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 March 31, 2017

	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, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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

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

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards pursuant to Section 13(a) of the Exchange Act. ¨

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 974,311,931 shares of common stock of VEREIT, Inc. outstanding as of May 2, 2017.

EXPLANATORY NOTE

This report combines the Quarterly Reports on Form 10-Q for the three months ended March 31, 2017 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 March 31, 2017

	Page
PART I
Item 1. Financial Statements	2
Consolidated Balance Sheets of VEREIT, Inc. as of March 31, 2017 and December 31, 2016	2
Consolidated Statements of Operations of VEREIT, Inc. for the Three Months Ended March 31, 2017 and 2016	3
Consolidated Statements of Comprehensive Income (Loss) of VEREIT, Inc. for the Three Months Ended March 31, 2017 and 2016	4
Consolidated Statements of Changes in Equity of VEREIT, Inc. for the Three Months Ended March 31, 2017 and 2016	5
Consolidated Statements of Cash Flows of VEREIT, Inc. for the Three Months Ended March 31, 2017 and 2016	6
Consolidated Balance Sheets of VEREIT Operating Partnership, L.P. as of March 31, 2017 and December 31, 2016	7
Consolidated Statements of Operations of VEREIT Operating Partnership, L.P. for the Three Months Ended March 31, 2017 and 2016	8
Consolidated Statements of Comprehensive Income (Loss) of VEREIT Operating Partnership, L.P. for the Three Months Ended March 31, 2017 and 2016	9
Consolidated Statements of Changes in Equity of VEREIT Operating Partnership, L.P. for the Three Months Ended March 31, 2017 and 2016	10
Consolidated Statements of Cash Flows of VEREIT Operating Partnership, L.P. for the Three Months Ended March 31, 2017 and 2016	11
Notes to Consolidated Financial Statements	12
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	48
Item 3. Quantitative and Qualitative Disclosures About Market Risk	66
Item 4. Controls and Procedures	68
PART II
Item 1. Legal Proceedings	69
Item 1A. Risk Factors	69
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	69
Item 3. Defaults Upon Senior Securities	69
Item 4. Mine Safety Disclosures	69
Item 5. Other Information	69
Item 6. Exhibits	69
Signatures	70

1

VEREIT, INC.

CONSOLIDATED BALANCE SHEETS

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

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements.

	March 31, 2017			December 31, 2016
ASSETS
Real estate investments, at cost:
Land	$	2,868,447		$	2,895,625
Buildings, fixtures and improvements	10,630,598			10,644,296
Intangible lease assets	2,017,739			2,044,521
Total real estate investments, at cost	15,516,784			15,584,442
Less: accumulated depreciation and amortization	2,494,811			2,331,643
Total real estate investments, net	13,021,973			13,252,799
Investment in unconsolidated entities	45,145			46,077
Investment in direct financing leases, net	34,909			39,455
Investment securities, at fair value	42,630			47,215
Mortgage notes receivable, net	22,545			22,764
Cash and cash equivalents	285,586			256,452
Restricted cash	46,712			45,018
Intangible assets, net	20,464			24,609
Rent and tenant receivables and other assets, net	346,898			330,705
Goodwill	1,462,585			1,462,203
Due from affiliates	15,007			21,349
Real estate assets held for sale, net	12,081			38,928
Total assets	$	15,356,535		$	15,587,574
LIABILITIES AND EQUITY
Mortgage notes payable and other debt, net	$	2,586,917		$	2,671,106
Corporate bonds, net	2,227,307			2,226,224
Convertible debt, net	976,031			973,340
Credit facility, net	497,148			496,578
Below-market lease liabilities, net	217,721			224,023
Accounts payable and accrued expenses	135,817			146,137
Deferred rent, derivative and other liabilities	68,196			68,039
Distributions payable	165,765			162,578
Due to affiliates	7			16
Total liabilities	6,874,909			6,968,041
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 March 31, 2017 and December 31, 2016	428			428
Common stock, $0.01 par value, 1,500,000,000 shares authorized and 974,238,458 and 974,146,650 issued and outstanding as of March 31, 2017 and December 31, 2016, respectively	9,742			9,741
Additional paid-in-capital	12,642,099			12,640,171
Accumulated other comprehensive loss	(1,795		)	(2,556		)
Accumulated deficit	(4,338,029		)	(4,200,423		)
Total stockholders’ equity	8,312,445			8,447,361
Non-controlling interests	169,181			172,172
Total equity	8,481,626			8,619,533
Total liabilities and equity	$	15,356,535		$	15,587,574

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 March 31,
	2017			2016
Revenues:
Rental income	$	293,739		$	313,971
Direct financing lease income	433			569
Operating expense reimbursements	26,726			23,247
Cole Capital revenue	27,131			31,233
Total revenues	348,029			369,020
Operating expenses:
Cole Capital reallowed fees and commissions	2,660			8,068
Acquisition-related	617			242
Litigation and other non-routine costs, net of insurance recoveries	12,875			(5,175		)
Property operating	34,016			34,813
General and administrative	29,148			29,400
Depreciation and amortization	183,152			204,308
Impairments	6,725			160,517
Total operating expenses	269,193			432,173
Operating income (loss)	78,836			(63,153		)
Other (expense) income:
Interest expense	(73,743		)	(80,426		)
Loss on extinguishment and forgiveness of debt, net	(70		)	—
Other income, net	798			1,062
Equity in (loss) income and gain on disposition of unconsolidated entities	(82		)	10,404
Gain (loss) on derivative instruments, net	824			(1,086		)
Total other expenses, net	(72,273		)	(70,046		)
Income (loss) before taxes and real estate dispositions	6,563			(133,199		)
Gain on disposition of real estate and held for sale assets, net	12,481			17,175
Income (loss) before taxes	19,044			(116,024		)
Provision for income taxes	(4,254		)	(56		)
Net income (loss)	14,790			(116,080		)
Net (income) loss attributable to non-controlling interests (1)	(352		)	2,994
Net income (loss) attributable to the General Partner	$	14,438		$	(113,086	)
Basic and diluted net loss per share attributable to common stockholders	$	(0.00	)	$	(0.15	)
Distributions declared per common share	$	0.14		$	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 March 31,
	2017			2016
Net income (loss)	$	14,790		$	(116,080	)
Other comprehensive income (loss):
Unrealized gain (loss) on interest rate derivatives	504			(9,702		)
Reclassification of previous unrealized loss on interest rate derivatives into net income (loss)	470			2,099
Unrealized loss on investment securities, net	(194		)	(1,961		)
Total other comprehensive income (loss)	780			(9,564		)
Total comprehensive income (loss)	15,570			(125,644		)
Comprehensive (income) loss attributable to non-controlling interests (1)	(371		)	3,238
Total comprehensive income (loss) attributable to the General Partner	$	15,199		$	(122,406	)

_______________________________________________

(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, 2017	42,834,138	$	428	974,146,650		$	9,741		$	12,640,171		$	(2,556	)	$	(4,200,423	)	$	8,447,361		$	172,172		$	8,619,533
Repurchases of common stock to settle tax obligation	—	—		(140,832	)	(1		)	(1,183		)	—			—			(1,184		)	—			(1,184		)
Equity-based compensation, net	—	—		232,640		2			3,111			—			—			3,113			—			3,113
Distributions declared on common stock	—	—		—		—			—			—			(133,929		)	(133,929		)	—			(133,929		)
Distributions to non-controlling interest holders	—	—		—		—			—			—			—			—			(3,326		)	(3,326		)
Distributions to participating securities	—	—		—		—			—			—			(178		)	(178		)	—			(178		)
Distributions to preferred shareholders and unitholders	—	—		—		—			—			—			(17,937		)	(17,937		)	(36		)	(17,973		)
Net income	—	—		—		—			—			—			14,438			14,438			352			14,790
Other comprehensive income	—	—		—		—			—			761			—			761			19			780
Balance, March 31, 2017	42,834,138	$	428	974,238,458		$	9,742		$	12,642,099		$	(1,795	)	$	(4,338,029	)	$	8,312,445		$	169,181		$	8,481,626

