and financial advisors, and provide assistance in connection with compliance matters relating to the offerings. We receive compensation and reimbursement for services relating to the Cole REITs’ offerings and the investment, management and disposition of their respective assets, as applicable. See “Note 17 –Related Party Transactions and Arrangements” to our consolidated financial statements in this report for a further explanation of the various related party transactions, agreements and fees.

Off-Balance Sheet Arrangements

We have no material off-balance sheet arrangements that have had or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Critical Accounting Policies and Significant Accounting Estimates

Our accounting policies have been established to conform with U.S. GAAP. The preparation of financial statements in conformity with U.S. GAAP requires us to use judgment in the application of accounting policies, including making estimates and assumptions. These judgments affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Management believes that we have made these estimates and assumptions in an appropriate manner and in a way that accurately reflects our financial condition. We continually test and evaluate these estimates and assumptions using our historical knowledge of the business, as well as other factors, to ensure that they are reasonable for reporting purposes. However, actual results may differ from these estimates and assumptions. If our judgment or interpretation of the facts and circumstances relating to the various transactions had been different, it is possible that different accounting policies would have been applied, thus resulting in a different presentation of the financial statements. Additionally, other companies may utilize different estimates that may impact comparability of our results of operations to those of companies in similar businesses. We believe the following critical accounting policies govern the significant judgments and estimates used in the preparation of our financial statements, which should be read in conjunction with the more complete discussion of our accounting policies and procedures included in our Annual Report on Form 10-K for the year ended December 31, 2015:

•Goodwill Impairment;

•Intangible Asset Impairment;

•Real Estate Investment Impairment;

•Mortgage Note Receivables Impairment;

•Program Development Costs;

•Consolidation of Equity Investments;

•Allocation of Purchase Price of Business Combinations including Acquired Properties; and

•Income Taxes.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Market Risk

The market risk associated with financial instruments and derivative financial instruments is the risk of loss from adverse changes in market prices or interest rates. Our market risk arises primarily from interest rate risk relating to variable-rate borrowings. To meet our short and long-term liquidity requirements, we borrow funds at a combination of fixed and variable rates. Our interest rate risk management objectives are to limit the impact of interest rate changes in earnings and cash flows and to manage our overall borrowing costs. To achieve these objectives, from time to time, we may enter into interest rate hedge contracts such as swaps, collars and treasury lock agreements in order to mitigate our interest rate risk with respect to various debt instruments. We would not hold or issue these derivative contracts for trading or speculative purposes. We have limited operations in Canada and thus, are not exposed to material foreign currency fluctuations.

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Interest Rate Risk

As of September 30, 2016, our debt included fixed-rate debt, including debt that has interest rates that are fixed with the use of derivative instruments, with a fair value and carrying value of $6.8 billion and $6.6 billion, respectively. Changes in market interest rates on our fixed rate debt impact the fair value of the debt, but they have no impact on interest incurred or cash flow. For instance, if interest rates rise 100 basis points and the fixed rate debt balance remains constant, we expect the fair value of our debt to decrease, the same way the price of a bond declines as interest rates rise. The sensitivity analysis related to our fixed-rate debt assumes an immediate 100 basis point move in interest rates from their September 30, 2016 levels, with all other variables held constant. A 100 basis point increase in market interest rates would result in a decrease in the fair value of our fixed rate debt of $2.5 billion. A 100 basis point decrease in market interest rates would result in an increase in the fair value of our fixed-rate debt of $2.2 billion.

As of September 30, 2016, our debt included variable-rate debt with a fair value and carrying value each of $9.7 million. The sensitivity analysis related to our variable-rate debt assumes an immediate 100 basis point move in interest rates from their September 30, 2016 levels, with all other variables held constant. A 100 basis point increase or decrease in variable interest rates on our variable-rate notes payable would increase or decrease our interest expense by $0.1 million annually. See “Note 10 –Debt” to our consolidated financial statements.

As of September 30, 2016, our interest rate swaps had a fair value that resulted in a liability of $8.2 million. See “Note 11 –Derivatives and Hedging Activities” to our consolidated financial statements for further discussion.

As the information presented above includes only those exposures that existed as of September 30, 2016, it does not consider exposures or positions arising after that date. The information presented herein has limited predictive value. Future actual realized gains or losses with respect to interest rate fluctuations will depend on cumulative exposures, hedging strategies employed and the magnitude of the fluctuations.

These amounts were determined by considering the impact of hypothetical interest rate changes on our borrowing costs and assume no other changes in our capital structure.

Credit Risk

Concentrations of credit risk arise when a number of tenants are engaged in similar business activities, or activities in the same geographic region, or have similar economic features that would cause their ability to meet contractual obligations, including those to the Company, to be similarly affected by changes in economic conditions. The Company is subject to tenant, geographic and industry concentrations. Any downturn of the economic conditions in one or more of these tenants, geographies or industries could result in a material reduction of our cash flows or material losses to us.

The factors considered in determining the credit risk of our tenants include, but are not limited to: payment history; credit status and change in status (credit ratings for public companies are used as a primary metric); change in tenant space needs (i.e., expansion/downsize); tenant financial performance; economic conditions in a specific geographic region; and industry specific credit considerations. We believe that the credit risk of our portfolio is reduced by the high quality of our existing tenant base, reviews of prospective tenants’ risk profiles prior to lease execution and consistent monitoring of our portfolio to identify potential problem tenants.

72

Item 4. Controls and Procedures.

I. Discussion of Controls and Procedures of the General Partner

For purposes of the discussion in this Part I of Item 4, the “Company” refers to the General Partner.

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) that are designed to provide reasonable assurance thatinformation required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, we recognize that no controls and procedures, no matter how well designed and operated, can provide absolute assurance of achieving the desired control objectives.

In accordance with Rules 13a-15(b) and 15d-15(b) of the Exchange Act, management, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of our disclosure controls and procedures as of September 30, 2016 and determined that the disclosure controls and procedures were effective at a reasonable assurance level as of that date.

Changes in Internal Control over Financial Reporting

There were no changes to our internal control over financial reporting that occurred during the three months ended September 30, 2016 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 

II. Discussion of Controls and Procedures of the Operating Partnership

In the information incorporated by reference into this Part II of Item 4, the term “Company” refers to the Operating Partnership, except as the context otherwise requires.

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act that are designed to provide reasonable assurance thatinformation required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, we recognize that no controls and procedures, no matter how well designed and operated, can provide absolute assurance of achieving the desired control objectives.

In accordance with Rules 13a-15(b) and 15d-15(b) of the Exchange Act, management, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of our disclosure controls and procedures as of September 30, 2016 and determined that the disclosure controls and procedures were effective at a reasonable assurance level as of that date.

Changes in Internal Control over Financial Reporting

There were no changes to our internal control over financial reporting that occurred during the three months ended September 30, 2016 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 

73

PART II — OTHER INFORMATION

Item 1. Legal Proceedings.

The information contained under the heading “Litigation” in “Note 14 –Commitments and Contingencies” to our consolidated financial statements is incorporated by reference into this Part II, Item 1. Except as set forth therein, as of the end of the period covered by this Quarterly Report on Form 10-Q, we are not a party to, and none of our properties are subject to, any material pending legal proceedings.

Item 1A. Risk Factors.

There have been no material changes from the risk factors set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

During the three months ended September 30, 2016, the Company redeemed 15,450 Limited Partner OP Units for shares of the Company's Common Stock. These shares of Common Stock were issued in reliance on an exemption from registration under Section 4(a)(2) of the Securities Act. We relied on the exemption under Section 4(a)(2) based upon factual representations received from the limited partner who received the shares of Common Stock.

Repurchases of Equity Securities

We are authorized to repurchase shares of the General Partner’s common stock to satisfy employee withholding tax obligations related to stock-based compensation. During the third quarter of 2016, the General Partner and the Operating Partnership repurchased the following shares of common stock and corresponding OP Units that were issued to the General Partner, respectively, in order to satisfy the minimum tax withholding obligation for state and federal payroll taxes on employee stock awards:

Period	Total Number of Shares/ Units Purchased	Average Price Paid Per Share/Unit (1)
July	18,991	$	10.17
August	—	—
September	552	10.45
Total	19,543	$	10.18

_______________________________________________

(1) With respect to these shares/units, the price paid per share/unit is based on the weighted average closing price on the respective vesting date.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.

Item 6. Exhibits

The exhibits listed in the Exhibit Index (following the signatures section of this report) are included in, or incorporated by reference into, this Quarterly Report on Form 10-Q.

74

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, each registrant has duly caused this Quarterly Report on Form 10-Q to be signed on its behalf by the undersigned thereunto duly authorized.

VEREIT, INC.
By:	/s/ Michael J. Bartolotta
Michael J. Bartolotta
Executive Vice President and Chief Financial Officer (Principal Financial Officer)

VEREIT OPERATING PARTNERSHIP, L.P.
By: VEREIT, Inc., its sole general partner
By:	/s/ Michael J. Bartolotta
Michael J. Bartolotta
Executive Vice President and Chief Financial Officer (Principal Financial Officer)

Dated: November 1, 2016

75

Exhibit Index

The following exhibits are included in this Quarterly Report on Form 10-Q for the quarter ended September 30, 2016 (and are numbered in accordance with Item 601 of Regulation S-K):

Exhibit No.	Description
3.1	Articles of Amendment and Restatement of VEREIT, Inc. (Incorporated by reference to the Company's Pre-Effective Amendment No. 5 to Form S-11 (Registration No. 333-172205), filed with the SEC on July 5, 2011).
3.2	Articles Supplementary Relating to the Series A Convertible Preferred Stock of VEREIT, Inc., dated May 10, 2012 (Incorporated by reference to the Company's Form 8-K (File No. 001-35263), filed with the SEC on May 15, 2012).
3.3	Articles Supplementary Relating to the Series B Convertible Preferred Stock of VEREIT, Inc., dated July 24, 2012 (Incorporated by reference to the Company's Form 8-K (File No. 001-35263), filed with the SEC on July 30, 2012).
3.4	Articles Supplementary for the Series C Convertible Preferred Stock of VEREIT, Inc., dated June 6, 2013 (Incorporated by reference to the Company's Form 8-K (File No. 001-35263), filed with the SEC on June 12, 2013).
3.5	Articles of Amendment to Articles of Amendment and Restatement of VEREIT, Inc., effective July 2, 2013 (Incorporated by reference to the Company's Form 8-K (File No. 001-35263), filed with the SEC on July 9, 2013).
3.6	Articles Supplementary for the Series D Cumulative Convertible Preferred Stock of VEREIT, Inc., filed November 8, 2013 (Incorporated by reference to the Company's Form 8-K (File No. 001-35263), filed with the SEC on November 15, 2013).
3.7	Articles of Amendment to Articles of Amendment and Restatement of VEREIT, Inc., effective December 9, 2013 (Incorporated by reference to the Company's Amended Current Report on Form 8-K/A (File No. 001-35263), filed with the SEC on December 20, 2013).
3.8	Articles Supplementary Relating to the 6.70% Series F Cumulative Redeemable Preferred Stock of VEREIT, Inc., dated January 2, 2014 (Incorporated by reference to the Company's Registration Statement on Form 8-A (File No. 333-190056), filed with the SEC on January 3, 2014).
3.9	Articles of Amendment to Articles of Amendment and Restatement of VEREIT, Inc., dated July 28, 2015 (Incorporated by reference to the Company's Form 8-K (File No. 001-35263), filed with the SEC on July 28, 2015).
3.10	Articles Supplementary to Articles of Amendment and Restatement of VEREIT, Inc., dated August 5, 2015 (Incorporated by reference to the Company's Quarterly Report on Form 10-Q (File No. 001-35263), for the quarter ended June 30, 2015 filed with the SEC on August 6, 2015).
3.11	Amended and Restated Bylaws of VEREIT, Inc., effective as of January 1, 2016 (Incorporated by reference to the Company's Quarterly Report on Form 10-Q (File No. 001-35263), for the quarter ended September 30, 2015 filed with the SEC on November 5, 2015).
3.12	Certificate of Limited Partnership of VEREIT Operating Partnership, L.P. (Incorporated by reference to the Company's Registration Statement on Form S-4 (Registration No. 333-197780-01), filed with the SEC on August 1, 2014).
3.13	Amendment to Certificate of Limited Partnership of VEREIT Operating Partnership, L.P., effective July 28, 2015 (Incorporated by reference to the Company's Quarterly Report on Form 10-Q (File No. 001-35263), for the quarter ended June 30, 2015 filed with the SEC on August 6, 2015).
4.1	Third Amended and Restated Agreement of Limited Partnership of VEREIT Operating Partnership, L.P., effective January 3, 2014 (Incorporated by reference to the Company's Amendment No. 2 to its Annual Report on Form 10-K/A (File No. 001-35263), for the year ended December 31, 2013 filed with the SEC on March 2, 2015).
4.2	First Amendment to Third Amended and Restated Agreement of Limited Partnership of VEREIT Operating Partnership, L.P., dated January 26, 2015 (Incorporated by reference to the Company's Quarterly Report on Form 10-Q (File No. 001-35263), for the quarter ended June 30, 2015 filed with the SEC on August 6, 2015).
4.3	Second Amendment to Third Amended and Restated Agreement of Limited Partnership of VEREIT Operating Partnership, L.P., dated July 28, 2015 (Incorporated by reference to the Company's Quarterly Report on Form 10-Q (File No. 001-35263), for the quarter ended June 30, 2015 filed with the SEC on August 6, 2015).
4.4	Indenture, dated as of July 29, 2013, between American Realty Capital Properties, Inc. and U.S. Bank National Association, as trustee (Incorporated by reference to the Company's Current Report on Form 8-K (File No. 001-35263), filed with the SEC on July 29, 2013).
4.5	First Supplemental Indenture, dated as of July 29, 2013, between American Realty Capital Properties, Inc. and U.S. Bank National Association, as trustee (Incorporated by reference to the Company's Current Report on Form 8-K (File No. 001-35263), filed with the SEC on July 29, 2013).
4.6	Form of 3.00% Convertible Senior Notes due 2018 (Incorporated by reference to the Company's Current Report on Form 8-K (File No. 001-35263), filed with the SEC on December 11, 2013).
4.7	Second Supplemental Indenture, dated as of December 10, 2013, between American Realty Capital Properties, Inc. and U.S. Bank National Association, as trustee (Incorporated by reference to the Company's Current Report on Form 8-K (File No. 001-35263), filed with the SEC on December 11, 2013).
4.8	Form of 3.75% Convertible Senior Notes due 2020 (Incorporated by reference to the Company's Current Report on Form 8-K (File No. 001-35263), filed with the SEC on December 11, 2013).
4.9	Indenture, dated as of February 6, 2014, among ARC Properties Operating Partnership, L.P., Clark Acquisition, LLC, the guarantors named therein and U.S. Bank National Association, as trustee (Incorporated by reference to the Company's Current Report on Form 8-K (File No. 001-35263), filed with the SEC on February 7, 2014).

76

Exhibit No.	Description
4.10	Officers’ Certificate, dated as of February 6, 2014 (Incorporated by reference to the Company's Current Report on Form 8-K (File No. 001-35263), filed with the SEC on February 7, 2014).
4.11	Registration Rights Agreement, dated as of February 6, 2014, among ARC Properties Operating Partnership, L.P., Clark Acquisition, LLC, the guarantors named therein, Barclays Capital Inc. and Citigroup Global Markets Inc. (Incorporated by reference to the Company's Current Report on Form 8-K (File No. 001-35263), filed with the SEC on February 7, 2014).
4.12	First Supplemental Indenture, dated as of February 9, 2015, by and among ARC Properties Operating Partnership, L.P., American Realty Capital Properties, Inc. and U.S. Bank National Association (Incorporated by reference to the Company's Current Report on Form 8-K (File No. 001-35263), filed with the SEC on February 13, 2015).
4.13	Officer’s Certificate, dated as of June 2, 2016 (Incorporated by reference to the Company's Current Report on Form 8-K (File No. 001-35263), filed with the SEC on June 3, 2016).
4.14	Form of 4.125% Senior Notes due 2021 (Incorporated by reference to the Company's Current Report on Form 8-K (File No. 001-35263), filed with the SEC on June 3, 2016).
4.15	Form of 4.875% Senior Notes due 2026 (Incorporated by reference to the Company's Current Report on Form 8-K (File No. 001-35263), filed with the SEC on June 3, 2016).
31.1*	Certification of the Chief Executive Officer of VEREIT, Inc. pursuant to Securities Exchange Act Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of the Chief Financial Officer of VEREIT, Inc. pursuant to Securities Exchange Act Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.3*	Certification of the Chief Executive Officer of VEREIT, Inc., the sole general partner of VEREIT Operating Partnership, L.P., pursuant to Securities Exchange Act Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.4*	Certification of the Chief Financial Officer of VEREIT, Inc., the sole general partner of VEREIT Operating Partnership, L.P., pursuant to Securities Exchange Act Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**	Written statements of the Chief Executive Officer of VEREIT, Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**	Written statements of the Chief Financial Officer of VEREIT, Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.3**	Written statements of the Chief Executive Officer of VEREIT, Inc., the sole general partner of VEREIT Operating Partnership, L.P., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.4**	Written statements of the Chief Financial Officer of VEREIT, Inc., the sole general partner of VEREIT Operating Partnership, L.P., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*	XBRL Instance Document.
101.SCH*	XBRL Taxonomy Extension Schema Document.
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document.

_____________________________

* Filed herewith

** In accordance with Item 601(b)(32) of Regulation S-K, this Exhibit is not deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section. Such certifications will not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.

77

EX-31.1

Exhibit 31.1

VEREIT, INC.

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO RULES 13a-14(a) AND 15d-14(a)

OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED,

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Glenn J. Rufrano, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of VEREIT, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	November 1, 2016	/s/ Glenn J. Rufrano
		Glenn J. Rufrano
		Chief Executive Officer
		(Principal Executive Officer)

EX-31.2

Exhibit 31.2

VEREIT, INC.

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO RULES 13a-14(a) AND 15d-14(a)

OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED,

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Michael J. Bartolotta, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of VEREIT, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	November 1, 2016	/s/ Michael J. Bartolotta
		Michael J. Bartolotta Executive Vice President and Chief Financial Officer
		(Principal Financial Officer)

EX-31.3

Exhibit 31.3

VEREIT OPERATING PARTNERSHIP, L.P.

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO RULES 13a-14(a) AND 15d-14(a)

OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED,

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Glenn J. Rufrano, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of VEREIT Operating Partnership, L.P.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	November 1, 2016	/s/ Glenn J. Rufrano
		Glenn J. Rufrano
		Chief Executive Officer of VEREIT, Inc., the sole general partner
		of VEREIT Operating Partnership, L.P.
		(Principal Executive Officer)

EX-31.4

Exhibit 31.4

VEREIT OPERATING PARTNERSHIP, L.P.

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO RULES 13a-14(a) AND 15d-14(a)

OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED,

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Michael J. Bartolotta, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of VEREIT Operating Partnership, L.P.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	November 1, 2016	/s/ Michael J. Bartolotta
		Michael J. Bartolotta Executive Vice President and Chief Financial Officer of
		VEREIT, Inc., the sole general partner of VEREIT Operating Partnership, L.P.
		(Principal Financial Officer)

EX-32.1

Exhibit 32.1

VEREIT, INC.

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of VEREIT, Inc. (the “Company”) for the period ended September 30, 2016 (the “Report”), I, Glenn J. Rufrano, Chief Executive Officer of the Company, certify to my knowledge, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	November 1, 2016	/s/ Glenn J. Rufrano
		Glenn J. Rufrano
		Chief Executive Officer
		(Principal Executive Officer)

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

VEREIT, INC.

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of VEREIT, Inc. (the “Company”) for the period ended September 30, 2016 (the “Report”), I, Michael J. Bartolotta, Executive Vice President and Chief Financial Officer of the Company, certify to my knowledge, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	November 1, 2016	/s/ Michael J. Bartolotta
		Michael J. Bartolotta Executive Vice President and Chief Financial Officer
		(Principal Financial Officer)

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.3

Exhibit 32.3

VEREIT OPERATING PARTNERSHIP, L.P.

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of VEREIT Operating Partnership, L.P. (the “Company”) for the period ended September 30, 2016 (the “Report”), I, Glenn J. Rufrano, Chief Executive Officer of VEREIT, Inc., the sole general partner of the Company, certify to my knowledge, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	November 1, 2016	/s/ Glenn J. Rufrano
		Glenn J. Rufrano
		Chief Executive Officer of VEREIT, Inc., the sole general partner
		of VEREIT Operating Partnership, L.P.
		(Principal Executive Officer)

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.4

Exhibit 32.4

VEREIT OPERATING PARTNERSHIP, L.P.

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of VEREIT Operating Partnership, L.P. (the “Company”) for the period ended September 30, 2016 (the “Report”), I, Michael J. Bartolotta, Executive Vice President and Chief Financial Officer of VEREIT, Inc., the sole general partner of the Company, certify to my knowledge, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	November 1, 2016	/s/ Michael J. Bartolotta
		Michael J. Bartolotta Executive Vice President and Chief Financial Officer of
		VEREIT Inc., the sole general partner of VEREIT Operating Partnership, L.P.
		(Principal Financial Officer)

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2016	Oct. 31, 2016
Entity Information [Line Items]
Entity Registrant Name	VEREIT, Inc.
Entity Central Index Key	0001507385
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Document Type	10-Q
Document Period End Date	Sep. 30, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q3
Amendment Flag	false
Entity Common Stock, Shares Outstanding		974,174,176
Entity Current Reporting Status	Yes
VEREIT Operating Partnership, L.P. [Member]
Entity Information [Line Items]
Entity Registrant Name	VEREIT Operating Partnership, L.P.
Entity Central Index Key	0001528059
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Document Type	10-Q
Document Period End Date	Sep. 30, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q3
Amendment Flag	false
Entity Current Reporting Status	Yes

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Real estate investments, at cost:
Land	$ 2,946,105	$ 3,120,653
Buildings, fixtures and improvements	10,800,316	11,445,690
Intangible lease assets	2,073,076	2,218,378
Total real estate investments, at cost	15,819,497	16,784,721
Less: accumulated depreciation and amortization	2,188,998	1,778,597
Total real estate investments, net	13,630,499	15,006,124
Investment in unconsolidated entities	24,711	56,824
Investment in direct financing leases, net	40,785	46,312
Investment securities, at fair value	48,098	53,304
Mortgage notes receivable, net	23,014	24,238
Cash and cash equivalents	116,618	69,103
Restricted cash	61,828	59,767
Intangible assets, net	30,849	50,779
Rent and tenant receivables and other assets, net	339,529	303,637
Goodwill	1,602,610	1,656,374
Due from affiliates	20,883	60,633
Real estate assets held for sale, net	118,396	18,771
Total assets	16,057,820	17,405,866
LIABILITIES AND EQUITY
Mortgage notes payable and other debt, net	2,861,210	3,111,985
Corporate bonds, net	2,225,157	2,536,333
Convertible debt, net	970,691	962,894
Credit facility, net	496,008	1,448,590
Below-market lease liabilities, net	229,340	251,692
Accounts payable and accrued expenses	139,150	151,877
Deferred rent, derivative and other liabilities	89,154	87,490
Distributions payable	159,415	140,816
Due to affiliates	0	230
Total liabilities	7,170,125	8,691,907
Commitments and contingencies
EQUITY
Preferred stock, $0.01 par value, 100,000,000 shares authorized and 42,834,138 issued and outstanding as of each of September 30, 2016 and December 31, 2015	428	428
Common stock, $0.01 par value, 1,500,000,000 shares authorized and 974,183,819 and 904,884,394 issued and outstanding as of September 30, 2016 and December 31, 2015, respectively	9,742	9,049
Additional paid-in-capital	12,637,049	11,931,768
Accumulated other comprehensive loss	(4,687)	(2,025)
Accumulated deficit	(3,933,092)	(3,415,233)
Total stockholders’ equity	8,709,440	8,523,987
Non-controlling interests	178,255	189,972
Total equity	8,887,695	8,713,959
Total liabilities and equity	16,057,820	17,405,866
VEREIT Operating Partnership, L.P. [Member]
Real estate investments, at cost:
Land	2,946,105	3,120,653
Buildings, fixtures and improvements	10,800,316	11,445,690
Intangible lease assets	2,073,076	2,218,378
Total real estate investments, at cost	15,819,497	16,784,721
Less: accumulated depreciation and amortization	2,188,998	1,778,597
Total real estate investments, net	13,630,499	15,006,124
Investment in unconsolidated entities	24,711	56,824
Investment in direct financing leases, net	40,785	46,312
Investment securities, at fair value	48,098	53,304
Mortgage notes receivable, net	23,014	24,238
Cash and cash equivalents	116,618	69,103
Restricted cash	61,828	59,767
Intangible assets, net	30,849	50,779
Rent and tenant receivables and other assets, net	339,529	303,637
Goodwill	1,602,610	1,656,374
Due from affiliates	20,883	60,633
Real estate assets held for sale, net	118,396	18,771
Total assets	16,057,820	17,405,866
LIABILITIES AND EQUITY
Mortgage notes payable and other debt, net	2,861,210	3,111,985
Corporate bonds, net	2,225,157	2,536,333
Convertible debt, net	970,691	962,894
Credit facility, net	496,008	1,448,590
Below-market lease liabilities, net	229,340	251,692
Accounts payable and accrued expenses	139,150	151,877
Deferred rent, derivative and other liabilities	89,154	87,490
Distributions payable	159,415	140,816
Due to affiliates	0	230
Total liabilities	7,170,125	8,691,907
Commitments and contingencies
EQUITY
Total partners’ equity	8,885,272	8,712,102
Non-controlling interests	2,423	1,857
Total equity	8,887,695	8,713,959
Total liabilities and equity	16,057,820	17,405,866
VEREIT Operating Partnership, L.P. [Member] | Preferred Units [Member]
EQUITY
General Partners' capital account	871,758	925,569
Limited Partners' capital account	3,207	3,315
VEREIT Operating Partnership, L.P. [Member] | Common Stock [Member]
EQUITY
General Partners' capital account	7,837,682	7,598,418
Limited Partners' capital account	$ 172,625	$ 184,800

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Sep. 30, 2016	Dec. 31, 2015
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (shares)	100,000,000	100,000,000
Preferred stock, shares issued (shares)	42,834,138	42,834,138
Preferred stock, shares outstanding (shares)	42,834,138	42,834,138
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (shares)	1,500,000,000	1,500,000,000
Common stock, shares issued (shares)	974,183,819	904,884,394
Common stock, shares outstanding (shares)	974,183,819	904,884,394
VEREIT Operating Partnership, L.P. [Member] | Preferred Units [Member]
General partners', units issued (shares)	42,834,138	42,834,138
General partners', units outstanding (shares)	42,834,138	42,834,138
Limited partners', units issued (shares)	86,874	86,874
Limited partners', units outstanding (shares)	86,874	86,874
VEREIT Operating Partnership, L.P. [Member] | Common Stock [Member]
General partners', units issued (shares)	974,183,819	904,884,394
General partners', units outstanding (shares)	974,183,819	904,884,394
Limited partners', units issued (shares)	23,748,347	23,763,797
Limited partners', units outstanding (shares)	23,748,347	23,763,797

XML

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Revenues:
Rental income		$ 303,383	$ 333,766	$ 928,706	$ 1,017,708
Direct financing lease income		494	659	1,598	2,097
Operating expense reimbursements		27,969	22,983	77,862	71,269
Cole Capital revenue		31,069	27,546	94,788	81,569
Total revenues		362,915	384,954	1,102,954	1,172,643
Operating expenses:
Cole Capital reallowed fees and commissions		5,897	3,896	20,940	9,637
Acquisition related		90	1,764	373	5,509
Litigation and other non-routine costs, net of insurance recoveries		4,630	8,032	2,372	41,319
Property operating		34,820	31,950	107,832	95,547
General and administrative		29,761	32,842	92,255	99,906
Depreciation and amortization		195,173	208,542	596,826	645,196
Impairments		6,872	0	176,214	85,341
Total operating expenses		277,243	287,026	996,812	982,455
Operating income		85,672	97,928	106,142	190,188
Other (expense) income:
Interest expense		(79,869)	(89,530)	(242,763)	(275,801)
(Loss) gain on extinguishment and forgiveness of debt, net		(2,003)	0	(1,751)	5,302
Other income, net		1,744	2,368	4,022	10,255
Equity in income and gain on disposition of unconsolidated entities		212	6,837	10,686	8,340
Loss on derivative instruments, net		(2,023)	(1,420)	(3,286)	(2,137)
Total other expenses, net		(81,939)	(81,745)	(233,092)	(254,041)
Income (loss) before taxes and real estate dispositions		3,733	16,183	(126,950)	(63,853)
Gain (loss) on disposition of real estate, net		28,111	(6,542)	45,723	(62,584)
Income (loss) before taxes		31,844	9,641	(81,227)	(126,437)
Provision for income taxes		(1,598)	(1,500)	(1,374)	(4,824)
Net income (loss)		30,246	8,141	(82,601)	(131,261)
Net (income) loss attributable to non-controlling interests	[1]	(751)	(612)	2,156	2,298
Net income (loss) attributable to the General Partner / OP		$ 29,495	$ 7,529	$ (80,445)	$ (128,963)
Basic and diluted net income (loss) per share attributable to common stockholders and limited partners (in dollars per share)		$ 0.01	$ (0.01)	$ (0.15)	$ (0.20)
Distributions declared per common share / unit (in dollars per share)		$ 0.14	$ 0.14	$ 0.41	$ 0.14
VEREIT Operating Partnership, L.P. [Member]
Revenues:
Rental income		$ 303,383	$ 333,766	$ 928,706	$ 1,017,708
Direct financing lease income		494	659	1,598	2,097
Operating expense reimbursements		27,969	22,983	77,862	71,269
Cole Capital revenue		31,069	27,546	94,788	81,569
Total revenues		362,915	384,954	1,102,954	1,172,643
Operating expenses:
Cole Capital reallowed fees and commissions		5,897	3,896	20,940	9,637
Acquisition related		90	1,764	373	5,509
Litigation and other non-routine costs, net of insurance recoveries		4,630	8,032	2,372	41,319
Property operating		34,820	31,950	107,832	95,547
General and administrative		29,761	32,842	92,255	99,906
Depreciation and amortization		195,173	208,542	596,826	645,196
Impairments		6,872	0	176,214	85,341
Total operating expenses		277,243	287,026	996,812	982,455
Operating income		85,672	97,928	106,142	190,188
Other (expense) income:
Interest expense		(79,869)	(89,530)	(242,763)	(275,801)
(Loss) gain on extinguishment and forgiveness of debt, net		(2,003)	0	(1,751)	5,302
Other income, net		1,744	2,368	4,022	10,255
Equity in income and gain on disposition of unconsolidated entities		212	6,837	10,686	8,340
Loss on derivative instruments, net		(2,023)	(1,420)	(3,286)	(2,137)
Total other expenses, net		(81,939)	(81,745)	(233,092)	(254,041)
Income (loss) before taxes and real estate dispositions		3,733	16,183	(126,950)	(63,853)
Gain (loss) on disposition of real estate, net		28,111	(6,542)	45,723	(62,584)
Income (loss) before taxes		31,844	9,641	(81,227)	(126,437)
Provision for income taxes		(1,598)	(1,500)	(1,374)	(4,824)
Net income (loss)		30,246	8,141	(82,601)	(131,261)
Net (income) loss attributable to non-controlling interests	[2]	(12)	(404)	23	(1,197)
Net income (loss) attributable to the General Partner / OP		$ 30,234	$ 7,737	$ (82,578)	$ (132,458)
Basic and diluted net income (loss) per unit attributable to common unitholders (in dollars per share)		$ 0.01	$ (0.01)	$ (0.15)	$ (0.20)
Distributions declared per common share / unit (in dollars per share)		$ 0.14	$ 0.14	$ 0.41	$ 0.14

[1] Represents (income) loss attributable to limited partners and consolidated joint venture partners.

[2] Represents (income) loss attributable to consolidated joint venture partners.

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Net income (loss)		$ 30,246	$ 8,141	$ (82,601)	$ (131,261)
Other comprehensive income (loss):
Unrealized gain (loss) on interest rate derivatives		3,178	(10,076)	(9,811)	(21,057)
Reclassification of previous unrealized loss on interest rate derivatives into net income (loss)		4,650	2,787	8,668	8,316
Unrealized loss on investment securities, net		(29)	(918)	(1,599)	(232)
Reclassification of previous unrealized loss on investment securities into net income (loss) as other income, net		0	0	0	110
Total other comprehensive income (loss)		7,799	(8,207)	(2,742)	(12,863)
Total comprehensive income (loss)		38,045	(66)	(85,343)	(144,124)
Comprehensive (income) loss attributable to non-controlling interests	[1]	(940)	(283)	2,236	2,627
Total comprehensive income (loss) attributable to the General Partner / OP		37,105	(349)	(83,107)	(141,497)
VEREIT Operating Partnership, L.P. [Member]
Net income (loss)		30,246	8,141	(82,601)	(131,261)
Other comprehensive income (loss):
Unrealized gain (loss) on interest rate derivatives		3,178	(10,076)	(9,811)	(21,057)
Reclassification of previous unrealized loss on interest rate derivatives into net income (loss)		4,650	2,787	8,668	8,316
Unrealized loss on investment securities, net		(29)	(918)	(1,599)	(232)
Reclassification of previous unrealized loss on investment securities into net income (loss) as other income, net		0	0	0	110
Total other comprehensive income (loss)		7,799	(8,207)	(2,742)	(12,863)
Total comprehensive income (loss)		38,045	(66)	(85,343)	(144,124)
Comprehensive (income) loss attributable to non-controlling interests	[2]	(12)	(404)	23	(1,197)
Total comprehensive income (loss) attributable to the General Partner / OP		$ 38,033	$ (470)	$ (85,320)	$ (145,321)

[1] Represents (income) loss attributable to limited partners and consolidated joint venture partners.

[2] Represents (income) loss attributable to consolidated joint venture partners.

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CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) $ in Thousands	Total	Series D Preferred Stock [Member]	Preferred Stock [Member]	Total Stockholders' Equity	Total Stockholders' Equity Series D Preferred Stock [Member]	Total Stockholders' Equity Preferred Stock [Member]	Preferred Stock [Member]	Common Stock [Member]	Additional Paid-In Capital [Member]	Accumulated Other Comprehensive Income (loss) [Member]	Accumulated Deficit [Member]	Accumulated Deficit [Member] Series D Preferred Stock [Member]	Accumulated Deficit [Member] Preferred Stock [Member]	Non-Controlling Interests [Member]
Beginning balance (shares) at Dec. 31, 2014							42,834,138	905,530,431
Beginning balance at Dec. 31, 2014	$ 9,382,330			$ 9,153,888			$ 428	$ 9,055	$ 11,920,253	$ 2,728	$ (2,778,576)			$ 228,442
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Repurchases of common stock to settle tax obligation (shares)								(183,492)
Repurchases of common stock to settle tax obligation	(1,634)			(1,634)				$ (1)	(1,633)
Equity-based compensation, net (shares)								(386,705)
Equity-based compensation, net	10,189			10,189				$ (4)	10,193
Distributions declared on common stock	(124,225)			(124,225)							(124,225)
Tax shortfall from equity-based compensation	(629)			(629)					(629)
Distributions to non-controlling interest holders	(16,879)													(16,879)
Distributions		$ (222)	$ (53,920)		$ (222)	$ (53,920)						$ (222)	$ (53,920)
Disposition of joint venture	6,339													6,339
Net loss	(131,261)			(128,963)							(128,963)			(2,298)
Other comprehensive loss	(12,863)			(12,534)						(12,534)				(329)
Ending balance (shares) at Sep. 30, 2015							42,834,138	904,960,234
Ending balance at Sep. 30, 2015	9,057,225			8,841,950			$ 428	$ 9,050	11,928,184	(9,806)	(3,085,906)			215,275
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Cumulative-effect adjustment for equity-based compensation forfeitures	0								384		(384)
Beginning balance (shares) at Dec. 31, 2015							42,834,138	904,884,394
Beginning balance at Dec. 31, 2015	8,713,959			8,523,987			$ 428	$ 9,049	11,931,768	(2,025)	(3,415,233)			189,972
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock (shares)								69,000,000
Issuance of common stock, net	702,482			702,482				$ 690	701,792
Conversion of OP Units to common stock (shares)								15,450
Conversion of OP Units to common stock	0			159					159					(159)
Repurchases of common stock to settle tax obligation (shares)								(424,726)
Repurchases of common stock to settle tax obligation	(4,148)			(4,148)				$ (4)	(4,144)
Equity-based compensation, net (shares)								708,701
Equity-based compensation, net	7,097			7,097				$ 7	7,090
Contributions from non-controlling interest holders	675													675
Distributions declared on common stock	(382,819)			(382,819)							(382,819)
Distributions to non-controlling interest holders	(9,889)													(9,889)
Distributions		$ (400)	$ (53,919)		$ (400)	$ (53,811)						$ (400)	$ (53,811)	(108)
Net loss	(82,601)			(80,445)							(80,445)			(2,156)
Other comprehensive loss	(2,742)			(2,662)						(2,662)				(80)
Ending balance (shares) at Sep. 30, 2016							42,834,138	974,183,819
Ending balance at Sep. 30, 2016	$ 8,887,695			$ 8,709,440			$ 428	$ 9,742	$ 12,637,049	$ (4,687)	$ (3,933,092)			$ 178,255

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CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - OP - USD ($) $ in Thousands	Total	General Partner [Member]	VEREIT Operating Partnership, L.P. [Member]	VEREIT Operating Partnership, L.P. [Member] Total Partners' Capital [Member]	VEREIT Operating Partnership, L.P. [Member] Preferred Units [Member] General Partner [Member]	VEREIT Operating Partnership, L.P. [Member] Preferred Units [Member] Limited Partner [Member]	VEREIT Operating Partnership, L.P. [Member] Common Units [Member] General Partner [Member]	VEREIT Operating Partnership, L.P. [Member] Common Units [Member] Limited Partner [Member]	VEREIT Operating Partnership, L.P. [Member] Noncontrolling Interest [Member]
Beginning balance (shares) at Dec. 31, 2014					42,834,138	86,874	905,530,431	23,763,797
Beginning balance at Dec. 31, 2014			$ 9,382,330	$ 9,358,631	$ 996,987	$ 3,375	$ 8,157,167	$ 201,102	$ 23,699
Increase (Decrease) in Partners' Capital [Roll Forward]
Repurchases of Common OP Units to settle tax obligation (shares)							(183,492)
Repurchases of common OP Units to settle tax obligation	$ (1,634)		(1,634)	(1,634)			$ (1,634)
Equity-based compensation, net (shares)							(386,705)
Equity-based compensation, net			10,189	10,189			$ 10,189
Tax shortfall from equity-based compensation	(629)		(629)	(629)			(629)
Distributions to Common OP Units and non-controlling interest holders	(16,879)		(141,326)	(127,716)			(124,447)	(3,269)	(13,610)
Distributions			(53,920)	(53,920)	$ (53,920)
Disposition of joint venture	6,339								6,339
Net loss	(131,261)		(131,261)	(132,458)			(128,963)	(3,495)	1,197
Other comprehensive loss	(12,863)		(12,863)	(12,863)			$ (12,534)	$ (329)
Ending balance (shares) at Sep. 30, 2015					42,834,138	86,874	904,960,234	23,763,797
Ending balance at Sep. 30, 2015			9,057,225	9,039,600	$ 943,067	$ 3,375	$ 7,899,149	$ 194,009	17,625
Beginning balance (shares) at Dec. 31, 2015					42,834,138	86,874	904,884,394	23,763,797
Beginning balance at Dec. 31, 2015			8,713,959	8,712,102	$ 925,569	$ 3,315	$ 7,598,418	$ 184,800	1,857
Increase (Decrease) in Partners' Capital [Roll Forward]
Issuance of common units (shares)							69,000,000
Issuance of common units, net			702,482	702,482			$ 702,482
Conversion of Limited Partner' Common OP Units to General Partner's Common OP Units (shares)							15,450	(15,450)
Conversion of Limited Partners' Common OP Units to General Partner's Common OP Units			0	0			$ 159	$ (159)
Repurchases of Common OP Units to settle tax obligation (shares)		(424,726)					(424,726)
Repurchases of common OP Units to settle tax obligation	(4,148)		(4,148)	(4,148)			$ (4,148)
Equity-based compensation, net (shares)							708,701
Equity-based compensation, net			7,097	7,097			$ 7,097
Contributions from non-controlling interest holders	675		675						675
Distributions to Common OP Units and non-controlling interest holders	(9,889)		(393,108)	(393,022)			(383,219)	(9,803)	(86)
Distributions			(53,919)	(53,919)	$ (53,811)	$ (108)
Net loss	(82,601)		(82,601)	(82,578)			(80,445)	(2,133)	(23)
Other comprehensive loss	$ (2,742)		(2,742)	(2,742)			$ (2,662)	$ (80)
Ending balance (shares) at Sep. 30, 2016					42,834,138	86,874	974,183,819	23,748,347
Ending balance at Sep. 30, 2016			$ 8,887,695	$ 8,885,272	$ 871,758	$ 3,207	$ 7,837,682	$ 172,625	$ 2,423