	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
Repurchases of common stock to settle tax obligation	—	—		(127,741	)	(1		)	(1,023		)	—			—			(1,024		)	—			(1,024		)
Equity-based compensation, net	—	—		712		—			1,730			—			—			1,730			—			1,730
Contributions from non-controlling interest holders	—	—		—		—			—			—			—			—			675			675
Distributions declared on common stock	—	—		—		—			—			—			(124,285		)	(124,285		)	—			(124,285		)
Distributions to non-controlling interest holders	—	—		—		—			—			—			—			—			(3,299		)	(3,299		)
Distributions to participating securities	—	—		—		—			—			—			(125		)	(125		)	—			(125		)
Distributions to preferred shareholders	—	—		—		—			—			—			(17,937		)	(17,937		)	(36		)	(17,973		)
Cumulative effect adjustment for equity-based compensation forfeitures	—	—		—		—			384			—			(384		)	—			—			—
Net loss	—	—		—		—			—			—			(113,086		)	(113,086		)	(2,994		)	(116,080		)
Other comprehensive loss	—	—		—		—			—			(9,320		)	—			(9,320		)	(244		)	(9,564		)
Balance, March 31, 2016	42,834,138	$	428	904,757,365		$	9,048		$	11,932,859		$	(11,345	)	$	(3,671,050	)	$	8,259,940		$	184,074		$	8,444,014

The accompanying notes are an integral part of these statements.

5

VEREIT, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands) (Unaudited)

	Three Months Ended March 31,
	2017			2016
Cash flows from operating activities:
Net income (loss)	$	14,790		$	(116,080	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	189,880			208,362
Gain on real estate assets and joint venture, net	(12,481		)	(27,373		)
Impairments	6,725			160,517
Equity-based compensation	3,111			1,730
Equity in loss (income) of unconsolidated entities	82			(206		)
Distributions from unconsolidated entities	851			1,491
(Gain) loss on derivative instruments, net	(824		)	1,086
Loss on extinguishment and forgiveness of debt, net	70			—
Changes in assets and liabilities:
Investment in direct financing leases	621			701
Rent and tenant receivables and other assets, net	(20,939		)	(13,024		)
Due from affiliates	3,792			(984		)
Accounts payable and accrued expenses	(3,269		)	(32,556		)
Deferred rent, derivative and other liabilities	1,935			(4,822		)
Due to affiliates	(9		)	(230		)
Net cash provided by operating activities	184,335			178,612
Cash flows from investing activities:
Investments in real estate assets	(101,914		)	(19,952		)
Capital expenditures and leasing costs	(6,960		)	(5,388		)
Real estate developments	(5,615		)	(554		)
Principal repayments received from borrowers	3,672			3,863
Proceeds from disposition of real estate and joint venture	195,730			176,137
Investment in leasehold improvements and other assets	(99		)	(574		)
Deposits for real estate assets	(13,532		)	(3,818		)
Uses and refunds of deposits for real estate assets	7,717			2,019
Line of credit repayments from affiliates	2,550			50,000
Change in restricted cash	(1,694		)	(365		)
Net cash provided by investing activities	79,855			201,368
Cash flows from financing activities:
Proceeds from mortgage notes payable	2,403			206
Payments on mortgage notes payable and other debt, including extinguishment costs	(84,261		)	(21,948		)
Proceeds from credit facility	—			203,000
Payments on credit facility	—			(383,000		)
Payments of deferred financing costs	(3		)	(240		)
Repurchases of common stock to settle tax obligations	(976		)	(801		)
Contributions from non-controlling interest holders	—			675
Distributions paid	(152,219		)	(142,525		)
Net cash used in financing activities	(235,056		)	(344,633		)
Net change in cash and cash equivalents	29,134			35,347
Cash and cash equivalents, beginning of period	256,452			69,103
Cash and cash equivalents, end of period	$	285,586		$	104,450

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)

	March 31, 2017		December 31, 2016
ASSETS
Real estate investments, at cost:
Land	$	2,868,447	$	2,895,625
Buildings, fixtures and improvements	10,630,598		10,644,296
Intangible lease assets	2,017,739		2,044,521
Total real estate investments, at cost	15,516,784		15,584,442
Less: accumulated depreciation and amortization	2,494,811		2,331,643
Total real estate investments, net	13,021,973		13,252,799
Investment in unconsolidated entities	45,145		46,077
Investment in direct financing leases, net	34,909		39,455
Investment securities, at fair value	42,630		47,215
Mortgage notes receivable, net	22,545		22,764
Cash and cash equivalents	285,586		256,452
Restricted cash	46,712		45,018
Intangible assets, net	20,464		24,609
Rent and tenant receivables and other assets, net	346,898		330,705
Goodwill	1,462,585		1,462,203
Due from affiliates	15,007		21,349
Real estate assets held for sale, net	12,081		38,928
Total assets	$	15,356,535	$	15,587,574
LIABILITIES AND EQUITY
Mortgage notes payable and other debt, net	$	2,586,917	$	2,671,106
Corporate bonds, net	2,227,307		2,226,224
Convertible debt, net	976,031		973,340
Credit facility, net	497,148		496,578
Below-market lease liabilities, net	217,721		224,023
Accounts payable and accrued expenses	135,817		146,137
Deferred rent, derivative and other liabilities	68,196		68,039
Distributions payable	165,765		162,578
Due to affiliates	7		16
Total liabilities	6,874,909		6,968,041
Commitments and contingencies (Note 14)
General Partner's preferred equity, 42,834,138 General Partner Preferred Units issued and outstanding as of each of March 31, 2017 and December 31, 2016	835,884		853,821
General Partner's common equity, 974,238,458 and 974,146,650 General Partner OP Units issued and outstanding as of March 31, 2017 and December 31, 2016, respectively	7,476,561		7,593,540
Limited Partner's preferred equity, 86,874 Limited Partner Preferred Units issued and outstanding as of each of March 31, 2017 and December 31, 2016	3,135		3,171
Limited Partner's common equity, 23,748,347 Limited Partner OP Units issued and outstanding as of each of March 31, 2017 and December 31, 2016, respectively	163,710		166,598
Total partners’ equity	8,479,290		8,617,130
Non-controlling interests	2,336		2,403
Total equity	8,481,626		8,619,533
Total liabilities and equity	$	15,356,535	$	15,587,574

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 March 31,
	2017			2016
Revenues:
Rental income	$	293,739		$	313,971
Direct financing lease income	433			569
Operating expense reimbursements	26,726			23,247
Cole Capital revenue	27,131			31,233
Total revenues	348,029			369,020
Operating expenses:
Cole Capital reallowed fees and commissions	2,660			8,068
Acquisition-related	617			242
Litigation and other non-routine costs, net of insurance recoveries	12,875			(5,175		)
Property operating	34,016			34,813
General and administrative	29,148			29,400
Depreciation and amortization	183,152			204,308
Impairments	6,725			160,517
Total operating expenses	269,193			432,173
Operating income (loss)	78,836			(63,153		)
Other (expense) income:
Interest expense	(73,743		)	(80,426		)
Loss on extinguishment and forgiveness of debt, net	(70		)	—
Other income, net	798			1,062
Equity in (loss) income and gain on disposition of unconsolidated entities	(82		)	10,404
Gain (loss) on derivative instruments, net	824			(1,086		)
Total other expenses, net	(72,273		)	(70,046		)
Income (loss) before taxes and real estate dispositions	6,563			(133,199		)
Gain on disposition of real estate and held for sale assets, net	12,481			17,175
Income (loss) before taxes	19,044			(116,024		)
Provision for income taxes	(4,254		)	(56		)
Net income (loss)	14,790			(116,080		)
Net loss attributable to non-controlling interests (1)	7			39
Net income (loss) attributable to the OP	$	14,797		$	(116,041	)
Basic and diluted net loss per unit attributable to common unitholders	$	(0.00	)	$	(0.15	)
Distributions declared per common unit	$	0.14		$	0.14