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CONSOLIDATED STATEMENT OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Cash flows from operating activities:
Net loss	$ (82,601)	$ (131,261)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	610,291	660,715
(Gain) loss on real estate assets and joint venture, net	(55,921)	55,855
Impairments	176,214	85,341
Equity-based compensation	7,097	10,189
Equity in income of unconsolidated entities	(488)	(1,611)
Distributions from unconsolidated entities	3,007	9,578
Loss on derivative instruments	3,286	2,137
(Gain) on investment securities	0	(65)
Loss (gain) on extinguishment and forgiveness of debt, net	1,751	(5,307)
Changes in assets and liabilities:
Investment in direct financing leases	1,861	1,503
Rent and tenant receivables and other assets, net	(51,702)	(59,509)
Due from affiliates	50	19,141
Accounts payable and accrued expenses	(6,726)	6,679
Deferred rent, derivative and other liabilities	(1,235)	(24,939)
Due to affiliates	(230)	(318)
Net cash provided by operating activities	604,654	628,128
Cash flows from investing activities:
Investments in real estate assets	(19,952)	(10,207)
Capital expenditures and leasing costs	(15,892)	(10,880)
Real estate developments	(6,288)	(51,863)
Principal repayments received from borrowers	4,906	6,043
Investments in unconsolidated entities	(2,500)	0
Proceeds from disposition of real estate and joint venture	615,246	413,270
Investment in leasehold improvements and other assets	(726)	0
Proceeds from sale of investments and other assets	0	229
Deposits for real estate assets	(11,686)	(15,105)
Uses and refunds of deposits for real estate assets	9,753	42,619
Line of credit advances to affiliates	(10,300)	(10,000)
Line of credit repayments from affiliates	50,000	10,000
Change in restricted cash	(5,674)	10,488
Net cash provided by investing activities	606,887	384,594
Cash flows from financing activities:
Proceeds from mortgage notes payable	1,450	1,379
Payments on mortgage notes payable and other debt, including extinguishment costs	(145,802)	(113,570)
Proceeds from credit facility	783,000	0
Payments on credit facility	(1,743,000)	(1,074,000)
Proceeds from corporate bonds	1,000,000	0
Payments on corporate bonds, including extinguishment costs	(1,311,208)	0
Payments of deferred financing costs	(19,056)	(2,412)
Repurchases of common stock / units to settle tax obligations	(4,148)	(1,634)
Proceeds from the issuance of Common Stock, net of underwriters’ discount	702,765	0
Payments of equity issuance costs	(274)	0
Contributions from non-controlling interest holders	675	0
Distributions paid	(428,428)	(67,537)
Net cash used in financing activities	(1,164,026)	(1,257,774)
Net change in cash and cash equivalents	47,515	(245,052)
Cash and cash equivalents, beginning of period	69,103	416,711
Cash and cash equivalents, end of period	116,618	171,659
2016 Term Loan [Member]
Cash flows from financing activities:
Proceeds from 2016 Term Loan	300,000
Repayment of 2016 Term Loan	(300,000)
2016 Term Loan [Member] | Secured Debt [Member]
Cash flows from financing activities:
Proceeds from 2016 Term Loan	300,000	0
Repayment of 2016 Term Loan	(300,000)	0
VEREIT Operating Partnership, L.P. [Member]
Cash flows from operating activities:
Net loss	(82,601)	(131,261)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	610,291	660,715
(Gain) loss on real estate assets and joint venture, net	(55,921)	55,855
Impairments	176,214	85,341
Equity-based compensation	7,097	10,189
Equity in income of unconsolidated entities	(488)	(1,611)
Distributions from unconsolidated entities	3,007	9,578
Loss on derivative instruments	3,286	2,137
(Gain) on investment securities	0	(65)
Loss (gain) on extinguishment and forgiveness of debt, net	1,751	(5,307)
Changes in assets and liabilities:
Investment in direct financing leases	1,861	1,503
Rent and tenant receivables and other assets, net	(51,702)	(59,509)
Due from affiliates	50	19,141
Accounts payable and accrued expenses	(6,726)	6,679
Deferred rent, derivative and other liabilities	(1,235)	(24,939)
Due to affiliates	(230)	(318)
Net cash provided by operating activities	604,654	628,128
Cash flows from investing activities:
Investments in real estate assets	(19,952)	(10,207)
Capital expenditures and leasing costs	(15,892)	(10,880)
Real estate developments	(6,288)	(51,863)
Principal repayments received from borrowers	4,906	6,043
Investments in unconsolidated entities	(2,500)	0
Proceeds from disposition of real estate and joint venture	615,246	413,270
Investment in leasehold improvements and other assets	(726)	0
Proceeds from sale of investments and other assets	0	229
Deposits for real estate assets	(11,686)	(15,105)
Uses and refunds of deposits for real estate assets	9,753	42,619
Line of credit advances to affiliates	(10,300)	(10,000)
Line of credit repayments from affiliates	50,000	10,000
Change in restricted cash	(5,674)	10,488
Net cash provided by investing activities	606,887	384,594
Cash flows from financing activities:
Proceeds from mortgage notes payable	1,450	1,379
Payments on mortgage notes payable and other debt, including extinguishment costs	(145,802)	(113,570)
Proceeds from credit facility	783,000	0
Payments on credit facility	(1,743,000)	(1,074,000)
Proceeds from corporate bonds	1,000,000	0
Payments on corporate bonds, including extinguishment costs	(1,311,208)	0
Payments of deferred financing costs	(19,056)	(2,412)
Repurchases of common stock / units to settle tax obligations	(4,148)	(1,634)
Proceeds from the issuance of Common Stock, net of underwriters’ discount	702,765	0
Payments of equity issuance costs	(274)	0
Contributions from non-controlling interest holders	675	0
Distributions paid	(428,428)	(67,537)
Net cash used in financing activities	(1,164,026)	(1,257,774)
Net change in cash and cash equivalents	47,515	(245,052)
Cash and cash equivalents, beginning of period	69,103	416,711
Cash and cash equivalents, end of period	116,618	171,659
VEREIT Operating Partnership, L.P. [Member] | 2016 Term Loan [Member] | Secured Debt [Member]
Cash flows from financing activities:
Proceeds from 2016 Term Loan	300,000	0
Repayment of 2016 Term Loan	$ (300,000)	$ 0

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Organization

9 Months Ended

Sep. 30, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization

Organization

VEREIT^® is a Maryland corporation, incorporated on December 2, 2010, that qualified as a real estate investment trust (“REIT”) for U.S. federal income tax purposes beginning in the taxable year ended December 31, 2011. VEREIT Operating Partnership, L.P. (together with its subsidiaries, the “Operating Partnership” or the “OP”), is a Delaware limited partnership of which the General Partner is the sole general partner. VEREIT’s common stock, par value $0.01 per share (“Common Stock”), and its 6.70% Series F Cumulative Redeemable Preferred Stock, par value $0.01 per share (“Series F Preferred Stock”) trade on the New York Stock Exchange (“NYSE”) under the trading symbols, “VER” and “VER PRF,” respectively. As used herein, the terms the “Company,” “we,” “our” and “us” refer to VEREIT, together with its consolidated subsidiaries, including the OP.

The Company is a full-service real estate operating company with investment management capabilities that operates through two reportable segments, its real estate investment (“REI”) segment and its investment management segment, Cole Capital^® (“Cole Capital”), as further discussed in Note 3 –Segment Reporting. Through the REI segment, the Company owns and actively manages a diversified portfolio of retail, restaurant, office and industrial real estate properties subject to long-term net leases with creditworthy tenants. The Company actively manages its portfolio considering a number of metrics including property type, concentration and key economic factors for appropriate balance and diversity. Through the Cole Capital segment, the Company is responsible for raising capital for and managing the affairs of the Cole REITs^® (as defined in Note 3 –Segment Reporting) on a day-to-day basis, identifying and making acquisitions and investments on the Cole REITs’ behalf, and recommending to the respective board of directors of each of the Cole REITs an approach for providing investors with liquidity. Cole Capital receives compensation and reimbursement for performing these services. To support both reportable segments, the Company employs a shared services model pursuant to which its personnel are integral in providing, among other things, transactional and operational functions to the Company’s owned portfolio and the Cole REITs.

Substantially all of the REI segment’s operations are conducted through the OP. VEREIT is the sole general partner and holder of 97.6% of the common equity interests in the OP as of September 30, 2016 with the remaining 2.4% of the common equity interests owned by unaffiliated investors and certain former directors, officers and employees of ARC Properties Advisors, LLC (the “Former Manager”). Under the limited partnership agreement of the OP, as amended (the “LPA”), after holding units of limited partner interests in the OP (“OP Units”) for a period of one year, unless an earlier redemption is otherwise consented to by VEREIT, holders of OP Units have the right to redeem the OP Units for the cash value of a corresponding number of shares of VEREIT’s Common Stock or, at the option of VEREIT, a corresponding number of shares of VEREIT’s Common Stock. The remaining rights of the holders of OP Units are limited, however, and do not include the ability to replace the General Partner or to approve the sale, purchase or refinancing of the OP’s assets.

Substantially all of the Cole Capital segment’s operations are conducted through Cole Capital Advisors, Inc. (“CCA”), an Arizona corporation and a wholly owned subsidiary of the OP. CCA is treated as a taxable REIT subsidiary (“TRS”) under Section 856 of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”).

The actions of the OP and its relationship with the General Partner are governed by the LPA. The General Partner does not have any significant assets other than its investment in the OP. Therefore, the assets and liabilities of the General Partner and the OP are substantially the same. Additionally, pursuant to the LPA, all administrative expenses and expenses associated with the formation, continuity, existence and operation of the General Partner incurred by the General Partner on the OP’s behalf shall be treated as expenses of the OP. Further, when the General Partner issues any equity instrument that has been approved by the General Partner’s board of directors, the LPA requires the OP to issue to the General Partner equity instruments with substantially similar terms, to protect the integrity of the Company’s umbrella partnership REIT structure, pursuant to which each holder of interests in the OP has a proportionate economic interest in the OP reflecting its capital contributions thereto. OP Units issued to the General Partner are referred to as General Partner OP Units. OP Units issued to parties other than the General Partner are referred to as Limited Partner OP Units. The LPA also provides that the OP issue debt with terms and provisions consistent with debt issued by the General Partner. The LPA will be amended to provide for the issuance of any additional class of equivalent equity instruments to the extent the General Partner’s board of directors authorizes the issuance of any new class of equity securities.

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Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2016

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Basis of Accounting

The consolidated financial statements of the Company presented herein include the accounts of the General Partner and its consolidated subsidiaries, including the OP. All intercompany transactions have been eliminated upon consolidation. The financial statements are prepared on the accrual basis of accounting in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”). The information furnished includes all adjustments and accruals of a normal recurring nature, which, in the opinion of management, are necessary for a fair presentation of results for the interim periods. The results of operations for the three and nine months ended September 30, 2016 are not necessarily indicative of the results for the entire year or any subsequent interim period.

These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto as of and for the year ended December 31, 2015 of the Company, which are included in the Company’s Annual Report on Form 10-K filed on February 24, 2016. There have been no significant changes to the Company’s significant accounting policies during the nine months ended September 30, 2016. Information and footnote disclosures normally included in financial statements have been condensed or omitted pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) and U.S. GAAP.

Principles of Consolidation and Basis of Presentation

The consolidated financial statements include the accounts of the Company and its subsidiaries and consolidated joint venture arrangements. The portions of the consolidated joint venture arrangements not owned by the Company are presented as non-controlling interests in VEREIT’s and the OP’s consolidated balance sheets, statements of operations, statements of comprehensive income (loss) and statements of changes in equity. In addition, as described in Note 1 – Organization, certain third parties have been issued OP Units. Holders of OP Units are considered to be non-controlling interest holders in the OP and their ownership interest in the limited partner’s share is presented as non-controlling interests in VEREIT’s consolidated balance sheets, statements of operations, statements of comprehensive income (loss) and statements of changes in equity. Further, a portion of the earnings and losses of the OP are allocated to non-controlling interest holders based on their respective ownership percentages. Upon conversion of OP Units to Common Stock, any difference between the fair value of shares of Common Stock issued and the carrying value of the OP Units converted is recorded as a component of equity. As of September 30, 2016 and December 31, 2015, there were approximately 23.75 million and 23.76 million Limited Partner OP Units outstanding, respectively.

For legal entities being evaluated for consolidation, the Company must first determine whether the interests that it holds and fees it receives qualify as variable interests in the entity. A variable interest is an investment or other interest that will absorb portions of an entity’s expected losses or receive portions of the entity’s expected residual returns. The Company’s evaluation includes consideration of fees paid to the Company where the Company acts as a decision maker or service provider to the entity being evaluated. If the Company determines that it holds a variable interest in an entity, it evaluates whether that entity is a variable interest entity (“VIE”). VIEs are entities where investors lack sufficient equity at risk for the entity to finance its activities without additional subordinated financial support or where equity investors, as a group, lack one of the following characteristics: (a) the power to direct the activities that most significantly impact the entity’s economic performance, (b) the obligation to absorb the expected losses of the entity, or (c) the right to receive the expected returns of the entity.

The Company then qualitatively assesses whether it is (or is not) the primary beneficiary of a VIE, which is generally defined as the party who has a controlling financial interest in the VIE. Consideration of various factors include, but are not limited to, the Company’s ability to direct the activities that most significantly impact the entity’s economic performance and its obligation to absorb losses from or right to receive benefits of the VIE that could potentially be significant to the VIE. The Company consolidates any VIEs when the Company is determined to be the primary beneficiary of the VIE and the difference between consolidating the VIE and accounting for it using the equity method could be material to the Company’s consolidated financial statements. The Company continually evaluates the need to consolidate these VIEs based on standards set forth in U.S. GAAP.

Reclassification

As described below, the following items previously reported have been reclassified to conform with the current period’s presentation.

The land and construction in progress line item from prior periods has been combined into the land caption in the consolidated balance sheets. The gain on forgiveness of debt previously included in other income, net has been combined into the caption (loss) gain on extinguishment and forgiveness of debt, net in the consolidated statements of operations. Additionally, equity in income of unconsolidated joint ventures previously included in other income, net in the consolidated statements of operations has been included in a separate caption entitled equity in income and gain on disposition of unconsolidated entities. Insurance recoveries previously included in other income, net in the consolidated statements of operations has been included in litigation and other non-routine costs, net of insurance recoveries.

Restricted Cash

The Company had $61.8 million and $59.8 million, respectively, in restricted cash as of September 30, 2016 and December 31, 2015. Restricted cash primarily consists of reserves related to lease expirations, as well as maintenance, structural and debt service reserves. In accordance with certain debt agreements, rent from certain of the Company’s tenants is deposited directly into a lockbox account, from which the monthly debt service payments are disbursed to the lender and the excess funds are then disbursed to the Company. Included in restricted cash at September 30, 2016 was $52.2 million in lender reserves and $9.6 million held in restricted lockbox accounts. Included in restricted cash at December 31, 2015 was $47.9 million in lender reserves and $11.9 million held in restricted lockbox accounts.

Revenue Recognition – REI

The Company’s revenues, which primarily consist of rental income and include rents that each tenant pays in accordance with the terms of each lease reported on a straight-line basis over the initial non-cancelable term of the lease, are recognized when earned and collectability is reasonably assured. When the Company acquires a property, the term of each existing lease is considered to commence as of the acquisition date for the purposes of this calculation. Since many of the leases provide for rental increases at specified intervals, straight-line basis accounting requires the Company to record a receivable, and include in revenues, straight-line rent receivables that the Company will only receive if the tenant makes all rent payments required through the expiration of the initial term of the lease. Straight-line rent receivables are included in rent and tenant receivables and other assets, net, in the consolidated balance sheets. See Note 8 – Rent and Tenant Receivables and Other Assets, Net. Cost recoveries from tenants are included in operating expense reimbursements in the consolidated statements of operations in the period the related costs are incurred. The Company defers the revenue related to lease payments received from tenants in advance of their due dates. As of September 30, 2016 and December 31, 2015, the Company had $70.9 million and $67.2 million, respectively, of deferred rental income, which is included in deferred rent, derivative and other liabilities in the consolidated balance sheets.

The Company continually reviews receivables related to rent and unbilled rent receivables and determines collectability 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 the event that the collectability of a receivable is uncertain, the Company will record an increase in the allowance for uncollectible accounts in the consolidated balance sheets and in the consolidated statements of operations as a reduction to rental income. As of September 30, 2016 and December 31, 2015, the Company maintained an allowance for uncollectible accounts of $8.3 million and $6.6 million, respectively.

Revenue Recognition – Cole Capital

Revenue includes securities sales commissions, dealer manager fees, distribution and stockholder servicing fees, real estate acquisition fees, financing coordination fees, property management fees, advisory fees, asset management fees and performance fees for services relating to the Cole REITs’ offerings and the investment and management of their respective assets, in accordance with the respective dealer manager and advisory agreements. The Company records dealer manager fees, excluding those related to INAV (as defined in Note 3 –Segment Reporting), and securities sales commissions as revenue upon the sale of Cole REIT shares. Dealer manager fees from the sale of INAV shares and distribution and stockholder servicing fees are recorded as revenue when the fees are fixed or determinable. The Company records revenue related to acquisition and financing coordination fees upon completion of a transaction and advisory, asset and property management fees as services are performed. The Company is also reimbursed for certain costs incurred in providing these services. Securities sales commissions and dealer manager reimbursements are recorded as revenue as the expenses are incurred, as long as reimbursement is reasonably assured. 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 issued by such participating broker-dealers and the amount of marketing support provided by such participating broker-dealers. The Company also reallows 100% of selling commissions earned to participating broker-dealers. Refer to Note 17 –Related Party Transactions and Arrangements for further discussion. In addition, the Company earns property management, asset management and disposition fees from certain joint ventures and other real estate programs.

Acquisition Related Expenses and Litigation and Other Non-routine Costs

All costs incurred as a result of a business combination are classified as acquisition related expenses or other non-routine transaction related expenses and expensed as incurred. Acquisition related expenses include legal and other transaction related costs incurred in connection with self-originated acquisitions, including purchases of portfolios. In addition, indirect costs, such as internal salaries, that are tracked and documented in a manner that clearly indicates that the activities driving the cost directly relate to activities necessary to complete, or effect, self-originating purchases are classified as acquisition related expenses.

Similar costs incurred in relation to mergers (which are not considered self-originating purchases) and litigation resulting therefrom and other non-routine transactions are included in litigation and other non-routine costs, net of insurance recoveries in the consolidated statements of operations. The Company has also incurred legal fees and other costs associated with the Audit Committee Investigation (defined below) and the litigations and investigations resulting therefrom, which are considered non-routine. The Company has directors’ and officers’ insurance and the insurance carriers have paid certain defense costs subject to standard reservation of rights under the respective policies.

Litigation and other non-routine costs include the following costs (amounts in thousands):

	Three Months Ended September 30,							Nine Months Ended September 30,
	2016			2015				2016			2015
Litigation and other non-routine costs:
Audit Committee Investigation and related matters (1)	$	5,221		$	9,251			$	13,413		$	38,953
Legal fees and expenses	59			(294		)	(2)	155			2,659			(3)
Other fees and expenses	—			—				—			632
Total costs incurred	5,280			8,957				13,568			42,244
Insurance recoveries	(650		)	(925		)		(11,196		)	(925		)
Total	$	4,630		$	8,032			$	2,372		$	41,319

___________________________________

(1) Includes all fees and costs associated with the previously-announced investigation conducted by the audit committee (the “Audit Committee”) of the General Partner’s board of directors (the “Audit Committee Investigation”) and various litigations and investigations prompted by the results of the Audit Committee Investigation, including fees and costs incurred pursuant to the Company’s advancement obligations.

(2) The negative balance for the three months ended September 30, 2015 is a result of estimated costs accrued in prior periods that exceeded actual expenses incurred.

(3) Primarily relates to fees incurred in connection with a legal matter resolved in early 2014.

Income Taxes

The General Partner currently qualifies and has elected to be taxed as a REIT for U.S. federal income tax purposes under Sections 856 through 860 of the Internal Revenue Code. As a REIT, except as discussed below, the General Partner generally is not subject to federal income tax on taxable income that it distributes to its stockholders so long as it distributes at least 90% of its annual taxable income (computed without regard to the deduction for dividends paid and excluding net capital gains). REITs are subject to a number of other organizational and operational requirements. Even if the General Partner maintains its qualification for taxation as a REIT, it may be subject to certain state and local taxes on its income and property, federal income taxes on certain income and excise taxes on its undistributed income.

The OP is classified as a partnership for U.S. federal income tax purposes. As a partnership, the OP is not a taxable entity for U.S. federal income tax purposes. Instead, each partner in the OP is required to take into account its allocable share of the OP’s income, gains, losses, deductions and credits for each taxable year. However, the OP may be subject to certain state and local taxes on its income and property.

As of September 30, 2016, the OP and the General Partner had no material uncertain income tax positions. The tax years subsequent to and including the fiscal year ended December 31, 2011 remain open to examination by the major taxing jurisdictions to which the OP, the General Partner, American Realty Capital Trust III, Inc. (“ARCT III”), CapLease, Inc. (“CapLease”), American Realty Capital Trust IV, Inc., (“ARCT IV”), Cole Real Estate Investments, Inc. (“Cole”) and Cole Credit Property Trust, Inc. are subject.

Under the LPA, the OP is to conduct business in such a manner as to permit the General Partner at all times to qualify as a REIT.

The Company conducts substantially all of its Cole Capital segment business activities through a TRS. A TRS is a subsidiary of a REIT that is subject to corporate federal, state and local income taxes, as applicable. The Company’s use of a TRS enables it to engage in certain business activities while complying with the REIT qualification requirements and to retain any income generated by these businesses for reinvestment without the requirement to distribute those earnings. The Company conducts all of its business in the United States and Canada and, as a result, it files income tax returns in the U.S. federal jurisdiction, the Canadian federal jurisdiction and various state and local jurisdictions. Certain of the Company’s inter-company transactions that have been eliminated in consolidation for financial accounting purposes are also subject to taxation.

The Company provides for income taxes in accordance with current authoritative accounting and tax guidance. The tax provision or benefit related to significant or unusual items is recognized in the quarter in which those items occur. In addition, the effect of changes in enacted tax laws, rates or tax status is recognized in the quarter in which the change occurs. The accounting estimates used to compute the provision for or benefit from income taxes may change as new events occur, additional information is obtained or the tax environment changes.

Recent Accounting Pronouncements

In May 2014, the U.S. Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update, (“ASU”) 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which supersedes the revenue recognition requirements in Revenue Recognition, Accounting Standards Codification (“ASC”) (Topic 605) and requires an entity to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In August 2015, an amendment to ASU 2014-09, ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date (“ASU 2015-14”), was issued to defer the effective date for all entities by one year. For public business entities, certain not-for-profit entities and certain employee benefit plans, the guidance should be applied to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. The Company has identified its revenue streams and is in the process of evaluating the impact on its financial statements and internal accounting processes; however, as the majority of the Company’s revenue is derived from real estate lease contracts, as discussed in relation to ASU 2016-02 Leases (Topic 842) (“ASU 2016-02”), the Company does not expect that the adoption of ASU 2014-09 or related amendments and modifications issued by the FASB will have a material impact on its financial statements.

In January 2016, the FASB issued ASU 2016-01, Financial Instruments(Subtopic 825-10), which requires all equity investments to be measured at fair value with changes in the fair value recognized through net income (other than those accounted for under equity method of accounting or those that result in consolidation of the investee). The amendments in this update also require an entity to present separately in other comprehensive income, the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. In addition, the amendments in this update require separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements. The amendments in this update are effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. The Company is currently evaluating the impact that this new guidance will have on its financial statements.

In February 2016, the FASB issued ASU 2016-02, which will require that a lessee recognize assets and liabilities on the balance sheet for all leases with a lease term of more than 12 months, with the result being the recognition of a right of use asset and a lease liability and the disclosure of key information about the entity's leasing arrangements. ASU 2016-02 retains a distinction between finance leases (i.e., capital leases under current U.S. GAAP) and operating leases. The classification criteria for distinguishing between finance leases and operating leases will be substantially similar to the classification criteria for distinguishing between capital leases and operating leases under current U.S. GAAP. The amendments in ASU 2016-02 are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. A modified retrospective approach is required for existing leases that have not expired upon adoption. The Company is currently evaluating the impact this amendment will have on its consolidated financial statements.

In March 2016, the FASB issued ASU 2016-05, Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships (Topic 815). The amendments in this update clarify that a change in the counterparty to a derivative instrument that has been designated as the hedging instrument does not, in and of itself, require de-designation of that hedging relationship provided that all other hedge accounting criteria continue to be met. These provisions are effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact this amendment will have on its consolidated financial statements.

In March 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation (Topic 718): Improvement to Employee Share-Based Payment Accounting (“ASU 2016-09”), which affects entities that issue share-based payment awards to their employees. ASU 2016-09 is designed to simplify several aspects of accounting for share-based payment award transactions including the income tax consequences, classification of awards as either equity or liabilities, classification on the statement of cash flows and forfeiture rate calculations. The guidance will be effective for annual reporting periods beginning after December 15, 2016 and interim periods within those fiscal years with early adoption permitted. The Company elected to early adopt this guidance during the first quarter of 2016, which did not have a material effect on the Company’s consolidated financial statements. In connection with the adoption, the Company modified the consolidated statement of changes in equity to include the line item cumulative-effect adjustment for equity-based compensation forfeitures, which represents application of the accounting change on a modified retrospective basis.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326) (“ASU 2016-13”). ASU 2016-13 is intended to improve financial reporting by requiring more timely recording of credit losses on loans and other financial instruments that are not accounted for at fair value through net income, including loans held for investment, held-to-maturity debt securities, trade and other receivables, net investment in leases and other such commitments. ASU 2016-13 requires that financial assets measured at amortized cost be presented at the net amount expected to be collected, through an allowance for credit losses that is deducted from the amortized cost basis. The amendments in ASU 2016-13 require the Company to measure all expected credit losses based upon historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the financial assets and eliminates the “incurred loss” methodology in current GAAP. ASU 2016-13 is effective for fiscal years, and interim periods within, beginning after December 15, 2019. Early adoption is permitted for fiscal years, and interim periods within, beginning after December 15, 2018. The Company is currently evaluating the impact this amendment will have on its consolidated financial statements.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”), which is intended to address diversity in practice related to how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The amendments in ASU 2016-15 address eight specific cash flow issues as well as application of the predominance principle (dependence on predominant source or use of receipt or payment) and are effective for public business entities for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years with early adoption permitted. ASU 2016-15 requires retrospective adoption unless it is impracticable to apply, in which case it is to be applied prospectively as of the earliest date practicable. The Company is currently evaluating the impact this amendment will have on its consolidated financial statements.

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Segment Reporting

9 Months Ended

Sep. 30, 2016

Segment Reporting [Abstract]

Segment Reporting

Segment Reporting

The Company has organized its operations into two segments for management and internal financial reporting purposes, REI and Cole Capital, as further discussed below.

REI – Through its REI segment, the Company owns and actively manages a diversified portfolio of retail, restaurant, office and industrial real estate properties subject to long-term net leases with creditworthy tenants. As of September 30, 2016, the Company owned 4,213 properties comprising 96.9 million square feet of retail and commercial space located in 49 states, Puerto Rico and Canada, which includes properties owned through consolidated joint ventures. The rentable space at these properties was 98.0% leased with a weighted-average remaining lease term of 10.0 years. In addition, as of September 30, 2016, the Company owned eight commercial mortgage-backed securities (“CMBS”) and nine mortgage notes receivable.

Cole Capital – Through its Cole Capital segment, the Company is responsible for managing the day-to-day affairs of Cole Credit Property Trust IV, Inc. (“CCPT IV”); Cole Real Estate Income Strategy (Daily NAV), Inc. (“INAV”); Cole Office & Industrial REIT (CCIT II), Inc. (“CCIT II”); Cole Office & Industrial REIT (CCIT III), Inc. (“CCIT III”), Cole Credit Property Trust V, Inc. (“CCPT V”); and other real estate offerings in registration (collectively with CCPT IV, INAV, CCIT II, CCIT III and CCPT V, the “Cole REITs”), raising capital for those Cole REITs still in offering, identifying and making acquisitions and investments on the Cole REITs’ behalf and recommending to the respective board of directors of each of the Cole REITs an approach for providing investors with liquidity. Cole Capital serves as the dealer manager and distributes shares of common stock for certain Cole 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. Cole Capital receives compensation and reimbursement for services relating to the Cole REITs’ offerings and the investment, management, financing and disposition of their respective assets, as applicable. Cole Capital also develops new REIT offerings and assists in obtaining regulatory approvals from the SEC, the Financial Industry Regulatory Authority, Inc. and various blue sky jurisdictions for such offerings. See Note 17 –Related Party Transactions and Arrangements for further discussion on the Cole REITs.

The Company allocates certain operating expenses, such as legal fees, employee related costs and benefits and general overhead expenses between its operating segments. The following tables present a summary of the comparative financial results and total assets for each segment (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
REI segment:
Revenues:
Rental income	$	303,383		$	333,766		$	928,706		$	1,017,708
Direct financing lease income	494			659			1,598			2,097
Operating expense reimbursements	27,969			22,983			77,862			71,269
Total real estate investment revenues	331,846			357,408			1,008,166			1,091,074
Operating expenses:
Acquisition related	90			1,690			334			4,976
Litigation and other non-routine costs, net of insurance recoveries	4,630			8,032			2,372			41,319
Property operating	34,820			31,950			107,832			95,547
General and administrative	12,069			15,848			37,998			48,045
Depreciation and amortization	187,897			200,158			574,124			620,068
Impairment of real estate	6,872			—			176,214			85,341
Total operating expenses	246,378			257,678			898,874			895,296
Operating income	85,468			99,730			109,292			195,778
Other (expense) income:
Interest expense	(79,869		)	(89,530		)	(242,763		)	(275,801		)
(Loss) gain on extinguishment and forgiveness of debt, net	(2,003		)	—			(1,751		)	5,302
Other income, net	1,649			1,903			3,433			8,179
Equity in income and gain on disposition of unconsolidated entities	212			6,837			10,686			8,340
Loss on derivative instruments, net	(2,023		)	(1,420		)	(3,286		)	(2,137		)
Total other expenses, net	(82,034		)	(82,210		)	(233,681		)	(256,117		)
Income (loss) before taxes and real estate dispositions	3,434			17,520			(124,389		)	(60,339		)
Gain (loss) on disposition of real estate, net	28,111			(6,542		)	45,723			(62,584		)
Income (loss) before taxes	31,545			10,978			(78,666		)	(122,923		)
Provision for income taxes	(1,539		)	(2,238		)	(4,695		)	(7,211		)
Net income (loss)	$	30,006		$	8,740		$	(83,361	)	$	(130,134	)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Cole Capital segment:
Revenues:
Offering-related fees and reimbursements	$	9,545		$	5,850		$	32,850		$	14,483
Transaction service fees and reimbursements	3,779			7,400			10,639			24,696
Management fees and reimbursements	17,745			14,296			51,299			42,390
Total Cole Capital revenues	31,069			27,546			94,788			81,569
Operating expenses:
Cole Capital reallowed fees and commissions	5,897			3,896			20,940			9,637
Acquisition related	—			74			39			533
General and administrative	17,692			16,994			54,257			51,861
Depreciation and amortization	7,276			8,384			22,702			25,128
Total operating expenses	30,865			29,348			97,938			87,159
Operating income (loss)	204			(1,802		)	(3,150		)	(5,590		)
Total other income, net	95			465			589			2,076
Income (loss) before taxes	299			(1,337		)	(2,561		)	(3,514		)
(Provision for) benefit from income taxes	(59		)	738			3,321			2,387
Net income (loss)	$	240		$	(599	)	$	760		$	(1,127	)
Total Company:
Total revenues	$	362,915		$	384,954		$	1,102,954		$	1,172,643
Total operating expenses	$	(277,243	)	$	(287,026	)	$	(996,812	)	$	(982,455	)
Total other expense, net	$	(81,939	)	$	(81,745	)	$	(233,092	)	$	(254,041	)
Net income (loss)	$	30,246		$	8,141		$	(82,601	)	$	(131,261	)

	Total Assets
	September 30, 2016		December 31, 2015
REI segment	$	15,668,974	$	16,966,729
Cole Capital segment	388,846		439,137
Total Company	$	16,057,820	$	17,405,866

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Goodwill and Other Intangibles

9 Months Ended

Sep. 30, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangibles

Goodwill and Other Intangibles

Goodwill

In connection with prior mergers, the Company recorded goodwill as a result of the merger consideration exceeding the net assets acquired. The goodwill recorded as a result of the merger of Cole with and into a wholly owned subsidiary of the Company (the “Cole Merger”) was allocated between the Company’s two segments, the REI segment and the Cole Capital segment. The REI segment and the Cole Capital segment each comprise one reporting unit.

In the event the Company disposes of a property that constitutes a business under U.S. GAAP, the Company will allocate a portion of the REI segment’s goodwill to that property in determining the gain or loss on the disposal of the property. The amount of goodwill allocated to the property will be based on the relative fair value of the property to the fair value of the REI segment. Future property acquisitions that constitute a business will be integrated into the REI segment and therefore will also be allocated goodwill upon disposition.

The Company evaluates goodwill for impairment annually or more frequently when an event occurs or circumstances change that indicate the carrying value, by reporting unit, may not be recoverable. The analysis for the annual goodwill test is performed during the fourth quarter. The Company tests goodwill for impairment by first comparing the carrying value of net assets to the fair value of each reporting unit. If the fair value is determined to be less than the carrying value or if qualitative factors indicate that it is more likely than not that goodwill is impaired, a second step is performed to compute the amount of impairment as the difference between the fair value of goodwill and the carrying value. The Company estimates the fair value of the reporting units using discounted cash flows and relevant competitor multiples. The evaluation of goodwill for potential impairment requires the Company’s management to exercise significant judgment and to make certain assumptions. While the Company believes its assumptions are reasonable, there are no guarantees as to actual results. Changes in assumptions based on actual results may have a material impact on the Company’s financial results.

The fair value of the Cole Capital segment is dependent upon actual results, including, but not limited to, the timing and amount of aggregate capital raised and deployed on behalf of the Cole REITs, which is influenced by the Company’s ability to reinstate certain selling agreements that were suspended as a result of the Audit Committee Investigation and the resulting restatements, as well as regulatory requirements affecting broker-dealers. If the Company is unable to reinstate selling agreements or raise and deploy capital as estimated, the fair values of the Cole Capital segment and intangible assets may be less than the respective carrying value, resulting in an impairment that could have a material effect on the Company’s financial results. In addition, the actual timing of closing an offering or executing a liquidity event on behalf of a Cole REIT or the commencement of operations of newly formed REITs, which are not yet effective, may differ from the Company’s assumptions.

During the nine months ended September 30, 2016 and 2015, management monitored the actual performance of the business segments relative to the fair value assumptions used during the annual goodwill impairment test. For the periods presented, management determined it remains more likely than not that the fair value of the reporting unit is greater than its carrying value.

The following table summarizes the Company’s goodwill activity by segment during the nine months ended September 30, 2016 and 2015 (in thousands):

	REI Segment			Cole Capital Segment		Consolidated
Balance as of December 31, 2015	$	1,410,631		$	245,743	$	1,656,374
Goodwill allocated to dispositions and held for sale assets (1) (2)	(53,764		)	—		(53,764		)
Balance as of September 30, 2016	$	1,356,867		$	245,743	$	1,602,610

	REI Segment			Cole Capital Segment		Consolidated
Balance as of December 31, 2014	$	1,509,396		$	385,398	$	1,894,794
Goodwill allocated to dispositions and held for sale assets (1)	(66,789		)	—		(66,789		)
Balance as of September 30, 2015	$	1,442,607		$	385,398	$	1,828,005

_______________________________________________

(1) Included in gain (loss) on disposition of real estate, net, in the consolidated statement of operations.

(2) Includes $51.5 million of goodwill allocated to the cost basis of properties disposed of and classified as held for sale as discussed in Note 5 –Real Estate Investments and $2.3 million of goodwill allocated to the cost basis of two properties foreclosed upon as discussed in Note 10 –Debt during the nine months ended September 30, 2016.

Intangible Assets

The intangible assets primarily consisted of management and advisory contracts that the Company has with certain Cole REITs, which are subject to an estimated useful life of approximately four years.

The Company evaluates intangible assets for impairment when an event occurs or circumstances change that indicate the carrying value may not be recoverable. The Company tests intangible assets for impairment by first comparing the carrying value of the asset group to the undiscounted future cash flows expected from the use of the assets and their eventual disposition. In the event that such expected undiscounted future cash flows do not exceed the carrying value, the Company will adjust the intangible assets to their respective fair values and recognize an impairment loss.

The Company will estimate the fair value of the intangible assets using a discounted cash flow model specific to the applicable Cole REITs. The evaluation of intangible assets for potential impairment requires the Company’s management to exercise significant judgment and to make certain assumptions. While the Company believes its assumptions are reasonable, there are no guarantees as to actual results. Changes in assumptions based on actual results may have a material impact on the Company’s financial results. There were no events or changes in circumstances that indicated that intangible assets were impaired during the nine months ended September 30, 2016 or 2015.

The Company recorded $6.2 million and $19.9 million of amortization expenses related to the intangible assets for the three and nine months ended September 30, 2016, respectively and $7.5 million and $22.5 million of amortization expense related to the intangible assets for the three and nine months ended September 30, 2015, respectively. The estimated amortization expense is expected to be $6.2 million for the remainder of the year ending December 31, 2016, $16.6 million and $4.0 million for the years ending December 31, 2017 and 2018, respectively, and $3.8 million for the nine months ended September 30, 2019. The intangible assets were $30.8 million and $50.8 million, net of accumulated amortization of $23.3 million and $3.4 million, respectively, as of September 30, 2016 and December 31, 2015.

Intangible Lease Assets and Liabilities

Intangible lease assets and liabilities of the Company consisted of the following as of September 30, 2016 and December 31, 2015 (amounts in thousands, except weighted-average useful life):

	Weighted-Average Useful Life	September 30, 2016		December 31, 2015
Intangible lease assets:
In-place leases, net of accumulated amortization of $469,617 and $398,770, respectively	14.8	$	1,246,392	$	1,458,354
Leasing commissions, net of accumulated amortization of $1,681 and $1,035, respectively	9.5	8,541		4,872
Above-market leases, net of accumulated amortization of $63,952 and $47,041, respectively	16.6	282,893		308,306
Total intangible lease assets, net		$	1,537,826	$	1,771,532
Intangible lease liabilities:
Below-market leases, net of accumulated amortization of $52,027 and $38,340, respectively	18.0	$	229,340	$	251,692

The following table provides the projected amortization expense and adjustments to rental income related to the intangible lease assets and liabilities for the next five years as of September 30, 2016 (amounts in thousands):

	October 1, 2016 - December 31, 2016		2017		2018		2019		2020
In-place leases:
Total projected to be included in amortization expense	$	41,368	$	149,340	$	136,656	$	125,238	$	116,997
Leasing Commissions
Total projected to be included in amortization expense	271		1,167		979		901		850
Above-market lease assets:
Total projected to be deducted from rental income	6,371		24,995		24,460		22,529		22,087
Below-market lease liabilities:
Total projected to be included in rental income	6,629		20,114		19,787		19,049		17,857

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Real Estate Investments

9 Months Ended

Sep. 30, 2016

Real Estate [Abstract]

Real Estate Investments

Real Estate Investments

The Company acquired controlling financial interests in one commercial property for a purchase price of $20.0 million during the nine months ended September 30, 2016. During the nine months ended September 30, 2015, the Company acquired controlling interests in 14 commercial properties, including nine land parcels, for an aggregate purchase price of $10.2 million.

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

	Nine Months Ended September 30,
	2016		2015
Real estate investments, at cost:
Land	$	4,215	$	4,187
Buildings, fixtures and improvements	14,555		5,258
Total tangible assets	18,770		9,445
Acquired intangible assets:
In-place leases	1,182		717
Above-market leases	—		153
Assumed intangible liabilities:
Below-market leases	—		(108		)
Total purchase price of assets acquired	$	19,952	$	10,207

Future Lease Payments

The following table presents future minimum base rent 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)
October 1, 2016 - December 31, 2016	$	268,066	$	1,001
2017	1,131,536		3,818
2018	1,108,872		3,016
2019	1,068,910		2,397
2020	1,031,688		2,023
Thereafter	7,574,101		5,893
Total	$	12,183,173	$	18,148

____________________________________

(1) 33 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 minimum base rental cash payments due to the Company under the lease agreements on these respective properties.

Investment in Direct Financing Leases, Net

The components of the Company’s net investment in direct financing leases as of September 30, 2016 and December 31, 2015 are as follows (in thousands):

	September 30, 2016			December 31, 2015
Future minimum lease payments receivable	$	18,148		$	21,993
Unguaranteed residual value of property	28,235			31,562
Unearned income	(5,598		)	(7,243		)
Net investment in direct financing leases	$	40,785		$	46,312

Development Activities

As of September 30, 2016 and December 31, 2015, the Company had $8.4 million and $20.0 million, respectively, of land and construction in progress. The Company has contracted with a developer to complete a portfolio of 37 build-to-suit development projects, of which 36 have been completed as of September 30, 2016, for an aggregate cost of $52.3 million. During the nine months ended September 30, 2016 and 2015, the Company capitalized $0.2 million and $1.0 million, respectively, of interest expense associated with development projects.

As of September 30, 2016, there was one remaining development project still in progress and expected to be completed within the next six months, with $1.1 million invested to date and an estimated remaining investment of $0.7 million, for a total investment of $1.8 million. Pursuant to the agreement between the Company and the developer, the Company will pay a fixed construction draw until the project is complete. The Company is contractually committed to fund the developer $0.7 million to complete the remaining build-to-suit development project.