_______________________________________________

(1) Represents 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 March 31,
	2017			2016
Net income (loss)	$	14,790		$	(116,080	)
Other comprehensive income (loss):
Unrealized gain (loss) on interest rate derivatives	504			(9,702		)
Reclassification of previous unrealized loss on interest rate derivatives into net income (loss)	470			2,099
Unrealized loss on investment securities, net	(194		)	(1,961		)
Total other comprehensive income (loss)	780			(9,564		)
Total comprehensive income (loss)	15,570			(125,644		)
Comprehensive loss attributable to non-controlling interests (1)	7			39
Total comprehensive income (loss) attributable to the OP	$	15,577		$	(125,605	)

_______________________________________________

(1) Represents 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, 2017	42,834,138	$	853,821		86,874	$	3,171		974,146,650		$	7,593,540		23,748,347	$	166,598		$	8,617,130		$	2,403		$	8,619,533
Repurchases of common OP Units to settle tax obligation	—	—			—	—			(140,832	)	(1,184		)	—	—			(1,184		)	—			(1,184		)
Equity-based compensation, net	—	—			—	—			232,640		3,113			—	—			3,113			—			3,113
Distributions to Common OP Units and non-controlling interest holders	—	—			—	—			—		(134,107		)	—	(3,266		)	(137,373		)	(60		)	(137,433		)
Distributions to Preferred OP Units	—	(17,937		)	—	(36		)	—		—			—	—			(17,973		)	—			(17,973		)
Net income	—	—			—	—			—		14,438			—	359			14,797			(7		)	14,790
Other comprehensive income	—	—			—	—			—		761			—	19			780			—			780
Balance, March 31, 2017	42,834,138	$	835,884		86,874	$	3,135		974,238,458		$	7,476,561		23,748,347	$	163,710		$	8,479,290		$	2,336		$	8,481,626

	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
Repurchases of common OP Units to settle tax obligation	—	—			—	—			(127,741	)	(1,024		)	—	—			(1,024		)	—			(1,024		)
Equity-based compensation, net	—	—			—	—			712		1,730			—	—			1,730			—			1,730
Contributions from non-controlling interest holders	—	—			—	—			—		—			—	—			—			675			675
Distributions to Common OP Units and non-controlling interest holders	—	—			—	—			—		(124,410		)	—	(3,269		)	(127,679		)	(30		)	(127,709		)
Distributions to Preferred OP Units	—	(17,937		)	—	(36		)	—		—			—	—			(17,973		)	—			(17,973		)
Net loss	—	—			—	—			—		(113,086		)	—	(2,955		)	(116,041		)	(39		)	(116,080		)
Other comprehensive loss	—	—			—	—			—		(9,320		)	—	(244		)	(9,564		)	—			(9,564		)
Balance, March 31, 2016	42,834,138	$	907,632		86,874	$	3,279		904,757,365		$	7,352,308		23,763,797	$	178,332		$	8,441,551		$	2,463		$	8,444,014

The accompanying notes are an integral part of these statements.

10

VEREIT OPERATING PARTNERSHIP, L.P.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands) (Unaudited)

	Three Months Ended March 31,
	2017			2016
Cash flows from operating activities:
Net income (loss)	$	14,790		$	(116,080	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	189,880			208,362
Gain on real estate assets and joint venture, net	(12,481		)	(27,373		)
Impairments	6,725			160,517
Equity-based compensation	3,111			1,730
Equity in loss (income) of unconsolidated entities	82			(206		)
Distributions from unconsolidated entities	851			1,491
(Gain) loss on derivative instruments, net	(824		)	1,086
Loss on extinguishment and forgiveness of debt, net	70			—
Changes in assets and liabilities:
Investment in direct financing leases	621			701
Rent and tenant receivables and other assets, net	(20,939		)	(13,024		)
Due from affiliates	3,792			(984		)
Accounts payable and accrued expenses	(3,269		)	(32,556		)
Deferred rent, derivative and other liabilities	1,935			(4,822		)
Due to affiliates	(9		)	(230		)
Net cash provided by operating activities	184,335			178,612
Cash flows from investing activities:
Investments in real estate assets	(101,914		)	(19,952		)
Capital expenditures and leasing costs	(6,960		)	(5,388		)
Real estate developments	(5,615		)	(554		)
Principal repayments received from borrowers	3,672			3,863
Proceeds from disposition of real estate and joint venture	195,730			176,137
Investment in leasehold improvements and other assets	(99		)	(574		)
Deposits for real estate assets	(13,532		)	(3,818		)
Uses and refunds of deposits for real estate assets	7,717			2,019
Line of credit repayments from affiliates	2,550			50,000
Change in restricted cash	(1,694		)	(365		)
Net cash provided by investing activities	79,855			201,368
Cash flows from financing activities:
Proceeds from mortgage notes payable	2,403			206
Payments on mortgage notes payable and other debt, including extinguishment costs	(84,261		)	(21,948		)
Proceeds from credit facility	—			203,000
Payments on credit facility	—			(383,000		)
Payments of deferred financing costs	(3		)	(240		)
Repurchases of common units to settle tax obligations	(976		)	(801		)
Contributions from non-controlling interest holders	—			675
Distributions paid	(152,219		)	(142,525		)
Net cash used in financing activities	(235,056		)	(344,633		)
Net change in cash and cash equivalents	29,134			35,347
Cash and cash equivalents, beginning of period	256,452			69,103
Cash and cash equivalents, end of period	$	285,586		$	104,450

The accompanying notes are an integral part of these statements.

11

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2017 (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. 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 March 31, 2017 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

March 31, 2017 (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 months ended March 31, 2017 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, 2016 of the Company, which are included in the Company’s Annual Report on Form 10-K filed on February 23, 2017. There have been no significant changes to the Company’s significant accounting policies during the three months ended March 31, 2017, except the Company adopted Accounting Standards Update (“ASU”) 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (“ASU 2017-01”), as disclosed within the “Acquisition-Related Expenses and Litigation and Other Non-routine Costs” and “Recent Accounting Pronouncements” sections herein. 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 both March 31, 2017 and December 31, 2016, there were approximately 23.75 million Limited Partner OP Units outstanding.

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.

13

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2017 (Unaudited) – (Continued)

Acquisition-Related Expenses and Litigation and Other Non-routine Costs

As further disclosed in the “Recent Accounting Pronouncements” section herein, in January 2017, the Company elected to early adopt ASU 2017-01 which clarifies the definition of a business by adding guidance to assist entities in evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. During the three months ended March 31, 2017, all real estate acquisitions qualified as asset acquisitions, and external acquisition costs related to these asset acquisitions were capitalized. Prior to January 1, 2017, external costs related to property acquisitions were expensed as incurred. Internal costs, such as employee salaries, related to activities necessary to complete, or affect, self-originating asset acquisitions or business combinations are classified as acquisition-related expenses in the accompanying consolidated statements of operations. Any costs incurred as a result of a business combination will be classified as acquisition-related expenses or other non-routine transaction related expenses and expensed as incurred.

External acquisition-related costs incurred in relation to mergers 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 March 31,
	2017		2016
Litigation and other non-routine costs:
Audit Committee Investigation and related matters (1)	$	12,671	$	4,742
Legal fees and expenses (2)	204		83
Total costs incurred	12,875		4,825
Insurance recoveries	—		(10,000		)
Total	$	12,875	$	(5,175	)

___________________________________

(1) Includes all fees and costs associated with the previously-announced investigation conducted by the audit committee (the “Audit Committee”) of the Company’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) Includes legal fees and expenses associated with litigation resulting from prior mergers.

Recent Accounting Pronouncements

In May 2014, the U.S. Financial Accounting Standards Board (“FASB”) issued ASU 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which supersedes the revenue recognition requirements in Revenue Recognition, Accounting Standards Codification (Topic 605) and will require 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, was issued to defer the effective date for all entities by one year. For public business entities, the guidance should be applied to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Companies may use either a full retrospective or a modified retrospective approach to adopt ASU 2014-09. The Company is currently assessing the adoption methodology. In accordance with the Company’s plan for the adoption of ASU 2014-09, the Company’s implementation team has identified the Company’s revenue streams and is performing an in-depth review of the Company’s revenue contracts to identify the related performance obligations and to evaluate the impact on the Company’s financial statements and internal accounting processes and controls. 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 will have a material impact on its consolidated financial statements.