In addition, during the nine months ended September 30, 2016, five development projects were completed and placed into service for an aggregate cost of $14.8 million.

Property Dispositions and Held for Sale Assets

During the nine months ended September 30, 2016, the Company disposed of 223 properties for an aggregate gross sales price of $672.5 million, of which our share was $646.4 million after the profit participation payment related to the disposition of 47 Red Lobster properties. The dispositions resulted in proceeds of $573.0 million after a debt assumption of $55.0 million and closing costs. The Company recorded a gain of $50.7 million related to the sales, which included $28.8 million of goodwill allocated to the cost basis of such properties, which is included in gain (loss) on disposition of real estate, net in the accompanying consolidated statements of operations. During the nine months ended September 30, 2015, the Company disposed of 88 properties and one property owned by a consolidated joint venture for an aggregate gross sales price of $675.9 million, resulting in proceeds of $370.2 million after debt assumptions and closing costs. The Company recorded a loss of $39.3 million, including $48.5 million of goodwill allocation related to the sales. The Company has no continuing involvement with these properties. The dispositions were not classified as discontinued operations for any period presented.

During the nine months ended September 30, 2016, the Company also disposed of one property owned by an unconsolidated joint venture for a gross sales price of $113.5 million, of which our share was $102.1 million based on our ownership interest in the joint venture, resulting in proceeds of $42.3 million after debt repayments of $57.0 million and closing costs. The Company recorded a gain of $10.2 million related to the sale, which is included in equity in income and gain on disposition of unconsolidated entities in the accompanying consolidated statements of operations. During the nine months ended September 30, 2015, the Company also disposed of its interest in one consolidated joint venture, whose only assets were investments in three unconsolidated joint ventures, for an aggregate gross sales price of $77.5 million, resulting in proceeds of $43.0 million after debt repayment and closing costs. The debt obligation of the consolidated joint venture was held by an unconsolidated entity. The Company recorded a gain of $6.7 million related to the sale of the consolidated joint venture, which is included in gain on disposition of interest in joint venture in the accompanying consolidated statements of operations.

As of September 30, 2016, there were 19 properties classified as held for sale which are expected to be sold in the next 12 months as part of the Company’s portfolio management strategy. During the nine months ended September 30, 2016 and 2015, the Company recorded a loss of $5.0 million and $23.3 million, respectively, related to properties classified as held for sale during the respective periods, which included $22.7 million and $18.3 million, respectively, of goodwill allocated to the cost basis of such properties. The loss on properties held for sale is included in gain (loss) on disposition of real estate, net in the accompanying consolidated statements of operations. As of December 31, 2015, there were 17 properties classified as held for sale, all of which were sold during the three months ended March 31, 2016.

Impairment of Real Estate Investments

The Company performs quarterly impairment review procedures, primarily through continuous monitoring of events and changes in circumstances that could indicate the carrying value of its real estate assets may not be recoverable. Impairment indicators that the Company considers include, but are not limited to, decrease in net operating income, bankruptcy or other credit concerns of a property’s major tenant or tenants, such as history of late payments, rental concessions and other factors, as well as significant decreases in a property’s revenues due to lease terminations, vacancies, co-tenancy clauses or reduced lease rates.

When impairment indicators are identified or if a property is considered to have a more likely than not probability of being disposed of within the next 12 to 24 months, the Company assesses the recoverability of the assets by determining whether the carrying value of the assets will be recovered through the undiscounted future cash flows expected from the use of the assets and their eventual disposition. In the event that such expected undiscounted future cash flows do not exceed the carrying value, the Company will adjust the real estate assets to their respective fair values and recognize an impairment loss. Generally, fair value is determined using a discounted cash flow analysis and recent comparable sales transactions.

During the nine months ended September 30, 2016, management identified certain properties for potential sale as part of its portfolio management strategy to reduce exposure to office properties. Additionally, a tenant of 59 restaurant properties filed for bankruptcy during the nine months ended September 30, 2016. As part of the Company’s quarterly impairment review procedures and considering the factors mentioned above, real estate assets with carrying values totaling $655.1 million were deemed to be impaired and their carrying values were reduced to their estimated fair values of $478.9 million resulting in impairment charges of $176.2 million during the nine months ended September 30, 2016. During the nine months ended September 30, 2015, real estate assets with carrying values totaling $319.3 million were deemed to be impaired and their carrying values were reduced to their estimated fair values of $234.0 million, resulting in impairment charges of $85.3 million.

Consolidated Joint Ventures

The Company had interests in two joint ventures that owned two properties as of each of September 30, 2016 and December 31, 2015 (the “Consolidated Joint Ventures”). As of September 30, 2016 and December 31, 2015, the Consolidated Joint Ventures had total assets of $59.6 million and $58.5 million, of which $55.6 million and $55.2 million, respectively, were real estate investments, net of accumulated depreciation and amortization. One property secured a mortgage note payable of $9.9 million, which was non-recourse to the Company. The Company has the ability to control operating and financial policies of the Consolidated Joint Ventures. There are restrictions on the use of these assets as the Company would generally be required to obtain the approval of each partner (the “Partner”) in accordance with the joint venture agreement for any major transactions. The Company and each Partner are subject to the provisions of each joint venture agreement, which includes provisions for when additional contributions may be required to fund certain cash shortfalls. The Partners’ share of the Consolidated Joint Ventures’ income was $12,000 for the three months ended September 30, 2016 and the Partners’ share of the Consolidated Joint Ventures’ loss was $23,000 for the nine months ended September 30, 2016, respectively. The Partners’ share of the Consolidated Joint Ventures’ income or loss is included in net (income) loss attributable to non-controlling interests in the consolidated statements of operations.

The Partners’ share of income from four consolidated joint ventures was $0.4 million and $1.2 million for the three and nine months ended September 30, 2015, respectively, and is included in net (income) loss attributable to non-controlling interests in the consolidated statements of operations. The Company disposed of its interest in two of these consolidated joint ventures on or after June 30, 2015.

Unconsolidated Joint Ventures

The Company’s investment in unconsolidated joint ventures consisted of interests in two joint ventures that owned two properties, which were comprised of 0.5 million square feet of retail space as of September 30, 2016, and interests in three joint ventures that owned three properties, which were comprised of 0.9 million square feet of retail and office space as of December 31, 2015. As of September 30, 2016 and December 31, 2015, the Company owned aggregate equity investments of $18.6 million and $52.8 million, respectively, in unconsolidated joint ventures. The Company accounts for its investments in unconsolidated joint ventures using the equity method of accounting as the Company has the ability to exercise significant influence, but not control, over operating and financial policies of these investments. The equity method of accounting requires the investment to be initially recorded at cost and subsequently adjusted for the Company’s share of equity in earnings and distributions from the joint ventures. As of September 30, 2016, the Company’s maximum exposure to risk was $18.6 million, the carrying value of the investments, which is presented in investment in unconsolidated entities in the consolidated balance sheet. The unconsolidated joint ventures had total debt outstanding of $46.2 million as of September 30, 2016, none of which is recourse to the Company, as discussed in Note 10 –Debt. The Company and the respective unconsolidated joint venture partners are subject to the provisions of the applicable joint venture agreement, which includes provisions for when additional contributions may be required to fund certain cash shortfalls.

The Company records its proportionate share of net income (loss) from the unconsolidated joint ventures in the equity in income and gain on disposition of unconsolidated entities in the consolidated statements of operations. During the three and nine months ended September 30, 2016, the Company recognized $0.2 million and $0.6 million of net income, respectively,  from the unconsolidated joint ventures which owned two and three properties, respectively. During the three and nine months ended September 30, 2015, the Company recognized $0.1 million and $1.5 million of net income, respectively, from unconsolidated joint ventures which owned six properties.

The following is a summary of the Company’s percentage ownership and carrying amount related to each of the unconsolidated joint ventures as of September 30, 2016 (dollar amounts in thousands):

Name of Joint Venture	Partner	Ownership % (1)	Carrying Amount of Investment (2)
Cole/Mosaic JV South Elgin IL, LLC	Affiliate of Mosaic Properties and Development, LLC	50%	$	6,108
Cole/Faison JV Bethlehem GA, LLC	Faison-Winder Investors, LLC	90%	12,501
			$	18,609

_______________________________________________

(1) The Company’s ownership interest in this table reflects its legal ownership interest. Legal ownership may, at times, not equal the Company’s economic interest in the listed properties because of various provisions in certain joint venture agreements regarding distributions of cash flow based on capital account balances, allocations of profits and losses and payments of preferred returns. As a result, the Company’s actual economic interest (as distinct from its legal ownership interest) in certain of the properties could fluctuate from time to time and may not wholly align with its legal ownership interests.

(2) The total carrying amount of the investments is greater than the underlying equity in net assets by $6.5 million. This difference relates to a purchase price allocation of goodwill and a step up in fair value of the investment assets acquired in connection with the Cole Merger. The step up in fair value was allocated to the individual investment assets and is being amortized in accordance with the Company’s depreciation policy.

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Investment Securities, at Fair Value

9 Months Ended

Sep. 30, 2016

Investments, Debt and Equity Securities [Abstract]

Investment Securities, at Fair Value

Investment Securities, at Fair Value

Investment securities are considered available-for-sale and, therefore, increases or decreases in the fair value of these investments are recorded in accumulated other comprehensive income (loss) as a component of equity in the consolidated balance sheets unless the securities are considered to be other-than-temporarily impaired at which time the losses are reclassified to expense.

The following tables detail the unrealized gains and losses on investment securities as of September 30, 2016 and December 31, 2015 (in thousands):

	September 30, 2016
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
CMBS	$	48,509	$	1,556	$	(1,967	)	$	48,098

	December 31, 2015
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
CMBS	$	52,115	$	2,169	$	(980	)	$	53,304

As of September 30, 2016 and December 31, 2015, the Company owned eight and ten CMBS, respectively, with an estimated aggregate fair value of $48.1 million and $53.3 million, respectively. During the nine months ended September 30, 2016, two CMBS with a combined carrying value of less than $0.1 million at December 31, 2015, were paid in full. The Company generally receives monthly payments of principal and interest on the CMBS. As of September 30, 2016, the Company earned interest on the CMBS at rates ranging between 5.88% and 8.95%. As of September 30, 2016, the fair value of six CMBS were below their amortized cost. In estimating other-than-temporary impairment losses, management considers a variety of factors, including: (i) whether the Company has the intent to sell the impaired security, (ii) whether the Company expects to hold the investment for a period of time sufficient to allow for anticipated recovery in fair value, and (iii) whether the company expects to recover the entire amortized cost basis of the security. The Company believes that none of the unrealized losses on investment securities are other-than-temporary as management expects the Company will fully recover the entire amortized cost basis of all securities. As of September 30, 2016, the Company had no other-than-temporary impairment losses.

The scheduled maturity of the Company’s CMBS as of September 30, 2016 are as follows (in thousands):

	September 30, 2016
	Amortized Cost		Fair Value
Due within one year	$	—	$	—
Due after one year through five years	21,489		22,066
Due after five years through 10 years	12,725		10,805
Due after 10 years	14,295		15,227
Total	$	48,509	$	48,098

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Mortgage Notes Receivable

9 Months Ended

Sep. 30, 2016

Receivables [Abstract]

Mortgage Notes Receivable

Mortgage Notes Receivable

As of September 30, 2016, the Company owned nine mortgage notes receivable with a weighted-average interest rate of 6.3% and weighted-average years to maturity of 13.2 years. During the nine months ended September 30, 2016, one note with a carrying value of $0.4 million at December 31, 2015, reached maturity and was paid in full. The following table details the mortgage notes receivable as of September 30, 2016 (dollar amounts in thousands):

Outstanding Balance		Carrying Value		Interest Rate Range				Maturity Date Range
$	24,996	$	23,014	5.9	%	–	7.2%	May 2020	–	January 2033

The Company’s mortgage notes receivable are comprised primarily of fully-amortizing or nearly fully-amortizing first mortgage loans. The Company has one mortgage note receivable where the Company does not receive monthly payments of principal and interest but rather the interest is capitalized into the outstanding balance that is due at maturity. The mortgage notes receivable are primarily on commercial real estate, each leased to a single tenant. Therefore, the Company’s monitoring of the credit quality of its mortgage notes receivable is focused primarily on an analysis of the tenant, including review of tenant quality and ratings, trends in the tenant’s industry and general economic conditions and an analysis of measures of collateral coverage, such as an estimate of the loan-to-value ratio (principal amount outstanding divided by the estimated value of the property) and its remaining term until maturity.

The following table summarizes the scheduled aggregate principal payments due to the Company on the mortgage notes receivable subsequent to September 30, 2016 (in thousands):

	Outstanding Balance
Due within one year	$	1,057
Due after one year through five years	5,357
Due after five years through 10 years	6,919
Due after 10 years(1)	15,523
Total	$	28,856

____________________________________

(1) Includes additional $3.9 million of interest that will be capitalized into the outstanding balance of the mortgage note receivable subsequent to September 30, 2016.

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Rent and Tenant Receivables and Other Assets, Net

9 Months Ended

Sep. 30, 2016

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Rent and Tenant Receivables and Other Assets, Net

Rent and Tenant Receivables and Other Assets, Net

Rent and tenant receivables and other assets, net consisted of the following as of September 30, 2016 and December 31, 2015 (in thousands):

	September 30, 2016		December 31, 2015
Accounts receivable, net (1)	$	48,682	$	44,798
Straight-line rent receivable	196,669		161,079
Deferred costs, net (2)	18,443		26,110
Prepaid expenses	13,269		9,773
Leasehold improvements, property and equipment, net (3)	16,845		18,180
Restricted escrow deposits	3,123		1,190
Deferred tax asset and tax receivable	27,529		25,287
Program development costs, net (4)	12,268		12,855
Interest rate swap assets, at fair value	—		1,892
Other assets	2,701		2,473
Total	$	339,529	$	303,637

___________________________________

(1) Allowance for doubtful accounts was $8.3 million and $6.6 million as of September 30, 2016 and December 31, 2015, respectively.

(2) Amortization expense for deferred costs related to the revolving credit facility totaled $2.6 million and $7.8 million for the three and nine months ended September 30, 2016, respectively, and $2.6 million and $8.1 million for the three and nine months ended September 30, 2015, respectively. Accumulated amortization for deferred costs related to the revolving credit facility were $27.2 million and $19.4 million as of September 30, 2016 and December 31, 2015, respectively.

(3) Amortization expense for leasehold improvements totaled $0.3 million and $0.9 million for the three and nine months ended September 30, 2016, respectively, and $0.4 million and $1.1 million for the three and nine months ended September 30, 2015, respectively. Accumulated amortization was $3.5 million and $2.6 million as of September 30, 2016 and December 31, 2015, respectively. Depreciation expense for property and equipment totaled $0.6 million and $1.6 million for the three and nine months ended September 30, 2016, respectively, and $0.5 million and $1.5 million for the three and nine months ended September 30, 2015, respectively. Accumulated depreciation was $5.3 million and $3.7 million as of September 30, 2016 and December 31, 2015, respectively.

(4) As of September 30, 2016 and December 31, 2015, the Company had reserves of $18.8 million and $34.8 million, respectively, relating to the program development costs.

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Fair Value Measures

9 Months Ended

Sep. 30, 2016

Fair Value Disclosures [Abstract]

Fair Value Measures

Fair Value Measures

The Company determines fair value based on quoted prices when available or through the use of alternative approaches, such as discounting the expected cash flows using market interest rates commensurate with the credit quality and duration of the investment. U.S. GAAP guidance defines three levels of inputs that may be used to measure fair value:

Level 1 – Quoted prices in active markets for identical assets and liabilities that the reporting entity has the ability to access at the measurement date.

Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset and liability or can be corroborated with observable market data for substantially the entire contractual term of the asset or liability.

Level 3 – Unobservable inputs reflect the entity’s own assumptions about the assumptions that market participants would use in the pricing of the asset or liability and are consequently not based on market activity, but rather through particular valuation techniques.

The determination of where an asset or liability falls in the hierarchy requires significant judgment and considers factors specific to the asset or liability. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company evaluates its hierarchy disclosures each quarter and depending on various factors, it is possible that an asset or liability may be classified differently from quarter to quarter. Changes in the type of inputs may result in a reclassification for certain assets. There were no transfers between Level 1, Level 2 or Level 3 of the fair value hierarchy during the nine months ended September 30, 2016. The Company expects that changes in classifications between levels will be infrequent.

Items Measured at Fair Value on a Recurring Basis

The following tables present information about the Company’s assets and liabilities measured at fair value on a recurring basis, based on market rates of the Company’s positions and other observable interest rates as discussed in Note 6 –Investment Securities, at Fair Value andNote 11 –Derivatives and Hedging Activities, as of September 30, 2016 and December 31, 2015, aggregated by the level in the fair value hierarchy within which those instruments fall (in thousands):

	Level 1		Level 2			Level 3		Balance as of September 30, 2016
Assets:
CMBS	$	—	$	—		$	48,098	$	48,098
Liabilities:
Derivative liabilities	$	—	$	(8,194	)	$	—	$	(8,194	)
	Level 1		Level 2			Level 3		Balance as of December 31, 2015
Assets:
CMBS	$	—	$	—		$	53,304	$	53,304
Derivative assets	—		1,892			—		1,892
Total assets	$	—	$	1,892		$	53,304	$	55,196
Liabilities:
Derivative liabilities	$	—	$	(6,922	)	$	—	$	(6,922	)

CMBS – The Company’s CMBS are carried at fair value and are valued using Level 3 inputs. The Company used estimated non-binding quoted market prices from the trading desks of financial institutions that are dealers in such securities for similar CMBS tranches that actively participate in the CMBS market. Broker quotes are only indicative of fair value and may not necessarily represent what the Company would receive in an actual trade for the applicable instrument. Management determines that the prices are representative of fair value through its knowledge of and experience in the market. The significant unobservable input used in valuing the CMBS is the discount rate or market yield used to discount the estimated future cash flows expected to be received from the underlying investment, which include both future principal and interest payments. Significant increases or decreases in the discount rate or market yield would result in a decrease or increase in the fair value measurement. The following risks are included in the consideration and selection of discount rates or market yields: risk of default, rating of the investment and comparable company investments.

Derivative Assets and Liabilities –The Company’s derivative financial instruments relate to interest rate swaps, discussed in Note 11 –Derivatives and Hedging Activities. The valuation of derivative instruments is determined using a discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, as well as observable market-based inputs, including interest rate curves and implied volatilities. In addition, credit valuation adjustments are incorporated into the fair values to account for the Company’s potential nonperformance risk and the performance risk of the counterparties.

Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with those derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by the Company and its counterparties. However, as of September 30, 2016, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of the Company’s derivatives. As a result, the Company has determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy.

The fair value of short-term financial instruments such as cash and cash equivalents, restricted cash, due to affiliates and accounts payable approximate their carrying value in the accompanying consolidated balance sheets due to their short-term nature and are classified as Level 1 under the fair value hierarchy.

The following are reconciliations of the changes in assets and liabilities with Level 3 inputs in the fair value hierarchy for the nine months ended September 30, 2016 and 2015 (in thousands):

	CMBS
Beginning balance, December 31, 2015	$	53,304
Total gains and losses:
Unrealized loss included in other comprehensive income, net	(1,599		)
Purchases, issuances, settlements and amortization:
Principal payments received	(3,786		)
Amortization included in net income	179
Ending Balance, September 30, 2016	$	48,098

	CMBS
Beginning balance, December 31, 2014	$	58,646
Total gains and losses:
Unrealized loss included in other comprehensive income, net	(232		)
Purchases, issuances, settlements and amortization:
Principal payments received	(4,055		)
Amortization included in net income	96
Ending Balance, September 30, 2015	$	54,455

The fair values of the Company’s financial instruments that are not reported at fair value in the consolidated balance sheets are reported below (dollar amounts in thousands):

	Level	Carrying Amount at September 30, 2016		Fair Value at September 30, 2016		Carrying Amount at December 31, 2015		Fair Value at December 31, 2015
Assets:
Mortgage notes receivable	3	$	23,014	$	31,963	$	24,238	$	31,842
Liabilities (1):
Mortgage notes payable and other debt, net	2	$	2,878,774	$	2,972,148	$	3,133,005	$	3,240,153
Corporate bonds, net	2	2,247,893		2,334,291		2,547,255		2,580,786
Convertible debt, net	2	985,866		1,010,722		982,217		1,007,042
Credit facility	2	500,000		496,814		1,460,000		1,536,264
Total liabilities		$	6,612,533	$	6,813,975	$	8,122,477	$	8,364,245

_______________________________________________

(1) Current and prior period liabilities’ carrying and fair values exclude net deferred financing costs.

Mortgage notes receivable – The fair value of the Company’s fixed-rate loan portfolio is estimated with a discounted cash flow analysis, utilizing scheduled cash flows and discount rates estimated by management to approximate market interest rates.

Debt – The fair value is estimated by an independent third party using a discounted cash flow analysis, based on management’s estimates of observable market interest rates. Corporate bonds and convertible debt are valued using quoted market prices in active markets with limited trading volume when available.

Items Measured at Fair Value on a Non-Recurring Basis

Certain financial and nonfinancial assets and liabilities are measured at fair value on a nonrecurring basis and are subject to fair value adjustments in certain circumstances, such as when there is evidence of impairment.

Real Estate Assets

As discussed in Note 5 –Real Estate Investments, during the nine months ended September 30, 2016, real estate assets related to 139 properties were deemed to be impaired and their carrying values were reduced to their estimated fair value of $478.9 million, resulting in impairment charges of $176.2 million. During the nine months ended September 30, 2015, $85.3 million of impairment charges were recorded. The Company estimates fair values using Level 3 inputs and using a combined income and market approach, specifically using discounted cash flow analysis and recent comparable sales transactions. The evaluation of real estate assets for potential impairment requires the Company’s management to exercise significant judgment and to make certain key assumptions, including, but not limited to, the following: (1) capitalization rate; (2) discount rates; (3) number of years property will be held; (4) property operating expenses; and (5) re-leasing assumptions including number of months to re-lease, market rental income and required tenant improvements. There are inherent uncertainties in making these estimates such as market conditions and performance and sustainability of the Company’s tenants. For our impairment tests for the real estate assets during the nine months ended September 30, 2016, we used a range of discount rates from of 6.7% to 9.0% with a weighted-average rate of 8.0% and capitalization rates from 7.0% to 12.5% with a weighted-average rate of 7.9%.

The following table presents the impairment charges by asset class recorded during the nine months ended September 30, 2016 (dollar amounts in thousands):

	Nine Months Ended September 30, 2016
Properties impaired (1)	139
Asset classes impaired:
Investment in real estate assets, net	$	176,635
Below-market lease liabilities, net	(421		)
Total impairment loss	$	176,214

_______________________________________________

(1) Includes 35 properties disposed of during the nine months ended September 30, 2016.

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Debt

9 Months Ended

Sep. 30, 2016

Debt Disclosure [Abstract]

Debt

Debt

As of September 30, 2016, the Company had $6.6 billion of debt outstanding, including net premiums and net deferred financing costs, with a weighted-average years to maturity of 4.5 years and a weighted-average interest rate of 4.3%. The following table summarizes the carrying value of debt as of September 30, 2016 and December 31, 2015, and the debt activity for the nine months ended September 30, 2016 (in thousands):

					Nine Months Ended September 30, 2016
		Balance as of December 31, 2015			Debt Issuances			Repayments, Extinguishment and Assumptions				(Accretion) and Amortization			Balance as of September 30, 2016
Mortgage notes payable:
	Outstanding balance	$	3,039,882		$	1,450		$	(227,503	)	(1)	$	—		$	2,813,829
	Net premiums (2)	59,402			—			(1,364		)	(1)	(16,229		)	41,809
	Deferred costs	(21,020		)	(27		)	510			(1)	2,973			(17,564		)
Other debt:
	Outstanding balance	33,463			—			(10,453		)		—			23,010
	Premium (2)	258			—			—				(132		)	126
Mortgages and other debt, net		3,111,985			1,423			(238,810		)		(13,388		)	2,861,210
Corporate bonds:
	Outstanding balance	2,550,000			1,000,000			(1,300,000		)		—			2,250,000
	Discount (3)	(2,745		)	—			73				565			(2,107		)
	Deferred costs	(10,922		)	(17,128		)	1,898				3,416			(22,736		)
Corporate bonds, net		2,536,333			982,872			(1,298,029		)		3,981			2,225,157
Convertible debt:
	Outstanding balance	1,000,000			—			—				—			1,000,000
	Discount (3)	(17,779		)	—			—				3,645			(14,134		)
	Deferred costs	(19,327		)	—			—				4,152			(15,175		)
Convertible debt, net		962,894			—			—				7,797			970,691
Credit facility:
	Outstanding balance	1,460,000			783,000			(1,743,000		)		—			500,000
	Deferred costs (4)	(11,410		)	—			4,314				3,104			(3,992		)
Credit facility, net		1,448,590			783,000			(1,738,686		)		3,104			496,008
2016 Term Loan:
	Outstanding balance	—			300,000			(300,000		)		—			—
	Deferred costs	—			(2,764		)	2,588				176			—
2016 Term Loan, net		—			297,236			(297,412		)		176			—
Total debt		$	8,059,802		$	2,064,531		$	(3,572,937	)		$	1,670		$	6,553,066

____________________________________

(1) Includes $83.5 million of notes repaid prior to maturity, resulting in a loss on extinguishment of debt of $0.6 million due to the write-off of the unamortized net premiums and prepayment penalties of $0.3 million and $0.9 million, respectively. Additionally, a $55.0 million note was assumed by the buyer in a real estate disposition resulting in a write-off of the unamortized premium of $1.1 million and the unamortized deferred financing costs of $0.3 million, which are included in gain (loss) on disposition of real estate, net.

(2) Net premiums on mortgage notes payable and other debt were recorded upon the assumption of the respective debt instruments in relation to the various mergers and acquisitions. Amortization of these net premiums is recorded as a reduction to interest expense over the remaining term of the respective debt instruments using the effective-interest method.

(3) Discounts on the corporate bonds and convertible debt were recorded based upon the fair value of the respective debt instruments as of the respective issuance dates. Amortization of these discounts is recorded as an increase to interest expense over the remaining term of the respective debt instruments using the effective-interest method.

(4) Deferred costs relate to the term portion of the credit facility.

Mortgage Notes Payable

The Company’s mortgage notes payable consisted of the following as of September 30, 2016 (dollar amounts in thousands):

	Encumbered Properties	Gross Carrying Value of Collateralized Properties (1)		Outstanding Balance		Weighted-Average Interest Rate (2)		Weighted-Average Years to Maturity
Fixed-rate debt (3)	642	$	5,484,499	$	2,804,142	5.01	%	4.6
Variable-rate debt	1	26,454		9,687		3.79	%	0.9
Total (4)	643	$	5,510,953	$	2,813,829	5.01	%	4.6

____________________________________

(1) Gross carrying value is gross real estate assets, including investment in direct financing leases, net of gross real estate liabilities.

(2) Weighted-average interest rate for variable-rate debt represents the interest rate in effect as of September 30, 2016.

(3) Includes $242.4 million of variable-rate debt fixed by way of interest rate swap arrangements. 

(4) The table above does not include loan amounts associated with the unconsolidated joint ventures of $46.2 million, none of which is recourse to the Company. These loans represent secured fixed and variable rates ranging from 2.93% to 5.20% and maturities ranging from October 2016 to July 2021, with a weighted-average interest rate of 3.93% and a weighted-average years to maturity of 2.1 years as of September 30, 2016.

The Company’s mortgage loan agreements generally restrict corporate guarantees and require the maintenance of financial covenants, including maintenance of certain financial ratios (such as specified debt to equity and debt service coverage ratios). The mortgage loan agreements contain no dividend restrictions except in the event of default or when a distribution would drive liquidity below the applicable thresholds. At September 30, 2016, the Company believes it was in compliance with the debt covenants under the mortgage loan agreements and had no restrictions on the payment of dividends.

On January 13, 2015, a substantially vacant office building in Bethesda, Maryland was foreclosed upon after the Company elected to stop making debt service payments on the related non-recourse loan with an outstanding balance of $53.8 million as of December 31, 2014. As a result of the foreclosure, the Company forfeited its right to the property and was relieved of all obligations on the non-recourse loan. During the nine months ended September 30, 2015, the Company recorded a gain on the forgiveness of debt of $4.9 million, which is included in (loss) gain on extinguishment and forgiveness of debt, net in the accompanying consolidated statements of operations.

On March 6, 2015, the Company received a notice of default from the lender of a non-recourse loan secured by two properties, which had an outstanding balance of $38.1 million on the notice date, due to the Company’s election not to make a reserve payment required per the loan agreement. The foreclosure sale of the first property securing the loan occurred during the three months ended June 30, 2016. As the loan was outstanding upon the foreclosure of the first property, the Company recorded a loss of $3.4 million in gain (loss) on disposition of real estate, net in the accompanying consolidated statements of operations for the nine months ended September 30, 2016. The foreclosure proceedings on the second property that secured the loan were completed during the three months ended September 30, 2016. As a result of the foreclosure sale and deed transfer of both properties securing the loan, the Company recognized a gain on forgiveness of debt of $19.1 million, which is included in (loss) gain on extinguishment and forgiveness of debt, net in the accompanying consolidated statements of operations.

The following table summarizes the scheduled aggregate principal repayments due on mortgage notes subsequent to September 30, 2016 (in thousands):

	Total
October 1, 2016 - December 31, 2016	$	49,767
2017	420,662
2018	209,229
2019	229,516
2020	282,190
Thereafter	1,622,465
Total	$	2,813,829

Other Debt

As of September 30, 2016, the Company had a secured term loan from KBC Bank, N.V. with an outstanding principal balance of $23.0 million and remaining unamortized premium of $0.1 million (the “KBC Loan”). The interest coupon on the KBC Loan is fixed at 5.81% annually until its maturity in January 2018. The KBC Loan is non-recourse to the Company, subject to limited non-recourse exceptions. The KBC Loan provides for monthly payments of both principal and interest. The scheduled principal repayments subsequent to September 30, 2016 are $2.0 million, $7.7 million and $13.3 million for the years ended December 31, 2016, 2017 and 2018, respectively.

The KBC Loan is secured by various investment assets held by the Company. The following table is a summary of the outstanding balance and carrying value of the collateral by asset type as of September 30, 2016 (in thousands):

	Outstanding Balance		Collateral Carrying Value
Mortgage notes receivable	$	7,279	$	19,457
Intercompany mortgage loans	1,754		4,212
CMBS	13,977		34,356
Total	$	23,010	$	58,025

Corporate Bonds

As of September 30, 2016, the OP had $2.25 billion aggregate principal amount of senior unsecured notes (the “Senior Notes”) outstanding comprised of the following (dollar amounts in thousands):

	Outstanding Balance September 30, 2016		Interest Rate		Maturity Date
2019 Senior Notes	750,000		3.000	%	February 6, 2019
2021 Senior Notes	400,000		4.125	%	June 1, 2021
2024 Senior Notes	500,000		4.600	%	February 6, 2024
2026 Senior Notes	600,000		4.875	%	June 1, 2026
Total balance and weighted-average interest rate	$	2,250,000	4.056	%

On June 2, 2016, the Company closed its senior note offering, consisting of (i) $0.4 billion aggregate principal amount of 4.125% Senior Notes due June 1, 2021 (the “2021 Senior Notes”) and (ii) $0.6 billion aggregate principal amount of 4.875% Senior Notes due June 1, 2026 (the “2026 Senior Notes”) (the offering of the 2021 Senior Notes, collectively with the 2026 Senior Notes, the “2016 Bond Offering”).

On July 5, 2016, the Company redeemed the $1.3 billion aggregate principal amount of 2.000% Senior Notes due February 6, 2017 (the “2017 Senior Notes”), plus accrued and unpaid interest thereon and the required make-whole premium. Upon consummation of these transactions, the Company had no 2017 Senior Notes outstanding. The Company recorded a loss related to the early extinguishment of $13.2 million which is included in (loss) gain on extinguishment and forgiveness of debt, net in the accompanying consolidated statements of operations.

The Senior Notes are guaranteed by the General Partner. The OP may redeem all or a part of any series of the Senior Notes at any time, at its option, for the redemption prices set forth in the indenture governing the Senior Notes. With respect to the 2019 Senior Notes and the 2024 Senior Notes, if such Senior Notes are redeemed on or after January 6, 2019 with respect to the 2019 Senior Notes, or November 6, 2023 with respect to the 2024 Senior Notes, the redemption price will equal 100% of the principal amount of the Senior Notes of the applicable series to be redeemed, plus accrued and unpaid interest on the amount being redeemed to, but excluding, the applicable redemption date. The Senior Notes are registered under the Securities Act of 1933, as amended, (the “Securities Act”) and are freely transferable. The Company believes it was in compliance with the covenants pursuant to the indenture governing the Senior Notes as of September 30, 2016.

Convertible Debt

On July 29, 2013, the Company issued $300.0 million aggregate principal amount of convertible senior notes due 2018 (the “2018 Convertible Notes”) and, pursuant to an over-allotment exercise by the underwriters of such 2018 Convertible Notes offering, issued an additional $10.0 million aggregate principal amount of its 2018 Convertible Notes on August 1, 2013. On December 10, 2013, the Company issued an additional $287.5 million of the 2018 Convertible Notes by reopening the indenture governing the 2018 Convertible Notes. Also on December 10, 2013, the Company issued $402.5 million aggregate principal amount of convertible senior notes due 2020 (the “2020 Convertible Notes” and, together with the 2018 Convertible Notes, the “Convertible Notes”). As of September 30, 2016, the outstanding aggregate balance of the Convertible Notes was $1.0 billion. The OP has issued corresponding identical convertible notes to the General Partner. The following table presents each of the 2018 Convertible Notes and the 2020 Convertible Notes listed below with their respective terms (dollar amounts in thousands):

	Outstanding Balance (1)		Interest Rate		Conversion Rate (2)	Maturity Date
2018 Convertible Notes	$	597,500	3.00	%	60.5997	August 1, 2018
2020 Convertible Notes	402,500		3.75	%	66.7249	December 15, 2020
Total balance and weighted-average interest rate	$	1,000,000	3.30	%

____________________________________

(1) Excludes the carrying value of the conversion options recorded within additional paid-in capital of $28.6 million and the unamortized discount of $14.1 million as of September 30, 2016. The discount will be amortized over the remaining term of 2.8 years.

(2) Conversion rate represents the amount of the General Partner OP Units per $1,000 principal amount of Convertible Notes converted as of September 30, 2016, as adjusted in accordance with the applicable indentures as a result of cash dividend payments.

The 2018 Convertible Notes may be converted into cash, shares of the Company’s common stock or a combination thereof in limited circumstances prior to February 1, 2018 and may be converted into such consideration at any time on or after February 1, 2018. The 2020 Convertible Notes may be converted into cash, shares of the Company’s common stock or a combination thereof, in limited circumstances prior to June 15, 2020, and may be converted into such consideration at any time on or after June 15, 2020. There were no changes to the terms of the Convertible Notes and the Company believes it was in compliance with the covenants pursuant to the indenture governing the Convertible Notes as of September 30, 2016.

Credit Facility

The General Partner, as guarantor, and the OP, as borrower, are parties to an unsecured credit facility (the “Credit Facility”) pursuant to a credit agreement, dated as of June 30, 2014, as amended, with Wells Fargo Bank, National Association (“Wells Fargo”), as administrative agent and other lenders party thereto (the “Credit Agreement”).

As of September 30, 2016, the Credit Facility allowed for maximum borrowings of $2.8 billion, consisting of a $0.5 billion term loan facility (the “Credit Facility Term Loan”) and a $2.3 billion revolving credit facility. The maximum aggregate dollar amount of letters of credit that may be outstanding at any one time under the Credit Facility is $25.0 million. During the three months ended September 30, 2016, the Company repaid all of the outstanding borrowings under its revolving credit facility. Additionally, the Company repaid $0.5 billion of the Credit Facility Term Loan, resulting in the write-off of unamortized deferred financing costs of $4.3 million, which is included in (loss) gain on extinguishment and forgiveness of debt, net in the accompanying consolidated statements of operations. As discussed in Note 11 –Derivatives and Hedging Activities, in connection with the early repayment of a portion of the Credit Facility Term Loan, the Company terminated two of its interest rate swaps, resulting in the reclassification of $3.3 million in other comprehensive income to earnings, which is included in loss on derivative instruments, net in the accompanying consolidated statements of operations. The remaining outstanding balance on the Credit Facility Term Loan of $0.5 billion is, in effect, fixed through the use of derivative instruments used to hedge interest rate volatility. Including the spread, which can vary based on the General Partner’s credit rating, the interest rate on this portion was 3.25% at September 30, 2016. As of September 30, 2016, a maximum of $2.3 billion was available to the OP for future borrowings, subject to borrowing availability.

The revolving credit facility generally bears interest at an annual rate of LIBOR plus 1.00% to 1.80% or Base Rate plus 0.00% to 0.80% (based upon the General Partner’s then current credit rating). “Base Rate” is defined as the highest of the prime rate, the federal funds rate plus 0.50% or a floating rate based on one month LIBOR, determined on a daily basis. The Credit Facility Term Loan generally bears interest at an annual rate of LIBOR plus 1.15% to 2.05%, or Base Rate plus 0.15% to 1.05% (based upon the General Partner’s then current credit rating). In addition, the Credit Agreement provides the flexibility for interest rate auctions, pursuant to which, at the Company’s election, the Company may request that lenders make competitive bids to provide revolving loans, which competitive bids may be at pricing levels that differ from the foregoing interest rates.

The Credit Agreement provides for monthly interest payments under the Credit Facility. In the event of default, at the election of a majority of the lenders (or automatically upon a bankruptcy event of default with respect to the OP or the General Partner), the commitments of the lenders under the Credit Facility will mature, and payment of any unpaid amounts in respect of the Credit Facility will be accelerated. The revolving credit facility and the Credit Facility Term Loan both terminate on June 30, 2018, in each case, unless extended in accordance with the terms of the Credit Agreement. The Credit Agreement provides for a one-year extension option with respect to each of the revolving credit facility and the Credit Facility Term Loan, exercisable at the Company’s election and subject to certain customary conditions, as well as certain customary “amend and extend” provisions. At any time, upon timely notice by the OP and subject to any breakage fees, the OP may prepay borrowings under the Credit Facility (subject to certain limitations applicable to the prepayment of any loans obtained through an interest rate auction, as described above). The OP incurs a fee equal to 0.15% to 0.25% per annum (based upon the General Partner’s then current credit rating) multiplied by the commitments (whether or not utilized) in respect of the revolving credit facility. In addition, the OP incurs customary administrative agent, letter of credit issuance, letter of credit fronting, extension and other fees.

The Credit Facility requires restrictions on corporate guarantees, as well as the maintenance of financial covenants, including the maintenance of certain financial ratios (such as specified debt to equity and debt service coverage ratios) and the maintenance of a minimum net worth. The key financial covenants in the Credit Facility, as defined and calculated per the terms of the Credit Agreement, include maintaining (i) a maximum leverage ratio less than or equal to 60%, (ii) a minimum fixed charge coverage ratio of at least 1.5x, (iii) a secured leverage ratio less than or equal to 45%, (iv) a total unencumbered asset value ratio less than or equal to 60%, (v) a minimum tangible net worth covenant of at least $5.5 billion, (vi) a minimum unencumbered interest coverage ratio of at least 1.75x and (vii) a minimum unencumbered asset value of at least $8.0 billion (up to 35% of which may be comprised of restaurant properties from June 30, 2016 to December 30, 2016 and up to 30% of which may be comprised of restaurant properties from December 31, 2016 on). The Company believes it was in compliance with the Credit Agreement and is not restricted from accessing any borrowing availability under the Credit Facility as of September 30, 2016.

2016 Term Loan

On June 2, 2016, the General Partner as guarantor, and the OP, as borrower, entered into a $300.0 million senior secured term loan facility (the “2016 Term Loan”), pursuant to a credit agreement (the “2016 Term Loan Agreement”) with JPMorgan Chase Bank, N.A., as the administrative agent, and certain other lenders party thereto. During the three months ended September 30, 2016, the Company borrowed $300.0 million on the 2016 Term Loan and subsequently repaid the balance prior to September 30, 2016. In connection with the prepayment, the Company wrote-off the remaining unamortized deferred financing costs resulting in a loss of $2.6 million which is included in (loss) gain on extinguishment and forgiveness of debt, net in the accompanying consolidated statements of operations.

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Derivatives and Hedging Activities

9 Months Ended

Sep. 30, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives and Hedging Activities

Derivatives and Hedging Activities

Risk Management Objective of Using Derivatives

The Company may use derivative financial instruments, including interest rate swaps, caps, options, floors and other interest rate derivative contracts, to hedge all or a portion of the interest rate risk associated with its borrowings. The principal objective of such arrangements is to minimize the risks and/or costs associated with the Company’s operating and financial structure as well as to hedge specific anticipated transactions. The Company does not intend to utilize derivatives for purposes other than interest rate risk management. The use of derivative financial instruments carries certain risks, including the risk that the counterparties to these contractual arrangements are not able to perform under the agreements. To mitigate this risk, the Company only enters into derivative financial instruments with counterparties with high credit ratings and with major financial institutions with which the Company and its affiliates may also have other financial relationships. The Company does not anticipate that any of the counterparties will fail to meet their obligations.