14

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2017 (Unaudited) – (Continued)

In January 2016, the FASB issued ASU 2016-01, Financial Instruments(Subtopic 825-10), which will require 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 the 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 consolidated 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’s implementation team is developing an inventory of all leases, as well as identifying any non-lease components in the lease arrangements, and evaluating the impact to the Company, both as lessor and lessee, and its consolidated financial statements.

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 recognition 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 under current U.S. 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. The Company plans to adopt ASU 2016-15 during the fourth quarter of fiscal year 2017.

In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (“ASU 2016-18”), which provides guidance on the presentation of restricted cash and restricted cash equivalents in the statement of cash flows. In accordance with ASU 2016-18, restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period amounts shown on the statements of cash flows. The amendments of ASU 2016-18 are effective for reporting periods beginning after December 15, 2017, with early adoption permitted. The Company is currently evaluating the impact this amendment will have on its consolidated financial statements.

In January 2017, the FASB issued ASU 2017-01, which clarifies the definition of a business by adding guidance to assist entities in evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those periods, with early adoption permitted, and is required to be applied prospectively to any transactions occurring within the period of adoption. The Company has elected to early adopt ASU 2017-01 effective January 1, 2017. As the Company expects that a majority of its real estate acquisitions will be considered asset acquisitions, external acquisition costs related to these asset acquisitions will be capitalized. Prior to 2017, all acquisition-related costs were expensed as incurred. The adoption of this pronouncement resulted in capitalization of $0.4 million of external acquisitions-related costs during the three months ended March 31, 2017. Internal

15

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2017 (Unaudited) – (Continued)

costs, such as employee salaries, related to activities necessary to complete, or affect, self-originating asset acquisitions or business combinations are classified as acquisition-related expenses in the accompanying consolidated statements of operations. Upon adoption of ASU 2017-01, the Company's real estate dispositions qualify as asset dispositions and as such, no portion of the Company’s REI segment’s goodwill was allocated to the cost basis of these assets in determining the gain or loss on disposition of real estate and held for sale assets. Prior to January 1, 2017, when the Company disposed of a property or classified a property as held for sale, it constituted a business per U.S. GAAP and the Company allocated a portion of the REI segment's goodwill to the cost basis of that property in determining the gain or loss on the disposition of real estate and held for sale assets.

In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Others (Topic 350): Simplifying the Test for Goodwill Impairment (“ASU 2017-04”), which simplifies the measurement of goodwill impairment by eliminating Step 2 from the goodwill impairment test (comparing the implied fair value of goodwill with the carrying amount of goodwill). ASU 2017-04 is effective for public business entities for fiscal years beginning after December 15, 2019, 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 February 2017, the FASB issued ASU 2017-05, Other Income – Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets (“ASU 2017-05”), which clarifies the following: 1) nonfinancial assets within the scope of Subtopic 610-20 may include nonfinancial assets transferred within a legal entity to a counterparty; 2) an entity should allocate consideration to each distinct asset by applying the guidance in Topic 606 on allocating the transaction price to performance obligations; and 3) requires entities to derecognize a distinct nonfinancial asset or distinct in substance nonfinancial asset in a partial sale transaction when it (a) does not have (or ceases to have) a controlling financial interest in the legal entity that holds the asset in accordance with Subtopic 810 and (b) transfers control of the asset in accordance with Topic 606. ASU 2017-05 is effective for annual periods, and interim periods therein, beginning after December 15, 2017. Early adoption is permitted. 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 March 31, 2017, the Company owned 4,107 properties comprising 93.5 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 97.8% leased with a weighted-average remaining lease term of 9.6 years. In addition, as of March 31, 2017, 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, 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.

16

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2017 (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 March 31,
	2017			2016
REI segment:
Revenues:
Rental income	$	293,739		$	313,971
Direct financing lease income	433			569
Operating expense reimbursements	26,726			23,247
Total real estate investment revenues	320,898			337,787
Operating expenses:
Acquisition-related	617			217
Litigation and other non-routine costs, net of insurance recoveries	12,875			(5,175		)
Property operating	34,016			34,813
General and administrative	12,560			12,228
Depreciation and amortization	178,297			195,991
Impairment of real estate	6,725			160,517
Total operating expenses	245,090			398,591
Operating income (loss)	75,808			(60,804		)
Other (expense) income:
Interest expense	(73,743		)	(80,426		)
Loss on extinguishment and forgiveness of debt, net	(70		)	—
Other income, net	670			568
Equity in (loss) income and gain on disposition of unconsolidated entities	(82		)	10,404
Gain (loss) on derivative instruments, net	824			(1,086		)
Total other expenses, net	(72,401		)	(70,540		)
Income (loss) before taxes and real estate dispositions	3,407			(131,344		)
Gain on disposition of real estate and held for sale assets, net	12,481			17,175
Income (loss) before taxes	15,888			(114,169		)
Provision for income taxes	(3,108		)	(1,365		)
Net income (loss)	$	12,780		$	(115,534	)

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2017 (Unaudited) – (Continued)

	Three Months Ended March 31,
	2017			2016
Cole Capital segment:
Revenues:
Offering-related fees and reimbursements	$	4,316		$	12,391
Transaction service fees and reimbursements	4,097			2,384
Management fees and reimbursements	18,718			16,458
Total Cole Capital revenues	27,131			31,233
Operating expenses:
Cole Capital reallowed fees and commissions	2,660			8,068
Acquisition-related	—			25
General and administrative	16,588			17,172
Depreciation and amortization	4,855			8,317
Total operating expenses	24,103			33,582
Operating income (loss)	3,028			(2,349		)
Total other income, net	128			494
Income (loss) before taxes	3,156			(1,855		)
(Provision for) benefit from income taxes	(1,146		)	1,309
Net income (loss)	$	2,010		$	(546	)
Total Company:
Total revenues	$	348,029		$	369,020
Total operating expenses	$	(269,193	)	$	(432,173	)
Total other expense, net	$	(72,273	)	$	(70,046	)
Net income (loss)	$	14,790		$	(116,080	)

	Total Assets
	March 31, 2017		December 31, 2016
REI segment	$	15,110,337	$	15,337,623
Cole Capital segment	246,198		249,951
Total Company	$	15,356,535	$	15,587,574

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.

As of each of March 31, 2017 and December 31, 2016, $1.3 billion and $124.8 million of goodwill was allocated to the REI segment and the Cole Capital segment, respectively. During the three months ended March 31, 2017, one property classified as held for sale as of December 31, 2016 was classified as held and used, resulting in an increase to the goodwill allocated to the REI segment of $0.4 million. During the three months ended March 31, 2016, the Company allocated $13.5 million of goodwill to dispositions and held for sale assets, which was included in gain on disposition of real estate and held for sale assets, net in the consolidated statement of operations.

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 Company’s annual testing date is 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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2017 (Unaudited) – (Continued)

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 continue 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 continue 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 three months ended March 31, 2017 and 2016, 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 remained more likely than not that the fair value of the reporting unit was greater than its carrying value.

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 remaining useful life of approximately three 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 three months ended March 31, 2017 or 2016.