Cash Flow Hedges of Interest Rate Risk

The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish these objectives, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.

The effective portion of changes in the fair value of derivatives designated that qualify as cash flow hedges is recorded in accumulated other comprehensive income and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. During the nine months ended September 30, 2016 and 2015, such derivatives were used to hedge the variable cash flows associated with variable-rate debt. During the three and nine months ended September 30, 2016, the Company reclassified $1.2 million and $5.1 million, respectively, from accumulated other comprehensive income into interest expense as a result of the hedged forecasted transactions affecting earnings.

The ineffective portion of the change in fair value of the derivatives designated that qualify as cash flow hedges is recognized directly in earnings. During the three and nine months ended September 30, 2016, the Company recorded a gain of $1.0 million and $1.1 million, respectively, in earnings related to the ineffective portion of the change in fair value of derivatives designated that qualify as cash flow hedges.

During the three months ended September 30, 2016, the Company terminated two of its interest rate swaps in connection with the early repayment of a portion of the Credit Facility Term Loan, as discussed in Note 10 –Debt, and accelerated the reclassification of a portion of the amounts in other comprehensive income to earnings as a result of a portion of the hedged forecasted transactions becoming probable not to occur. A loss of $3.3 million was recorded in relation to the acceleration, which is included in loss on derivative instruments, net in the accompanying consolidated statements of operations.

Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. During the next twelve months, the Company estimates that an additional $2.3 million will be reclassified from other comprehensive income as an increase to interest expense.

As of September 30, 2016, the Company had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk (dollar amounts in thousands):

Interest Rate Swaps	September 30, 2016
Number of Instruments	14
Notional Amount	$	691,016

The table below presents the fair value of the Company’s derivative financial instruments as well as their classification in the consolidated balance sheets as of September 30, 2016 and December 31, 2015 (in thousands):

Derivatives Designated as Hedging Instruments	Balance Sheet Location	September 30, 2016			December 31, 2015
Interest rate swaps	Rent and tenant receivables and other assets, net	$	—		$	1,794
Interest rate swaps	Deferred rent, derivative and other liabilities	$	(7,471	)	$	(6,922	)

In January 2014, the Company entered into an interest rate lock agreement with a notional amount of $250.0 million (the “Treasury Lock Agreement”). The Treasury Lock Agreement, which had an original maturity date of February 12, 2014, was entered into to hedge part of the Company’s interest rate exposure associated with the variability in future cash flows attributable to changes in the 10-year U.S. treasury rates related to the planned issuance of debt securities in conjunction with the merger of Cole Capital with and into a wholly owned subsidiary of the Company. In connection with the Company’s offering of Senior Notes in February 2014, the Company settled the Treasury Lock Agreement for $3.9 million, which was accounted for as a cash flow hedge, recorded to other comprehensive loss and will be amortized into earnings over the 10-year term of the Treasury Lock. The Company recognized $0.1 million and $0.3 million of interest expense for the three and nine months ended September 30, 2016, respectively, related to the Treasury Lock Agreement.

Derivatives Not Designated as Hedging Instruments

Derivatives not designated as hedges are not speculative and are used to manage the Company’s exposure to interest rate movements and other identified risks but do not meet the requirements to be classified as hedging instruments. A gain of $0.3 million and a loss of $1.1 million related to the change in the fair value of derivatives not designated as hedging instruments was recorded in loss on derivative instruments, net in the accompanying consolidated statements of operations for the three and nine months ended September 30, 2016, respectively. The Company recorded a loss of $0.9 million and $1.5 million for the three and nine months ended September 30, 2015, respectively.

As of September 30, 2016, the Company had the following outstanding interest rate derivative that was not designated as a qualifying hedging relationship (dollar amounts in thousands):

Interest Rate Swap	September 30, 2016
Number of Instruments	1
Notional Amount	$	51,400

The table below presents the fair value of the Company’s derivative financial instrument not designated as a hedge as well as its classification in the consolidated balance sheets as of September 30, 2016 and December 31, 2015 (in thousands):

Derivatives Not Designated as Hedging Instruments	Balance Sheet Location	September 30, 2016			December 31, 2015
Interest rate swaps	Rent and tenant receivables and other assets, net	$	—		$	98
Interest rate swaps	Deferred rent, derivative and other liabilities	$	(723	)	$	—

Tabular Disclosure of Offsetting Derivatives

The table below details a gross presentation, the effects of offsetting and a net presentation of the Company’s derivatives as of September 30, 2016 and December 31, 2015 (in thousands). The net amounts of derivative assets or liabilities can be reconciled to the tabular disclosure of fair value.

	Offsetting of Derivative Assets and Liabilities
	Gross Amounts of Recognized Assets		Gross Amounts of Recognized Liabilities			Gross Amounts Offset in the Consolidated Balance Sheets		Net Amounts of Assets Presented in the Consolidated Balance Sheets		Net Amounts of Liabilities Presented in the Consolidated Balance Sheets			Financial Instruments		Cash Collateral Received		Net Amount
September 30, 2016	$	—	$	(8,194	)	$	—	$	—	$	(8,194	)	$	—	$	—	$	(8,194	)
December 31, 2015	$	1,892	$	(6,922	)	$	—	$	1,892	$	(6,922	)	$	—	$	—	$	(5,030	)

Credit Risk Related Contingent Features

The Company has agreements with each of its derivative counterparties that contain a provision specifying that if the Company either defaults or is capable of being declared in default on any of its indebtedness, the Company could also be declared in default on its derivative obligations.

As of September 30, 2016, the fair value of the interest rate derivatives in a net liability position, including accrued interest but excluding any adjustment for nonperformance risk related to these agreements, was $9.4 million. As of September 30, 2016, the Company has not posted any collateral related to these agreements and was not in breach of any provisions in these agreements. If the Company had breached any of these provisions, it could have been required to settle its obligations under the agreements at their aggregate termination value of $9.4 million at September 30, 2016.

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Supplemental Cash Flow Disclosures

9 Months Ended

Sep. 30, 2016

Supplemental Cash Flow Elements [Abstract]

Supplemental Cash Flow Disclosures

Supplemental Cash Flow Disclosures

Supplemental cash flow information was as follows for the nine months ended September 30, 2016 and 2015 (in thousands):

	Nine Months Ended September 30,
	2016		2015
Supplemental Disclosures:
Cash paid for interest	$	246,602	$	280,659
Cash paid for income taxes	$	18,822	$	10,205
Non-cash investing and financing activities:
Accrued capital expenditures and real estate developments	$	3,556	$	4,363
Accrued deferred financing costs	$	860	$	164
Distributions declared and unpaid	$	146,118	$	130,648
Accrued equity issuance costs	$	9	$	—
Mortgage note payable relieved by foreclosure	$	38,050	$	53,798
Mortgage notes payable assumed in real estate disposition	$	55,000	$	300,720

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Accounts Payable and Accrued Expenses

9 Months Ended

Sep. 30, 2016

Payables and Accruals [Abstract]

Accounts Payable and Accrued Expenses

Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses consisted of the following as of September 30, 2016 and December 31, 2015 (in thousands):

	September 30, 2016		December 31, 2015
Accrued interest	$	42,915	$	56,273
Accrued real estate taxes	42,812		47,319
Accrued legal fees	14,214		9,212
Accounts payable	6,223		2,868
Accrued other	32,986		36,205
Total	$	139,150	$	151,877

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2016

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Litigation

The Company is involved in various routine legal proceedings and claims incidental to the ordinary course of its business. There are no material legal proceedings pending against the Company, except as follows:

Government Investigations and Litigation Relating to the Audit Committee Investigation

As previously reported, on October 29, 2014, the Company filed a Current Report on Form 8-K (the “October 29 8-K”) reporting the Audit Committee’s conclusion, based on the preliminary findings of its investigation, that certain previously issued consolidated financial statements of the Company, including those included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013 and Quarterly Reports on Form 10-Q for the quarters ended March 31, 2014 and June 30, 2014, and related financial information should no longer be relied upon. The Company also reported that the Audit Committee had based its conclusion on the preliminary findings of its investigation into concerns regarding accounting practices and other matters that were first reported to the Audit Committee in early September 2014 and that the Audit Committee believed that an error in the calculation of adjusted funds from operations for the first quarter of 2014 had been identified but intentionally not corrected when the Company reported its financial results for the three and six months ended June 30, 2014. Prior to the filing of the October 29 8-K, the Audit Committee previewed for the SEC the information contained in the filing. Subsequent to that filing, the SEC provided notice that it had commenced a formal investigation and issued subpoenas calling for the production of various documents. In addition, the United States Attorney’s Office for the Southern District of New York contacted counsel for the Audit Committee and counsel for the Company with respect to this matter, and the Secretary of the Commonwealth of Massachusetts issued a subpoena calling for the production of various documents. The Audit Committee and the Company have been cooperating with these regulators in their investigations.

In connection with these investigations, on September 8, 2016, the United States Attorney’s Office for the Southern District of New York announced the filing of criminal charges against the Company’s former Chief Financial Officer and former Chief Accounting Officer (the “Criminal Action”), as well as the fact that the former Chief Accounting Officer has pleaded guilty to the charges filed. That same day, the SEC announced the filing of a civil complaint against the same two individuals in the United States District Court for the Southern District of New York (the “SEC Civil Action”). On October 12, 2016, the United States Attorney for the Southern District of New York filed a motion to intervene in and stay the SEC Civil Action until the conclusion of the Criminal Action. On November 1, 2016, the Court granted the motion to stay with respect to all witness related discovery.

As discussed below, the Company and certain of its former officers and current and former directors have been named as defendants in a number of lawsuits filed following the October 29 8-K, including class actions, derivative actions, and individual actions seeking money damages and other relief under the federal securities laws and state laws in both federal and state courts in New York, Maryland and Arizona.

Between October 30, 2014 and January 20, 2015, the Company and certain of its former officers and current and former directors, among other individuals and entities, were named as defendants in ten securities class action complaints filed in the United States District Court for the Southern District of New York. The court consolidated these actions under the caption In re American Realty Capital Properties, Inc. Litigation, No. 15-MC-00040 (AKH) (the “SDNY Consolidated Securities Class Action”). The plaintiffs filed a second amended class action complaint on December 11, 2015, which asserted claims for violations of Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. Certain defendants, including the Company and the OP, filed motions to dismiss the second amended class action complaint (or portions thereof), which were granted in part and denied in part by the court at oral argument on June 1, 2016. The Company and the OP filed an answer to the second amended class action complaint on July 29, 2016. On September 8, 2016, the Court issued an order directing plaintiffs to file a third amended complaint to reflect certain prior rulings by the court. The third amended complaint was filed on September 30, 2016 and the defendants are not required to file new answers. In the September 8, 2016 order, the court also directed that document production should be substantially complete by December 15, 2016, and scheduled a status conference on January 10, 2017.

The Company, certain of its former officers and current and former directors, and the OP, among others, have also been named as defendants in additional individual securities fraud actions filed in the United States District Court for the Southern District of New York: Jet Capital Master Fund, L.P. v. American Realty Capital Properties, Inc., et al., No. 15-cv-307 (the “Jet Capital Action”); Twin Securities, Inc. v. American Realty Capital Properties, Inc., et al., No. 15-cv-1291; HG Vora Special Opportunities Master Fund, Ltd v. American Realty Capital Properties, Inc., et al., No. 15-cv-4107; BlackRock ACS US Equity Tracker Fund, et al. v. American Realty Capital Properties, Inc. et al., No. 15-cv-08464; PIMCO Funds: PIMCO Diversified Income Fund, et al. v. American Realty Capital Properties, Inc. et al., No. 15-cv-08466; Clearline Capital Partners LP, et al. v. American Realty Capital Properties, Inc. et al., No. 15-cv-08467; Pentwater Equity Opportunities Master Fund Ltd., et al. v. American Realty Capital Properties, Inc. et al., No. 15-cv-08510; Archer Capital Master Fund, et al. v. American Realty Capital Properties, Inc. et al, No. 16-cv-05471 (the “Archer Capital Action”); and Atlas Master Fund et al. v. American Realty Capital Properties, Inc. et al., No. 16-cv-05475 (the “Atlas Action”) (collectively, the “Opt-Out Actions”). The Opt-Out Actions assert claims arising out of allegedly false and misleading statements in connection with the purchase or sale of the Company’s securities. The Company filed an answer to the complaint in the Jet Capital Action in December 2015. The Company filed answers to the complaints in all of the other Opt-Out Actions in July 2016 or in October 2016. Document production in the Opt-Out Actions is being coordinated with production in the SDNY Consolidated Securities Class Action.

On October 27, 2015, the Company and certain of its former officers, among others, were named as defendants in an individual securities fraud action filed in the United States District Court for the District of Arizona, captioned Vanguard Specialized Funds, et al. v. VEREIT, Inc. et al., No. 15-cv-02157 (the “Vanguard Action”). The Vanguard Action asserts claims arising out of allegedly false and misleading statements in connection with the purchase or sale of the Company’s securities. On January 21, 2016, the Company filed a motion to transfer the Vanguard Action to the United States District Court for the Southern District of New York and a motion to dismiss the complaint. On September 29, 2016, the court entered an order denying the Company’s motion to transfer and granting in part and denying in part the Company’s motion to dismiss. The Company is required to file an answer to the complaint by November 4, 2016.

The Company was also named as a nominal defendant, and certain of its former officers and current and former directors were named as defendants, in shareholder derivative actions filed in the United States District Court for the Southern District of New York: Witchko v. Schorsch, et al., No. 15-cv-06043 (the “Witchko Action”); and Serafin, et al. v. Schorsch, et al., No. 15-cv-08563 (the “Serafin Action”). The court consolidated the Witchko Action and the Serafin Action (together “the SDNY Derivative Action”) and the plaintiffs designated the complaint filed in the Witchko Action as the operative complaint in the SDNY Derivative Action. The SDNY Derivative Action seeks money damages and other relief on behalf of the Company for alleged breaches of fiduciary duty, among other claims. On February 12, 2016, the Company and other defendants filed a motion to dismiss the SDNY Derivative Action due to plaintiffs’ failure to plead facts demonstrating that the Board’s decision to refuse plaintiffs’ pre-suit demands was wrongful and not a protected business judgment. Other defendants also filed motions to dismiss for failure to state a claim. On June 9, 2016, the court granted in part and denied in part the Company’s and other defendants’ motions to dismiss. Plaintiffs filed an amended complaint on June 30, 2016, and the Company and other defendants filed answers to the amended complaint on July 22, 2016. On September 1, 2016, the Company filed a motion to stay the Witchko Action. On September 8, 2016, the court issued an order denying the Company’s motion. Document production in the Witchko Action is being coordinated with production in the SDNY Consolidated Securities Class Action.

On December 3, 2015, the Company was named as a nominal defendant and certain of its former officers and directors were named as defendants in a shareholder derivative action filed in the Circuit Court for Baltimore City in Maryland, captioned Frampton v. Schorsch, et al., No. 24-C-15-006269 (the “Frampton Action”). The Frampton Action seeks money damages and other relief on behalf of the Company for, among other things, alleged breaches of fiduciary duty and contribution and indemnification. The Company filed a motion to stay the Frampton Action on March 7, 2016. That motion is fully briefed and pending before the court and a conference is scheduled on November 3, 2016.

On June 10, 2016, the Company was named as a nominal defendant, and certain of its former officers and directors, among others, were named as defendants, in a shareholder derivative action filed in the Supreme Court of the State of New York, captioned Kosky v. Schorsch, et al., No. 653093/2016 (the “Kosky Action”). The Kosky Action seeks money damages and other relief on behalf of the Company for, among other things, alleged breaches of fiduciary duty, negligence, and breach of contract. On October 6, 2016, the parties filed a stipulation staying the Kosky Action until final resolution of the SDNY Consolidated Securities Class Action.

On October 6, 2016, the Company was named as a nominal defendant, and certain of its former officers and directors, among others, were named as defendants, in a shareholder derivative action filed in United States District Court for the District of Maryland, captioned Meloche v. Schorsch, et al., 16-cv-03366 (the “Meloche Action”). The Meloche Action seeks money damages and other relief on behalf of the Company for alleged breaches of fiduciary duty and negligence. The Company is required to respond to the complaint by January 13, 2017.

The Company has not reserved amounts for any of the litigation or investigation matters above either because it has not concluded that a loss is probable in the matter or because it believes that any probable loss or reasonably possible range of loss is not reasonably estimable at this time. The Company is currently unable to reasonably estimate a range of reasonably possible loss because these matters involve significant uncertainties, including the complexity of the facts and the legal theory and the nature of the claims.

CapLease Litigation Matters

Following the announcement of the merger agreement with CapLease in May 2013, a number of lawsuits were filed by CapLease stockholders, the following of which remain pending:

On June 25, 2013, a putative class action and derivative lawsuit was filed in the Circuit Court for Baltimore City against the Company, the OP, CapLease, and members of the CapLease board of directors, among others, captioned Tarver v. CapLease, Inc., et al., No. 24-C-13-004176 (the “Tarver Action”). The complaint alleged, among other things, that the merger agreement was the product of breaches of fiduciary duty by the CapLease directors because the transaction purportedly did not provide for full and fair value for the CapLease shareholders and was not the result of a competitive bidding process, the merger agreement allegedly contained coercive deal protection measures and the merger was purportedly approved as a result of improper self-dealing by certain defendants who would receive certain alleged employment compensation benefits and continued employment pursuant to the merger agreement. In August 2013, counsel in the Tarver Action filed a motion for a stay in the Baltimore Court, informing the court that the plaintiff had agreed to join and participate in the prosecution of other actions concerning the CapLease transaction then pending in a New York court (which were subsequently dismissed). The stay was granted by the Baltimore Court and the parties have engaged in no subsequent activity in the Tarver Action.

In October 2013, a putative class action lawsuit was filed in the Circuit Court for Baltimore City against the Company, the OP, CapLease, and members of the CapLease board of directors, among others, captioned Poling v. CapLease, Inc., et al., No. 24-C-13-006178 (the “Poling Action”). The complaint alleged that the merger agreement breached the terms of the CapLease 8.375% Series B Cumulative Redeemable Preferred Stock (“Series B”) and the terms of the 7.25% Series C Cumulative Redeemable Preferred Stock (“Series C”) and was in violation of the Series B Articles Supplementary and the Series C Articles Supplementary. The complaint alleged claims for breach of contract and breach of fiduciary duty.

In December 2013, all Defendants filed a motion to dismiss the Poling Action, which was granted by the court in May 2015. Plaintiff appealed the decision to the Court of Special Appeals of Maryland, which affirmed the trial court’s order on May 3, 2016. A petition seeking further appellate review was subsequently denied by the Maryland Court of Appeals on August 22, 2016.

Cole Litigation Matter

In December 2013, Realistic Partners filed a putative class action lawsuit against the Company and the then-members of its board of directors in the Supreme Court for the State of New York, captioned Realistic Partners v. American Realty Capital Partners, et al., No. 654468/2013. Cole was later added as a defendant. The plaintiff alleged, among other things, that the board of the Company breached its fiduciary duties in connection with the transactions contemplated under the Cole Merger Agreement (in connection with the merger between a wholly owned subsidiary of Cole and Cole Holdings Corporation) and that Cole aided and abetted those breaches. In January 2014, the parties entered into a memorandum of understanding regarding settlement of all claims asserted on behalf of the alleged class of the Company’s stockholders. The proposed settlement terms required the Company to make certain additional disclosures related to the Cole Merger, which were included in a Current Report on Form 8-K filed by the Company with the SEC on January 17, 2014. The memorandum of understanding also contemplated that the parties would enter into a stipulation of settlement, which would be subject to customary conditions, including confirmatory discovery and court approval following notice to the Company’s stockholders, and provided that the defendants would not object to a payment of up to $625,000 for attorneys’ fees. If the parties enter into a stipulation of settlement, which has not occurred, a hearing will be scheduled at which the court will consider the fairness, reasonableness and adequacy of the settlement. There can be no assurance that the parties will ultimately enter into a stipulation of settlement, that the court will approve any proposed settlement, or that any eventual settlement will be under the same terms as those contemplated by the memorandum of understanding.

Contractual Lease Obligations

The following table reflects the minimum base rent payments due from the Company over the next five years and thereafter for certain ground lease obligations, which are substantially reimbursable by our tenants, and office lease obligations (in thousands):

	Future Minimum Base Rent Payments
	Ground Leases		Office Leases
October 1, 2016 - December 31, 2016	$	3,722	$	1,189
2017	14,651		4,727
2018	14,370		4,704
2019	14,223		4,769
2020	13,586		4,798
Thereafter	224,662		14,089
Total	$	285,214	$	34,276

Purchase Commitments

Cole Capital enters into purchase and sale agreements and deposits funds into escrow towards the purchase of real estate assets, most of which are expected to be assigned to one of the Cole REITs at or prior to the closing of the respective acquisition. As of September 30, 2016, Cole Capital was a party to nine purchase and sale agreements with unaffiliated third-party sellers to purchase a 100% interest in 13 properties, subject to meeting certain criteria, for an aggregate purchase price of $290.0 million, exclusive of closing costs. As of September 30, 2016, Cole Capital had $3.1 million of property escrow deposits held by escrow agents in connection with these future property acquisitions, which may be forfeited if the transactions are not completed under certain circumstances. Cole Capital will be reimbursed by the assigned Cole REIT for amounts escrowed when the property is assigned to the respective Cole REIT.

Environmental Matters

In connection with the ownership and operation of real estate, the Company may potentially be liable for costs and damages related to environmental matters. The Company has not been notified by any governmental authority of any non-compliance, liability or other claim, and is not aware of any other environmental condition, in each case, that it believes will have a material adverse effect on the results of operations.

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Equity

9 Months Ended

Sep. 30, 2016

Equity [Abstract]

Equity

Equity

Common Stock and General Partner OP Units

The General Partner is authorized to issue up to 1.5 billion shares of Common Stock. As of September 30, 2016, the General Partner had approximately 974.2 million shares of Common Stock issued and outstanding.

Additionally, the Operating Partnership had approximately 974.2 million General Partner OP Units issued and outstanding as of September 30, 2016, corresponding to the General Partner’s outstanding shares of Common Stock.

Common Stock Offering

On August 10, 2016, the Company issued 69.0 million shares of Common Stock in a public offering for net proceeds, after underwriting discounts and offering costs, of $702.5 million which were used in part to repay the 2016 Term Loan and amounts under the Credit Facility.

Common Stock Continuous Offering Program

On September 19, 2016, the Company registered a continuous equity offering program (the “Program”) pursuant to which the Company can offer and sell, from time to time through September 19, 2019 in “at-the-market” offerings or certain other transactions, shares of Common Stock with an aggregate gross sales price of up to $750.0 million, through its sales agents. The Company intends to use the proceeds from any sale of shares for general corporate purposes, which may include funding potential acquisitions and repurchasing or repaying outstanding indebtedness. As of September 30, 2016, no shares of Common Stock have been issued pursuant to the Program.

Preferred Stock and Preferred OP Units

Series F Preferred Stock

On January 3, 2014, in connection with the merger of American Realty Capital Trust IV, Inc. with and into a subsidiary of the OP (the “ARCT IV Merger”), 42.2 million shares of Series F Preferred Stock were issued by the Company, resulting in the Operating Partnership concurrently issuing 42.2 million General Partner Series F preferred units (“General Partner Series F Preferred Units”) to the General Partner, and 700,000 Series F Preferred Units (“Limited Partner Series F Preferred Units”) to holders of each outstanding unit of American Realty Capital Operating Partnership IV, L.P. (the “ARCT IV Operating Partnership”) (each, an “ARCT IV OP Unit”). As of September 30, 2016, there were approximately 42.8 million shares of Series F Preferred Stock (and approximately 42.8 million corresponding General Partner Series F Preferred Units) and 86,874 Limited Partner Series F Preferred Units issued and outstanding.

The Series F Preferred Stock pays cumulative cash dividends at the rate of 6.70% per annum on their liquidation preference of $25.00 per share (equivalent to $1.675 per share on an annual basis). The Series F Preferred Stock is not redeemable by the Company before the fifth anniversary of the date on which such Series F Preferred Stock was issued (the “Initial Redemption Date”), except under circumstances intended to preserve the General Partner’s status as a REIT for federal and/or state income tax purposes and except upon the occurrence of a change of control. On and after the Initial Redemption Date, the General Partner may, at its option, redeem shares of the Series F Preferred Stock, in whole or from time to time in part, at a redemption price of $25.00 per share plus, subject to exceptions, any accrued and unpaid dividends thereon to the date fixed for redemption. The shares of Series F Preferred Stock have no stated maturity, are not subject to any sinking fund or mandatory redemption and will remain outstanding indefinitely unless the General Partner redeems or otherwise repurchases them or they become convertible and are converted into Common Stock (or, if applicable, alternative consideration). The Series F Preferred Stock trades on the NYSE under the symbol “VER PRF”. The Series F Preferred Units contain the same terms as the Series F Preferred Stock.

Limited Partner OP Units

As of September 30, 2016, the Operating Partnership had approximately 23.75 million Limited Partner OP Units outstanding, following the redemption of 15,450 Limited Partner OP Units, owned by a party unaffiliated with the Former Manager, for shares of the Company's Common Stock pursuant to the terms of the LPA. As of December 31, 2015, the Operating Partnership had approximately 23.76 million Limited Partner OP Units outstanding.

As of September 30, 2016, the Company has received redemption requests totaling approximately 13.1 million Limited Partner OP Units from certain affiliates of the Former Manager, which would have been redeemable for a corresponding number of common shares. The Company believes it has potential claims against recipients of those OP Units and has engaged in discussions with affiliates of the Former Manager regarding the redemption requests. Pending any resolution, the Company does not currently intend to satisfy any of the redemption requests. In light of the potential claims, since October 15, 2015, the OP has not paid distributions in respect of a substantial portion of the outstanding Limited Partner OP Units when the Common Stock dividends were otherwise paid.

Common Stock Dividends

On August 1, 2016, the Company’s board of directors declared a quarterly cash dividend of $0.1375 per share of common stock (equaling an annualized dividend rate of $0.55 per share) for the third quarter of 2016 to stockholders of record as of September 30, 2016, which was paid on October 17, 2016. An equivalent distribution by the Operating Partnership is applicable per OP unit.

Common Stock Repurchases

Under the General Partner’s Equity Plan (defined below), individuals have the option to have the General Partner repurchase shares vesting from awards made under the Equity Plan in order to satisfy the minimum federal and state tax withholding obligations. During the nine months ended September 30, 2016, the General Partner repurchased 424,726 shares to satisfy the federal and state tax withholding on behalf of employees.

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Equity-based Compensation

9 Months Ended

Sep. 30, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Equity-based Compensation

Equity-based Compensation

Equity Plan

The General Partner has adopted an equity plan (the “Equity Plan”), which provides for the grant of stock options, stock appreciation rights, restricted shares of Common Stock (“Restricted Shares”), restricted stock units (“Restricted Stock Units”), dividend equivalent rights and other stock-based awards to the General Partner’s and its affiliates’ non-executive directors, officers and other employees and advisors or consultants who are providing services to the General Partner or its affiliates. To date, the General Partner has granted fully vested shares of Common Stock, Restricted Shares, Restricted Stock Units and Deferred Stock Units (defined below) under the Equity Plan. Restricted Shares provide for rights identical to those of Common Stock. Restricted Stock Units do not provide for any rights of a common stockholder prior to the vesting of such Restricted Stock Units. In accordance with U.S. GAAP, Restricted Shares are considered issued and outstanding. As is the case when fully vested shares of Common Stock are issued from the Equity Plan, for each Restricted Share awarded under the Equity Plan, the Operating Partnership issues a General Partner OP Unit to the General Partner with identical terms. Upon vesting of Restricted Stock Units, the Operating Partnership issues a General Partner OP Unit to the General Partner for each share of Common Stock issued as a result of such vesting.

The General Partner has authorized and reserved a total number of shares equal to 10.0% of the total number of issued and outstanding shares of Common Stock (on a fully diluted basis assuming the redemption of all OP Units for shares of Common Stock) to be issued at any time under the Equity Plan for equity incentive awards. As of September 30, 2016, the General Partner had cumulatively awarded under its Equity Plan approximately 4.1 million Restricted Shares, net of the forfeiture of 3.6 million Restricted Shares through that date, 3.4 million Restricted Stock Units, net of the forfeiture of 0.5 million Restricted Stock Units through that date, and 0.2 million Deferred Stock Units, collectively representing approximately 7.7 million shares of Common Stock. Accordingly, as of such date, approximately 92.1 million additional shares were available for future issuance.

Restricted Shares

The Company has issued Restricted Shares to certain employees and non-executive directors beginning in 2011. In addition, the Company issued Restricted Shares to employees of affiliates of the Former Manager prior to 2015. The fair value of the Restricted Shares granted to employees under the Equity Plan is generally determined using the closing stock price on the grant date and is expensed over the requisite service period on a straight-line basis. The fair value of Restricted Shares granted to non-executive directors and employees of affiliates of the Former Manager under the Equity Plan was measured based upon the fair value of goods or services received or the equity instruments granted, whichever was more reliably determinable, and was expensed in full at the date of grant.

During the three and nine months ended September 30, 2016, the Company recorded $0.4 million and $1.3 million, respectively, of compensation expense related to the Restricted Shares, which is recorded in general and administrative expense in the accompanying consolidated statements of operations.

The following table details the activity of the Restricted Shares during the nine months ended September 30, 2016:

	Restricted Shares		Weighted-Average Grant Date Fair Value
Unvested shares, December 31, 2015	1,239,662		$	13.86
Vested	(434,004	)	$	14.19
Forfeited	(89,955	)	$	14.08
Unvested shares, September 30, 2016	715,703		$	13.64

Time-Based Restricted Stock Units

Under the Equity Plan, the Company may award Restricted Stock Units to employees that will vest if the recipient maintains his/her employment over the requisite service period (the “Time-Based Restricted Stock Units”). The fair value of the Time-Based Restricted Stock Units granted to employees under the Equity Plan is generally determined using the closing stock price on the grant date and is expensed over the requisite service period on a straight-line basis, which is generally three years. During the three and nine months ended September 30, 2016, the Company recorded $0.9 million and $2.5 million, respectively, of compensation expense related to the Time-Based Restricted Stock Units, which is recorded in general and administrative expense in the accompanying consolidated statements of operations.

Deferred Stock Units

The Company may award Deferred Stock Units to non-executive directors under the Equity Plan (the “Deferred Stock Units”). Each Deferred Stock Unit represents the right to receive one share of Common Stock. The Deferred Stock Units provide for immediate vesting on the grant date and will be settled with Common Stock either on the earlier of the date on which the respective director separates from the Company or the third anniversary of the grant date, or if granted pursuant to the director’s voluntary election to participate in the director’s deferred compensation program, on the date the director separates from the Company. The fair value of the Deferred Stock Units is determined using the closing stock price on the grant date and is expensed over the requisite service period or on the grant date for awards with no requisite service period. During the three and nine months ended September 30, 2016, the Company recorded $34,000 and $0.7 million of expense related to Deferred Stock Units, which is recorded in general and administrative expense in the accompanying consolidated statements of operations.

The following table details the activity of the Time-Based Restricted Stock Units and Deferred Stock Units during the nine months ended September 30, 2016.

	Time-Based Restricted Stock Units		Weighted-Average Grant Date Fair Value		Deferred Stock Units		Weighted-Average Grant Date Fair Value
Unvested units, December 31, 2015	589,138		$	9.61	—		$	—
Granted	736,427		7.82		79,208		9.18
Vested	(184,455	)	9.70		(79,208	)	9.18
Forfeited	(35,377	)	8.71		—		—
Unvested units, September 30, 2016	1,105,733		$	8.43	—		$	—

Market-Based Restricted Stock Units

During the year ended December 31, 2015, the General Partner awarded Restricted Stock Units to certain employees under the Equity Plan that were contingent upon the Common Stock reaching a certain market price (the “Market-Based Restricted Stock Units”). The Market-Based Restricted Stock Units were contingent upon the closing price of the Common Stock equaling or exceeding $10 per share for 20 consecutive trading days (the “Market Condition”) and the grantee’s continued employment as of such date on which the Market Condition was met. On July 28, 2016, 610,839 Market-Based Restricted Stock Units vested, of which 199,858 shares were withheld to cover grantees’ tax withholding obligations, resulting in 410,981 shares being issued.

The fair value and derived service period of the Market-Based Restricted Stock Units as of their grant date was determined using a Monte Carlo simulation, which took into account multiple input variables that determine the probability of satisfying the Market Condition. The method required the input of assumptions, including the future dividend yield and expected volatility of the Common Stock. Compensation expense was recognized on a straight-line basis over the derived service period regardless of whether the Market Condition was satisfied, provided that the requisite service condition had been achieved. The Market-Based Restricted Stock Units were fully expensed during the year ended December 31, 2015, however the Company recorded contra-expense due to the forfeiture of such awards. During the three and nine months ended September 30, 2016, the Company recorded contra-expense of $0.1 million and $0.8 million, respectively, related to forfeitures of the Market-Based Restricted Stock Units which is recorded in general and administrative expense in the accompanying consolidated statements of operations.

Long-Term Incentive Awards

The General Partner may award long-term incentive-based Restricted Stock Units (the “LTI Target Awards”) to employees under the Equity Plan. Vesting of the LTI Target Awards is based upon the General Partner’s level of achievement of total stockholder return (“TSR”), including both share price appreciation and Common Stock dividends, as measured equally against a market index and against a peer group generally over a three year period.

The fair value and derived service period of the LTI Target Awards as of their grant date is determined using a Monte Carlo simulation which takes into account multiple input variables that determine the probability of satisfying the required TSR, as outlined in the award agreements. This method requires the input of assumptions, including the future dividend yield, the expected volatility of the Common Stock and the expected volatility of the market index constituents and the peer group. Compensation expense is recognized on a straight-line basis over the derived service period regardless of whether the necessary TSR is attained, provided that the requisite service condition has been achieved. During the three and nine months ended September 30, 2016, the Company recorded $1.3 million and $3.3 million, respectively, of expense related to the LTI Target Awards, which is recorded in general and administrative expense in the accompanying consolidated statements of operations.

The following table details the activity of the unvested Market-Based Restricted Stock Units and the LTI Target Awards during the nine months ended September 30, 2016.

	Market-Based Restricted Stock Units		Weighted-Average Grant Date Fair Value		LTI Target Awards		Weighted-Average Grant Date Fair Value
Unvested units, December 31, 2015	704,804		$	8.58	731,448		$	11.38
Granted	—		—		855,471		7.14
Vested	(610,839	)	8.58		(3,362	)	11.77
Forfeited	(93,965	)	8.58		(52,109	)	11.24
Unvested units, September 30, 2016	—		$	—	1,531,448		$	9.01

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Related Party Transactions and Arrangements

9 Months Ended

Sep. 30, 2016

Related Party Transactions [Abstract]

Related Party Transactions and Arrangements

Related Party Transactions and Arrangements

Cole Capital

Cole Capital is contractually responsible for managing the Cole REITs’ affairs on a day-to-day basis, identifying and making acquisitions and investments on the Cole REITs’ behalf, and recommending to the respective board of directors of each of the Cole REITs an approach for providing investors with liquidity. In addition, the Company distributes the shares of common stock for certain Cole 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 Cole REITs’ offerings and the investment, management and disposition of their respective assets, as applicable.

Offering-Related Revenue

The Company generally receives a selling commission, dealer manager fee and/or a distribution and stockholder servicing fee based on the gross offering proceeds related to the sale of shares of the Cole REITs’ common stock in their primary offerings. The Company has reallowed 100% of selling commissions earned to participating broker-dealers. 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 issued 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 issued under the respective Cole REIT’s distribution reinvestment plan, under which the stockholders may elect to have distributions reinvested in additional shares.

All other organization and offering expenses associated with the sale of the Cole REITs’ common stock are paid for in advance by the Company and subject to reimbursement by the Cole REITs, up to certain limits in accordance with their respective advisory agreements and charters. As these costs are incurred, they are recorded as reimbursement revenue, up to the respective limit, and are included in offering-related revenues in the financial results for Cole Capital. Expenses paid on behalf of the Cole REITs in excess of these limits that are expected to be collected based on future estimated offering proceeds are recorded as program development costs, which are included in rent and tenant receivables and other assets, net in the accompanying consolidated balance sheets. The Company assesses the collectability of the program development costs, considering the offering period and historical and forecasted sales of shares under the Cole REITs’ respective offerings and reserves for any balances considered not collectible. Additional reserves are generally recorded if actual proceeds raised from the offerings and corresponding program development costs incurred differ from management’s assumptions. As of September 30, 2016 and December 31, 2015, the Company had organization and offering costs recorded as program development costs, included in rent and tenant receivables and other assets, net in the consolidated balance sheets, of $12.3 million and $12.9 million, respectively, which were net of reserves of $18.8 million and $34.8 million, respectively.

The following table shows the offering fee summary information for the Cole REITs as of September 30, 2016:

Program	Selling Commissions (1)	Dealer Manager Fees (2)		Annual Distribution and Stockholder Servicing Fee (2)
Open Programs (3)
CCPT V
Class A Shares	7%	2%		—%
Class T Shares (4)	3%	2%		0.8%	(5) (6)
INAV (7)
Wrap Class Shares	—%	0.55%	(6)	—%
Advisor Class Shares	up to 3.75%	0.55%	(6)	0.5%	(6)
Institutional Class Shares	—%	0.25%	(6)	—%
CCIT III (8)
Class A Shares	7%	2%		—%
Class T Shares	3%	2%		1%	(6)

_______________________________________________

(1) The Company reallowed 100% of selling commissions earned to participating broker-dealers during the three and nine months ended September 30, 2016 and 2015.

(2) The Company may reallow all or a portion of its dealer manager fee and/or a distribution and stockholder servicing fee to participating broker-dealers as a marketing and due diligence expense reimbursement.

(3) CCIT II closed its offering during the three months ended September 30, 2016. The program’s fee structure was similar to that of CCPT V.

(4) Commencing on April 29, 2016, CCPT V began offering Class T shares of common stock in addition to the class of shares of common stock previously offered (now referred to as Class A shares).

(5) Subsequent to September 30, 2016, the distribution and stockholder servicing fee was amended to be 1.0%.

(6) Fees are accrued daily in the amount of 1/365^th of a percentage of the estimated per share NAV and payable monthly in arrears. The maximum amount of the distribution and stockholder servicing fee with respect to sales of Class T shares is 4.0% of the gross offering proceeds for CCPT V and CCIT III.

(7) In connection with the INAV offering, the Company receives selling commissions, an asset-based dealer manager fee and/or an asset-based distribution and stockholder servicing fee, all based on the net asset value for each class of common stock.

(8) On September 22, 2016, the registration statement for the initial public offering of CCIT III was declared effective by the SEC, consisting of Class A shares of common stock and Class T shares of common stock.

Transaction Service Revenue

The Company earns acquisition fees related to the acquisition, development or construction of properties on behalf of certain of the Cole 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 Cole REIT and other affiliates.

The following table shows the transaction-related fees for the Cole REITs and other real estate programs as of September 30, 2016:

Program	Acquisition Fees (1)	Disposition Fees	Performance Fees (2)	Financing Coordination Fee (3)
Open Programs
CCPT V	2%	1%	15%	—
INAV	—	—	—	—
CCIT III	2%	1%	15%	1%
Closed Programs
CCIT II	2%	1%	15%	—
CCPT IV	2%	1%	15%	—
Other Programs	Various	Various	Various	—

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(1) Percent taken on gross purchase price.

(2) Performance fee paid only under the following circumstances: (i) if shares are listed on a national securities exchange; (ii) if the respective Cole REIT is sold or the assets are liquidated; or (iii) upon termination of the advisory agreement. In connection with such events, the performance fee will only be earned upon the return to investors of their net capital invested and a 6% annual cumulative, non-compounded return (8% in the case of CCIT II and CCPT IV).

(3) Financing coordination fee payable for services in connection with the origination, assumption, or refinancing for any debt (other than loans advanced by the Company) to acquire properties or make other permitted investments.

Management Service Revenue

The Company earns advisory and asset and property management fees from certain Cole REITs and other real estate programs. The Company may also be reimbursed for expenses incurred in providing advisory and asset and property management services, subject to certain limitations. In addition, the Company earns a performance fee relating to INAV for any year in which the total return on stockholders’ capital exceeds 6% per annum on a calendar year basis.

The following table shows the management fees for the Cole REITs as of September 30, 2016:

Program	Asset Management / Advisory Fees (1)	Performance Fees (2)
Open Programs
CCPT V	0.65% - 0.75%	—
INAV	0.90%	25%
CCIT III	0.65% - 0.75%	—
Closed Programs
CCIT II	0.65% - 0.75%	—
CCPT IV	0.65% - 0.75%	—
Other Programs	Various	—

_______________________________________________

(1)    Annualized fee based on the average monthly invested assets or net asset value, if available.

(2)    The performance fee is limited to 10% of the aggregate total return, for each class, for any individual year.

The table below reflects the revenue earned from the Cole REITs (including closed programs, as applicable) and joint ventures for the three and nine months ended September 30, 2016 and 2015 (in thousands).

	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
Offering-related fees and reimbursements
Selling commissions (1)	$	5,008	$	3,328	$	18,112	$	8,345
Dealer manager and distribution fees (2)	2,237		1,258		7,292		3,143
Reimbursement revenue	2,300		1,264		7,446		2,995
Offering-related fees and reimbursements	9,545		5,850		32,850		14,483
Transaction service fees and reimbursements
Acquisition fees	2,813		6,233		8,273		14,913
Disposition fees (3)	—		—		—		4,350
Reimbursement revenues	686		403		2,024		1,594
Transaction service fees and reimbursements	3,499		6,636		10,297		20,857
Management fees and reimbursements
Asset and property management fees and leasing fees	53		108		159		332
Advisory and performance fee revenue	13,011		10,998		37,621		32,674
Reimbursement revenues	4,430		2,882		12,803		8,503
Management fees and reimbursements	17,494		13,988		50,583		41,509
Interest income on Affiliate Lines of Credit	—		306		308		967
Total related party revenues(4)	$	30,538	$	26,780	$	94,038	$	77,816

___________________________________

(1) The Company reallowed 100% of selling commissions earned to participating broker-dealers during the three and nine months ended September 30, 2016 and 2015.

(2) During the three and nine months ended September 30, 2016, the Company reallowed $0.9 million and $2.8 million, respectively, of dealer manager fees and/or distribution and stockholder servicing fees to participating broker dealers as a marketing and due diligence expense reimbursement. During the three and nine months ended September 30, 2015, the Company reallowed $0.6 million and $1.3 million, respectively, of such fees.

(3) The Company earned a disposition fee of $4.4 million on behalf of CCIT when CCIT merged with Select Income REIT on January 29, 2015.

(4) Total related party revenues excludes fees earned from 1031 real estate programs of $0.5 million and $1.1 million for the three and nine months ended September 30, 2016, respectively and fees earned from 1031 real estate programs of $1.1 million and $4.7 million for the three and nine months ended September 30, 2015, respectively.

Investment in the Cole REITs

As of September 30, 2016 and December 31, 2015, the Company owned aggregate equity investments of $6.1 million and $4.1 million, respectively, in the Cole REITs and other affiliated offerings. The Company accounts for these investments using the equity method of accounting which requires the investment to be initially recorded at cost and subsequently adjusted for the Company’s share of equity in the respective Cole REIT’s earnings and distributions. The Company records its proportionate share of net income from the Cole REITs in equity in income and gain on disposition of unconsolidated entities in the consolidated statements of operations. During the three and nine months ended September 30, 2016, the Company recognized $1,000 and $128,000 of net loss, respectively, from the Cole REITs. During the three and nine months ended September 30, 2015, the Company recognized $27,000 of net loss and $63,000 of net income, respectively, from the Cole REITs.

The table below presents certain information related to the Company’s investments in the Cole REITs as of September 30, 2016 (carrying amount in thousands):

	September 30, 2016
Cole REIT	% of Outstanding Shares Owned	Carrying Amount of Investment
CCPT V	1.00%	$	1,448
INAV	0.09%	143
CCIT II	0.44%	1,299
CCIT III	100%	2,697
CCPT IV	0.01%	115
Funds not yet in offering	N/A	400
		$	6,102

Due to Affiliates

Due to affiliates, as reported in the accompanying consolidated balance sheets, was $0.2 million as of December 31, 2015, related to amounts due to the Cole REITs for expense reimbursements. As of September 30, 2016, there was no such balance due to affiliates.

Due from Affiliates

As of each of September 30, 2016 and December 31, 2015, $10.6 million was expected to be collected from affiliates, excluding balances from the Cole REITs’ lines of credit, discussed below, related to services provided by the Company and expenses subject to reimbursement by the Cole REITs in accordance with their respective advisory and property management agreements.

On September 23, 2016, the Company entered into a $30.0 million revolving line of credit (the “Subordinate Promissory Note”) with Cole Corporate Income Operating Partnership III, LP (“CCI III OP”), the operating partnership of CCIT III (the “Subordinate Promissory Note Agreement”) . The Subordinate Promissory Note bears variable interest rates of one-month LIBOR plus the Credit Facility Margin (as defined in the Subordinate Promissory Note Agreement), which ranges from 2.20% to 2.75%, plus 1.75% and matures on September 22, 2017. As of September 30, 2016, the Subordinate Promissory Note had an interest rate of 5.05% and $10.3 million was outstanding.

As of December 31, 2015, the Company had revolving line of credit agreements in place with CCIT II and CCPT V (the “Affiliate Lines of Credit”) that provided for maximum borrowings of $60.0 million to each of CCIT II and CCPT V and bore variable interest rates of one-month LIBOR plus 2.20%. As of December 31, 2015, there was $50.0 million outstanding on the Affiliate Lines of Credit. During the nine months ended September 30, 2016, the Affiliate Lines of Credit had matured and no amounts were outstanding as of September 30, 2016.

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Net Income (Loss) Per Share/Unit

9 Months Ended

Sep. 30, 2016

Earnings Per Share [Abstract]

Net Income (Loss) Per Share/Unit

Net Income (Loss) Per Share/Unit

The General Partner’s unvested Restricted Shares contain non-forfeitable rights to dividends and are considered to be participating securities in accordance with U.S. GAAP and, therefore, are included in the computation of earnings per share under the two-class computation method. Under the two-class computation method, net losses are not allocated to participating securities unless the holder of the security has a contractual obligation to share in the losses. The unvested Restricted Shares are not allocated losses as the awards do not have a contractual obligation to share in losses of the General Partner. The two-class computation method is an earnings allocation formula that determines earnings per share for each class of shares of Common Stock and participating securities according to dividends declared (or accumulated) and participation rights in undistributed earnings.

Net Income (Loss) Per Share

The following is a summary of the basic and diluted net loss per share computation for the General Partner for the three and nine months ended September 30, 2016 and 2015 (dollar amounts in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Net income (loss) attributable to the General Partner	$	29,495		$	7,529		$	(80,445	)	$	(128,963	)
Dividends to preferred shares and units	(17,973		)	(17,974		)	(53,919		)	(53,920		)
Net income (loss) available to the General Partner	11,522			(10,445		)	(134,364		)	(182,883		)
Earnings allocated to participating securities	(154		)	(217		)	(400		)	(222		)
Income attributable to limited partners	739			—			—			—
Net Income (loss) attributable to common stockholders and limited partners used in basic and diluted net income (loss) per share	$	12,107		$	(10,662	)	$	(134,764	)	$	(183,105	)
Weighted average number of common stock outstanding - basic	943,480,170			903,461,323			917,233,898			903,267,282
Effect of Limited Partner OP Units and dilutive securities	25,206,373			—			—			—
Weighted average number of common stock outstanding - diluted	968,686,543			903,461,323			917,233,898			903,267,282
Basic and diluted net income (loss) per share attributable to common stockholders and limited partners	$	0.01		$	(0.01	)	$	(0.15	)	$	(0.20	)

For the nine months ended September 30, 2016, diluted net loss per share attributable to common stockholders excludes approximately 0.9 million of unvested Restricted Shares and Restricted Stock Units and approximately 23.8 million OP Units as the effect would have been antidilutive.

For the three and nine months ended September 30, 2015, diluted net loss attributable to common stockholders excludes approximately 2.2 million and 2.3 million, respectively, of unvested Restricted Shares and Restricted Stock Units and approximately 23.8 million OP Units as the effect would have been antidilutive.

Net Income (Loss) Per Unit

The following is a summary of the basic and diluted net loss per unit attributable to common unitholders, which includes all common general partner unitholders and limited partner unitholders. The computation for the OP for the three and nine months ended September 30, 2016 and 2015 (dollar amounts in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Net income (loss) attributable to the Operating Partnership	$	30,234		$	7,737		$	(82,578	)	$	(132,458	)
Dividends to preferred units	(17,973		)	(17,974		)	(53,919		)	(53,920		)
Net income (loss) available to the Operating Partnership	12,261			(10,237		)	(136,497		)	(186,378		)
Earnings allocated to participating units	(154		)	(217		)	(400		)	(222		)
Net Income (loss) attributable to common unitholders used in basic and diluted net income (loss) per unit	$	12,107		$	(10,454	)	$	(136,897	)	$	(186,600	)
Weighted average number of common units outstanding - basic	967,237,921			927,225,120			940,995,665			927,031,079
Effect of dilutive securities	1,448,622			—			—			—
Weighted average number of common units outstanding - diluted	968,686,543			927,225,120			940,995,665			927,031,079
Basic and diluted net income (loss) per unit attributable to common unitholders	$	0.01		$	(0.01	)	$	(0.15	)	$	(0.20	)

For the nine months ended September 30, 2016, diluted net loss per unit attributable to common unitholders excludes approximately 0.9 million of unvested Restricted Shares and Restricted Stock Units as the effect would have been antidilutive.

For the three and nine months ended September 30, 2015, diluted net loss attributable to common unitholders excludes approximately 2.2 million and 2.3 million, respectively, of unvested Restricted Shares and Restricted Stock Units as the effect would have been antidilutive.

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Income Taxes

9 Months Ended

Sep. 30, 2016

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

As a REIT, the General Partner generally is not subject to federal income tax, with the exception of its TRS entities. However, the General Partner, including its TRS entities, and the Operating Partnership are still subject to certain state and local income and franchise taxes in the various jurisdictions in which they operate.

Cole Capital Income Taxes

Based on the above, Cole Capital’s business, substantially all of which is conducted through a TRS, recognized a provision of$0.1 million and a benefit of$3.3 million for the three and nine months ended September 30, 2016, respectively, which are included in provision for income taxes in the accompanying consolidated statements of operations. A benefit of$0.7 million and $2.4 million was recognized for the three and nine months ended September 30, 2015, respectively.

REI Income Taxes

The REI segment recognized a provision of$1.5 million and $4.7 million for the three and nine months ended September 30, 2016, respectively, and a provision of$2.2 million and $7.2 million for the three and nine months ended September 30, 2015, respectively, which are included in provision for income taxes in the accompanying consolidated statements of operations.

The Company had no unrecognized tax benefits as of or during the nine months ended September 30, 2016 and 2015. Any interest and penalties related to unrecognized tax benefits would be recognized in provision for income taxes in the accompanying consolidated statements of operations. The Company files income tax returns in the U.S. federal jurisdiction, Canadian federal jurisdiction and various state and local jurisdictions, and is subject to routine examinations by the respective tax authorities. With few exceptions, the Company is no longer subject to federal or state examinations by tax authorities for years before 2011.

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Subsequent Events

9 Months Ended

Sep. 30, 2016

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

The following events occurred subsequent to September 30, 2016:

Real Estate Investment Activity

From October 1, 2016 through October 28, 2016, the Company sold nine properties for an aggregate gross sales price of $57.2 million, of which our share was $54.8 million and an estimated gain of $3.0 million.

Common Stock Dividend

On November 1, 2016, the Company’s board of directors declared a quarterly cash dividend of $0.1375 per share of common stock (equaling an annualized dividend rate of $0.55 per share) for the fourth quarter of 2016 to stockholders of record as of December 30, 2016, which will be paid on January 17, 2017. An equivalent distribution by the Operating Partnership is applicable per OP unit.

Preferred Stock Dividend

On November 1, 2016, the Company’s board of directors declared a monthly cash dividend to holders of the Series F Preferred Stock for January 2017 through March 2017 in respect to the periods included in the table below. The corresponding record and payment dates for each month's Series F Preferred Stock dividend are also shown in the table below.  The dividend for the Series F Preferred Stock accrues daily on a 360-day annual basis equal to an annualized dividend rate of $1.675 per share, or $0.1395833 per 30-day month.

Period	Record Date	Payment Date
December 15, 2016 - January 14, 2017	January 1, 2017	January 17, 2017
January 15, 2017 - February 14, 2017	February 1, 2017	February 15, 2017
February 15, 2017 - March 14, 2017	March 1, 2017	March 15, 2017

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Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2016

Accounting Policies [Abstract]

Basis of Accounting

The consolidated financial statements of the Company presented herein include the accounts of the General Partner and its consolidated subsidiaries, including the OP. All intercompany transactions have been eliminated upon consolidation. The financial statements are prepared on the accrual basis of accounting in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”). The information furnished includes all adjustments and accruals of a normal recurring nature, which, in the opinion of management, are necessary for a fair presentation of results for the interim periods. The results of operations for the three and nine months ended September 30, 2016 are not necessarily indicative of the results for the entire year or any subsequent interim period.

These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto as of and for the year ended December 31, 2015 of the Company, which are included in the Company’s Annual Report on Form 10-K filed on February 24, 2016. There have been no significant changes to the Company’s significant accounting policies during the nine months ended September 30, 2016. Information and footnote disclosures normally included in financial statements have been condensed or omitted pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) and U.S. GAAP.

Principles of Consolidation and Basis of Presentation

The consolidated financial statements include the accounts of the Company and its subsidiaries and consolidated joint venture arrangements. The portions of the consolidated joint venture arrangements not owned by the Company are presented as non-controlling interests in VEREIT’s and the OP’s consolidated balance sheets, statements of operations, statements of comprehensive income (loss) and statements of changes in equity. In addition, as described in Note 1 – Organization, certain third parties have been issued OP Units. Holders of OP Units are considered to be non-controlling interest holders in the OP and their ownership interest in the limited partner’s share is presented as non-controlling interests in VEREIT’s consolidated balance sheets, statements of operations, statements of comprehensive income (loss) and statements of changes in equity. Further, a portion of the earnings and losses of the OP are allocated to non-controlling interest holders based on their respective ownership percentages. Upon conversion of OP Units to Common Stock, any difference between the fair value of shares of Common Stock issued and the carrying value of the OP Units converted is recorded as a component of equity. As of September 30, 2016 and December 31, 2015, there were approximately 23.75 million and 23.76 million Limited Partner OP Units outstanding, respectively.

For legal entities being evaluated for consolidation, the Company must first determine whether the interests that it holds and fees it receives qualify as variable interests in the entity. A variable interest is an investment or other interest that will absorb portions of an entity’s expected losses or receive portions of the entity’s expected residual returns. The Company’s evaluation includes consideration of fees paid to the Company where the Company acts as a decision maker or service provider to the entity being evaluated. If the Company determines that it holds a variable interest in an entity, it evaluates whether that entity is a variable interest entity (“VIE”). VIEs are entities where investors lack sufficient equity at risk for the entity to finance its activities without additional subordinated financial support or where equity investors, as a group, lack one of the following characteristics: (a) the power to direct the activities that most significantly impact the entity’s economic performance, (b) the obligation to absorb the expected losses of the entity, or (c) the right to receive the expected returns of the entity.

The Company then qualitatively assesses whether it is (or is not) the primary beneficiary of a VIE, which is generally defined as the party who has a controlling financial interest in the VIE. Consideration of various factors include, but are not limited to, the Company’s ability to direct the activities that most significantly impact the entity’s economic performance and its obligation to absorb losses from or right to receive benefits of the VIE that could potentially be significant to the VIE. The Company consolidates any VIEs when the Company is determined to be the primary beneficiary of the VIE and the difference between consolidating the VIE and accounting for it using the equity method could be material to the Company’s consolidated financial statements. The Company continually evaluates the need to consolidate these VIEs based on standards set forth in U.S. GAAP.

Reclassification

As described below, the following items previously reported have been reclassified to conform with the current period’s presentation.

The land and construction in progress line item from prior periods has been combined into the land caption in the consolidated balance sheets. The gain on forgiveness of debt previously included in other income, net has been combined into the caption (loss) gain on extinguishment and forgiveness of debt, net in the consolidated statements of operations. Additionally, equity in income of unconsolidated joint ventures previously included in other income, net in the consolidated statements of operations has been included in a separate caption entitled equity in income and gain on disposition of unconsolidated entities. Insurance recoveries previously included in other income, net in the consolidated statements of operations has been included in litigation and other non-routine costs, net of insurance recoveries.

Restricted Cash

The Company had $61.8 million and $59.8 million, respectively, in restricted cash as of September 30, 2016 and December 31, 2015. Restricted cash primarily consists of reserves related to lease expirations, as well as maintenance, structural and debt service reserves. In accordance with certain debt agreements, rent from certain of the Company’s tenants is deposited directly into a lockbox account, from which the monthly debt service payments are disbursed to the lender and the excess funds are then disbursed to the Company.

Revenue Recognition - REI and Cole Capital

The Company’s revenues, which primarily consist of rental income and include rents that each tenant pays in accordance with the terms of each lease reported on a straight-line basis over the initial non-cancelable term of the lease, are recognized when earned and collectability is reasonably assured. When the Company acquires a property, the term of each existing lease is considered to commence as of the acquisition date for the purposes of this calculation. Since many of the leases provide for rental increases at specified intervals, straight-line basis accounting requires the Company to record a receivable, and include in revenues, straight-line rent receivables that the Company will only receive if the tenant makes all rent payments required through the expiration of the initial term of the lease. Straight-line rent receivables are included in rent and tenant receivables and other assets, net, in the consolidated balance sheets. See Note 8 – Rent and Tenant Receivables and Other Assets, Net. Cost recoveries from tenants are included in operating expense reimbursements in the consolidated statements of operations in the period the related costs are incurred. The Company defers the revenue related to lease payments received from tenants in advance of their due dates. As of September 30, 2016 and December 31, 2015, the Company had $70.9 million and $67.2 million, respectively, of deferred rental income, which is included in deferred rent, derivative and other liabilities in the consolidated balance sheets.

The Company continually reviews receivables related to rent and unbilled rent receivables and determines collectability 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 the event that the collectability of a receivable is uncertain, the Company will record an increase in the allowance for uncollectible accounts in the consolidated balance sheets and in the consolidated statements of operations as a reduction to rental income. As of September 30, 2016 and December 31, 2015, the Company maintained an allowance for uncollectible accounts of $8.3 million and $6.6 million, respectively.

Revenue Recognition – Cole Capital

Revenue includes securities sales commissions, dealer manager fees, distribution and stockholder servicing fees, real estate acquisition fees, financing coordination fees, property management fees, advisory fees, asset management fees and performance fees for services relating to the Cole REITs’ offerings and the investment and management of their respective assets, in accordance with the respective dealer manager and advisory agreements. The Company records dealer manager fees, excluding those related to INAV (as defined in Note 3 –Segment Reporting), and securities sales commissions as revenue upon the sale of Cole REIT shares. Dealer manager fees from the sale of INAV shares and distribution and stockholder servicing fees are recorded as revenue when the fees are fixed or determinable. The Company records revenue related to acquisition and financing coordination fees upon completion of a transaction and advisory, asset and property management fees as services are performed. The Company is also reimbursed for certain costs incurred in providing these services. Securities sales commissions and dealer manager reimbursements are recorded as revenue as the expenses are incurred, as long as reimbursement is reasonably assured. 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 issued by such participating broker-dealers and the amount of marketing support provided by such participating broker-dealers. The Company also reallows 100% of selling commissions earned to participating broker-dealers. Refer to Note 17 –Related Party Transactions and Arrangements for further discussion. In addition, the Company earns property management, asset management and disposition fees from certain joint ventures and other real estate programs.

Acquisition Related Expenses and Litigation and Other Non-routine Costs

All costs incurred as a result of a business combination are classified as acquisition related expenses or other non-routine transaction related expenses and expensed as incurred. Acquisition related expenses include legal and other transaction related costs incurred in connection with self-originated acquisitions, including purchases of portfolios. In addition, indirect costs, such as internal salaries, that are tracked and documented in a manner that clearly indicates that the activities driving the cost directly relate to activities necessary to complete, or effect, self-originating purchases are classified as acquisition related expenses.

Similar costs incurred in relation to mergers (which are not considered self-originating purchases) and litigation resulting therefrom and other non-routine transactions are included in litigation and other non-routine costs, net of insurance recoveries in the consolidated statements of operations. The Company has also incurred legal fees and other costs associated with the Audit Committee Investigation (defined below) and the litigations and investigations resulting therefrom, which are considered non-routine. The Company has directors’ and officers’ insurance and the insurance carriers have paid certain defense costs subject to standard reservation of rights under the respective policies.

Income Taxes

The General Partner currently qualifies and has elected to be taxed as a REIT for U.S. federal income tax purposes under Sections 856 through 860 of the Internal Revenue Code. As a REIT, except as discussed below, the General Partner generally is not subject to federal income tax on taxable income that it distributes to its stockholders so long as it distributes at least 90% of its annual taxable income (computed without regard to the deduction for dividends paid and excluding net capital gains). REITs are subject to a number of other organizational and operational requirements. Even if the General Partner maintains its qualification for taxation as a REIT, it may be subject to certain state and local taxes on its income and property, federal income taxes on certain income and excise taxes on its undistributed income.

The OP is classified as a partnership for U.S. federal income tax purposes. As a partnership, the OP is not a taxable entity for U.S. federal income tax purposes. Instead, each partner in the OP is required to take into account its allocable share of the OP’s income, gains, losses, deductions and credits for each taxable year. However, the OP may be subject to certain state and local taxes on its income and property.

As of September 30, 2016, the OP and the General Partner had no material uncertain income tax positions. The tax years subsequent to and including the fiscal year ended December 31, 2011 remain open to examination by the major taxing jurisdictions to which the OP, the General Partner, American Realty Capital Trust III, Inc. (“ARCT III”), CapLease, Inc. (“CapLease”), American Realty Capital Trust IV, Inc., (“ARCT IV”), Cole Real Estate Investments, Inc. (“Cole”) and Cole Credit Property Trust, Inc. are subject.

Under the LPA, the OP is to conduct business in such a manner as to permit the General Partner at all times to qualify as a REIT.

The Company conducts substantially all of its Cole Capital segment business activities through a TRS. A TRS is a subsidiary of a REIT that is subject to corporate federal, state and local income taxes, as applicable. The Company’s use of a TRS enables it to engage in certain business activities while complying with the REIT qualification requirements and to retain any income generated by these businesses for reinvestment without the requirement to distribute those earnings. The Company conducts all of its business in the United States and Canada and, as a result, it files income tax returns in the U.S. federal jurisdiction, the Canadian federal jurisdiction and various state and local jurisdictions. Certain of the Company’s inter-company transactions that have been eliminated in consolidation for financial accounting purposes are also subject to taxation.

The Company provides for income taxes in accordance with current authoritative accounting and tax guidance. The tax provision or benefit related to significant or unusual items is recognized in the quarter in which those items occur. In addition, the effect of changes in enacted tax laws, rates or tax status is recognized in the quarter in which the change occurs. The accounting estimates used to compute the provision for or benefit from income taxes may change as new events occur, additional information is obtained or the tax environment changes.

Recent Accounting Pronouncements

In May 2014, the U.S. Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update, (“ASU”) 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which supersedes the revenue recognition requirements in Revenue Recognition, Accounting Standards Codification (“ASC”) (Topic 605) and requires an entity to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In August 2015, an amendment to ASU 2014-09, ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date (“ASU 2015-14”), was issued to defer the effective date for all entities by one year. For public business entities, certain not-for-profit entities and certain employee benefit plans, the guidance should be applied to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. The Company has identified its revenue streams and is in the process of evaluating the impact on its financial statements and internal accounting processes; however, as the majority of the Company’s revenue is derived from real estate lease contracts, as discussed in relation to ASU 2016-02 Leases (Topic 842) (“ASU 2016-02”), the Company does not expect that the adoption of ASU 2014-09 or related amendments and modifications issued by the FASB will have a material impact on its financial statements.

In January 2016, the FASB issued ASU 2016-01, Financial Instruments(Subtopic 825-10), which requires all equity investments to be measured at fair value with changes in the fair value recognized through net income (other than those accounted for under equity method of accounting or those that result in consolidation of the investee). The amendments in this update also require an entity to present separately in other comprehensive income, the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. In addition, the amendments in this update require separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements. The amendments in this update are effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. The Company is currently evaluating the impact that this new guidance will have on its financial statements.

In February 2016, the FASB issued ASU 2016-02, which will require that a lessee recognize assets and liabilities on the balance sheet for all leases with a lease term of more than 12 months, with the result being the recognition of a right of use asset and a lease liability and the disclosure of key information about the entity's leasing arrangements. ASU 2016-02 retains a distinction between finance leases (i.e., capital leases under current U.S. GAAP) and operating leases. The classification criteria for distinguishing between finance leases and operating leases will be substantially similar to the classification criteria for distinguishing between capital leases and operating leases under current U.S. GAAP. The amendments in ASU 2016-02 are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. A modified retrospective approach is required for existing leases that have not expired upon adoption. The Company is currently evaluating the impact this amendment will have on its consolidated financial statements.

In March 2016, the FASB issued ASU 2016-05, Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships (Topic 815). The amendments in this update clarify that a change in the counterparty to a derivative instrument that has been designated as the hedging instrument does not, in and of itself, require de-designation of that hedging relationship provided that all other hedge accounting criteria continue to be met. These provisions are effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact this amendment will have on its consolidated financial statements.

In March 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation (Topic 718): Improvement to Employee Share-Based Payment Accounting (“ASU 2016-09”), which affects entities that issue share-based payment awards to their employees. ASU 2016-09 is designed to simplify several aspects of accounting for share-based payment award transactions including the income tax consequences, classification of awards as either equity or liabilities, classification on the statement of cash flows and forfeiture rate calculations. The guidance will be effective for annual reporting periods beginning after December 15, 2016 and interim periods within those fiscal years with early adoption permitted. The Company elected to early adopt this guidance during the first quarter of 2016, which did not have a material effect on the Company’s consolidated financial statements. In connection with the adoption, the Company modified the consolidated statement of changes in equity to include the line item cumulative-effect adjustment for equity-based compensation forfeitures, which represents application of the accounting change on a modified retrospective basis.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326) (“ASU 2016-13”). ASU 2016-13 is intended to improve financial reporting by requiring more timely recording of credit losses on loans and other financial instruments that are not accounted for at fair value through net income, including loans held for investment, held-to-maturity debt securities, trade and other receivables, net investment in leases and other such commitments. ASU 2016-13 requires that financial assets measured at amortized cost be presented at the net amount expected to be collected, through an allowance for credit losses that is deducted from the amortized cost basis. The amendments in ASU 2016-13 require the Company to measure all expected credit losses based upon historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the financial assets and eliminates the “incurred loss” methodology in current GAAP. ASU 2016-13 is effective for fiscal years, and interim periods within, beginning after December 15, 2019. Early adoption is permitted for fiscal years, and interim periods within, beginning after December 15, 2018. The Company is currently evaluating the impact this amendment will have on its consolidated financial statements.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”), which is intended to address diversity in practice related to how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The amendments in ASU 2016-15 address eight specific cash flow issues as well as application of the predominance principle (dependence on predominant source or use of receipt or payment) and are effective for public business entities for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years with early adoption permitted. ASU 2016-15 requires retrospective adoption unless it is impracticable to apply, in which case it is to be applied prospectively as of the earliest date practicable. The Company is currently evaluating the impact this amendment will have on its consolidated financial statements.

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Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2016

Accounting Policies [Abstract]

Litigation and Other Non-Routine Transaction Related Expenses

Litigation and other non-routine costs include the following costs (amounts in thousands):

	Three Months Ended September 30,							Nine Months Ended September 30,
	2016			2015				2016			2015
Litigation and other non-routine costs:
Audit Committee Investigation and related matters (1)	$	5,221		$	9,251			$	13,413		$	38,953
Legal fees and expenses	59			(294		)	(2)	155			2,659			(3)
Other fees and expenses	—			—				—			632
Total costs incurred	5,280			8,957				13,568			42,244
Insurance recoveries	(650		)	(925		)		(11,196		)	(925		)
Total	$	4,630		$	8,032			$	2,372		$	41,319

___________________________________

(1) Includes all fees and costs associated with the previously-announced investigation conducted by the audit committee (the “Audit Committee”) of the General Partner’s board of directors (the “Audit Committee Investigation”) and various litigations and investigations prompted by the results of the Audit Committee Investigation, including fees and costs incurred pursuant to the Company’s advancement obligations.

(2) The negative balance for the three months ended September 30, 2015 is a result of estimated costs accrued in prior periods that exceeded actual expenses incurred.

(3) Primarily relates to fees incurred in connection with a legal matter resolved in early 2014.

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Segment Reporting (Tables)

9 Months Ended

Sep. 30, 2016

Segment Reporting [Abstract]

Summary of Comparative Financial Results and Total Assets

The following tables present a summary of the comparative financial results and total assets for each segment (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
REI segment:
Revenues:
Rental income	$	303,383		$	333,766		$	928,706		$	1,017,708
Direct financing lease income	494			659			1,598			2,097
Operating expense reimbursements	27,969			22,983			77,862			71,269
Total real estate investment revenues	331,846			357,408			1,008,166			1,091,074
Operating expenses:
Acquisition related	90			1,690			334			4,976
Litigation and other non-routine costs, net of insurance recoveries	4,630			8,032			2,372			41,319
Property operating	34,820			31,950			107,832			95,547
General and administrative	12,069			15,848			37,998			48,045
Depreciation and amortization	187,897			200,158			574,124			620,068
Impairment of real estate	6,872			—			176,214			85,341
Total operating expenses	246,378			257,678			898,874			895,296
Operating income	85,468			99,730			109,292			195,778
Other (expense) income:
Interest expense	(79,869		)	(89,530		)	(242,763		)	(275,801		)
(Loss) gain on extinguishment and forgiveness of debt, net	(2,003		)	—			(1,751		)	5,302
Other income, net	1,649			1,903			3,433			8,179
Equity in income and gain on disposition of unconsolidated entities	212			6,837			10,686			8,340
Loss on derivative instruments, net	(2,023		)	(1,420		)	(3,286		)	(2,137		)
Total other expenses, net	(82,034		)	(82,210		)	(233,681		)	(256,117		)
Income (loss) before taxes and real estate dispositions	3,434			17,520			(124,389		)	(60,339		)
Gain (loss) on disposition of real estate, net	28,111			(6,542		)	45,723			(62,584		)
Income (loss) before taxes	31,545			10,978			(78,666		)	(122,923		)
Provision for income taxes	(1,539		)	(2,238		)	(4,695		)	(7,211		)
Net income (loss)	$	30,006		$	8,740		$	(83,361	)	$	(130,134	)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Cole Capital segment:
Revenues:
Offering-related fees and reimbursements	$	9,545		$	5,850		$	32,850		$	14,483
Transaction service fees and reimbursements	3,779			7,400			10,639			24,696
Management fees and reimbursements	17,745			14,296			51,299			42,390
Total Cole Capital revenues	31,069			27,546			94,788			81,569
Operating expenses:
Cole Capital reallowed fees and commissions	5,897			3,896			20,940			9,637
Acquisition related	—			74			39			533
General and administrative	17,692			16,994			54,257			51,861
Depreciation and amortization	7,276			8,384			22,702			25,128
Total operating expenses	30,865			29,348			97,938			87,159
Operating income (loss)	204			(1,802		)	(3,150		)	(5,590		)
Total other income, net	95			465			589			2,076
Income (loss) before taxes	299			(1,337		)	(2,561		)	(3,514		)
(Provision for) benefit from income taxes	(59		)	738			3,321			2,387
Net income (loss)	$	240		$	(599	)	$	760		$	(1,127	)
Total Company:
Total revenues	$	362,915		$	384,954		$	1,102,954		$	1,172,643
Total operating expenses	$	(277,243	)	$	(287,026	)	$	(996,812	)	$	(982,455	)
Total other expense, net	$	(81,939	)	$	(81,745	)	$	(233,092	)	$	(254,041	)
Net income (loss)	$	30,246		$	8,141		$	(82,601	)	$	(131,261	)

	Total Assets
	September 30, 2016		December 31, 2015
REI segment	$	15,668,974	$	16,966,729
Cole Capital segment	388,846		439,137
Total Company	$	16,057,820	$	17,405,866

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Goodwill and Other Intangibles (Tables)

9 Months Ended

Sep. 30, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill

The following table summarizes the Company’s goodwill activity by segment during the nine months ended September 30, 2016 and 2015 (in thousands):

	REI Segment			Cole Capital Segment		Consolidated
Balance as of December 31, 2015	$	1,410,631		$	245,743	$	1,656,374
Goodwill allocated to dispositions and held for sale assets (1) (2)	(53,764		)	—		(53,764		)
Balance as of September 30, 2016	$	1,356,867		$	245,743	$	1,602,610

	REI Segment			Cole Capital Segment		Consolidated
Balance as of December 31, 2014	$	1,509,396		$	385,398	$	1,894,794
Goodwill allocated to dispositions and held for sale assets (1)	(66,789		)	—		(66,789		)
Balance as of September 30, 2015	$	1,442,607		$	385,398	$	1,828,005

_______________________________________________

(1) Included in gain (loss) on disposition of real estate, net, in the consolidated statement of operations.

(2) Includes $51.5 million of goodwill allocated to the cost basis of properties disposed of and classified as held for sale as discussed in Note 5 –Real Estate Investments and $2.3 million of goodwill allocated to the cost basis of two properties foreclosed upon as discussed in Note 10 –Debt during the nine months ended September 30, 2016.

Schedule of Intangible Assets

Intangible lease assets and liabilities of the Company consisted of the following as of September 30, 2016 and December 31, 2015 (amounts in thousands, except weighted-average useful life):

	Weighted-Average Useful Life	September 30, 2016		December 31, 2015
Intangible lease assets:
In-place leases, net of accumulated amortization of $469,617 and $398,770, respectively	14.8	$	1,246,392	$	1,458,354
Leasing commissions, net of accumulated amortization of $1,681 and $1,035, respectively	9.5	8,541		4,872
Above-market leases, net of accumulated amortization of $63,952 and $47,041, respectively	16.6	282,893		308,306
Total intangible lease assets, net		$	1,537,826	$	1,771,532
Intangible lease liabilities:
Below-market leases, net of accumulated amortization of $52,027 and $38,340, respectively	18.0	$	229,340	$	251,692

Schedule of Projected Amortization Expense and Adjustments

The following table provides the projected amortization expense and adjustments to rental income related to the intangible lease assets and liabilities for the next five years as of September 30, 2016 (amounts in thousands):

	October 1, 2016 - December 31, 2016		2017		2018		2019		2020
In-place leases:
Total projected to be included in amortization expense	$	41,368	$	149,340	$	136,656	$	125,238	$	116,997
Leasing Commissions
Total projected to be included in amortization expense	271		1,167		979		901		850
Above-market lease assets:
Total projected to be deducted from rental income	6,371		24,995		24,460		22,529		22,087
Below-market lease liabilities:
Total projected to be included in rental income	6,629		20,114		19,787		19,049		17,857

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Real Estate Investments (Tables)

9 Months Ended

Sep. 30, 2016

Real Estate [Abstract]

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

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

	Nine Months Ended September 30,
	2016		2015
Real estate investments, at cost:
Land	$	4,215	$	4,187
Buildings, fixtures and improvements	14,555		5,258
Total tangible assets	18,770		9,445
Acquired intangible assets:
In-place leases	1,182		717
Above-market leases	—		153
Assumed intangible liabilities:
Below-market leases	—		(108		)
Total purchase price of assets acquired	$	19,952	$	10,207

Schedule of Future Minimum Operating Lease Base Rent Payments

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)
October 1, 2016 - December 31, 2016	$	268,066	$	1,001
2017	1,131,536		3,818
2018	1,108,872		3,016
2019	1,068,910		2,397
2020	1,031,688		2,023
Thereafter	7,574,101		5,893
Total	$	12,183,173	$	18,148

____________________________________

(1) 33 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 minimum base rental cash payments due to the Company under the lease agreements on these respective properties.

The following table reflects the minimum base rent payments due from the Company over the next five years and thereafter for certain ground lease obligations, which are substantially reimbursable by our tenants, and office lease obligations (in thousands):

	Future Minimum Base Rent Payments
	Ground Leases		Office Leases
October 1, 2016 - December 31, 2016	$	3,722	$	1,189
2017	14,651		4,727
2018	14,370		4,704
2019	14,223		4,769
2020	13,586		4,798
Thereafter	224,662		14,089
Total	$	285,214	$	34,276

Schedule of Future Minimum Direct Financing Lease Payments

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)
October 1, 2016 - December 31, 2016	$	268,066	$	1,001
2017	1,131,536		3,818
2018	1,108,872		3,016
2019	1,068,910		2,397
2020	1,031,688		2,023
Thereafter	7,574,101		5,893
Total	$	12,183,173	$	18,148

____________________________________

(1) 33 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 minimum base rental cash payments due to the Company under the lease agreements on these respective properties.

Schedule of Capital Leased Assets

The components of the Company’s net investment in direct financing leases as of September 30, 2016 and December 31, 2015 are as follows (in thousands):

	September 30, 2016			December 31, 2015
Future minimum lease payments receivable	$	18,148		$	21,993
Unguaranteed residual value of property	28,235			31,562
Unearned income	(5,598		)	(7,243		)
Net investment in direct financing leases	$	40,785		$	46,312

Summary of Unconsolidated Joint Ventures

The following is a summary of the Company’s percentage ownership and carrying amount related to each of the unconsolidated joint ventures as of September 30, 2016 (dollar amounts in thousands):

Name of Joint Venture	Partner	Ownership % (1)	Carrying Amount of Investment (2)
Cole/Mosaic JV South Elgin IL, LLC	Affiliate of Mosaic Properties and Development, LLC	50%	$	6,108
Cole/Faison JV Bethlehem GA, LLC	Faison-Winder Investors, LLC	90%	12,501
			$	18,609

_______________________________________________

(1) The Company’s ownership interest in this table reflects its legal ownership interest. Legal ownership may, at times, not equal the Company’s economic interest in the listed properties because of various provisions in certain joint venture agreements regarding distributions of cash flow based on capital account balances, allocations of profits and losses and payments of preferred returns. As a result, the Company’s actual economic interest (as distinct from its legal ownership interest) in certain of the properties could fluctuate from time to time and may not wholly align with its legal ownership interests.

(2) The total carrying amount of the investments is greater than the underlying equity in net assets by $6.5 million. This difference relates to a purchase price allocation of goodwill and a step up in fair value of the investment assets acquired in connection with the Cole Merger. The step up in fair value was allocated to the individual investment assets and is being amortized in accordance with the Company’s depreciation policy.

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Investment Securities, at Fair Value (Tables)

9 Months Ended

Sep. 30, 2016

Investments, Debt and Equity Securities [Abstract]

Schedule of Unrealized Gains and Losses on Investment Securities

The following tables detail the unrealized gains and losses on investment securities as of September 30, 2016 and December 31, 2015 (in thousands):

	September 30, 2016
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
CMBS	$	48,509	$	1,556	$	(1,967	)	$	48,098

	December 31, 2015
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
CMBS	$	52,115	$	2,169	$	(980	)	$	53,304

Schedule of Maturity of CMBS

The scheduled maturity of the Company’s CMBS as of September 30, 2016 are as follows (in thousands):

	September 30, 2016
	Amortized Cost		Fair Value
Due within one year	$	—	$	—
Due after one year through five years	21,489		22,066
Due after five years through 10 years	12,725		10,805
Due after 10 years	14,295		15,227
Total	$	48,509	$	48,098

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Mortgage Notes Receivable (Tables)

9 Months Ended

Sep. 30, 2016

Receivables [Abstract]

Schedule of Mortgage Notes Receivable

The following table details the mortgage notes receivable as of September 30, 2016 (dollar amounts in thousands):

Outstanding Balance		Carrying Value		Interest Rate Range				Maturity Date Range
$	24,996	$	23,014	5.9	%	–	7.2%	May 2020	–	January 2033

Schedule of Aggregate Principal Payments Due on Mortgage Notes Receivable

The following table summarizes the scheduled aggregate principal payments due to the Company on the mortgage notes receivable subsequent to September 30, 2016 (in thousands):

	Outstanding Balance
Due within one year	$	1,057
Due after one year through five years	5,357
Due after five years through 10 years	6,919
Due after 10 years(1)	15,523
Total	$	28,856

____________________________________

(1) Includes additional $3.9 million of interest that will be capitalized into the outstanding balance of the mortgage note receivable subsequent to September 30, 2016.

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Rent and Tenant Receivables and Other Assets, Net (Tables)

9 Months Ended

Sep. 30, 2016

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Schedule of Rent and Tenant Receivables and Other Assets, Net

Rent and tenant receivables and other assets, net consisted of the following as of September 30, 2016 and December 31, 2015 (in thousands):

	September 30, 2016		December 31, 2015
Accounts receivable, net (1)	$	48,682	$	44,798
Straight-line rent receivable	196,669		161,079
Deferred costs, net (2)	18,443		26,110
Prepaid expenses	13,269		9,773
Leasehold improvements, property and equipment, net (3)	16,845		18,180
Restricted escrow deposits	3,123		1,190
Deferred tax asset and tax receivable	27,529		25,287
Program development costs, net (4)	12,268		12,855
Interest rate swap assets, at fair value	—		1,892
Other assets	2,701		2,473
Total	$	339,529	$	303,637

___________________________________

(1) Allowance for doubtful accounts was $8.3 million and $6.6 million as of September 30, 2016 and December 31, 2015, respectively.

(2) Amortization expense for deferred costs related to the revolving credit facility totaled $2.6 million and $7.8 million for the three and nine months ended September 30, 2016, respectively, and $2.6 million and $8.1 million for the three and nine months ended September 30, 2015, respectively. Accumulated amortization for deferred costs related to the revolving credit facility were $27.2 million and $19.4 million as of September 30, 2016 and December 31, 2015, respectively.

(3) Amortization expense for leasehold improvements totaled $0.3 million and $0.9 million for the three and nine months ended September 30, 2016, respectively, and $0.4 million and $1.1 million for the three and nine months ended September 30, 2015, respectively. Accumulated amortization was $3.5 million and $2.6 million as of September 30, 2016 and December 31, 2015, respectively. Depreciation expense for property and equipment totaled $0.6 million and $1.6 million for the three and nine months ended September 30, 2016, respectively, and $0.5 million and $1.5 million for the three and nine months ended September 30, 2015, respectively. Accumulated depreciation was $5.3 million and $3.7 million as of September 30, 2016 and December 31, 2015, respectively.