The Company recorded $4.1 million and $7.5 million of amortization expense related to the intangible assets for the three months ended March 31, 2017 and 2016, respectively. The estimated amortization expense is expected to be $12.4 million for the remainder of the year ending December 31, 2017, $4.0 million for the year ending December 31, 2018 and $3.8 million for the nine months ending September 30, 2019. The intangible assets were $20.5 million and $24.6 million, net of accumulated amortization of $33.7 million and $29.6 million, respectively, as of March 31, 2017 and December 31, 2016.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2017 (Unaudited) – (Continued)

Intangible Lease Assets and Liabilities

Intangible lease assets and liabilities of the Company consisted of the following as of March 31, 2017 and December 31, 2016 (amounts in thousands, except weighted-average useful life):

	Weighted-Average Useful Life	March 31, 2017		December 31, 2016
Intangible lease assets:
In-place leases, net of accumulated amortization of $525,079 and $494,131, respectively	14.7	$	1,148,158	$	1,192,756
Leasing commissions, net of accumulated amortization of $2,158 and $1,836, respectively	10.3	10,570		10,231
Above-market lease assets and deferred lease incentives, net of accumulated amortization of $74,206 and $69,670, respectively	16.1	257,568		275,897
Total intangible lease assets, net		$	1,416,296	$	1,478,884
Intangible lease liabilities:
Below-market leases, net of accumulated amortization of $61,631 and $56,891, respectively	18.1	$	217,721	$	224,023

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 March 31, 2017 (amounts in thousands):

	April 1, 2017 - December 31, 2017		2018		2019		2020		2021
In-place leases:
Total projected to be included in amortization expense	$	111,195	$	136,056	$	124,895	$	116,752	$	107,913
Leasing commissions:
Total projected to be included in amortization expense	1,008		1,164		1,098		1,076		1,038
Above-market lease assets and deferred lease incentives:
Total projected to be deducted from rental income	18,533		24,098		22,184		21,748		21,234
Below-market lease liabilities:
Total projected to be included in rental income	16,204		19,672		18,939		17,775		16,425

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2017 (Unaudited) – (Continued)

Note 5 –Real Estate Investments

During the three months ended March 31, 2017, the Company acquired controlling financial interests in 16 commercial properties and three land parcels for an aggregate purchase price of $101.9 million, which includes $0.4 million of external acquisition-related expenses that were capitalized in accordance with ASU 2017-01. Prior to the adoption of ASU 2017-01, costs related to property acquisitions were expensed as incurred. During the three months ended March 31, 2016, the Company acquired a controlling interest in one commercial property for a purchase price of $20.0 million.

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

	Three Months Ended March 31,
	2017			2016
Real estate investments, at cost:
Land	$	24,107		$	4,215
Buildings, fixtures and improvements	59,261			14,555
Total tangible assets	83,368			18,770
Acquired intangible assets:
In-place leases	15,916			1,182
Above-market leases	2,815			—
Assumed intangible liabilities:
Below-market leases	(185		)	—
Total purchase price of assets acquired	$	101,914		$	19,952

The Company has not included pro forma information or revenue and earnings for the Company’s 2016 acquisitions that were classified as business combinations prior to the adoption of ASU 2017-01, as they did not have a material impact on its consolidated financial position or results of operations. 

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)
April 1, 2017 - December 31, 2017	$	812,431	$	2,599
2018	1,086,126		3,016
2019	1,049,422		2,397
2020	1,013,348		2,023
2021	971,437		1,899
Thereafter	6,300,003		3,993
Total	$	11,232,767	$	15,927

____________________________________

(1) 29 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.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2017 (Unaudited) – (Continued)

Investment in Direct Financing Leases, Net

The components of the Company’s net investment in direct financing leases as of March 31, 2017 and December 31, 2016 are as follows (in thousands):

	March 31, 2017			December 31, 2016
Future minimum lease payments receivable	$	15,927		$	17,147
Unguaranteed residual value of property	23,700			27,450
Unearned income	(4,718		)	(5,142		)
Net investment in direct financing leases	$	34,909		$	39,455

Property Dispositions and Held for Sale Assets

During the three months ended March 31, 2017, the Company disposed of 50 properties for an aggregate gross sales price of $210.6 million, of which our share was $200.8 million after the profit participation payment related to the disposition of 14 Red Lobster properties. The dispositions resulted in proceeds of $195.7 million after closing costs. Additionally, the Company’s tax provision for the three months ended March 31, 2017 included $1.7 million of Canadian tax on the gain on sale of certain Canadian properties. The Company recorded a gain of $12.5 million related to the sales which is included in gain on disposition of real estate and held for sale assets, net in the accompanying consolidated statements of operations. During the three months ended March 31, 2016, the Company disposed of 58 properties for an aggregate gross sales price of $193.7 million, of which our share was $193.1 million after the profit participation payment related to the disposition of one Red Lobster. The dispositions resulted in proceeds of $133.8 million after a debt assumption of $55.0 million and closing costs. The Company recorded a gain of $18.8 million, which included $11.3 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 three months ended March 31, 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 (loss) income and gain on disposition of unconsolidated entities in the accompanying consolidated statements of operations.

As of March 31, 2017, there were seven 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. There was no loss related to held for sale properties, nor any goodwill allocated to the cost basis for three additional properties classified as held for sale during the three months ended March 31, 2017. During the three months ended March 31, 2016, the Company recorded a loss of $1.7 million related to properties classified as held for sale during the respective period, which included $2.2 million of goodwill allocated to the cost basis of such properties. The loss on properties held for sale is included in gain on disposition of real estate and held for sale assets, net in the accompanying consolidated statements of operations.

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.

As part of the Company’s quarterly impairment review procedures and considering the factors mentioned above, real estate assets with carrying values totaling $16.6 million were deemed to be impaired and their carrying values were reduced to their estimated fair values of $9.9 million resulting in impairment charges of $6.7 million during the three months ended March 31, 2017. During the three months ended March 31, 2016, management identified certain properties for potential sale as part of its

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2017 (Unaudited) – (Continued)

portfolio management strategy to reduce exposure to office properties. Additionally, a tenant of 59 restaurants filed for bankruptcy. As a result, during the three months ended March 31, 2016, real estate assets with carrying values totaling $623.0 million were deemed to be impaired and their carrying values were reduced to their estimated fair values of $462.5 million, resulting in impairment charges of $160.5 million.

Consolidated Joint Ventures

The Company had interests in two joint ventures that owned two properties as of each of March 31, 2017 and December 31, 2016, respectively (the “Consolidated Joint Ventures”). As of March 31, 2017 and December 31, 2016, the Consolidated Joint Ventures had total assets of $67.4 million and $64.8 million, respectively, of which $58.8 million were real estate investments, net of accumulated depreciation and amortization, for each of the respective periods. One property is secured by a mortgage note payable of $13.9 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’ loss was $7,000 and $39,000 for the three months ended March 31, 2017 and 2016, respectively, and is included in net loss attributable to non-controlling interests in the consolidated statements of operations.

Unconsolidated Joint Ventures

The Company’s investment in unconsolidated joint venture arrangements (the “Unconsolidated Joint Ventures”) consisted of interests in two joint ventures that owned two properties as of each of March 31, 2017 and December 31, 2016. As of March 31, 2017 and December 31, 2016, the Company owned aggregate equity investments of $41.0 million and $41.3 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 March 31, 2017, the Company’s maximum exposure to risk was $41.0 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 $20.4 million as of March 31, 2017, 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 (loss) income and gain on disposition of unconsolidated entities in the consolidated statements of operations. During each of the three months ended March 31, 2017 and 2016, the Company recognized $0.3 million of net income from two 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 March 31, 2017 (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%	$	5,839
Cole/Faison JV Bethlehem GA, LLC	Faison-Winder Investors, LLC	90%	35,119
			$	40,958

_______________________________________________

(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 $6.3 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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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2017 (Unaudited) – (Continued)

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 March 31, 2017 and December 31, 2016 (in thousands):

	March 31, 2017
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
CMBS	$	43,906	$	1,039	$	(2,315	)	$	42,630

	December 31, 2016
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
CMBS	$	48,297	$	1,248	$	(2,330	)	$	47,215

As of each of March 31, 2017 and December 31, 2016, the Company owned eight CMBS with an estimated aggregate fair value of $42.6 million and $47.2 million, respectively. The Company generally receives monthly payments of principal and interest on the CMBS. As of March 31, 2017, the Company earned interest on the CMBS at rates ranging between 5.88% and 8.95%. As of March 31, 2017, 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 March 31, 2017, the Company had no other-than-temporary impairment losses.

The scheduled maturity of the Company’s CMBS as of March 31, 2017 are as follows (in thousands):

	March 31, 2017
	Amortized Cost		Fair Value
Due within one year	$	—	$	—
Due after one year through five years	18,142		18,638
Due after five years through 10 years	11,955		9,685
Due after 10 years	13,809		14,307
Total	$	43,906	$	42,630

Note 7 – Mortgage Notes Receivable

As of March 31, 2017, the Company owned nine mortgage notes receivable with a weighted-average interest rate of 6.3% and weighted-average years to maturity of 12.8 years. The following table details the mortgage notes receivable as of March 31, 2017 (dollar amounts in thousands):

Outstanding Balance		Carrying Value		Interest Rate Range				Maturity Date Range
$	24,574	$	22,545	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.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2017 (Unaudited) – (Continued)

The following table summarizes the scheduled aggregate principal payments due to the Company on the mortgage notes receivable subsequent to March 31, 2017 (in thousands):

	Outstanding Balance
Due within one year	$	1,122
Due after one year through five years	5,378
Due after five years through 10 years	7,034
Due after 10 years(1)	14,832
Total	$	28,366

____________________________________

(1) Includes additional $3.8 million of interest that will be capitalized into the outstanding balance of the mortgage note receivable subsequent to March 31, 2017.