(4) As of September 30, 2016 and December 31, 2015, the Company had reserves of $18.8 million and $34.8 million, respectively, relating to the program development costs.

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Fair Value Measures (Tables)

9 Months Ended

Sep. 30, 2016

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

The following tables present information about the Company’s assets and liabilities measured at fair value on a recurring basis, based on market rates of the Company’s positions and other observable interest rates as discussed in Note 6 –Investment Securities, at Fair Value andNote 11 –Derivatives and Hedging Activities, as of September 30, 2016 and December 31, 2015, aggregated by the level in the fair value hierarchy within which those instruments fall (in thousands):

	Level 1		Level 2			Level 3		Balance as of September 30, 2016
Assets:
CMBS	$	—	$	—		$	48,098	$	48,098
Liabilities:
Derivative liabilities	$	—	$	(8,194	)	$	—	$	(8,194	)
	Level 1		Level 2			Level 3		Balance as of December 31, 2015
Assets:
CMBS	$	—	$	—		$	53,304	$	53,304
Derivative assets	—		1,892			—		1,892
Total assets	$	—	$	1,892		$	53,304	$	55,196
Liabilities:
Derivative liabilities	$	—	$	(6,922	)	$	—	$	(6,922	)

Reconciliations of Changes in (Liabilities) with Level 3 Inputs

The following are reconciliations of the changes in assets and liabilities with Level 3 inputs in the fair value hierarchy for the nine months ended September 30, 2016 and 2015 (in thousands):

	CMBS
Beginning balance, December 31, 2015	$	53,304
Total gains and losses:
Unrealized loss included in other comprehensive income, net	(1,599		)
Purchases, issuances, settlements and amortization:
Principal payments received	(3,786		)
Amortization included in net income	179
Ending Balance, September 30, 2016	$	48,098

	CMBS
Beginning balance, December 31, 2014	$	58,646
Total gains and losses:
Unrealized loss included in other comprehensive income, net	(232		)
Purchases, issuances, settlements and amortization:
Principal payments received	(4,055		)
Amortization included in net income	96
Ending Balance, September 30, 2015	$	54,455

Reconciliations of Changes in Assets with Level 3 Inputs

The following are reconciliations of the changes in assets and liabilities with Level 3 inputs in the fair value hierarchy for the nine months ended September 30, 2016 and 2015 (in thousands):

	CMBS
Beginning balance, December 31, 2015	$	53,304
Total gains and losses:
Unrealized loss included in other comprehensive income, net	(1,599		)
Purchases, issuances, settlements and amortization:
Principal payments received	(3,786		)
Amortization included in net income	179
Ending Balance, September 30, 2016	$	48,098

	CMBS
Beginning balance, December 31, 2014	$	58,646
Total gains and losses:
Unrealized loss included in other comprehensive income, net	(232		)
Purchases, issuances, settlements and amortization:
Principal payments received	(4,055		)
Amortization included in net income	96
Ending Balance, September 30, 2015	$	54,455

Fair Value, by Balance Sheet Grouping

The fair values of the Company’s financial instruments that are not reported at fair value in the consolidated balance sheets are reported below (dollar amounts in thousands):

	Level	Carrying Amount at September 30, 2016		Fair Value at September 30, 2016		Carrying Amount at December 31, 2015		Fair Value at December 31, 2015
Assets:
Mortgage notes receivable	3	$	23,014	$	31,963	$	24,238	$	31,842
Liabilities (1):
Mortgage notes payable and other debt, net	2	$	2,878,774	$	2,972,148	$	3,133,005	$	3,240,153
Corporate bonds, net	2	2,247,893		2,334,291		2,547,255		2,580,786
Convertible debt, net	2	985,866		1,010,722		982,217		1,007,042
Credit facility	2	500,000		496,814		1,460,000		1,536,264
Total liabilities		$	6,612,533	$	6,813,975	$	8,122,477	$	8,364,245

_______________________________________________

(1) Current and prior period liabilities’ carrying and fair values exclude net deferred financing costs

Summary of Impairment Charges by Asset Class

The following table presents the impairment charges by asset class recorded during the nine months ended September 30, 2016 (dollar amounts in thousands):

	Nine Months Ended September 30, 2016
Properties impaired (1)	139
Asset classes impaired:
Investment in real estate assets, net	$	176,635
Below-market lease liabilities, net	(421		)
Total impairment loss	$	176,214

_______________________________________________

(1) Includes 35 properties disposed of during the nine months ended September 30, 2016.

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Debt (Tables)

9 Months Ended

Sep. 30, 2016

Debt Instrument [Line Items]

Schedule of Debt

The following table summarizes the carrying value of debt as of September 30, 2016 and December 31, 2015, and the debt activity for the nine months ended September 30, 2016 (in thousands):

					Nine Months Ended September 30, 2016
		Balance as of December 31, 2015			Debt Issuances			Repayments, Extinguishment and Assumptions				(Accretion) and Amortization			Balance as of September 30, 2016
Mortgage notes payable:
	Outstanding balance	$	3,039,882		$	1,450		$	(227,503	)	(1)	$	—		$	2,813,829
	Net premiums (2)	59,402			—			(1,364		)	(1)	(16,229		)	41,809
	Deferred costs	(21,020		)	(27		)	510			(1)	2,973			(17,564		)
Other debt:
	Outstanding balance	33,463			—			(10,453		)		—			23,010
	Premium (2)	258			—			—				(132		)	126
Mortgages and other debt, net		3,111,985			1,423			(238,810		)		(13,388		)	2,861,210
Corporate bonds:
	Outstanding balance	2,550,000			1,000,000			(1,300,000		)		—			2,250,000
	Discount (3)	(2,745		)	—			73				565			(2,107		)
	Deferred costs	(10,922		)	(17,128		)	1,898				3,416			(22,736		)
Corporate bonds, net		2,536,333			982,872			(1,298,029		)		3,981			2,225,157
Convertible debt:
	Outstanding balance	1,000,000			—			—				—			1,000,000
	Discount (3)	(17,779		)	—			—				3,645			(14,134		)
	Deferred costs	(19,327		)	—			—				4,152			(15,175		)
Convertible debt, net		962,894			—			—				7,797			970,691
Credit facility:
	Outstanding balance	1,460,000			783,000			(1,743,000		)		—			500,000
	Deferred costs (4)	(11,410		)	—			4,314				3,104			(3,992		)
Credit facility, net		1,448,590			783,000			(1,738,686		)		3,104			496,008
2016 Term Loan:
	Outstanding balance	—			300,000			(300,000		)		—			—
	Deferred costs	—			(2,764		)	2,588				176			—
2016 Term Loan, net		—			297,236			(297,412		)		176			—
Total debt		$	8,059,802		$	2,064,531		$	(3,572,937	)		$	1,670		$	6,553,066

____________________________________

(1) Includes $83.5 million of notes repaid prior to maturity, resulting in a loss on extinguishment of debt of $0.6 million due to the write-off of the unamortized net premiums and prepayment penalties of $0.3 million and $0.9 million, respectively. Additionally, a $55.0 million note was assumed by the buyer in a real estate disposition resulting in a write-off of the unamortized premium of $1.1 million and the unamortized deferred financing costs of $0.3 million, which are included in gain (loss) on disposition of real estate, net.

(2) Net premiums on mortgage notes payable and other debt were recorded upon the assumption of the respective debt instruments in relation to the various mergers and acquisitions. Amortization of these net premiums is recorded as a reduction to interest expense over the remaining term of the respective debt instruments using the effective-interest method.

(3) Discounts on the corporate bonds and convertible debt were recorded based upon the fair value of the respective debt instruments as of the respective issuance dates. Amortization of these discounts is recorded as an increase to interest expense over the remaining term of the respective debt instruments using the effective-interest method.

(4) Deferred costs relate to the term portion of the credit facility.

Mortgage Notes Payable [Member]

Debt Instrument [Line Items]

Schedule of Debt

The Company’s mortgage notes payable consisted of the following as of September 30, 2016 (dollar amounts in thousands):

	Encumbered Properties	Gross Carrying Value of Collateralized Properties (1)		Outstanding Balance		Weighted-Average Interest Rate (2)		Weighted-Average Years to Maturity
Fixed-rate debt (3)	642	$	5,484,499	$	2,804,142	5.01	%	4.6
Variable-rate debt	1	26,454		9,687		3.79	%	0.9
Total (4)	643	$	5,510,953	$	2,813,829	5.01	%	4.6

____________________________________

(1) Gross carrying value is gross real estate assets, including investment in direct financing leases, net of gross real estate liabilities.

(2) Weighted-average interest rate for variable-rate debt represents the interest rate in effect as of September 30, 2016.

(3) Includes $242.4 million of variable-rate debt fixed by way of interest rate swap arrangements. 

(4) The table above does not include loan amounts associated with the unconsolidated joint ventures of $46.2 million, none of which is recourse to the Company. These loans represent secured fixed and variable rates ranging from 2.93% to 5.20% and maturities ranging from October 2016 to July 2021, with a weighted-average interest rate of 3.93% and a weighted-average years to maturity of 2.1 years as of September 30, 2016.

Schedule of Aggregate Principal Payments of Mortgages

The following table summarizes the scheduled aggregate principal repayments due on mortgage notes subsequent to September 30, 2016 (in thousands):

	Total
October 1, 2016 - December 31, 2016	$	49,767
2017	420,662
2018	209,229
2019	229,516
2020	282,190
Thereafter	1,622,465
Total	$	2,813,829

Other Debt [Member]

Debt Instrument [Line Items]

Schedule of Debt

The following table is a summary of the outstanding balance and carrying value of the collateral by asset type as of September 30, 2016 (in thousands):

	Outstanding Balance		Collateral Carrying Value
Mortgage notes receivable	$	7,279	$	19,457
Intercompany mortgage loans	1,754		4,212
CMBS	13,977		34,356
Total	$	23,010	$	58,025

Corporate Bonds [Member]

Debt Instrument [Line Items]

Schedule of Debt

As of September 30, 2016, the OP had $2.25 billion aggregate principal amount of senior unsecured notes (the “Senior Notes”) outstanding comprised of the following (dollar amounts in thousands):

	Outstanding Balance September 30, 2016		Interest Rate		Maturity Date
2019 Senior Notes	750,000		3.000	%	February 6, 2019
2021 Senior Notes	400,000		4.125	%	June 1, 2021
2024 Senior Notes	500,000		4.600	%	February 6, 2024
2026 Senior Notes	600,000		4.875	%	June 1, 2026
Total balance and weighted-average interest rate	$	2,250,000	4.056	%

Convertible Debt [Member]

Debt Instrument [Line Items]

Schedule of Debt

The following table presents each of the 2018 Convertible Notes and the 2020 Convertible Notes listed below with their respective terms (dollar amounts in thousands):

	Outstanding Balance (1)		Interest Rate		Conversion Rate (2)	Maturity Date
2018 Convertible Notes	$	597,500	3.00	%	60.5997	August 1, 2018
2020 Convertible Notes	402,500		3.75	%	66.7249	December 15, 2020
Total balance and weighted-average interest rate	$	1,000,000	3.30	%

____________________________________

(1) Excludes the carrying value of the conversion options recorded within additional paid-in capital of $28.6 million and the unamortized discount of $14.1 million as of September 30, 2016. The discount will be amortized over the remaining term of 2.8 years.

(2) Conversion rate represents the amount of the General Partner OP Units per $1,000 principal amount of Convertible Notes converted as of September 30, 2016, as adjusted in accordance with the applicable indentures as a result of cash dividend payments.

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Derivatives and Hedging Activities (Tables)

9 Months Ended

Sep. 30, 2016

Designated as Hedging Instrument [Member]

Derivative Instruments and Hedging Activities Disclosures [Line Items]

Schedule of Interest Rate Derivatives

As of September 30, 2016, the Company had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk (dollar amounts in thousands):

Interest Rate Swaps	September 30, 2016
Number of Instruments	14
Notional Amount	$	691,016

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value

The table below presents the fair value of the Company’s derivative financial instruments as well as their classification in the consolidated balance sheets as of September 30, 2016 and December 31, 2015 (in thousands):

Derivatives Designated as Hedging Instruments	Balance Sheet Location	September 30, 2016			December 31, 2015
Interest rate swaps	Rent and tenant receivables and other assets, net	$	—		$	1,794
Interest rate swaps	Deferred rent, derivative and other liabilities	$	(7,471	)	$	(6,922	)

Not Designated as Hedging Instrument [Member]

Derivative Instruments and Hedging Activities Disclosures [Line Items]

Schedule of Interest Rate Derivatives

As of September 30, 2016, the Company had the following outstanding interest rate derivative that was not designated as a qualifying hedging relationship (dollar amounts in thousands):

Interest Rate Swap	September 30, 2016
Number of Instruments	1
Notional Amount	$	51,400

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value

The table below presents the fair value of the Company’s derivative financial instrument not designated as a hedge as well as its classification in the consolidated balance sheets as of September 30, 2016 and December 31, 2015 (in thousands):

Derivatives Not Designated as Hedging Instruments	Balance Sheet Location	September 30, 2016			December 31, 2015
Interest rate swaps	Rent and tenant receivables and other assets, net	$	—		$	98
Interest rate swaps	Deferred rent, derivative and other liabilities	$	(723	)	$	—

Schedule of Offsetting Assets

The net amounts of derivative assets or liabilities can be reconciled to the tabular disclosure of fair value.

	Offsetting of Derivative Assets and Liabilities
	Gross Amounts of Recognized Assets		Gross Amounts of Recognized Liabilities			Gross Amounts Offset in the Consolidated Balance Sheets		Net Amounts of Assets Presented in the Consolidated Balance Sheets		Net Amounts of Liabilities Presented in the Consolidated Balance Sheets			Financial Instruments		Cash Collateral Received		Net Amount
September 30, 2016	$	—	$	(8,194	)	$	—	$	—	$	(8,194	)	$	—	$	—	$	(8,194	)
December 31, 2015	$	1,892	$	(6,922	)	$	—	$	1,892	$	(6,922	)	$	—	$	—	$	(5,030	)

Schedule of Offsetting Liabilities

The net amounts of derivative assets or liabilities can be reconciled to the tabular disclosure of fair value.

	Offsetting of Derivative Assets and Liabilities
	Gross Amounts of Recognized Assets		Gross Amounts of Recognized Liabilities			Gross Amounts Offset in the Consolidated Balance Sheets		Net Amounts of Assets Presented in the Consolidated Balance Sheets		Net Amounts of Liabilities Presented in the Consolidated Balance Sheets			Financial Instruments		Cash Collateral Received		Net Amount
September 30, 2016	$	—	$	(8,194	)	$	—	$	—	$	(8,194	)	$	—	$	—	$	(8,194	)
December 31, 2015	$	1,892	$	(6,922	)	$	—	$	1,892	$	(6,922	)	$	—	$	—	$	(5,030	)

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Supplemental Cash Flow Disclosures (Tables)

9 Months Ended

Sep. 30, 2016

Supplemental Cash Flow Elements [Abstract]

Supplemental Cash Flow Disclosures

Supplemental cash flow information was as follows for the nine months ended September 30, 2016 and 2015 (in thousands):

	Nine Months Ended September 30,
	2016		2015
Supplemental Disclosures:
Cash paid for interest	$	246,602	$	280,659
Cash paid for income taxes	$	18,822	$	10,205
Non-cash investing and financing activities:
Accrued capital expenditures and real estate developments	$	3,556	$	4,363
Accrued deferred financing costs	$	860	$	164
Distributions declared and unpaid	$	146,118	$	130,648
Accrued equity issuance costs	$	9	$	—
Mortgage note payable relieved by foreclosure	$	38,050	$	53,798
Mortgage notes payable assumed in real estate disposition	$	55,000	$	300,720

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Accounts Payable and Accrued Expenses (Tables)

9 Months Ended

Sep. 30, 2016

Payables and Accruals [Abstract]

Schedule of Accrued Liabilities

Accounts payable and accrued expenses consisted of the following as of September 30, 2016 and December 31, 2015 (in thousands):

	September 30, 2016		December 31, 2015
Accrued interest	$	42,915	$	56,273
Accrued real estate taxes	42,812		47,319
Accrued legal fees	14,214		9,212
Accounts payable	6,223		2,868
Accrued other	32,986		36,205
Total	$	139,150	$	151,877

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Commitments and Contingencies (Tables)

9 Months Ended

Sep. 30, 2016

Commitments and Contingencies Disclosure [Abstract]

Schedule of Future Minimum Rental Payments for Operating Leases

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)
October 1, 2016 - December 31, 2016	$	268,066	$	1,001
2017	1,131,536		3,818
2018	1,108,872		3,016
2019	1,068,910		2,397
2020	1,031,688		2,023
Thereafter	7,574,101		5,893
Total	$	12,183,173	$	18,148

____________________________________

(1) 33 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 minimum base rental cash payments due to the Company under the lease agreements on these respective properties.

The following table reflects the minimum base rent payments due from the Company over the next five years and thereafter for certain ground lease obligations, which are substantially reimbursable by our tenants, and office lease obligations (in thousands):

	Future Minimum Base Rent Payments
	Ground Leases		Office Leases
October 1, 2016 - December 31, 2016	$	3,722	$	1,189
2017	14,651		4,727
2018	14,370		4,704
2019	14,223		4,769
2020	13,586		4,798
Thereafter	224,662		14,089
Total	$	285,214	$	34,276

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Equity-based Compensation (Tables)

9 Months Ended

Sep. 30, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of Activity for Share-based Compensation

The following table details the activity of the Restricted Shares during the nine months ended September 30, 2016:

	Restricted Shares		Weighted-Average Grant Date Fair Value
Unvested shares, December 31, 2015	1,239,662		$	13.86
Vested	(434,004	)	$	14.19
Forfeited	(89,955	)	$	14.08
Unvested shares, September 30, 2016	715,703		$	13.64

The following table details the activity of the Time-Based Restricted Stock Units and Deferred Stock Units during the nine months ended September 30, 2016.

	Time-Based Restricted Stock Units		Weighted-Average Grant Date Fair Value		Deferred Stock Units		Weighted-Average Grant Date Fair Value
Unvested units, December 31, 2015	589,138		$	9.61	—		$	—
Granted	736,427		7.82		79,208		9.18
Vested	(184,455	)	9.70		(79,208	)	9.18
Forfeited	(35,377	)	8.71		—		—
Unvested units, September 30, 2016	1,105,733		$	8.43	—		$	—

The following table details the activity of the unvested Market-Based Restricted Stock Units and the LTI Target Awards during the nine months ended September 30, 2016.

	Market-Based Restricted Stock Units		Weighted-Average Grant Date Fair Value		LTI Target Awards		Weighted-Average Grant Date Fair Value
Unvested units, December 31, 2015	704,804		$	8.58	731,448		$	11.38
Granted	—		—		855,471		7.14
Vested	(610,839	)	8.58		(3,362	)	11.77
Forfeited	(93,965	)	8.58		(52,109	)	11.24
Unvested units, September 30, 2016	—		$	—	1,531,448		$	9.01

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Related Party Transactions and Arrangements (Tables)

9 Months Ended

Sep. 30, 2016

Offering Related Revenue [Member]

Related Party Transaction [Line Items]

Schedule of Related Party Transactions

The following table shows the offering fee summary information for the Cole REITs as of September 30, 2016:

Program	Selling Commissions (1)	Dealer Manager Fees (2)		Annual Distribution and Stockholder Servicing Fee (2)
Open Programs (3)
CCPT V
Class A Shares	7%	2%		—%
Class T Shares (4)	3%	2%		0.8%	(5) (6)
INAV (7)
Wrap Class Shares	—%	0.55%	(6)	—%
Advisor Class Shares	up to 3.75%	0.55%	(6)	0.5%	(6)
Institutional Class Shares	—%	0.25%	(6)	—%
CCIT III (8)
Class A Shares	7%	2%		—%
Class T Shares	3%	2%		1%	(6)

_______________________________________________

(1) The Company reallowed 100% of selling commissions earned to participating broker-dealers during the three and nine months ended September 30, 2016 and 2015.

(2) The Company may reallow all or a portion of its dealer manager fee and/or a distribution and stockholder servicing fee to participating broker-dealers as a marketing and due diligence expense reimbursement.

(3) CCIT II closed its offering during the three months ended September 30, 2016. The program’s fee structure was similar to that of CCPT V.

(4) Commencing on April 29, 2016, CCPT V began offering Class T shares of common stock in addition to the class of shares of common stock previously offered (now referred to as Class A shares).

(5) Subsequent to September 30, 2016, the distribution and stockholder servicing fee was amended to be 1.0%.

(6) Fees are accrued daily in the amount of 1/365^th of a percentage of the estimated per share NAV and payable monthly in arrears. The maximum amount of the distribution and stockholder servicing fee with respect to sales of Class T shares is 4.0% of the gross offering proceeds for CCPT V and CCIT III.

(7) In connection with the INAV offering, the Company receives selling commissions, an asset-based dealer manager fee and/or an asset-based distribution and stockholder servicing fee, all based on the net asset value for each class of common stock.

(8) On September 22, 2016, the registration statement for the initial public offering of CCIT III was declared effective by the SEC, consisting of Class A shares of common stock and Class T shares of common stock.

Transaction Related Fees [Member]

Related Party Transaction [Line Items]

Schedule of Related Party Transactions

The following table shows the transaction-related fees for the Cole REITs and other real estate programs as of September 30, 2016:

Program	Acquisition Fees (1)	Disposition Fees	Performance Fees (2)	Financing Coordination Fee (3)
Open Programs
CCPT V	2%	1%	15%	—
INAV	—	—	—	—
CCIT III	2%	1%	15%	1%
Closed Programs
CCIT II	2%	1%	15%	—
CCPT IV	2%	1%	15%	—
Other Programs	Various	Various	Various	—

_______________________________________________

(1) Percent taken on gross purchase price.

(2) Performance fee paid only under the following circumstances: (i) if shares are listed on a national securities exchange; (ii) if the respective Cole REIT is sold or the assets are liquidated; or (iii) upon termination of the advisory agreement. In connection with such events, the performance fee will only be earned upon the return to investors of their net capital invested and a 6% annual cumulative, non-compounded return (8% in the case of CCIT II and CCPT IV).

(3) Financing coordination fee payable for services in connection with the origination, assumption, or refinancing for any debt (other than loans advanced by the Company) to acquire properties or make other permitted investments.

Management Service Revenue [Member]

Related Party Transaction [Line Items]

Schedule of Related Party Transactions

The following table shows the management fees for the Cole REITs as of September 30, 2016:

Program	Asset Management / Advisory Fees (1)	Performance Fees (2)
Open Programs
CCPT V	0.65% - 0.75%	—
INAV	0.90%	25%
CCIT III	0.65% - 0.75%	—
Closed Programs
CCIT II	0.65% - 0.75%	—
CCPT IV	0.65% - 0.75%	—
Other Programs	Various	—

_______________________________________________

(1)    Annualized fee based on the average monthly invested assets or net asset value, if available.

(2)    The performance fee is limited to 10% of the aggregate total return, for each class, for any individual year.

Revenue from Managed REITs [Member]

Related Party Transaction [Line Items]

Schedule of Related Party Transactions

The table below reflects the revenue earned from the Cole REITs (including closed programs, as applicable) and joint ventures for the three and nine months ended September 30, 2016 and 2015 (in thousands).

	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
Offering-related fees and reimbursements
Selling commissions (1)	$	5,008	$	3,328	$	18,112	$	8,345
Dealer manager and distribution fees (2)	2,237		1,258		7,292		3,143
Reimbursement revenue	2,300		1,264		7,446		2,995
Offering-related fees and reimbursements	9,545		5,850		32,850		14,483
Transaction service fees and reimbursements
Acquisition fees	2,813		6,233		8,273		14,913
Disposition fees (3)	—		—		—		4,350
Reimbursement revenues	686		403		2,024		1,594
Transaction service fees and reimbursements	3,499		6,636		10,297		20,857
Management fees and reimbursements
Asset and property management fees and leasing fees	53		108		159		332
Advisory and performance fee revenue	13,011		10,998		37,621		32,674
Reimbursement revenues	4,430		2,882		12,803		8,503
Management fees and reimbursements	17,494		13,988		50,583		41,509
Interest income on Affiliate Lines of Credit	—		306		308		967
Total related party revenues(4)	$	30,538	$	26,780	$	94,038	$	77,816

___________________________________

(1) The Company reallowed 100% of selling commissions earned to participating broker-dealers during the three and nine months ended September 30, 2016 and 2015.

(2) During the three and nine months ended September 30, 2016, the Company reallowed $0.9 million and $2.8 million, respectively, of dealer manager fees and/or distribution and stockholder servicing fees to participating broker dealers as a marketing and due diligence expense reimbursement. During the three and nine months ended September 30, 2015, the Company reallowed $0.6 million and $1.3 million, respectively, of such fees.

(3) The Company earned a disposition fee of $4.4 million on behalf of CCIT when CCIT merged with Select Income REIT on January 29, 2015.

(4) Total related party revenues excludes fees earned from 1031 real estate programs of $0.5 million and $1.1 million for the three and nine months ended September 30, 2016, respectively and fees earned from 1031 real estate programs of $1.1 million and $4.7 million for the three and nine months ended September 30, 2015, respectively.

Investments In Managed REITs [Member]

Related Party Transaction [Line Items]

Schedule of Related Party Transactions

The table below presents certain information related to the Company’s investments in the Cole REITs as of September 30, 2016 (carrying amount in thousands):

	September 30, 2016
Cole REIT	% of Outstanding Shares Owned	Carrying Amount of Investment
CCPT V	1.00%	$	1,448
INAV	0.09%	143
CCIT II	0.44%	1,299
CCIT III	100%	2,697
CCPT IV	0.01%	115
Funds not yet in offering	N/A	400
		$	6,102

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Net Income (Loss) Per Share/Unit (Tables)

9 Months Ended

Sep. 30, 2016

Earnings Per Share [Abstract]

Summary of Basic and Diluted Net Loss Per Share

The following is a summary of the basic and diluted net loss per unit attributable to common unitholders, which includes all common general partner unitholders and limited partner unitholders. The computation for the OP for the three and nine months ended September 30, 2016 and 2015 (dollar amounts in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Net income (loss) attributable to the Operating Partnership	$	30,234		$	7,737		$	(82,578	)	$	(132,458	)
Dividends to preferred units	(17,973		)	(17,974		)	(53,919		)	(53,920		)
Net income (loss) available to the Operating Partnership	12,261			(10,237		)	(136,497		)	(186,378		)
Earnings allocated to participating units	(154		)	(217		)	(400		)	(222		)
Net Income (loss) attributable to common unitholders used in basic and diluted net income (loss) per unit	$	12,107		$	(10,454	)	$	(136,897	)	$	(186,600	)
Weighted average number of common units outstanding - basic	967,237,921			927,225,120			940,995,665			927,031,079
Effect of dilutive securities	1,448,622			—			—			—
Weighted average number of common units outstanding - diluted	968,686,543			927,225,120			940,995,665			927,031,079
Basic and diluted net income (loss) per unit attributable to common unitholders	$	0.01		$	(0.01	)	$	(0.15	)	$	(0.20	)

The following is a summary of the basic and diluted net loss per share computation for the General Partner for the three and nine months ended September 30, 2016 and 2015 (dollar amounts in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Net income (loss) attributable to the General Partner	$	29,495		$	7,529		$	(80,445	)	$	(128,963	)
Dividends to preferred shares and units	(17,973		)	(17,974		)	(53,919		)	(53,920		)
Net income (loss) available to the General Partner	11,522			(10,445		)	(134,364		)	(182,883		)
Earnings allocated to participating securities	(154		)	(217		)	(400		)	(222		)
Income attributable to limited partners	739			—			—			—
Net Income (loss) attributable to common stockholders and limited partners used in basic and diluted net income (loss) per share	$	12,107		$	(10,662	)	$	(134,764	)	$	(183,105	)
Weighted average number of common stock outstanding - basic	943,480,170			903,461,323			917,233,898			903,267,282
Effect of Limited Partner OP Units and dilutive securities	25,206,373			—			—			—
Weighted average number of common stock outstanding - diluted	968,686,543			903,461,323			917,233,898			903,267,282
Basic and diluted net income (loss) per share attributable to common stockholders and limited partners	$	0.01		$	(0.01	)	$	(0.15	)	$	(0.20	)

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Subsequent Events (Tables)

9 Months Ended

Sep. 30, 2016

Subsequent Events [Abstract]

Schedule of Record and Payments Dates for Preferred Stock Dividends

The dividend for the Series F Preferred Stock accrues daily on a 360-day annual basis equal to an annualized dividend rate of $1.675 per share, or $0.1395833 per 30-day month.

Period	Record Date	Payment Date
December 15, 2016 - January 14, 2017	January 1, 2017	January 17, 2017
January 15, 2017 - February 14, 2017	February 1, 2017	February 15, 2017
February 15, 2017 - March 14, 2017	March 1, 2017	March 15, 2017

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Organization (Details)	9 Months Ended
	Sep. 30, 2016 segment $ / shares	Dec. 31, 2015 $ / shares
Real Estate Properties [Line Items]
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Series F Cumulative Redeemable Preferred Stock, par value (in dollars per share)	$ 0.01	$ 0.01
Number of reportable segments | segment	2
VEREIT Operating Partnership, L.P. [Member]
Real Estate Properties [Line Items]
Partnership units, holding period until right to redeem	1 year
General Partner [Member]
Real Estate Properties [Line Items]
General partner ownership interest in OP	97.60%
Limited Partner [Member] | VEREIT Operating Partnership, L.P. [Member]
Real Estate Properties [Line Items]
Common equity interests owned by certain unaffiliated investors	2.40%
Series F Preferred Stock [Member]
Real Estate Properties [Line Items]
Series F Cumulative Redeemable Preferred Stock, dividend rate	6.70%
Series F Cumulative Redeemable Preferred Stock, par value (in dollars per share)	$ 0.01

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Summary of Significant Accounting Policies (Narrative) (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Restricted Cash
Restricted cash	$ 61,828	$ 59,767
Revenue Recognition
Allowance for doubtful accounts	$ 8,300	6,600
Selling Commissions Allowable [Member]
Revenue Recognition
Revenue from related party allowed, percentage	100.00%
Selling Commissions Allowable [Member] | Cole REITs [Member]
Revenue Recognition
Revenue from related party allowed, percentage	100.00%
Deferred Rent, Derivative and Other Liabilities [Member]
Revenue Recognition
Deferred rental income	$ 70,900	67,200
Lender Reserves [Member]
Restricted Cash
Restricted cash	52,200	47,900
Restricted Lockbox Accounts [Member]
Restricted Cash
Restricted cash	9,600	11,900
VEREIT Operating Partnership, L.P. [Member]
Restricted Cash
Restricted cash	$ 61,828	$ 59,767
VEREIT Operating Partnership, L.P. [Member] | Common Stock [Member]
Principles of Consolidation and Basis of Presentation
Limited Partner OP Units outstanding (shares)	23,748,347	23,763,797
VEREIT Operating Partnership, L.P. [Member] | Common Stock [Member] | Limited Partner [Member]
Principles of Consolidation and Basis of Presentation
Limited Partner OP Units outstanding (shares)	23,750,000	23,763,797

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Summary of Significant Accounting Policies - Litigation and Other Non-Routine Costs (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Litigation and other non-routine costs:
Audit Committee Investigation and related matters	$ 5,221	$ 9,251	$ 13,413	$ 38,953
Legal fees and expenses	59	(294)	155	2,659
Other fees and expenses	0	0	0	632
Total costs incurred	5,280	8,957	13,568	42,244
Insurance recoveries	(650)	(925)	(11,196)	(925)
Total	$ 4,630	$ 8,032	$ 2,372	$ 41,319

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Segment Reporting (Narrative) (Details) ft² in Millions	9 Months Ended
	Sep. 30, 2016 ft² property security state segment loan	Dec. 31, 2015 security
Segment Reporting Information [Line Items]
Number of operating segments | segment	2
Number of loans held for investment | loan	9
Commercial Mortgage Backed Securities [Member]
Segment Reporting Information [Line Items]
Number of securities held | security	8	10
REI Segment [Member] | Consolidated Properties [Member]
Segment Reporting Information [Line Items]
Number of properties owned | property	4,213
Square feet of property | ft²	96.9
Number of states in which entity operates | state	49
Percentage of rentable space leased	98.00%
Real estate property, weighted average remaining lease term	10 years

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Segment Reporting (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Segment Reporting Information [Line Items]
Rental income	$ 303,383	$ 333,766	$ 928,706	$ 1,017,708
Direct financing lease income	494	659	1,598	2,097
Operating expense reimbursements	27,969	22,983	77,862	71,269
Total revenues	362,915	384,954	1,102,954	1,172,643
Cole Capital reallowed fees and commissions	5,897	3,896	20,940	9,637
Acquisition related	90	1,764	373	5,509
Litigation and other non-routine costs, net of insurance recoveries	4,630	8,032	2,372	41,319
Property operating	34,820	31,950	107,832	95,547
General and administrative	29,761	32,842	92,255	99,906
Depreciation and amortization	195,173	208,542	596,826	645,196
Impairment of real estate	6,872	0	176,214	85,341
Total operating expenses	277,243	287,026	996,812	982,455
Operating income	85,672	97,928	106,142	190,188
Interest expense	(79,869)	(89,530)	(242,763)	(275,801)
(Loss) gain on extinguishment and forgiveness of debt, net	(2,003)	0	(1,751)	5,302
Other income, net	1,744	2,368	4,022	10,255
Equity in income and gain on disposition of unconsolidated entities	212	6,837	10,686	8,340
Loss on derivative instruments, net	(2,023)	(1,420)	(3,286)	(2,137)
Total other expenses, net	(81,939)	(81,745)	(233,092)	(254,041)
Income (loss) before taxes and real estate dispositions	3,733	16,183	(126,950)	(63,853)
Income (loss) before taxes	31,844	9,641	(81,227)	(126,437)
(Provision for) benefit from income taxes	(1,598)	(1,500)	(1,374)	(4,824)
Net income (loss)	30,246	8,141	(82,601)	(131,261)
Total Assets	16,057,820		16,057,820		$ 17,405,866
REI segment [Member]
Segment Reporting Information [Line Items]
Rental income	303,383	333,766	928,706	1,017,708
Direct financing lease income	494	659	1,598	2,097
Operating expense reimbursements	27,969	22,983	77,862	71,269
Total revenues	331,846	357,408	1,008,166	1,091,074
Acquisition related	90	1,690	334	4,976
Litigation and other non-routine costs, net of insurance recoveries	4,630	8,032	2,372	41,319
Property operating	34,820	31,950	107,832	95,547
General and administrative	12,069	15,848	37,998	48,045
Depreciation and amortization	187,897	200,158	574,124	620,068
Impairment of real estate	6,872	0	176,214	85,341
Total operating expenses	246,378	257,678	898,874	895,296
Operating income	85,468	99,730	109,292	195,778
Interest expense	(79,869)	(89,530)	(242,763)	(275,801)
(Loss) gain on extinguishment and forgiveness of debt, net	(2,003)	0	(1,751)	5,302
Other income, net	1,649	1,903	3,433	8,179
Equity in income and gain on disposition of unconsolidated entities	212	6,837	10,686	8,340
Loss on derivative instruments, net	(2,023)	(1,420)	(3,286)	(2,137)
Total other expenses, net	(82,034)	(82,210)	(233,681)	(256,117)
Income (loss) before taxes and real estate dispositions	3,434	17,520	(124,389)	(60,339)
Gain (loss) on disposition of real estate, net	28,111	(6,542)	45,723	(62,584)
Income (loss) before taxes	31,545	10,978	(78,666)	(122,923)
(Provision for) benefit from income taxes	(1,539)	(2,238)	(4,695)	(7,211)
Net income (loss)	30,006	8,740	(83,361)	(130,134)
Total Assets	15,668,974		15,668,974		16,966,729
Cole Capital segment [Member]
Segment Reporting Information [Line Items]
Offering-related fees and reimbursements	9,545	5,850	32,850	14,483
Transaction service fees and reimbursements	3,779	7,400	10,639	24,696
Management fees and reimbursements	17,745	14,296	51,299	42,390
Total revenues	31,069	27,546	94,788	81,569
Cole Capital reallowed fees and commissions	5,897	3,896	20,940	9,637
Acquisition related	0	74	39	533
General and administrative	17,692	16,994	54,257	51,861
Depreciation and amortization	7,276	8,384	22,702	25,128
Total operating expenses	30,865	29,348	97,938	87,159
Operating income	204	(1,802)	(3,150)	(5,590)
Total other expenses, net	95	465	589	2,076
Income (loss) before taxes	299	(1,337)	(2,561)	(3,514)
(Provision for) benefit from income taxes	(59)	738	3,321	2,387
Net income (loss)	240	$ (599)	760	$ (1,127)
Total Assets	$ 388,846		$ 388,846		$ 439,137

XML

Goodwill and Other Intangibles (Narrative) (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016 USD ($)	Sep. 30, 2015 USD ($)	Sep. 30, 2016 USD ($) segment	Sep. 30, 2015 USD ($)	Dec. 31, 2015 USD ($)
Related Party Transaction [Line Items]
Number of segments | segment			2
Amortization expense	$ 6,200	$ 7,500	$ 19,900	$ 22,500
Intangible assets	30,849		$ 30,849		$ 50,779
Cole REITs [Member] | Management And Advisory Contracts [Member]
Related Party Transaction [Line Items]
Estimated useful life			4 years
Estimated amortization expense for remainder of 2016	6,200		$ 6,200
Estimated amortization expense for 2017	16,600		16,600
Estimated amortization expense for 2018	4,000		4,000
Estimated amortization expense for the nine months ended September 30, 2019	3,800		3,800
Intangible assets	30,800		30,800		50,800
Intangible assets, accumulated amortization	$ (23,300)		$ (23,300)		$ (3,400)
REI Segment [Member]
Related Party Transaction [Line Items]
Number of segments | segment			1
Cole Capital Segment [Member]
Related Party Transaction [Line Items]
Number of segments | segment			1

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Goodwill and Other Intangibles (Goodwill Activity by Segment) (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2016 USD ($)	Sep. 30, 2015 USD ($)	Mar. 06, 2015 property
Goodwill [Roll Forward]
Goodwill, beginning balance	$ 1,656,374	$ 1,894,794
Goodwill allocated to dispositions and held for sale assets	(53,764)	(66,789)
Goodwill, ending balance	1,602,610	1,828,005
Mortgages [Member]
Goodwill [Roll Forward]
Number of properties foreclosed upon | property			2
REI segment [Member]
Goodwill [Roll Forward]
Goodwill, beginning balance	1,410,631	1,509,396
Goodwill allocated to dispositions and held for sale assets	(53,764)	(66,789)
Goodwill, ending balance	1,356,867	1,442,607
REI segment [Member] | Disposed of and classified as held for sale [Member]
Goodwill [Roll Forward]
Goodwill allocated to cost basis of properties	51,500
REI segment [Member] | Properties foreclosed upon [Member]
Goodwill [Roll Forward]
Goodwill allocated to cost basis of properties	2,300
Cole Capital Segment [Member]
Goodwill [Roll Forward]
Goodwill, beginning balance	245,743	385,398
Goodwill allocated to dispositions and held for sale assets	0	0
Goodwill, ending balance	$ 245,743	$ 385,398

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Goodwill and Other Intangibles (Intangible Lease Assets and Liabilities) (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Finite-Lived Intangible Assets [Line Items]
Intangible lease liabilities, accumulated amortization	$ 52,027	$ 38,340
Below-market lease, Weighted-Average Useful Life	17 years 11 months 16 days	17 years 11 months 16 days
Intangible lease liabilities, net	$ 229,340	$ 251,692
Total Intangible Lease Assets [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible lease assets, net	1,537,826	1,771,532
In-Place Leases [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible lease assets, accumulated amortization	$ 469,617	$ 398,770
Intangible lease assets, Weighted-Average Useful Life	14 years 9 months	14 years 9 months
Intangible lease assets, net	$ 1,246,392	$ 1,458,354
Leasing Commissions [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible lease assets, accumulated amortization	$ 1,681	$ 1,035
Intangible lease assets, Weighted-Average Useful Life	9 years 6 months 15 days	9 years 6 months 15 days
Intangible lease assets, net	$ 8,541	$ 4,872
Above-Market Leases [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible lease assets, accumulated amortization	$ 63,952	$ 47,041
Intangible lease assets, Weighted-Average Useful Life	16 years 7 months 6 days	16 years 7 months 6 days
Intangible lease assets, net	$ 282,893	$ 308,306

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Goodwill and Other Intangibles (Projected Amortization Expense and Adjustments) (Details) $ in Thousands	Sep. 30, 2016 USD ($)
Acquired Finite-Lived Intangible Assets [Line Items]
Below-market lease liabilities, projected amortization income, October 1, 2016 - December 31, 2016	$ 6,629
Below-market lease liabilities, projected amortization income, 2017	20,114
Below-market lease liabilities, projected amortization income, 2018	19,787
Below-market lease liabilities, projected amortization income, 2019	19,049
Below-market lease liabilities, projected amortization income, 2020	17,857
In-Place Leases [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Projected amortization expense, October 1, 2016 - December 31, 2016	41,368
Projected amortization expense, 2017	149,340
Projected amortization expense, 2018	136,656
Projected amortization expense, 2019	125,238
Projected amortization expense, 2020	116,997
Leasing Commissions [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Projected amortization expense, October 1, 2016 - December 31, 2016	271
Projected amortization expense, 2017	1,167
Projected amortization expense, 2018	979
Projected amortization expense, 2019	901
Projected amortization expense, 2020	850
Above-Market Lease Assets [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Projected amortization expense, October 1, 2016 - December 31, 2016	6,371
Projected amortization expense, 2017	24,995
Projected amortization expense, 2018	24,460
Projected amortization expense, 2019	22,529
Projected amortization expense, 2020	$ 22,087