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

Rent and tenant receivables and other assets, net consisted of the following as of March 31, 2017 and December 31, 2016 (in thousands):

	March 31, 2017		December 31, 2016
Accounts receivable, net (1)	$	48,477	$	49,148
Straight-line rent receivable	207,420		201,584
Deferred costs, net (2)	13,548		16,154
Prepaid expenses	11,600		6,814
Leasehold improvements, property and equipment, net (3)	14,056		14,702
Restricted escrow deposits	11,555		5,741
Deferred tax asset and tax receivable	32,976		31,113
Program development costs, net (4)	3,182		3,161
Interest rate swap assets, at fair value	371		199
Other assets	3,713		2,089
Total	$	346,898	$	330,705

___________________________________

(1) Allowance for doubtful accounts was $8.1 million and $6.0 million as of March 31, 2017 and December 31, 2016, respectively.

(2) Amortization expense for deferred costs related to the revolving credit facility totaled $2.6 million for each of the three months ended March 31, 2017 and 2016. Accumulated amortization for deferred costs related to the revolving credit facility were $32.4 million and $29.8 million as of March 31, 2017 and December 31, 2016, respectively.

(3) Amortization expense for leasehold improvements totaled $0.3 million for each of the three months ended March 31, 2017 and 2016. Accumulated amortization was $3.8 million and $3.5 million as of March 31, 2017 and December 31, 2016, respectively. Depreciation expense for property and equipment totaled $0.4 million and $0.5 million for the three months ended March 31, 2017 and 2016. Accumulated depreciation was $4.3 million and $3.9 million as of March 31, 2017 and December 31, 2016, respectively.

(4) As of March 31, 2017 and December 31, 2016, the Company had reserves of $33.8 million and $31.7 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.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2017 (Unaudited) – (Continued)

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 three months ended March 31, 2017. 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 March 31, 2017 and December 31, 2016, 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 March 31, 2017
Assets:
CMBS	$	—	$	—		$	42,630	$	42,630
Derivative assets	—		371			—		371
Total assets	$	—	$	371		$	42,630	$	43,001
Liabilities:
Derivative liabilities	$	—	$	(1,996	)	$	—	$	(1,996	)
	Level 1		Level 2			Level 3		Balance as of December 31, 2016
Assets:
CMBS	$	—	$	—		$	47,215	$	47,215
Derivative assets	—		199			—		199
Total assets	$	—	$	199		$	47,215	$	47,414
Liabilities:
Derivative liabilities	$	—	$	(3,547	)	$	—	$	(3,547	)

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.

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2017 (Unaudited) – (Continued)

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 March 31, 2017, 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 three months ended March 31, 2017 and 2016 (in thousands):

	CMBS
Balance as of December 31, 2016	$	47,215
Total gains and losses
Unrealized loss included in other comprehensive income, net	(194		)
Purchases, issuance, settlements
Return of principal received	(3,469		)
Amortization included in net income, net	(922		)
Ending Balance, March 31, 2017	$	42,630

	CMBS
Balance as of December 31, 2015	$	53,304
Total gains and losses
Unrealized loss included in other comprehensive loss, net	(1,961		)
Purchases, issuance, settlements
Return of principal received	(3,217		)
Accretion included in net loss, net	36
Ending Balance, March 31, 2016	$	48,162

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 March 31, 2017		Fair Value at March 31, 2017		Carrying Amount at December 31, 2016		Fair Value at December 31, 2016
Assets:
Mortgage notes receivable	3	$	22,545	$	30,355	$	22,764	$	30,460
Liabilities (1):
Mortgage notes payable and other debt, net	2	$	2,602,733	$	2,644,244	$	2,687,739	$	2,713,155
Corporate bonds, net	2	2,248,239		2,305,877		2,248,063		2,273,850
Convertible debt, net	2	988,367		1,007,731		987,106		1,004,733
Credit facility	2	500,000		500,000		500,000		500,000
Total liabilities		$	6,339,339	$	6,457,852	$	6,422,908	$	6,491,738

_______________________________________________

(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.

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2017 (Unaudited) – (Continued)

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 three months ended March 31, 2017, net real estate assets related to 14 properties were deemed to be impaired and their carrying values were reduced to their estimated fair value of $9.9 million, resulting in impairment charges of $6.7 million. During the three months ended March 31, 2016, net real estate assets related to 125 properties were deemed to be impaired and their carrying values totaling $623.0 million were reduced to their estimated fair values of $462.5 million, resulting in impairment charges of $160.5 million. 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 the Company’s impairment tests for the real estate assets during the three months ended March 31, 2017, the Company used a discount rate of 7.8% and capitalization rates from 7.2% to 7.5% with a weighted-average rate of 7.4%.

The following table presents the impairment charges by asset class recorded during the three months ended March 31, 2017 (dollar amounts in thousands):

	Three Months Ended March 31, 2017
Properties impaired (1)	14
Asset classes impaired:
Investment in real estate assets, net	$	6,748
Below-market lease liabilities, net	(23		)
Total impairment loss	$	6,725

_______________________________________________

(1) None of these properties were disposed of during the three months ended March 31, 2017.

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2017 (Unaudited) – (Continued)

Note 10 –Debt

As of March 31, 2017, the Company had $6.3 billion of debt outstanding, including net premiums and net deferred financing costs, with a weighted-average years to maturity of 4.2 years and a weighted-average interest rate of 4.3%. The following table summarizes the carrying value of debt as of March 31, 2017 and December 31, 2016, and the debt activity for the three months ended March 31, 2017 (in thousands):

					Three Months Ended March 31, 2017
		Balance as of December 31, 2016			Debt Issuances		Repayments, Extinguishment and Assumptions			Accretion and Amortization			Balance as of March 31, 2017
Mortgage notes payable:
	Outstanding balance	$	2,629,949		$	2,403	$	(78,966	)	$	—		$	2,553,386		(1)
	Net premiums (2)	36,751			—		—			(3,290		)	33,461
	Deferred costs	(16,633		)	—		—			817			(15,816		)
Other debt:
	Outstanding balance	20,947			—		(5,125		)	—			15,822
	Premium (2)	92			—		—			(28		)	64
Mortgages and other debt, net		2,671,106			2,403		(84,091		)	(2,501		)	2,586,917
Corporate bonds:
	Outstanding balance	2,250,000			—		—			—			2,250,000
	Discount (3)	(1,937		)	—		—			176			(1,761		)
	Deferred costs	(21,839		)	—		—			907			(20,932		)
Corporate bonds, net		2,226,224			—		—			1,083			2,227,307
Convertible debt:
	Outstanding balance	1,000,000			—		—			—			1,000,000
	Discount (3)	(12,894		)	—		—			1,261			(11,633		)
	Deferred costs	(13,766		)	—		—			1,430			(12,336		)
Convertible debt, net		973,340			—		—			2,691			976,031
Credit facility:
	Outstanding balance	500,000			—		—			—			500,000
	Deferred costs (4)	(3,422		)	—		—			570			(2,852		)
Credit facility, net		496,578			—		—			570			497,148
Total debt		$	6,367,248		$	2,403	$	(84,091	)	$	1,843		$	6,287,403

____________________________________

(1) Includes $41.8 million related to two mortgage notes payable in default.

(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.

29

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2017 (Unaudited) – (Continued)

Mortgage Notes Payable

The Company’s mortgage notes payable consisted of the following as of March 31, 2017 (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)	596	$	4,949,078	$	2,539,726	4.99	%	4.6
Variable-rate debt	1	30,846		13,660		3.79	%	0.4
Total (4)	597	$	4,979,924	$	2,553,386	4.99	%	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 March 31, 2017.

(3) Includes $188.7 million of variable-rate debt fixed by way of interest rate swap arrangements. 

(4) The table above does not include the loan amount associated with an Unconsolidated Joint Venture of $20.4 million, none of which is recourse to the Company. The loan represents a secured fixed rate of 5.20% and a maturity of July 2021.

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 March 31, 2017, except for the loans in default described below, the Company believes it was in compliance with the financial covenants under the mortgage loan agreements and had no restrictions on the payment of dividends.

During the three months ended March 31, 2017, the Company received two notices of default from the lenders of two non-recourse loans each secured by one property, which had an aggregate outstanding balance of $41.8 million on the notice date, due to the Company’s intentional non-repayment of the respective loan balances at maturity.

On December 30, 2016, the Company received a notice of default from the lender of a non-recourse loan secured by 16 properties, which had an outstanding balance of $11.6 million on the notice date, due to the Company's non-repayment of the loan balance at maturity. During the three months ended March 31, 2017, the Company cured the default by fully repaying the outstanding loan balance.

The following table summarizes the scheduled aggregate principal repayments due on mortgage notes subsequent to March 31, 2017 (in thousands):

	Total
April 1, 2017 - December 31, 2017 (1)	$	340,411
2018	108,694
2019	228,107
2020	280,668
2021	356,849
Thereafter	1,238,657
Total	$	2,553,386

____________________________________

(1) Includes $41.8 million of outstanding balances on mortgage notes payable, excluding accrued interest, related to two mortgage notes payable in default.

Other Debt

As of March 31, 2017, the Company had a secured term loan from KBC Bank, N.V. with an outstanding principal balance of $15.8 million and remaining unamortized premium of less than $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 March 31, 2017 are $2.5 million and $13.3 million for the years ended December 31, 2017 and 2018, respectively.

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2017 (Unaudited) – (Continued)

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 March 31, 2017 (in thousands):

	Outstanding Balance		Collateral Carrying Value
Mortgage notes receivable	$	5,598	$	18,936
Intercompany mortgage loans	404		1,240
CMBS	9,820		30,688
Total	$	15,822	$	50,864

Corporate Bonds

As of March 31, 2017, 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 March 31, 2017		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	%

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. If the redemption date is 30 or fewer days prior to the maturity date with respect to the 2019 Senior Notes and the 2021 Senior Notes or is 90 or fewer days prior to the maturity date with respect to the 2024 Senior Notes and the 2026 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 indenture governing our Senior Notes requires us to maintain financial ratios which include maintaining (i) a maximum limitation on incurrence of total debt less than or equal to 65% of Total Assets (as defined in the indenture), (ii) maximum limitation on incurrence of secured debt less than or equal to 40% of Total Assets (as defined in the indenture), (iii) a minimum debt service coverage ratio of at least 1.5x and (iv) a minimum unencumbered asset value of at least 150% of the aggregate principal amount of all of the outstanding Unsecured Debt (as defined in the indenture). The Company believes it was in compliance with the financial covenants pursuant to the indenture governing the Senior Notes as of March 31, 2017.

Convertible Debt

The following table presents each of the Company’s $597.5 million aggregate principal amount of convertible senior notes due 2018 (the “2018 Convertible Notes”) and $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”) with their respective terms (dollar amounts in thousands). The OP has issued corresponding identical convertible notes to the General Partner.

	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 $11.6 million as of March 31, 2017. The discount will be amortized over the remaining weighted average term of 2.3 years.

(2) Conversion rate represents the amount of the General Partner OP Units per $1,000 principal amount of Convertible Notes converted as of March 31, 2017, as adjusted in accordance with the applicable indentures as a result of cash dividend payments.

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2017 (Unaudited) – (Continued)

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 financial covenants pursuant to the indenture governing the Convertible Notes as of March 31, 2017.

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 March 31, 2017, 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 year ended December 31, 2016, the Company repaid all of the outstanding borrowings under its revolving credit facility and has no outstanding balance as of March 31, 2017. The interest rate on 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 the outstanding balance was 3.25% at March 31, 2017. As of March 31, 2017, 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 30% of which may be comprised of restaurant properties from December 31, 2016 on). The Company believes it was in compliance with the financial covenants pursuant to the Credit Agreement and is not restricted from accessing any borrowing availability under the Credit Facility as of March 31, 2017.

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2017 (Unaudited) – (Continued)

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.

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 three months ended March 31, 2017 and 2016, such derivatives were used to hedge the variable cash flows associated with variable-rate debt. During the three months ended March 31, 2017, the Company reclassified $0.3 million from accumulated other comprehensive income into interest expense as a result of the hedged forecasted transactions affecting earnings. The Company also reclassified $0.2 million from accumulated other comprehensive income into interest expense associated with previously settled interest rate derivatives.

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 months ended March 31, 2017, the Company recorded a gain of $0.7 million in earnings related to the ineffective portion of the change in fair value of derivatives designated that qualify as cash flow hedges which is included in gain (loss) on derivative instruments, net in the accompanying consolidated statements of operations. The ineffectiveness is primarily attributable to the designation of acquired interest rate swaps with a non-zero fair value at inception associated with the Cole Merger.

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 $0.3 million will be reclassified from other comprehensive income as an increase to interest expense.

As of March 31, 2017, 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	March 31, 2017		December 31, 2016
Number of Instruments	11		14
Notional Amount	$	637,304	$	690,816

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 March 31, 2017 and December 31, 2016 (in thousands):

Derivatives Designated as Hedging Instruments	Balance Sheet Location	March 31, 2017			December 31, 2016
Interest rate swaps	Rent and tenant receivables and other assets, net	$	7		$	3
Interest rate swaps	Deferred rent, derivative and other liabilities	$	(1,996	)	$	(3,547	)

33

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2017 (Unaudited) – (Continued)

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 $0.1 million related to the change in the fair value of derivatives not designated as hedging instruments was recorded in gain (loss) on derivative instruments, net in the accompanying consolidated statements of operations for the three months ended March 31, 2017. The Company recorded a loss of $1.1 million for the three months ended March 31, 2016.

As of March 31, 2017, 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	March 31, 2017		December 31, 2016
Number of Instruments	1		1
Notional Amount	$	51,400	$	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 March 31, 2017 and December 31, 2016 (in thousands):

Derivatives Not Designated as Hedging Instruments	Balance Sheet Location	March 31, 2017		December 31, 2016
Interest rate swaps	Rent and tenant receivables and other assets, net	$	364	$	196

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 March 31, 2017 and December 31, 2016 (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
March 31, 2017	$	371	$	(1,996	)	$	—	$	371	$	(1,996	)	$	—	$	—	$	(1,625	)
December 31, 2016	$	199	$	(3,547	)	$	—	$	199	$	(3,547	)	$	—	$	—	$	(3,348	)

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 March 31, 2017, 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 $2.4 million. As of March 31, 2017, 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 $2.4 million at March 31, 2017.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2017 (Unaudited) – (Continued)

Note 12 – Supplemental Cash Flow Disclosures

Supplemental cash flow information was as follows for the three months ended March 31, 2017 and 2016 (in thousands):

	Three Months Ended March 31,
	2017		2016
Supplemental Disclosures:
Cash paid for interest	$	68,908	$	93,713
Cash paid for income taxes	$	4,503	$	10,848
Non-cash investing and financing activities:
Accrued capital expenditures and real estate developments	$	720	$	1,327
Accrued repurchases of common stock to settle tax obligation	$	208	$	223
Distributions declared and unpaid	$	140,232	$	130,494
Mortgage notes payable assumed in real estate disposition	$	—	$	55,000

Note 13 – Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses consisted of the following as of March 31, 2017 and December 31, 2016 (in thousands):

	March 31, 2017		December 31, 2016
Accrued interest	$	43,472	$	43,188
Accrued real estate taxes	37,392		38,877
Accrued legal fees	28,159		17,827
Accounts payable	2,132		5,030
Accrued other	24,662		41,215
Total	$	135,817	$	146,137

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 Company has 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. The former Chief Financial Officer has pleaded not guilty, and his trial is currently scheduled to commence on June

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2017 (Unaudited) – (Continued)

12, 2017. Also on September 8, 2016, 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 in the SEC Civil Action granted the motion to intervene and granted the motion to stay with respect to all witness-related discovery, with some limited exceptions, as clarified in a subsequent ruling on December 15, 2016.