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Real Estate Investments (Narrative) (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2016 USD ($) property	Sep. 30, 2015 USD ($) property land_parcel
2016 Acquisitions [Member]
Business Acquisition [Line Items]
Number of properties acquired | property	1
Total purchase price of assets acquired | $	$ 19,952
2015 Acquisitions [Member]
Business Acquisition [Line Items]
Number of properties acquired | property		14
Total purchase price of assets acquired | $		$ 10,207
Development projects in progress | land_parcel		9

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Real Estate Investments (Assets Acquired and Liabilities Assumed) (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
2016 Acquisitions [Member]
Real estate investments, at cost:
Land	$ 4,215
Buildings, fixtures and improvements	14,555
Total tangible assets	18,770
Assumed intangible liabilities:
Total purchase price of assets acquired	19,952
2016 Acquisitions [Member] | In-place leases [Member]
Acquired intangible assets:
Acquired intangible assets	1,182
2016 Acquisitions [Member] | Above-market leases [Member]
Acquired intangible assets:
Acquired intangible assets	0
2016 Acquisitions [Member] | Below-market leases [Member]
Assumed intangible liabilities:
Below-market leases	$ 0
2015 Acquisitions [Member]
Real estate investments, at cost:
Land		$ 4,187
Buildings, fixtures and improvements		5,258
Total tangible assets		9,445
Assumed intangible liabilities:
Total purchase price of assets acquired		10,207
2015 Acquisitions [Member] | In-place leases [Member]
Acquired intangible assets:
Acquired intangible assets		717
2015 Acquisitions [Member] | Above-market leases [Member]
Acquired intangible assets:
Acquired intangible assets		153
2015 Acquisitions [Member] | Below-market leases [Member]
Assumed intangible liabilities:
Below-market leases		$ (108)

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Real Estate Investments (Future Lease Payments) (Details) $ in Thousands	Sep. 30, 2016 USD ($) property
Operating Leases, Future Minimum Payments Receivable [Abstract]
October 1, 2016 - December 31, 2016	$ 268,066
2017	1,131,536
2018	1,108,872
2019	1,068,910
2020	1,031,688
Thereafter	7,574,101
Total	12,183,173
Future Minimum Direct Financing Lease Payments
October 1, 2016 - December 31, 2016	1,001
2017	3,818
2018	3,016
2019	2,397
2020	2,023
Thereafter	5,893
Total	$ 18,148
Number of properties subject to direct financing leases | property	33

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Real Estate Investments (Investment in Direct Financing Leases, Net) (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Real Estate [Abstract]
Future minimum lease payments receivable	$ 18,148	$ 21,993
Unguaranteed residual value of property	28,235	31,562
Unearned income	(5,598)	(7,243)
Net investment in direct financing leases	$ 40,785	$ 46,312

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Real Estate Investments (Development Activities) (Details) $ in Millions	9 Months Ended
	Sep. 30, 2016 USD ($) development_project	Sep. 30, 2015 USD ($)	Dec. 31, 2015 USD ($)
Real Estate [Abstract]
Land and construction in progress	$ 8.4		$ 20.0
Number of development projects to complete | development_project	37
Number of development projects completed | development_project	36
Aggregate cost to date	$ 52.3
Capitalized interest expense	$ 0.2	$ 1.0
Number of remaining projects to be completed | development_project	1
Estimated completion period for remaining projects	6 months
Invested to date	$ 1.1
Estimated remaining investment	0.7
Total investment	$ 1.8
Number of development projects completed and placed into service | development_project	5
Aggregate cost of projects completed placed into service	$ 14.8

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Real Estate Investments (Property Dispositions and Held for Sale Assets) (Narrative) (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2016 USD ($) property	Sep. 30, 2015 USD ($) property	Dec. 31, 2015 property
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Number of real estate properties disposed | property	35
Proceeds after debt assumptions and closing costs	$ 615,246	$ 413,270
Debt assumption	55,000	300,720
Goodwill allocated to dispositions	53,764	$ 66,789
Mortgages [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Debt repayments	$ 227,503
Consolidated Property Dispositions, 2016 [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Number of real estate properties disposed | property	223
Aggregate proceeds	$ 672,500
Company's share of proceeds	646,400
Proceeds after debt assumptions and closing costs	573,000
Gain (loss) related to sale, including goodwill	50,700
Goodwill included in sale	28,800
Consolidated Property Dispositions, 2016 [Member] | Mortgages [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Debt assumption	$ 55,000
Red Lobster [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Number of real estate properties disposed | property	47
Consolidated Property Dispositions, 2015 [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Number of real estate properties disposed | property		88
Aggregate proceeds		$ 675,900
Proceeds after debt assumptions and closing costs		370,200
Gain (loss) related to sale, including goodwill		(39,300)
Goodwill included in sale		$ 48,500
Number of properties owned by consolidated joint ventures disposed of | property		1
Net proceeds		$ 77,500
Proceeds from after debt repayments and closing costs		43,000
Gain related to sale of unconsolidated entities		$ 6,700
Unconsolidated Property Dispositions, 2016 [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Company's share of proceeds	$ 102,100
Number of disposed properties owned by unconsolidated joint ventures | property	1
Net proceeds	$ 113,500
Proceeds from after debt repayments and closing costs	42,300
Debt repayments	57,000
Gain related to sale of unconsolidated entities	$ 10,200
Unconsolidated Property Dispositions, 2015 [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Number of disposed properties owned by unconsolidated joint ventures | property		3
2016 Property Dispositions [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Number of properties classified held for sale | property	19
Net loss on sale of properties	$ (5,000)	$ (23,300)
Goodwill allocated to dispositions	$ 22,700	$ 18,300
2015 Property Dispositions [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Number of properties classified held for sale | property			17

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Real Estate Investments (Impairment of Real Estate Investments) (Narrative) (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2016 USD ($) restaurant	Sep. 30, 2015 USD ($)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Number of restaurants owned by tenant | restaurant	59
Impairment charges	$ 176,214	$ 85,300
Reported Value Measurement [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying value of real estate assets deemed to be impaired	655,100	319,300
Estimated fair value of real estate assets deemed to be impaired	$ 478,900	$ 234,000
Minimum [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Period for determining disposal is more likely than not	12 months
Maximum [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Period for determining disposal is more likely than not	24 months

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Real Estate Investments (Consolidated Joint Ventures) (Narrative) (Details) $ in Thousands			3 Months Ended		9 Months Ended		12 Months Ended
		Jun. 30, 2015 property	Sep. 30, 2016 USD ($) property	Sep. 30, 2015 USD ($) joint_venture	Sep. 30, 2016 USD ($) property joint_venture	Sep. 30, 2015 USD ($) joint_venture	Dec. 31, 2015 USD ($) property joint_venture
Schedule of Equity Method Investments [Line Items]
Total assets			$ 16,057,820		$ 16,057,820		$ 17,405,866
Real estate investments, net			13,630,499		13,630,499		15,006,124
Net income (loss) attributable to non-controlling interests	[1]		751	$ 612	$ (2,156)	$ (2,298)
Number of joint ventures disposed of | property					35
VEREIT Operating Partnership, L.P. [Member]
Schedule of Equity Method Investments [Line Items]
Number of joint ventures | joint_venture				4		4
Total assets			16,057,820		$ 16,057,820		17,405,866
Real estate investments, net			13,630,499		13,630,499		$ 15,006,124
Net income (loss) attributable to non-controlling interests	[2]		$ 12	$ 404	$ (23)	$ 1,197
Number of joint ventures disposed of | property		2
Mortgages [Member]
Schedule of Equity Method Investments [Line Items]
Number of properties owned | property			643		643
Joint ventures [Member]
Schedule of Equity Method Investments [Line Items]
Number of joint ventures | joint_venture					2		2
Total assets			$ 59,600		$ 59,600		$ 58,500
Real estate investments, net			$ 55,600		$ 55,600		$ 55,200
Number of properties with secured mortgage note payable | property			1		1
Joint ventures [Member] | Mortgages [Member]
Schedule of Equity Method Investments [Line Items]
Mortgage note payable			$ 9,900		$ 9,900
Joint ventures [Member] | Consolidated Properties [Member]
Schedule of Equity Method Investments [Line Items]
Number of properties owned | property			2		2		2

[1] Represents (income) loss attributable to limited partners and consolidated joint venture partners.

[2] Represents (income) loss attributable to consolidated joint venture partners.

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Real Estate Investments (Unconsolidated Joint Ventures) (Narrative) (Details) ft² in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2016 USD ($) ft² property joint_venture	Sep. 30, 2015 USD ($) property	Sep. 30, 2016 USD ($) ft² property joint_venture	Sep. 30, 2015 USD ($) property	Dec. 31, 2015 USD ($) ft² property joint_venture
Schedule of Equity Method Investments [Line Items]
Aggregate equity investments	$ 24,711,000		$ 24,711,000		$ 56,824,000
Net (loss) income			$ 488,000	$ 1,611,000
Mortgages [Member]
Schedule of Equity Method Investments [Line Items]
Number of properties owned | property	643		643
Aggregate balance outstanding	$ 2,813,829,000		$ 2,813,829,000		3,039,882,000
Unconsolidated Joint Venture [Member]
Schedule of Equity Method Investments [Line Items]
Aggregate equity investments	18,600,000		18,600,000		$ 52,800,000
Net (loss) income	200,000	$ 100,000	600,000	$ 1,500,000
Unconsolidated Joint Venture [Member] | Mortgages [Member]
Schedule of Equity Method Investments [Line Items]
Aggregate balance outstanding	46,200,000		46,200,000
Unconsolidated Joint Venture [Member] | Mortgages [Member] | Recourse debt [Member]
Schedule of Equity Method Investments [Line Items]
Aggregate balance outstanding	$ 0		$ 0
Unconsolidated Properties [Member] | REI segment [Member]
Schedule of Equity Method Investments [Line Items]
Number of unconsolidated joint ventures | joint_venture	2		2		3
Number of properties owned | property	2	6	2	6	3
Net rentable area (in square feet) | ft²	0.5		0.5		0.9

XML

Real Estate Investments (Ownership and Carrying Amounts for Unconsolidated Ventures) (Details) $ in Thousands	Sep. 30, 2016 USD ($)
Schedule of Equity Method Investments [Line Items]
Carrying value of Investment	$ 18,609
Underlying equity in net assets	$ 6,500
Cole/Mosaic JV South Elgin IL, LLC [Member]
Schedule of Equity Method Investments [Line Items]
Ownership %	50.00%
Carrying value of Investment	$ 6,108
Cole/Faison JV Bethlehem GA, LLC [Member]
Schedule of Equity Method Investments [Line Items]
Ownership %	90.00%
Carrying value of Investment	$ 12,501

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Investment Securities, at Fair Value (Unrealized Gains and Losses) (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Schedule of Available-for-sale Securities [Line Items]
Fair Value	$ 48,098	$ 53,304
CMBS [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	48,509	52,115
Gross Unrealized Gains	1,556	2,169
Gross Unrealized Losses	(1,967)	(980)
Fair Value	$ 48,098	$ 53,304

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Investment Securities, at Fair Value (Narrative) (Details)	9 Months Ended
	Sep. 30, 2016 USD ($) security	Dec. 31, 2015 USD ($) security
Schedule of Available-for-sale Securities [Line Items]
Investment securities, at fair value	$ 48,098,000	$ 53,304,000
CMBS [Member]
Schedule of Available-for-sale Securities [Line Items]
Number of securities owned | security	8	10
Investment securities, at fair value	$ 48,098,000	$ 53,304,000
Number of securities paid in full prior to maturity | security	2
Carrying value of security paid in full (less than)	$ 100,000
Number of securities with fair value below amortized cost | security	6
Other-than-temporary impairment losses	$ 0
CMBS [Member] | Minimum [Member]
Schedule of Available-for-sale Securities [Line Items]
Interest rate	5.88%
CMBS [Member] | Maximum [Member]
Schedule of Available-for-sale Securities [Line Items]
Interest rate	8.95%

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Investment Securities, at Fair Value (Scheduled Maturity of CMBS) (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Fair Value
Total	$ 48,098	$ 53,304
CMBS [Member]
Amortized Cost
Due within one year	0
Due after one year through five years	21,489
Due after five years through 10 years	12,725
Due after 10 years	14,295
Amortized Cost	48,509	52,115
Fair Value
Due within one year	0
Due after one year through five years	22,066
Due after five years through 10 years	10,805
Due after 10 years	15,227
Total	$ 48,098	$ 53,304

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Mortgage Notes Receivable (Narrative) (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2016 USD ($) loan	Sep. 30, 2015 USD ($)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of mortgage notes receivable	9
Principal repayments received from borrowers | $	$ 4,906	$ 6,043
Mortgage notes receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of mortgage notes receivable	9
Weighted-average interest rate	6.30%
Weighted-average years to maturity	13 years 2 months 23 days
Number of mortgage notes receivable repaid at maturity	1
Principal repayments received from borrowers | $	$ 400
Number of mortgage notes with capitalized principal and interest	1

XML

Mortgage Notes Receivable (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Accounts, Notes, Loans and Financing Receivable [Line Items]
Carrying Value	$ 23,014	$ 24,238
Mortgage notes receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding Balance	24,996
Carrying Value	$ 23,014
Mortgage notes receivable [Member] | Minimum [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Interest Rate Range	5.90%
Mortgage notes receivable [Member] | Maximum [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Interest Rate Range	7.20%

XML

Mortgage Notes Receivable (Aggregate Principal Payments) (Details) - Mortgage notes receivable [Member] - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2016	Nov. 01, 2016
Subsequent Event [Line Items]
Due within one year	$ 1,057
Due after one year through five years	5,357
Due after five years through 10 years	6,919
Due after 10 years	15,523
Total	$ 28,856
Subsequent Event [Member]
Subsequent Event [Line Items]
Interest scheduled to be capitalized		$ 3,900

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Rent and Tenant Receivables and Other Assets, Net (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Property, Plant and Equipment [Line Items]
Accounts receivable, net	$ 48,682		$ 48,682		$ 44,798
Straight-line rent receivable	196,669		196,669		161,079
Deferred costs, net	18,443		18,443		26,110
Prepaid expenses	13,269		13,269		9,773
Leasehold improvements, property and equipment, net	16,845		16,845		18,180
Restricted escrow deposits	3,123		3,123		1,190
Deferred tax asset and tax receivable	27,529		27,529		25,287
Program development costs, net	12,268		12,268		12,855
Interest rate swap assets, at fair value	0		0		1,892
Other assets	2,701		2,701		2,473
Total	339,529		339,529		303,637
Allowance for doubtful accounts	8,300		8,300		6,600
Rent and Tenant Receivables and Other Assets, Net [Member] | Program Development Costs [Member]
Property, Plant and Equipment [Line Items]
Reserves related to program development costs	18,800		18,800		34,800
Leasehold Improvements [Member]
Property, Plant and Equipment [Line Items]
Amortization expense	300	$ 400	900	$ 1,100
Accumulated amortization and depreciation	3,500		3,500		2,600
Property and Equipment [Member]
Property, Plant and Equipment [Line Items]
Accumulated amortization and depreciation	5,300		5,300		3,700
Depreciation expense	600	500	1,600	1,500
Line of Credit [Member]
Property, Plant and Equipment [Line Items]
Amortization expense	2,600	$ 2,600	7,800	$ 8,100
Accumulated amortization for deferred costs	$ 27,200		$ 27,200		$ 19,400

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Fair Value Measures (Fair Value of Assets and Liabilities, Measured on a Recurring Basis) (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Assets:
Derivative assets	$ 0	$ 1,892
Liabilities:
Derivative liabilities	(8,194)	(6,922)
Fair Value, Measurements, Recurring [Member]
Assets:
CMBS	48,098	53,304
Derivative assets		1,892
Total assets		55,196
Liabilities:
Derivative liabilities	(8,194)	(6,922)
Fair Value, Measurements, Recurring [Member] | Level 1 [Member]
Assets:
CMBS	0	0
Derivative assets		0
Total assets		0
Liabilities:
Derivative liabilities	0	0
Fair Value, Measurements, Recurring [Member] | Level 2 [Member]
Assets:
CMBS	0	0
Derivative assets		1,892
Total assets		1,892
Liabilities:
Derivative liabilities	(8,194)	(6,922)
Fair Value, Measurements, Recurring [Member] | Level 3 [Member]
Assets:
CMBS	48,098	53,304
Derivative assets		0
Total assets		53,304
Liabilities:
Derivative liabilities	$ 0	$ 0

XML

Fair Value Measures (Reconciliation of Changes in Assets and Liabilities with Unobservable Inputs) (Details) - CMBS [Member] - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance	$ 53,304	$ 58,646
Total gains and losses:
Unrealized loss included in other comprehensive income, net	(1,599)	(232)
Purchases, issuances, settlements and amortization:
Principal payments received	(3,786)	(4,055)
Amortization included in net income	179	96
Ending balance	$ 48,098	$ 54,455

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Fair Value Measures (Fair Value of Financial Instruments by Balance Sheet Location) (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Carrying Amount [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total liabilities	$ 6,612,533	$ 8,122,477
Fair Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total liabilities	6,813,975	8,364,245
Level 3 [Member] | Carrying Amount [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Mortgage notes receivable	23,014	24,238
Level 3 [Member] | Fair Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Mortgage notes receivable	31,963	31,842
Level 2 [Member] | Mortgages [Member] | Carrying Amount [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total liabilities	2,878,774	3,133,005
Level 2 [Member] | Mortgages [Member] | Fair Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total liabilities	2,972,148	3,240,153
Level 2 [Member] | Corporate Bonds, Net [Member] | Senior Unsecured Note [Member] | Carrying Amount [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total liabilities	2,247,893	2,547,255
Level 2 [Member] | Corporate Bonds, Net [Member] | Senior Unsecured Note [Member] | Fair Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total liabilities	2,334,291	2,580,786
Level 2 [Member] | Convertible Debt, Net [Member] | Convertible Senior Notes [Member] | Carrying Amount [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total liabilities	985,866	982,217
Level 2 [Member] | Convertible Debt, Net [Member] | Convertible Senior Notes [Member] | Fair Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total liabilities	1,010,722	1,007,042
Level 2 [Member] | Credit Facility [Member] | Credit Facilities [Member] | Carrying Amount [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total liabilities	500,000	1,460,000
Level 2 [Member] | Credit Facility [Member] | Credit Facilities [Member] | Fair Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total liabilities	$ 496,814	$ 1,536,264

XML

Fair Value Measures (Narrative) (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2016 USD ($) property	Sep. 30, 2015 USD ($)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Properties impaired | property	139
Impairment charges	$ 176,214	$ 85,300
Minimum [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Discount rates	6.70%
Capitalization rates	7.00%
Maximum [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Discount rates	9.00%
Capitalization rates	12.50%
Weighted Average [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Discount rates	8.00%
Capitalization rates	7.90%
Reported Value Measurement [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Estimated fair value of real estate assets deemed to be impaired	$ 478,900	$ 234,000

XML

Fair Value Measures (Impairment Charges by Asset Class) (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2016 USD ($) property	Sep. 30, 2015 USD ($)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Properties impaired | property	139
Total impairment loss	$ 176,214	$ 85,300
Number of properties disposed of | property	35
Investment in Real Estate Assets, Net [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total impairment loss	$ 176,635
Below-Market Lease Liabilities, Net [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total impairment loss	$ (421)

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Debt (Narrative) (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Debt Disclosure [Abstract]
Debt outstanding	$ 6,553,066	$ 8,059,802
Weighted-average years to maturity	4 years 6 months
Weighted-average interest rate	4.30%

XML

Debt (Schedule of Debt) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Debt [Roll Forward]
Total debt, Beginning balance			$ 8,059,802
Debt Issuances, Net			2,064,531
Repayments, Extinguishment and Assumptions, Net			(3,572,937)
(Accretion) and Amortization			1,670
Total debt, Ending balance	$ 6,553,066		6,553,066
Gain on extinguishment	(2,003)	$ 0	(1,751)	$ 5,302
Note assumed by the buyer			55,000	$ 300,720
Mortgages and Other Debt [Member]
Debt [Roll Forward]
Total debt, Beginning balance			3,111,985
Debt Issuances, Net			1,423
Repayments, Extinguishment and Assumptions, Net			(238,810)
(Accretion) and Amortization			(13,388)
Total debt, Ending balance	2,861,210		2,861,210
Mortgage Notes Payable [Member]
Debt [Roll Forward]
Outstanding balance, Beginning balance			3,039,882
Net premiums (discount), Beginning balance			59,402
Deferred costs, Beginning balance			(21,020)
Debt Issuances			1,450
Debt Issuances, Deferred Costs			(27)
Repayments, Extinguishment and Assumptions			(227,503)
Repayments, Extinguishment and Assumptions, Net Premiums (Discount)			(1,364)
Repayments, Extinguishment and Assumptions, Deferred costs			510
(Accretion) and Amortization, (Premiums) Discount			(16,229)
(Accretion) and Amortization, Deferred costs			2,973
Outstanding balance, Ending balance	2,813,829		2,813,829
Net premiums (discount), Ending balance	41,809		41,809
Deferred costs, Ending balance	(17,564)		(17,564)
Notes repaid prior to maturity			83,500
Gain on extinguishment			(600)
Write off of unamortized premiums			300
Write off of prepayment penalties			900
Mortgage Notes Payable [Member] | 2016 Property Dispositions [Member]
Debt [Roll Forward]
Unamortized premium written-off			1,100
Unamortized deferred financing costs written-off			300
Other Debt [Member]
Debt [Roll Forward]
Outstanding balance, Beginning balance			33,463
Net premiums (discount), Beginning balance			258
Repayments, Extinguishment and Assumptions			(10,453)
(Accretion) and Amortization, (Premiums) Discount			(132)
Outstanding balance, Ending balance	23,010		23,010
Net premiums (discount), Ending balance	126		126
Corporate Bonds [Member]
Debt [Roll Forward]
Outstanding balance, Beginning balance			2,550,000
Net premiums (discount), Beginning balance			(2,745)
Deferred costs, Beginning balance			(10,922)
Total debt, Beginning balance			2,536,333
Debt Issuances			1,000,000
Debt Issuances, Deferred Costs			(17,128)
Debt Issuances, Net			982,872
Repayments, Extinguishment and Assumptions			(1,300,000)
Repayments, Extinguishment and Assumptions, Net Premiums (Discount)			73
Repayments, Extinguishment and Assumptions, Deferred costs			1,898
Repayments, Extinguishment and Assumptions, Net			(1,298,029)
(Accretion) and Amortization, (Premiums) Discount			565
(Accretion) and Amortization, Deferred costs			3,416
(Accretion) and Amortization			3,981
Outstanding balance, Ending balance	2,250,000		2,250,000
Net premiums (discount), Ending balance	(2,107)		(2,107)
Deferred costs, Ending balance	(22,736)		(22,736)
Total debt, Ending balance	2,225,157		2,225,157
Convertible Debt [Member]
Debt [Roll Forward]
Outstanding balance, Beginning balance			1,000,000
Net premiums (discount), Beginning balance			(17,779)
Deferred costs, Beginning balance			(19,327)
Total debt, Beginning balance			962,894
(Accretion) and Amortization, (Premiums) Discount			3,645
(Accretion) and Amortization, Deferred costs			4,152
(Accretion) and Amortization			7,797
Outstanding balance, Ending balance	1,000,000		1,000,000
Net premiums (discount), Ending balance	(14,134)		(14,134)
Deferred costs, Ending balance	(15,175)		(15,175)
Total debt, Ending balance	970,691		970,691
Credit Facility [Member]
Debt [Roll Forward]
Outstanding balance, Beginning balance			1,460,000
Deferred costs, Beginning balance			(11,410)
Total debt, Beginning balance			1,448,590
Debt Issuances			783,000
Debt Issuances, Deferred Costs			0
Debt Issuances, Net			783,000
Repayments, Extinguishment and Assumptions			(1,743,000)
Repayments, Extinguishment and Assumptions, Deferred costs			4,314
Repayments, Extinguishment and Assumptions, Net			(1,738,686)
(Accretion) and Amortization, Deferred costs			3,104
(Accretion) and Amortization			3,104
Outstanding balance, Ending balance	500,000		500,000
Deferred costs, Ending balance	(3,992)		(3,992)
Total debt, Ending balance	496,008		496,008
2016 Term Loan [Member]
Debt [Roll Forward]
Outstanding balance, Beginning balance			0
Deferred costs, Beginning balance			0
Total debt, Beginning balance			0
Debt Issuances			300,000
Debt Issuances, Deferred Costs			(2,764)
Debt Issuances, Net			297,236
Repayments, Extinguishment and Assumptions			(300,000)
Repayments, Extinguishment and Assumptions, Deferred costs			2,588
Repayments, Extinguishment and Assumptions, Net			(297,412)
(Accretion) and Amortization, Deferred costs			176
(Accretion) and Amortization			176
Outstanding balance, Ending balance	0		0
Deferred costs, Ending balance	0		0
Total debt, Ending balance	$ 0		$ 0

XML

Debt (Mortgage Notes Payable) (Details)	9 Months Ended
	Sep. 30, 2016 USD ($) property	Dec. 31, 2015 USD ($)
Debt Instrument [Line Items]
Weighted-Average Interest Rate	4.30%
Weighted-Average Years to Maturity	4 years 6 months
Mortgage Notes Payable [Member]
Debt Instrument [Line Items]
Encumbered Properties | property	643
Gross Carrying Value of Collateralized Properties	$ 5,510,953,000
Outstanding Balance	$ 2,813,829,000	$ 3,039,882,000
Weighted-Average Interest Rate	5.01%
Mortgage Notes Payable [Member] | Unconsolidated Joint Venture [Member]
Debt Instrument [Line Items]
Outstanding Balance	$ 46,200,000
Weighted-Average Interest Rate	3.93%
Mortgage Notes Payable [Member] | Weighted-Average [Member]
Debt Instrument [Line Items]
Weighted-Average Years to Maturity	4 years 7 months 6 days
Mortgage Notes Payable [Member] | Weighted-Average [Member] | Unconsolidated Joint Venture [Member]
Debt Instrument [Line Items]
Weighted-Average Years to Maturity	2 years 1 month 10 days
Mortgage Notes Payable [Member] | Minimum [Member] | Unconsolidated Joint Venture [Member]
Debt Instrument [Line Items]
Fixed and variable rate, maximum	2.93%
Mortgage Notes Payable [Member] | Maximum [Member] | Unconsolidated Joint Venture [Member]
Debt Instrument [Line Items]
Fixed and variable rate, maximum	5.20%
Mortgage Notes Payable [Member] | Fixed-rate debt [Member]
Debt Instrument [Line Items]
Encumbered Properties | property	642
Gross Carrying Value of Collateralized Properties	$ 5,484,499,000
Outstanding Balance	$ 2,804,142,000
Weighted-Average Interest Rate	5.01%
Mortgage Notes Payable [Member] | Fixed-rate debt [Member] | Interest Rate Swap [Member]
Debt Instrument [Line Items]
Outstanding Balance	$ 242,400,000
Mortgage Notes Payable [Member] | Fixed-rate debt [Member] | Weighted-Average [Member]
Debt Instrument [Line Items]
Weighted-Average Years to Maturity	4 years 7 months 6 days
Mortgage Notes Payable [Member] | Variable-rate debt [Member]
Debt Instrument [Line Items]
Encumbered Properties | property	1
Gross Carrying Value of Collateralized Properties	$ 26,454,000
Outstanding Balance	$ 9,687,000
Weighted-Average Interest Rate	3.79%
Mortgage Notes Payable [Member] | Variable-rate debt [Member] | Weighted-Average [Member]
Debt Instrument [Line Items]
Weighted-Average Years to Maturity	10 months 24 days
Mortgage Notes Payable [Member] | Recourse debt [Member] | Unconsolidated Joint Venture [Member]
Debt Instrument [Line Items]
Outstanding Balance	$ 0

XML

Debt (Mortgage Notes Payable) (Narrative) (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016 USD ($)	Sep. 30, 2015 USD ($)	Sep. 30, 2016 USD ($)	Sep. 30, 2015 USD ($)	Mar. 06, 2015 USD ($) property	Dec. 31, 2014 USD ($)
Debt Instrument [Line Items]
(Loss) gain on extinguishment and forgiveness of debt, net	$ (2,003)	$ 0	$ (1,751)	$ 5,302
Mortgage Notes Payable [Member]
Debt Instrument [Line Items]
Mortgage notes in connection with default from non-recourse loan					$ 38,100	$ 53,800
Gain (loss) on forgiveness of debt			(3,400)	$ 4,900
Number of non-recourse loan secured properties | property					2
(Loss) gain on extinguishment and forgiveness of debt, net			(600)
Mortgage Notes Payable [Member] | Foreclosure [Member]
Debt Instrument [Line Items]
(Loss) gain on extinguishment and forgiveness of debt, net			$ 19,100

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Debt (Aggregate Principal Repayments on Mortgage Notes) (Details) - Mortgage Notes Payable [Member] - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Debt Instrument [Line Items]
October 1, 2016 - December 31, 2016	$ 49,767
2017	420,662
2018	209,229
2019	229,516
2020	282,190
Thereafter	1,622,465
Total	$ 2,813,829	$ 3,039,882

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Debt (Other Debt) (Narrative) (Details) - Other Debt [Member] - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Debt Instrument [Line Items]
Outstanding Balance	$ 23,010	$ 33,463
Unamortized net premium	$ 126	$ 258
Interest rate	5.81%
Scheduled principal repayments, 2016	$ 2,000
Scheduled principal repayments, 2017	7,700
Scheduled principal repayments, 2018	$ 13,300

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Debt (Summary of Outstanding and Carrying Value of Collateral by Asset Type) (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Debt Instrument [Line Items]
Outstanding Balance	$ 6,553,066	$ 8,059,802
Other Debt [Member]
Debt Instrument [Line Items]
Collateral Carrying Value	58,025
Long-term Debt, Gross	23,010	$ 33,463
Other Debt [Member] | Mortgage notes receivable [Member]
Debt Instrument [Line Items]
Outstanding Balance	7,279
Collateral Carrying Value	19,457
Other Debt [Member] | Intercompany mortgage loans [Member]
Debt Instrument [Line Items]
Outstanding Balance	1,754
Collateral Carrying Value	4,212
Other Debt [Member] | CMBS [Member]
Debt Instrument [Line Items]
Outstanding Balance	13,977
Collateral Carrying Value	$ 34,356

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Debt (Corporate Bonds) (Narrative) (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
	Jul. 05, 2016	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Debt Instrument [Line Items]
(Loss) gain on extinguishment and forgiveness of debt, net		$ (2,003)	$ 0	$ (1,751)	$ 5,302
Corporate Bonds [Member]
Debt Instrument [Line Items]
Aggregate balance outstanding		2,250,000		2,250,000		$ 2,550,000
VEREIT Operating Partnership, L.P. [Member]
Debt Instrument [Line Items]
(Loss) gain on extinguishment and forgiveness of debt, net		(2,003)	$ 0	(1,751)	$ 5,302
VEREIT Operating Partnership, L.P. [Member] | Corporate Bonds [Member]
Debt Instrument [Line Items]
Aggregate balance outstanding		$ 2,250,000		$ 2,250,000
Interest rate		4.056%		4.056%
VEREIT Operating Partnership, L.P. [Member] | Corporate Bonds [Member] | 2021 Senior Notes [Member]
Debt Instrument [Line Items]
Aggregate balance outstanding		$ 400,000		$ 400,000
Interest rate		4.125%		4.125%
VEREIT Operating Partnership, L.P. [Member] | Corporate Bonds [Member] | 2026 Senior Notes [Member]
Debt Instrument [Line Items]
Aggregate balance outstanding		$ 600,000		$ 600,000
Interest rate		4.875%		4.875%
VEREIT Operating Partnership, L.P. [Member] | Corporate Bonds [Member] | 2017 Senior Notes [Member]
Debt Instrument [Line Items]
Aggregate balance outstanding	$ 0
Interest rate	2.00%
Aggregate principal amount redeemed	$ 1,300,000
(Loss) gain on extinguishment and forgiveness of debt, net	$ (13,200)
VEREIT Operating Partnership, L.P. [Member] | Corporate Bonds [Member] | 2019 Senior Notes [Member]
Debt Instrument [Line Items]
Aggregate balance outstanding		$ 750,000		$ 750,000
Interest rate		3.00%		3.00%
Redemption price, percentage of principal				100.00%
VEREIT Operating Partnership, L.P. [Member] | Corporate Bonds [Member] | 2024 Senior Notes [Member]
Debt Instrument [Line Items]
Aggregate balance outstanding		$ 500,000		$ 500,000
Interest rate		4.60%		4.60%
Redemption price, percentage of principal				100.00%

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Debt (Corporate Bonds) (Details) - Corporate Bonds [Member] - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Debt Instrument [Line Items]
Outstanding Balance	$ 2,250,000	$ 2,550,000
VEREIT Operating Partnership, L.P. [Member]
Debt Instrument [Line Items]
Outstanding Balance	$ 2,250,000
Interest Rate	4.056%
2019 Senior Notes [Member] | VEREIT Operating Partnership, L.P. [Member]
Debt Instrument [Line Items]
Outstanding Balance	$ 750,000
Interest Rate	3.00%
2021 Senior Notes [Member] | VEREIT Operating Partnership, L.P. [Member]
Debt Instrument [Line Items]
Outstanding Balance	$ 400,000
Interest Rate	4.125%
2024 Senior Notes [Member] | VEREIT Operating Partnership, L.P. [Member]
Debt Instrument [Line Items]
Outstanding Balance	$ 500,000
Interest Rate	4.60%
2026 Senior Notes [Member] | VEREIT Operating Partnership, L.P. [Member]
Debt Instrument [Line Items]
Outstanding Balance	$ 600,000
Interest Rate	4.875%

XML

Debt (Convertible Debt) (Narrative) (Details) - Convertible Debt [Member] - USD ($)	Sep. 30, 2016	Dec. 31, 2015	Dec. 10, 2013	Aug. 01, 2013	Jul. 29, 2013
Debt Instrument [Line Items]
Aggregate balance outstanding	$ 1,000,000,000	$ 1,000,000,000
2018 Convertible Notes [Member]
Debt Instrument [Line Items]
Aggregate principal amount issued			$ 287,500,000.0	$ 10,000,000.0	$ 300,000,000.0
Aggregate balance outstanding	597,500,000
2020 Convertible Notes [Member]
Debt Instrument [Line Items]
Aggregate principal amount issued			$ 402,500,000.0
Aggregate balance outstanding	$ 402,500,000

XML

Debt (Convertible Debt) (Details)	9 Months Ended
	Sep. 30, 2016 USD ($)	Dec. 31, 2015 USD ($)
Debt Instrument [Line Items]
Weighted-average interest rate	4.30%
Carrying value conversion options in additional paid-in capital	$ (28,600,000)
Convertible Debt [Member]
Debt Instrument [Line Items]
Outstanding Balance	$ 1,000,000,000	$ 1,000,000,000
Weighted-average interest rate	3.30%
Unamortized discount	$ 14,134,000	$ 17,779,000
Remaining amortization period	2 years 9 months 18 days
Amount of General Partner OP Units per principal amount	$ 1,000
Convertible Debt [Member] | 2018 Convertible Notes [Member]
Debt Instrument [Line Items]
Outstanding Balance	$ 597,500,000
Interest Rate	3.00%
Convertible Debt [Member] | 2020 Convertible Notes [Member]
Debt Instrument [Line Items]
Outstanding Balance	$ 402,500,000
Interest Rate	3.75%
VEREIT Operating Partnership, L.P. [Member] | Convertible Debt [Member] | 2018 Convertible Notes [Member]
Debt Instrument [Line Items]
Conversion Rate	0.0606
VEREIT Operating Partnership, L.P. [Member] | Convertible Debt [Member] | 2020 Convertible Notes [Member]
Debt Instrument [Line Items]
Conversion Rate	0.0667

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Debt (Credit Facility) (Narrative) (Details)	3 Months Ended	9 Months Ended
	Sep. 30, 2016 USD ($) swap_agreement	Sep. 30, 2016 USD ($)	Dec. 31, 2015 USD ($)
Line of Credit Facility [Line Items]
Outstanding balance	$ 496,008,000	$ 496,008,000	$ 1,448,590,000
VEREIT Operating Partnership, L.P. [Member]
Line of Credit Facility [Line Items]
Outstanding balance	496,008,000	496,008,000	$ 1,448,590,000
Cash Flow Hedging [Member] | Interest Rate Swap [Member]
Line of Credit Facility [Line Items]
Loss on derivative instruments	3,300,000
Credit Facility [Member]
Line of Credit Facility [Line Items]
Maximum borrowing capacity	$ 2,800,000,000	2,800,000,000
Maximum aggregate amount outstanding at any one time		$ 25,000,000
Length of extension option		1 year
Maximum leverage ratio (less than or equal to)	60.00%	60.00%
Minimum fixed charge coverage ratio (of at least)	1.5	1.5
Secured leverage ratio (less than or equal to)	45.00%	45.00%
Unencumbered asset value ratio (less than or equal to)	60.00%	60.00%
Minimum tangible net worth covenant (of at least)	$ 5,500,000,000.0	$ 5,500,000,000.0
Minimum unencumbered interest coverage ratio (of at least)		1.75
Minimum unencumbered asset value (of at least)	8,000,000,000.0	$ 8,000,000,000.0
Credit Facility [Member] | VEREIT Operating Partnership, L.P. [Member]
Line of Credit Facility [Line Items]
Remaining borrowing capacity	2,300,000,000	$ 2,300,000,000
Credit Facility [Member] | VEREIT Operating Partnership, L.P. [Member] | Minimum [Member]
Line of Credit Facility [Line Items]
Commitment fee percentage		0.15%
Credit Facility [Member] | VEREIT Operating Partnership, L.P. [Member] | Maximum [Member]
Line of Credit Facility [Line Items]
Commitment fee percentage		0.25%
Credit Facility [Member] | Credit Facility Term Loan [Member]
Line of Credit Facility [Line Items]
Current borrowing capacity	$ 500,000,000	$ 500,000,000
Debt repaid		500,000,000
Write-off of unamortized deferred financing costs		$ 4,300,000
Credit Facility [Member] | Credit Facility Term Loan [Member] | LIBOR [Member] | Minimum [Member]
Line of Credit Facility [Line Items]
Basis spread on variable rate		1.15%
Credit Facility [Member] | Credit Facility Term Loan [Member] | LIBOR [Member] | Maximum [Member]
Line of Credit Facility [Line Items]
Basis spread on variable rate		2.05%
Credit Facility [Member] | Credit Facility Term Loan [Member] | Base Rate [Member] | Minimum [Member]
Line of Credit Facility [Line Items]
Basis spread on variable rate		0.15%
Credit Facility [Member] | Credit Facility Term Loan [Member] | Base Rate [Member] | Maximum [Member]
Line of Credit Facility [Line Items]
Basis spread on variable rate		1.05%
Credit Facility [Member] | Credit Facility Term Loan [Member] | Cash Flow Hedging [Member] | Interest Rate Swap [Member]
Line of Credit Facility [Line Items]
Number of interest rate swaps terminated | swap_agreement	2
Credit Facility [Member] | Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Current borrowing capacity	$ 2,300,000,000	$ 2,300,000,000
Credit Facility [Member] | Revolving Credit Facility [Member] | LIBOR [Member] | Minimum [Member]
Line of Credit Facility [Line Items]
Basis spread on variable rate		1.00%
Credit Facility [Member] | Revolving Credit Facility [Member] | LIBOR [Member] | Maximum [Member]
Line of Credit Facility [Line Items]
Basis spread on variable rate		1.80%
Credit Facility [Member] | Revolving Credit Facility [Member] | Base Rate [Member] | Minimum [Member]
Line of Credit Facility [Line Items]
Basis spread on variable rate		0.00%
Credit Facility [Member] | Revolving Credit Facility [Member] | Base Rate [Member] | Maximum [Member]
Line of Credit Facility [Line Items]
Basis spread on variable rate		0.80%
Credit Facility [Member] | Revolving Credit Facility [Member] | Federal Funds Rate [Member]
Line of Credit Facility [Line Items]
Basis spread on variable rate		0.50%
Credit Facility [Member] | Fixed Interest Rate [Member]
Line of Credit Facility [Line Items]
Outstanding balance	$ 500,000,000	$ 500,000,000
Line of credit, amount bearing fixed interest rate, percentage	3.25%	3.25%
Credit Facility [Member] | Unencumbered Asset [Member] | Tranche One [Member]
Line of Credit Facility [Line Items]
Unencumbered Asset Value ratio	35.00%	35.00%
Credit Facility [Member] | Unencumbered Asset [Member] | Tranche Two [Member]
Line of Credit Facility [Line Items]
Unencumbered Asset Value ratio	30.00%	30.00%

XML

Debt (2016 Term Loan) (Narrative) (Details) - USD ($)			3 Months Ended		9 Months Ended
	Sep. 29, 2016	Jun. 02, 2016	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Debt Instrument [Line Items]
Loss from write-off of remaining amortized deferred financing costs			$ 2,003,000	$ 0	$ 1,751,000	$ (5,302,000)
VEREIT Operating Partnership, L.P. [Member]
Debt Instrument [Line Items]
Loss from write-off of remaining amortized deferred financing costs			$ 2,003,000	$ 0	$ 1,751,000	$ (5,302,000)
VEREIT Operating Partnership, L.P. [Member] | 2016 Term Loan [Member] | Secured Debt [Member]
Debt Instrument [Line Items]
Term loan facility		$ 300,000,000
Debt repaid	$ 300,000,000
Loss from write-off of remaining amortized deferred financing costs		$ 2,600,000

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Derivatives and Hedging Activities (Narrative) (Details)	1 Months Ended		3 Months Ended		9 Months Ended
	Feb. 28, 2014 USD ($)	Jan. 31, 2014 USD ($)	Sep. 30, 2016 USD ($) swap_agreement	Sep. 30, 2015 USD ($)	Sep. 30, 2016 USD ($)	Sep. 30, 2015 USD ($)
Interest Rate Swap [Member]
Derivative [Line Items]
Amount of gain (loss) related to change in fair value and other ineffectiveness			$ 300,000	$ (900,000)	$ (1,100,000)	$ (1,500,000)
Fair value interest rate derivatives			(9,400,000)		(9,400,000)
Aggregate termination value had provisions been breached			(9,400,000)		(9,400,000)
Interest Rate Swap [Member] | Cash Flow Hedging [Member]
Derivative [Line Items]
Reclassified from AOCI into interest expense			1,200,000		5,100,000
Gain in earnings related to ineffective portion			1,000,000		1,100,000
Loss on derivative instruments			(3,300,000)
Interest Rate Swap [Member] | Cash Flow Hedging [Member] | Interest Expense [Member]
Derivative [Line Items]
Derivative gain (loss) to be reclassified during next 12 months			$ (2,300,000)		(2,300,000)
Interest Rate Swap [Member] | Cash Flow Hedging [Member] | Credit Facility Term Loan [Member] | Line of Credit [Member]
Derivative [Line Items]
Number of interest rate swaps terminated | swap_agreement			2
Treasury Lock [Member] | Cash Flow Hedging [Member]
Derivative [Line Items]
Loss on derivative instruments	$ (3,900,000)
Notional amount		$ 250,000,000
Term of derivative contract		10 years
Treasury Lock [Member] | Cash Flow Hedging [Member] | Interest Expense [Member]
Derivative [Line Items]
Interest expense			$ 100,000		$ 300,000

XML

Derivatives and Hedging Activities (Schedule of Interest Rate Derivatives) (Details) - Interest Rate Swap [Member]	Sep. 30, 2016 USD ($) derivative
Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member]
Derivative [Line Items]
Number of Instruments | derivative	14
Notional Amount | $	$ 691,016,000
Not Designated as Hedging Instrument [Member]
Derivative [Line Items]
Number of Instruments | derivative	1
Notional Amount | $	$ 51,400,000

XML

Derivatives and Hedging Activities (Schedule of Derivative Instruments in Statement of Financial Position, Fair Value) (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Derivatives, Fair Value [Line Items]
Derivative assets	$ 0	$ 1,892
Derivative liabilities	(8,194)	(6,922)
Interest Rate Swap [Member] | Not Designated as Hedging Instrument [Member] | Rent and Tenant Receivables and Other Assets, Net [Member]
Derivatives, Fair Value [Line Items]
Derivative assets	0	98
Interest Rate Swap [Member] | Not Designated as Hedging Instrument [Member] | Deferred Rent, Derivative and Other Liabilities [Member]
Derivatives, Fair Value [Line Items]
Derivative liabilities	(723)	0
Cash Flow Hedging [Member] | Interest Rate Swap [Member] | Designated as Hedging Instrument [Member] | Rent and Tenant Receivables and Other Assets, Net [Member]
Derivatives, Fair Value [Line Items]
Derivative assets	0	1,794
Cash Flow Hedging [Member] | Interest Rate Swap [Member] | Designated as Hedging Instrument [Member] | Deferred Rent, Derivative and Other Liabilities [Member]
Derivatives, Fair Value [Line Items]
Derivative liabilities	$ (7,471)	$ (6,922)

XML

Derivatives and Hedging Activities (Tabular Disclosure Offsetting Derivatives) (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Gross Amounts of Recognized Assets	$ 0	$ 1,892
Gross Amounts of Recognized Liabilities	(8,194)	(6,922)
Gross Amounts Offset in the Consolidated Balance Sheets	0	0
Net Amounts of Assets Presented in the Consolidated Balance Sheets	0	1,892
Net Amounts of Liabilities Presented in the Consolidated Balance Sheets	(8,194)	(6,922)
Financial Instruments	0	0
Cash Collateral Received	0	0
Net Amount	$ (8,194)	$ (5,030)

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Supplemental Cash Flow Disclosures (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Supplemental Disclosures:
Cash paid for interest	$ 246,602	$ 280,659
Cash paid for income taxes	18,822	10,205
Non-cash investing and financing activities:
Accrued capital expenditures and real estate developments	3,556	4,363
Accrued deferred financing costs	860	164
Distributions declared and unpaid	146,118	130,648
Accrued equity issuance costs	9	0
Mortgage note payable relieved by foreclosure	38,050	53,798
Mortgage notes payable assumed in real estate disposition	$ 55,000	$ 300,720

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Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Payables and Accruals [Abstract]
Accrued interest	$ 42,915	$ 56,273
Accrued real estate taxes	42,812	47,319
Accrued legal fees	14,214	9,212
Accounts payable	6,223	2,868
Accrued other	32,986	36,205
Accounts payable and accrued expenses	$ 139,150	$ 151,877

XML

Commitments and Contingencies (Litigation) (Narrative) (Details) $ in Thousands		1 Months Ended
	Sep. 08, 2016 officer	Dec. 31, 2013 USD ($)	Oct. 31, 2013	Jan. 20, 2015 lawsuit
SDNY Actions [Member] | Pending Litigation [Member]
Loss Contingencies [Line Items]
Number of claims | lawsuit				10
John Poling Putative Class Action [Member] | Series B Cumulative Preferred [Member] | CapLease [Member]
Loss Contingencies [Line Items]
Preferred stock, dividend rate			8.375%
John Poling Putative Class Action [Member] | Series C Cumulative Preferred Stock [Member] | CapLease [Member]
Loss Contingencies [Line Items]
Preferred stock, dividend rate			7.25%
Putative Class Action [Member] | Pending Litigation [Member]
Loss Contingencies [Line Items]
Stipulation of settlement, maximum attorney fees | $		$ 625
Audit Committee Investigation [Member] | SDNY Actions [Member]
Loss Contingencies [Line Items]
Number of individuals in civil complaint | officer	2

XML

Commitments and Contingencies (Future Obligations) (Details) $ in Thousands	Sep. 30, 2016 USD ($)
Ground Leases [Member]
Operating Leased Assets [Line Items]
October 1, 2016 - December 31, 2016	$ 3,722
2017	14,651
2018	14,370
2019	14,223
2020	13,586
Thereafter	224,662
Total	285,214
Office Leases [Member]
Operating Leased Assets [Line Items]
October 1, 2016 - December 31, 2016	1,189
2017	4,727
2018	4,704
2019	4,769
2020	4,798
Thereafter	14,089
Total	$ 34,276

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Commitments and Contingencies (Purchase Commitments) (Narrative) (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2016 USD ($) property real_estate_investment_trust agreement	Dec. 31, 2015 USD ($)
Unrecorded Unconditional Purchase Obligation [Line Items]
Escrow deposits	$ 3,123	$ 1,190
Purchase Commitment [Member] | Private Capital Management Segment [Member]
Unrecorded Unconditional Purchase Obligation [Line Items]
Number of Managed REITs to be assigned | real_estate_investment_trust	1
Number of purchase and sale agreements | agreement	9
Percentage of voting interests acquired	100.00%
Number of properties acquired | property	13
Aggregate purchase price	$ 290,000
Escrow deposits	$ 3,100

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Equity (Common Stock and General Partner Common OP Units) (Narrative) (Details) - shares	Sep. 30, 2016	Dec. 31, 2015
Class of Stock [Line Items]
Common stock, shares authorized (shares)	1,500,000,000	1,500,000,000
Common stock, shares issued (shares)	974,183,819	904,884,394
Common stock, shares outstanding (shares)	974,183,819	904,884,394
VEREIT Operating Partnership, L.P. [Member] | Common Stock [Member]
Class of Stock [Line Items]
General partners', units issued (shares)	974,183,819	904,884,394
General partners', units outstanding (shares)	974,183,819	904,884,394
General Partner [Member] | VEREIT Operating Partnership, L.P. [Member] | Common Stock [Member]
Class of Stock [Line Items]
General partners', units issued (shares)	974,200,000

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Equity (Common Stock Offering) (Details) - USD ($) $ in Thousands		9 Months Ended
	Aug. 10, 2016	Sep. 30, 2016	Sep. 30, 2015
Class of Stock [Line Items]
Proceeds from the issuance of Common Stock, net of underwriters’ discount		$ 702,765	$ 0
Common Stock [Member]
Class of Stock [Line Items]
Issuance of common stock (shares)	69,000,000	69,000,000
Proceeds from the issuance of Common Stock, net of underwriters’ discount	$ 702,500

XML

Equity (Common Stock Continuous Offering Program) (Narrative) (Details) - Common Stock [Member] - USD ($)	Sep. 30, 2016	Sep. 19, 2016
Class of Stock [Line Items]
Distribution agreement gross sales price		$ 750,000,000
Distribution agreement stock issued	$ 0

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Equity (Series F Preferred Stock) (Narrative) (Details) - $ / shares		9 Months Ended
	Jan. 03, 2014	Sep. 30, 2016	Dec. 31, 2015
Class of Stock [Line Items]
Preferred stock, shares issued (shares)		42,834,138	42,834,138
Preferred stock, shares outstanding (shares)		42,834,138	42,834,138
VEREIT Operating Partnership, L.P. [Member] | Preferred Units [Member]
Class of Stock [Line Items]
General partners', units issued (shares)		42,834,138	42,834,138
Series F preferred units (shares)		86,874	86,874
General partners', units outstanding (shares)		42,834,138	42,834,138
Limited partners', units outstanding (shares)		86,874	86,874
Series F Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock, shares issued (shares)		42,800,000
Preferred stock, dividend rate		6.70%
Preferred stock, liquidation preference per share (in dollars per share)		$ 25.00
Dividend rate (in dollars per share)		$ 1.675
ARCT IV [Member] | Series F Preferred Stock [Member] | VEREIT Operating Partnership, L.P. [Member] | Preferred Units [Member]
Class of Stock [Line Items]
General partners', units issued (shares)	42,200,000
ARCT IV OP Merger [Member] | ARCT IV [Member] | Series F Preferred Stock [Member]
Class of Stock [Line Items]
Equity interest issued or issuable (shares)	42,200,000
ARCT IV OP Merger [Member] | ARCT IV [Member] | Series F Preferred Stock [Member] | VEREIT Operating Partnership, L.P. [Member] | Preferred Units [Member]
Class of Stock [Line Items]
Series F preferred units (shares)	700,000

XML

Equity (Limited Partner OP Units) (Narrative) (Details) - VEREIT Operating Partnership, L.P. [Member] - Common Stock [Member] - shares	9 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Class of Stock [Line Items]
Limited partners', units outstanding (shares)	23,748,347	23,763,797
Limited Partner [Member]
Class of Stock [Line Items]
Limited partners', units outstanding (shares)	23,750,000	23,763,797
Redemption of shares (shares)	(15,450)
Number of units requested for redemption (shares)	13,100,000
General Partner [Member]
Class of Stock [Line Items]
Redemption of shares (shares)	15,450

XML

Equity (Common Stock Dividends) (Narrative) (Details) - $ / shares		3 Months Ended		9 Months Ended
	Aug. 01, 2016	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Aug. 02, 2016
Equity [Abstract]
Quarterly dividend of common stock declared (in dollars per share)	$ 0.1375	$ 0.14	$ 0.14	$ 0.41	$ 0.14
Annualized dividend rate (in dollars per share)						$ 0.55

XML

Equity (Common Stock Repurchases) (Narrative) (Details)	9 Months Ended
	Sep. 30, 2016 shares
General Partner [Member]
Class of Stock [Line Items]
Common stock repurchases (shares)	424,726

XML

Equity-based Compensation (Equity Plan) (Narrative) (Details) - Equity Plan [Member] shares in Millions	9 Months Ended
	Sep. 30, 2016 shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Maximum authorized amount as a percentage of shares authorized	10.00%
Shares available for future issuance (shares)	92.1
Common Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Cumulative Restricted share awards (shares)	4.1
Cumulative Restricted share awards forfeited (shares)	(3.6)
Cumulative Restricted Stock Units (shares)	3.4
Cumulative Restricted Stock Units forfeited (shares)	(0.5)
Cumulative Deferred Stock Units (shares)	0.2
Shares issued in period (shares)	7.7

XML

Equity-based Compensation (Restricted Stock) (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2016
General and Administrative Expense [Member] | Equity Plan [Member] | Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense	$ 0.4	$ 1.3

XML

Equity-based Compensation (Restricted Stock) (Details) - Equity Plan [Member] - Restricted Stock [Member]	9 Months Ended
	Sep. 30, 2016 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Unvested shares, Beginning Balance (shares) | shares	1,239,662
Vested (shares) | shares	(434,004)
Forfeited (shares) | shares	(89,955)
Unvested shares, Ending Balance (shares) | shares	715,703
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Unvested shares, Beginning Balance, Weighted-Average Grant Date Fair Value (in dollars per share) | $ / shares	$ 13.86
Vested, Weighted-Average Grant Date Fair Value (in dollars per share) | $ / shares	14.19
Forfeited, Weighted-Average Grant Date Fair Value (in dollars per share) | $ / shares	14.08
Unvested shares, Ending Balance, Weighted-Average Grant Date Fair Value (in dollars per share) | $ / shares	$ 13.64

XML

Equity-based Compensation (Time-Based Restricted Stock Units) (Narrative) (Details) - Time-Based Restricted Stock Units [Member] - Equity Plan [Member] - USD ($) $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Requisite service period		3 years
General and Administrative Expense [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense	$ 0.9	$ 2.5

XML

Equity-based Compensation (Deferred Stock Units) (Narrative) (Details) - Equity Plan [Member] - Deferred Stock Units [Member] $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2016 USD ($) shares	Sep. 30, 2016 USD ($) shares
General and Administrative Expense [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense | $	$ 34	$ 700
General Partner [Member] | Common Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Right to receive common stock, number of shares (shares) | shares	1	1

XML

Equity-based Compensation (Time-Based Restricted Stock Units and Deferred Stock Units) (Details) - Equity Plan [Member]	9 Months Ended
	Sep. 30, 2016 $ / shares shares
Time-Based Restricted Stock Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Unvested shares, Beginning Balance (shares) | shares	589,138
Granted (shares) | shares	736,427
Vested (shares) | shares	(184,455)
Forfeited (shares) | shares	(35,377)
Unvested shares, Ending Balance (shares) | shares	1,105,733
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Unvested shares, Beginning Balance, Weighted-Average Grant Date Fair Value (in dollars per share) | $ / shares	$ 9.61
Granted, Weighted-Average Grant Date Fair Value (in dollars per share) | $ / shares	7.82
Vested, Weighted-Average Grant Date Fair Value (in dollars per share) | $ / shares	9.70
Forfeited, Weighted-Average Grant Date Fair Value (in dollars per share) | $ / shares	8.71
Unvested shares, Ending Balance, Weighted-Average Grant Date Fair Value (in dollars per share) | $ / shares	$ 8.43
Deferred Stock Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Unvested shares, Beginning Balance (shares) | shares	0
Granted (shares) | shares	79,208
Vested (shares) | shares	(79,208)
Forfeited (shares) | shares	0
Unvested shares, Ending Balance (shares) | shares	0
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Unvested shares, Beginning Balance, Weighted-Average Grant Date Fair Value (in dollars per share) | $ / shares	$ 0.00
Granted, Weighted-Average Grant Date Fair Value (in dollars per share) | $ / shares	9.18
Vested, Weighted-Average Grant Date Fair Value (in dollars per share) | $ / shares	9.18
Forfeited, Weighted-Average Grant Date Fair Value (in dollars per share) | $ / shares	0.00
Unvested shares, Ending Balance, Weighted-Average Grant Date Fair Value (in dollars per share) | $ / shares	$ 0.00

XML

Equity-based Compensation (Market-Based Restricted Stock Units) (Narrative) (Details) - Market-Based Restricted Stock Units [Member] - Equity Plan [Member] - USD ($) $ / shares in Units, $ in Millions		3 Months Ended	9 Months Ended	12 Months Ended
	Jul. 28, 2016	Sep. 30, 2016	Sep. 30, 2016	Dec. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Closing price threshold (in dollars per share)				$ 10
Closing price, threshold for consecutive trading days				20 days
Number of shares vested (shares)	610,839		610,839
Number of shares settled for tax withholding (shares)	199,858
Number of shares issued, net of tax withholding (shares)	410,981
General and Administrative Expense [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense		$ (0.1)	$ (0.8)

XML

Equity-based Compensation (Long-Term Incentive Awards) (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2016
Equity Plan [Member] | Long Term Incentive Target Awards [Member] | General and Administrative Expense [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense	$ 1.3	$ 3.3

XML

Equity-based Compensation (Market-Based Restricted Stock Units and LTI Target Awards) (Details) - Equity Plan [Member] - $ / shares		9 Months Ended
	Jul. 28, 2016	Sep. 30, 2016
Market-Based Restricted Stock Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Unvested shares, Beginning Balance (shares)		704,804
Granted (shares)		0
Vested (shares)	(610,839)	(610,839)
Forfeited (shares)		(93,965)
Unvested shares, Ending Balance (shares)		0
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Unvested shares, Beginning Balance, Weighted-Average Grant Date Fair Value (in dollars per share)		$ 8.58
Granted, Weighted-Average Grant Date Fair Value (in dollars per share)		0.00
Vested, Weighted-Average Grant Date Fair Value (in dollars per share)		8.58
Forfeited, Weighted-Average Grant Date Fair Value (in dollars per share)		8.58
Unvested shares, Ending Balance, Weighted-Average Grant Date Fair Value (in dollars per share)		$ 0.00
LTI Target Awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Unvested shares, Beginning Balance (shares)		731,448
Granted (shares)		855,471
Vested (shares)		(3,362)
Forfeited (shares)		(52,109)
Unvested shares, Ending Balance (shares)		1,531,448
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Unvested shares, Beginning Balance, Weighted-Average Grant Date Fair Value (in dollars per share)		$ 11.38
Granted, Weighted-Average Grant Date Fair Value (in dollars per share)		7.14
Vested, Weighted-Average Grant Date Fair Value (in dollars per share)		11.77
Forfeited, Weighted-Average Grant Date Fair Value (in dollars per share)		11.24
Unvested shares, Ending Balance, Weighted-Average Grant Date Fair Value (in dollars per share)		$ 9.01

XML

Related Party Transactions (Narrative) (Details) $ in Millions	9 Months Ended
	Sep. 30, 2016 USD ($) property	Dec. 31, 2015 USD ($)
Selling Commissions Allowable [Member]
Related Party Transaction [Line Items]
Revenue from related party, percentage	100.00%
Program Development Costs [Member] | Rent and Tenant Receivables and Other Assets, Net [Member]
Related Party Transaction [Line Items]
Reserves related to program development costs	$ 18.8	$ 34.8
Cole REITs [Member] | Selling Commissions Allowable [Member]
Related Party Transaction [Line Items]
Revenue from related party, percentage	100.00%
Cole REITs [Member] | Program Development Costs [Member] | Rent and Tenant Receivables and Other Assets, Net [Member]
Related Party Transaction [Line Items]
Organization and offering costs	$ 12.3	12.9
Reserves related to program development costs	$ 18.8	$ 34.8
Cole REITs [Member] | Disposition Fee Revenue [Member]
Related Party Transaction [Line Items]
Number (or more) of properties to earn disposition fees | property	1
INAV [Member]
Related Party Transaction [Line Items]
Threshold for return on stockholders' capital	6.00%

XML

Related Party Transactions and Arrangements (Offering Fee Summary for Cole REITs) (Details)	Nov. 01, 2016	Sep. 30, 2016
Selling Commissions Allowable [Member]
Related Party Transaction [Line Items]
Revenue from related party, percentage		100.00%
Cole REITs [Member] | Selling Commissions Allowable [Member]
Related Party Transaction [Line Items]
Revenue from related party, percentage		100.00%
CCPT V [Member] | Selling Commissions [Member] | Class A Shares [Member]
Related Party Transaction [Line Items]
Revenue from related party, percentage of gross offering proceeds		7.00%
CCPT V [Member] | Selling Commissions [Member] | Class T Shares [Member]
Related Party Transaction [Line Items]
Revenue from related party, percentage of gross offering proceeds		3.00%
CCPT V [Member] | Dealer Manager Fees [Member] | Class A Shares [Member]
Related Party Transaction [Line Items]
Revenue from related party, percentage of gross offering proceeds		2.00%
CCPT V [Member] | Dealer Manager Fees [Member] | Class T Shares [Member]
Related Party Transaction [Line Items]
Revenue from related party, percentage of gross offering proceeds		2.00%
CCPT V [Member] | Annual Distribution and Stockholder Servicing Fee [Member] | Class T Shares [Member]
Related Party Transaction [Line Items]
Revenue from related party, percentage of gross offering proceeds		0.80%
CCPT V [Member] | Annual Distribution and Stockholder Servicing Fee [Member] | Class T Shares [Member] | Subsequent Event [Member]
Related Party Transaction [Line Items]
Revenue from related party, percentage of gross offering proceeds	1.00%
CCPT V [Member] | Annual Distribution and Stockholder Servicing Fee [Member] | Maximum [Member] | Class T Shares [Member]
Related Party Transaction [Line Items]
Revenue from related party, percentage of gross offering proceeds		4.00%
INAV [Member] | Selling Commissions [Member] | Maximum [Member] | Advisor Class Shares [Member]
Related Party Transaction [Line Items]
Revenue from related party, percentage of gross offering proceeds		3.75%
INAV [Member] | Dealer Manager Fees [Member] | Wrap Class Shares [Member]
Related Party Transaction [Line Items]
Revenue from related party, percentage of gross offering proceeds		0.55%
INAV [Member] | Dealer Manager Fees [Member] | Advisor Class Shares [Member]
Related Party Transaction [Line Items]
Revenue from related party, percentage of gross offering proceeds		0.55%
INAV [Member] | Dealer Manager Fees [Member] | Institutional Class Shares [Member]
Related Party Transaction [Line Items]
Revenue from related party, percentage of gross offering proceeds		0.25%
INAV [Member] | Dealer Manager Fees [Member] | INAV Classes [Member]
Related Party Transaction [Line Items]
Daily accrual percentage of estimated per share NAV and payable monthly in arrears		0.27%
INAV [Member] | Annual Distribution and Stockholder Servicing Fee [Member] | Advisor Class Shares [Member]
Related Party Transaction [Line Items]
Revenue from related party, percentage of gross offering proceeds		0.50%
CCIT III [Member] | Selling Commissions [Member] | Class A Shares [Member]
Related Party Transaction [Line Items]
Revenue from related party, percentage of gross offering proceeds		7.00%
CCIT III [Member] | Selling Commissions [Member] | Class T Shares [Member]
Related Party Transaction [Line Items]
Revenue from related party, percentage of gross offering proceeds		3.00%
CCIT III [Member] | Dealer Manager Fees [Member] | Class A Shares [Member]
Related Party Transaction [Line Items]
Revenue from related party, percentage of gross offering proceeds		2.00%
CCIT III [Member] | Dealer Manager Fees [Member] | Class T Shares [Member]
Related Party Transaction [Line Items]
Revenue from related party, percentage of gross offering proceeds		2.00%
CCIT III [Member] | Annual Distribution and Stockholder Servicing Fee [Member] | Class T Shares [Member]
Related Party Transaction [Line Items]
Revenue from related party, percentage of gross offering proceeds		1.00%

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Related Party Transactions and Arrangements (Transaction-Related Fees for Cole REITs) (Details)	Sep. 30, 2016
CCPT V [Member]
Related Party Transaction [Line Items]
Threshold for return on stockholders' capital	6.00%
CCPT V [Member] | Acquisition Fees [Member]
Related Party Transaction [Line Items]
Revenue from related party, percentage	2.00%
CCPT V [Member] | Disposition Fees [Member]
Related Party Transaction [Line Items]
Revenue from related party, percentage	1.00%
CCPT V [Member] | Performance Fees [Member]
Related Party Transaction [Line Items]
Revenue from related party, percentage	15.00%
CCIT III [Member]
Related Party Transaction [Line Items]
Threshold for return on stockholders' capital	6.00%
CCIT III [Member] | Acquisition Fees [Member]
Related Party Transaction [Line Items]
Revenue from related party, percentage	2.00%
CCIT III [Member] | Disposition Fees [Member]
Related Party Transaction [Line Items]
Revenue from related party, percentage	1.00%
CCIT III [Member] | Performance Fees [Member]
Related Party Transaction [Line Items]
Revenue from related party, percentage	15.00%
CCIT III [Member] | Financing Coordination Fee [Member]
Related Party Transaction [Line Items]
Revenue from related party, percentage	1.00%
CCIT II [Member]
Related Party Transaction [Line Items]
Threshold for return on stockholders' capital	8.00%
CCIT II [Member] | Acquisition Fees [Member]
Related Party Transaction [Line Items]
Revenue from related party, percentage	2.00%
CCIT II [Member] | Disposition Fees [Member]
Related Party Transaction [Line Items]
Revenue from related party, percentage	1.00%
CCIT II [Member] | Performance Fees [Member]
Related Party Transaction [Line Items]
Revenue from related party, percentage	15.00%
CCPT IV [Member]
Related Party Transaction [Line Items]
Threshold for return on stockholders' capital	8.00%
CCPT IV [Member] | Acquisition Fees [Member]
Related Party Transaction [Line Items]
Revenue from related party, percentage	2.00%
CCPT IV [Member] | Disposition Fees [Member]
Related Party Transaction [Line Items]
Revenue from related party, percentage	1.00%
CCPT IV [Member] | Performance Fees [Member]
Related Party Transaction [Line Items]
Revenue from related party, percentage	15.00%

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Related Party Transactions and Arrangements (Management Fees for Cole REITs) (Details)	Sep. 30, 2016
CCPT V [Member]
Related Party Transaction [Line Items]
Threshold for return on stockholders' capital	6.00%
CCPT V [Member] | Asset Management / Advisory Fees [Member] | Minimum [Member]
Related Party Transaction [Line Items]
Revenue from related party, percentage	0.65%
CCPT V [Member] | Asset Management / Advisory Fees [Member] | Maximum [Member]
Related Party Transaction [Line Items]
Revenue from related party, percentage	0.75%
INAV [Member]
Related Party Transaction [Line Items]
Threshold for return on stockholders' capital	6.00%
INAV [Member] | Asset Management / Advisory Fees [Member]
Related Party Transaction [Line Items]
Revenue from related party, percentage	0.90%
INAV [Member] | Performance Fees [Member]
Related Party Transaction [Line Items]
Revenue from related party, percentage	25.00%
Percent of aggregate total return for any individual year	10.00%
CCIT III [Member]
Related Party Transaction [Line Items]
Threshold for return on stockholders' capital	6.00%
CCIT III [Member] | Asset Management / Advisory Fees [Member] | Minimum [Member]
Related Party Transaction [Line Items]
Revenue from related party, percentage	0.65%
CCIT III [Member] | Asset Management / Advisory Fees [Member] | Maximum [Member]
Related Party Transaction [Line Items]
Revenue from related party, percentage	0.75%
CCIT II [Member]
Related Party Transaction [Line Items]
Threshold for return on stockholders' capital	8.00%
CCIT II [Member] | Asset Management / Advisory Fees [Member] | Minimum [Member]
Related Party Transaction [Line Items]
Revenue from related party, percentage	0.65%
CCIT II [Member] | Asset Management / Advisory Fees [Member] | Maximum [Member]
Related Party Transaction [Line Items]
Revenue from related party, percentage	0.75%
CCPT IV [Member]
Related Party Transaction [Line Items]
Threshold for return on stockholders' capital	8.00%
CCPT IV [Member] | Asset Management / Advisory Fees [Member] | Minimum [Member]
Related Party Transaction [Line Items]
Revenue from related party, percentage	0.65%
CCPT IV [Member] | Asset Management / Advisory Fees [Member] | Maximum [Member]
Related Party Transaction [Line Items]
Revenue from related party, percentage	0.75%

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Related Party Transactions and Arrangements (Revenue from Cole REITs) (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
	Jan. 29, 2015	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Related Party Transaction [Line Items]
Related-party revenues		$ 30,538	$ 26,780	$ 94,038	$ 77,816
Affiliated Entity [Member] | Revolving Credit Facility [Member] | Credit Facility [Member]
Related Party Transaction [Line Items]
Interest income		0	306	308	967
Offering-related fees and reimbursements [Member]
Related Party Transaction [Line Items]
Related-party revenues		9,545	5,850	32,850	14,483
Selling commissions [Member]
Related Party Transaction [Line Items]
Related-party revenues		5,008	3,328	18,112	8,345
Dealer manager and distribution fees [Member]
Related Party Transaction [Line Items]
Related-party revenues		2,237	1,258	7,292	3,143
Reimbursement revenue [Member]
Related Party Transaction [Line Items]
Related-party revenues		2,300	1,264	7,446	2,995
Transaction service fees and reimbursements [Member]
Related Party Transaction [Line Items]
Related-party revenues		3,499	6,636	10,297	20,857
Acquisition fees [Member]
Related Party Transaction [Line Items]
Related-party revenues		2,813	6,233	8,273	14,913
Disposition fees [Member]
Related Party Transaction [Line Items]
Related-party revenues		0	0	0	4,350
Reimbursement revenues [Member]
Related Party Transaction [Line Items]
Related-party revenues		686	403	2,024	1,594
Management fees and reimbursements [Member]
Related Party Transaction [Line Items]
Related-party revenues		17,494	13,988	50,583	41,509
Asset and property management fees and leasing fees [Member]
Related Party Transaction [Line Items]
Related-party revenues		53	108	159	332
Advisory and performance fee revenue [Member]
Related Party Transaction [Line Items]
Related-party revenues		13,011	10,998	37,621	32,674
Reimbursement revenues [Member]
Related Party Transaction [Line Items]
Related-party revenues		$ 4,430	2,882	$ 12,803	8,503
Selling commissions allowable [Member]
Related Party Transaction [Line Items]
Selling commissions reallowed		100.00%		100.00%
Dealer manager fees reimbursement [Member]
Related Party Transaction [Line Items]
Related-party revenues		$ 900	600	$ 2,800	1,300
Disposition fee revenue [Member] | CCIT [Member]
Related Party Transaction [Line Items]
Related-party revenues	$ 4,400
Revenue from Managed Real Estate Investment Trusts, Excluding Fees from Real Estate Programs [Member]
Related Party Transaction [Line Items]
Related-party revenues		$ 500	$ 1,100	$ 1,100	$ 4,700

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Related Party Transactions and Arrangements (Investment in the Cole REITs) (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Related Party Transaction [Line Items]
Aggregate equity investments	$ 24,711		$ 24,711		$ 56,824
Net (loss) income			488	$ 1,611
Cole REITs [Member]
Related Party Transaction [Line Items]
Aggregate equity investments	6,102		6,102
Net (loss) income	(1)	$ (27)	(128)	$ 63
Cole REITs [Member]
Related Party Transaction [Line Items]
Aggregate equity investments	$ 6,100		$ 6,100		$ 4,100

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Related Party Transactions and Arrangements (Schedule of Investment in the Cole REITs) (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Related Party Transaction [Line Items]
Carrying Amount of Investment	$ 24,711	$ 56,824
Funds not yet in offering	400
Cole REITs [Member]
Related Party Transaction [Line Items]
Carrying Amount of Investment	$ 6,102
CCPT V [Member]
Related Party Transaction [Line Items]
% of Outstanding Shares Owned	1.00%
Carrying Amount of Investment	$ 1,448
INAV [Member]
Related Party Transaction [Line Items]
% of Outstanding Shares Owned	0.09%
Carrying Amount of Investment	$ 143
CCIT II [Member]
Related Party Transaction [Line Items]
% of Outstanding Shares Owned	0.44%
Carrying Amount of Investment	$ 1,299
CCIT III [Member]
Related Party Transaction [Line Items]
% of Outstanding Shares Owned	100.00%
Carrying Amount of Investment	$ 2,697
CCPT IV [Member]
Related Party Transaction [Line Items]
% of Outstanding Shares Owned	0.01%
Carrying Amount of Investment	$ 115

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Related Party Transactions and Arrangements (Due To Affiliates) (Narrative) (Details) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Related Party Transaction [Line Items]
Due to affiliates	$ 0	$ 230,000
Cole REITs [Member]
Related Party Transaction [Line Items]
Due to affiliates	$ 0	$ 200,000

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Related Party Transactions and Arrangements (Due from Affiliates) (Narrative) (Details) - USD ($)		9 Months Ended	12 Months Ended
	Sep. 23, 2016	Sep. 30, 2016	Dec. 31, 2015
Related Party Transaction [Line Items]
Due from affiliates		$ 20,883,000	$ 60,633,000
Credit Facility [Member]
Related Party Transaction [Line Items]
Maximum borrowing capacity		$ 2,800,000,000
Credit Facility [Member] | Revolving Credit Facility [Member] | Minimum [Member] | LIBOR [Member]
Related Party Transaction [Line Items]
Basis spread on variable rate		1.00%
Credit Facility [Member] | Revolving Credit Facility [Member] | Maximum [Member] | LIBOR [Member]
Related Party Transaction [Line Items]
Basis spread on variable rate		1.80%
CCI III OP [Member] | Credit Facility [Member] | Revolving Credit Facility [Member]
Related Party Transaction [Line Items]
Due from affiliates		$ 10,300,000
Maximum borrowing capacity	$ 30,000,000
Interest rate		5.05%
CCI III OP [Member] | Credit Facility [Member] | Revolving Credit Facility [Member] | LIBOR [Member]
Related Party Transaction [Line Items]
Basis spread on variable rate	1.75%
CCI III OP [Member] | Credit Facility [Member] | Revolving Credit Facility [Member] | Minimum [Member]
Related Party Transaction [Line Items]
Variable interest rate	2.20%
CCI III OP [Member] | Credit Facility [Member] | Revolving Credit Facility [Member] | Maximum [Member]
Related Party Transaction [Line Items]
Variable interest rate	2.75%
CCIT II [Member] | Credit Facility [Member] | Revolving Credit Facility [Member]
Related Party Transaction [Line Items]
Maximum borrowing capacity			$ 60,000,000
CCIT II [Member] | Credit Facility [Member] | Revolving Credit Facility [Member] | LIBOR [Member]
Related Party Transaction [Line Items]
Basis spread on variable rate			2.20%
Affiliated Entity [Member] | Credit Facility [Member] | Revolving Credit Facility [Member]
Related Party Transaction [Line Items]
Due from affiliates		$ 0	$ 50,000,000
CCPT V [Member] | Credit Facility [Member] | Revolving Credit Facility [Member]
Related Party Transaction [Line Items]
Maximum borrowing capacity			$ 60,000,000.0
CCPT V [Member] | Credit Facility [Member] | Revolving Credit Facility [Member] | LIBOR [Member]
Related Party Transaction [Line Items]
Basis spread on variable rate			2.20%
Excluding balances from Cole REITs [Member]
Related Party Transaction [Line Items]
Due from affiliates		$ 10,600,000	$ 10,600,000

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Net Income (Loss) Per Share/Unit (Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Earnings Per Share [Abstract]
Net income (loss) attributable to the General Partner	$ 29,495	$ 7,529	$ (80,445)	$ (128,963)
Dividends to preferred shares and units	(17,973)	(17,974)	(53,919)	(53,920)
Net income (loss) available to the General Partner	11,522	(10,445)	(134,364)	(182,883)
Earnings allocated to participating securities	(154)	(217)	(400)	(222)
Income attributable to limited partners	(739)	0	0	0
Net Income (loss) attributable to common stockholders/unitholders and limited partners used in basic and diluted net income (loss) per share/unit	$ 12,107	$ (10,662)	$ (134,764)	$ (183,105)
Weighted average number of common stock outstanding - basic (shares)	943,480,170	903,461,323	917,233,898	903,267,282
Effect of Limited Partner OP Units and dilutive securities (shares)	25,206,373	0	0	0
Weighted average number of common stock outstanding - diluted (shares)	968,686,543	903,461,323	917,233,898	903,267,282
Basic and diluted net income (loss) per share attributable to common stockholders and limited partners (in dollars per share)	$ 0.01	$ (0.01)	$ (0.15)	$ (0.20)

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Net Income (Loss) Per Share/Unit (Narrative) (Details) - shares shares in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Restricted Stock and Restricted Stock Units (RSUs) [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (shares)	2.2	0.9	2.3
Restricted Stock and Restricted Stock Units (RSUs) [Member] | VEREIT Operating Partnership, L.P. [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (shares)	2.2	0.9	2.3
Limited Partner Common Stock Units [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (shares)	23.8	23.8	23.8

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Net Income (Loss) Per Share/Unit (Schedule of Earnings Per Share, Basic and Diluted, Operating Partnership) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Net income (loss) attributable to the Operating Partnership	$ 29,495	$ 7,529	$ (80,445)	$ (128,963)
Dividends to preferred units	(17,973)	(17,974)	(53,919)	(53,920)
Net Income (loss) attributable to common stockholders/unitholders and limited partners used in basic and diluted net income (loss) per share/unit	$ 12,107	$ (10,662)	$ (134,764)	$ (183,105)
Weighted average number of common units outstanding - basic (shares)	943,480,170	903,461,323	917,233,898	903,267,282
Effect of dilutive securities (shares)	25,206,373	0	0	0
Weighted average number of common units outstanding - diluted (shares)	968,686,543	903,461,323	917,233,898	903,267,282
VEREIT Operating Partnership, L.P. [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Net income (loss) attributable to the Operating Partnership	$ 30,234	$ 7,737	$ (82,578)	$ (132,458)
Dividends to preferred units	(17,973)	(17,974)	(53,919)	(53,920)
Net income (loss) available to the Operating Partnership	12,261	(10,237)	(136,497)	(186,378)
Earnings allocated to participating units	(154)	(217)	(400)	(222)
Net Income (loss) attributable to common stockholders/unitholders and limited partners used in basic and diluted net income (loss) per share/unit	$ 12,107	$ (10,454)	$ (136,897)	$ (186,600)
Weighted average number of common units outstanding - basic (shares)	967,237,921	927,225,120	940,995,665	927,031,079
Effect of dilutive securities (shares)	1,448,622	0	0	0
Weighted average number of common units outstanding - diluted (shares)	968,686,543	927,225,120	940,995,665	927,031,079
Basic and diluted net loss per unit attributable to common unitholders (in dollars per share)	$ 0.01	$ (0.01)	$ (0.15)	$ (0.20)

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Income Taxes (Narrative) (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Segment Reporting Information [Line Items]
(Provision for) benefit from income taxes	$ (1,598,000)	$ (1,500,000)	$ (1,374,000)	$ (4,824,000)
Unrecognized tax benefits	0	0	0	0
Cole Capital Segment [Member]
Segment Reporting Information [Line Items]
(Provision for) benefit from income taxes	(59,000)	738,000	3,321,000	2,387,000
REI Segment [Member]
Segment Reporting Information [Line Items]
(Provision for) benefit from income taxes	$ (1,539,000)	$ (2,238,000)	$ (4,695,000)	$ (7,211,000)

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Subsequent Events (Real Estate Investment Activity) (Details) $ in Millions	1 Months Ended	9 Months Ended
	Oct. 28, 2016 USD ($) property	Sep. 30, 2016 property
Subsequent Event [Line Items]
Number of real estate properties disposed | property		35
Subsequent Event [Member] | 2016 Property Dispositions [Member]
Subsequent Event [Line Items]
Number of real estate properties disposed | property	9
Aggregate gross sales price	$ 57.2
Company's share of proceeds	54.8
Estimated gain on sale of properties	$ 3.0

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Subsequent Events (Common Stock Dividend) (Details) - $ / shares			3 Months Ended		9 Months Ended
	Nov. 01, 2016	Aug. 01, 2016	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Aug. 02, 2016
Subsequent Event [Line Items]
Quarterly dividend of common stock declared (in dollars per share)		$ 0.1375	$ 0.14	$ 0.14	$ 0.41	$ 0.14
Annualized dividend rate (in dollars per share)							$ 0.55
Subsequent Event [Member]
Subsequent Event [Line Items]
Quarterly dividend of common stock declared (in dollars per share)	$ 0.1375
Annualized dividend rate (in dollars per share)	$ 0.55

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Subsequent Events (Preferred Stock Dividend) (Details) - Subsequent Event [Member]	Nov. 01, 2016 $ / shares
Subsequent Event [Line Items]
Dividend accrual period on annual basis	360 days
Annual dividend rate (in dollars per share)	$ 1.675
Annualized dividend rate, per 30-day month	$ 0.1395833