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 were not required to file new answers. Document production is substantially complete. Plaintiffs in the SDNY Consolidated Securities Class Action filed a motion for class certification on March 15, 2017 and defendants are required to respond to the motion by May 5, 2017. A status conference before the court is scheduled for May 16, 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; 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; Atlas Master Fund et al. v. American Realty Capital Properties, Inc. et al., No. 16-cv-05475; and Eton Park Fund, L.P. v. American Realty Capital Properties, Inc., et al., No. 16-cv-09393 (the “Eton Park 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 has filed answers to the complaints in all of the Opt-Out Actions. Document production in the Opt-Out Actions is being coordinated with production in the SDNY Consolidated Securities Class Action, except that there has been no discovery in the Eton Park Action during the pendency of motions to dismiss filed by certain defendants. On April 18, 2017, an additional individual securities fraud action was filed in the United States District Court for the Southern District of New York captioned Reliance Standard Life Insurance Company, et al, v. American Realty Capital Properties, Inc. et al, No. 17-cv-02796. The Company is not yet required to respond to the complaint.

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 filed an answer to the complaint on November 4, 2016. Discovery is ongoing.

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2017 (Unaudited) – (Continued)

(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. 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. 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, 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. By order dated November 4, 2016, the Frampton Action was stayed pending resolution of the SDNY Derivative Action.

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, 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 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”). An amended complaint was filed on January 17, 2017. The Meloche Action seeks money damages and other relief on behalf of the Company for alleged breaches of fiduciary duty and negligence. The Company filed a motion to transfer or stay the action on March 24, 2017. Plaintiffs’ response is due on May 26, 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. The ultimate resolution of these matters, the timing of which is unknown, may materially impact the Company’s business, financial condition, liquidity and results of operations.

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 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.

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2017 (Unaudited) – (Continued)

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
April 1, 2017 - December 31, 2017	$	10,575	$	3,283
2018	13,832		4,298
2019	13,789		4,359
2020	13,317		4,381
2021	12,738		4,367
Thereafter	211,630		8,415
Total	$	275,881	$	29,103

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 March 31, 2017, Cole Capital was a party to ten purchase and sale agreements with unaffiliated third-party sellers to purchase a 100% interest in 18 properties, subject to meeting certain criteria, for an aggregate purchase price of $275.8 million, exclusive of closing costs. As of March 31, 2017, Cole Capital had $11.1 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.

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 March 31, 2017, 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 March 31, 2017, corresponding to the General Partner’s outstanding shares of Common Stock.

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. As of March 31, 2017, no shares of Common Stock have been issued pursuant to the Program.

Preferred Stock and Preferred OP Units

Series F Preferred Stock

As of March 31, 2017, 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.

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2017 (Unaudited) – (Continued)

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 both March 31, 2017 and December 31, 2016, the Operating Partnership had approximately 23.75 million Limited Partner OP Units outstanding.

As of March 31, 2017, 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 shares of Common Stock. 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 February 22, 2017, 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 first quarter of 2017 to stockholders of record as of March 31, 2017, which was paid on April 17, 2017. 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 three months ended March 31, 2017, the General Partner repurchased 140,832 shares to satisfy the federal and state tax withholding obligations 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”), deferred stock units (“Deferred 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 provide 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 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 or Deferred 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.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2017 (Unaudited) – (Continued)

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 March 31, 2017, the General Partner had cumulatively awarded under its Equity Plan approximately 4.0 million Restricted Shares, net of the forfeiture of 3.6 million Restricted Shares through that date, 4.9 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 9.1 million shares of Common Stock. Accordingly, as of such date, approximately 90.7 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 months ended March 31, 2017, the Company recorded $0.4 million 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 three months ended March 31, 2017:

	Restricted Shares		Weighted-Average Grant Date Fair Value
Unvested shares, December 31, 2016	562,406		$	13.78
Vested	(178,046	)	14.01
Forfeited	(36,346	)	13.88
Unvested shares, March 31, 2017	348,014		$	13.65

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 months ended March 31, 2017, the Company recorded $1.1 million 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 (or upon a change of control). 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 months ended March 31, 2017, the Company recorded approximately $42,800 of expense related to Deferred Stock Units, which is recorded in general and administrative expense in the accompanying consolidated statements of operations.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2017 (Unaudited) – (Continued)

The following table details the activity of the Time-Based Restricted Stock Units and Deferred Stock Units during the three months ended March 31, 2017.

	Time-Based Restricted Stock Units		Weighted-Average Grant Date Fair Value		Deferred Stock Units		Weighted-Average Grant Date Fair Value
Unvested units, December 31, 2016	1,085,914		$	8.43	—		$	—
Granted	673,381		8.90		12,006		8.67
Vested	(244,915	)	7.87		(12,006	)	8.67
Unvested units, March 31, 2017	1,514,380		$	8.73	—		$	—

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 months ended March 31, 2017, the Company recorded $1.5 million 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 LTI Target Awards during the three months ended March 31, 2017.

	LTI Target Awards	Weighted-Average Grant Date Fair Value
Unvested units, December 31, 2016	1,522,487	$	9.00
Granted	726,867	8.96
Unvested units, March 31, 2017	2,249,354	$	8.99

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, 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 and distribution and stockholder servicing 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. 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.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2017 (Unaudited) – (Continued)

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 each of March 31, 2017 and December 31, 2016, 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 $3.2 million, which were net of reserves of $33.8 million and $31.7 million, respectively.

The following table shows the offering fee summary information for the Cole REITs as of March 31, 2017:

	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	3%	2%		1%	(4)
INAV
Wrap Class Shares	—%	0.55%	(5)	—%
Advisor Class Shares	up to 3.75%	0.55%	(5)	0.5%	(5)
Institutional Class Shares	—%	0.25%	(5)	—%
CCIT III
Class A Shares	7%	2%		—%
Class T Shares	3%	2%		1%	(4)

_______________________________________________

(1) The Company reallowed 100% of selling commissions to participating broker-dealers during the three months ended March 31, 2017 and 2016.

(2) The Company may reallow all or a portion of its dealer manager fee and/or 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) 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. Distribution and stockholder servicing fees continue to be paid after the offering closes if the 4.0% maximum has not been met.

(5) Fees are accrued daily in the amount of 1/365th of a percentage of the estimated per share NAV and payable monthly in arrears.

42

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2017 (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 March 31, 2017:

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 of 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 March 31, 2017:

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.

43

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2017 (Unaudited) – (Continued)

The table below reflects the revenue earned from the Cole REITs (including closed programs, as applicable) and joint ventures for the three months ended March 31, 2017 and 2016 (in thousands).

	Three Months Ended March 31,
	2017		2016
Offering-related fees and reimbursements
Selling commissions (1)	$	2,177	$	7,041
Dealer manager and distribution fees (2)	1,253		2,640
Reimbursement revenue	886		2,710
Offering-related fees and reimbursements	4,316		12,391
Transaction service fees and reimbursements
Acquisition fees	3,272		1,702
Reimbursement revenues	734		682
Transaction service fees and reimbursements	4,006		2,384
Management fees and reimbursements
Asset and property management fees and leasing fees	53		55
Advisory and performance fee revenue	13,624		12,050
Reimbursement revenues	4,767		4,123
Management fees and reimbursements	18,444		16,228
Interest income on Affiliate Lines of Credit	124		308
Total related party revenues(3)	$	26,890	$	31,311

___________________________________

(1) The Company reallowed 100% of selling commissions to participating broker-dealers during the three months ended March 31, 2017 and 2016.

(2) During the three months ended March 31, 2017 and 2016, the Company reallowed $0.5 million and $1.0 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.

(3) Total related party revenues excludes fees earned from 1031 real estate programs of $0.4 million and $0.2 million, for the three months ended March 31, 2017 and 2016, respectively.

Investment in the Cole REITs

As of March 31, 2017 and December 31, 2016, the Company owned aggregate equity investments of $4.2 million and $4.7 million, respectively, in the Cole REITs and other affiliated offerings, presented in investment in unconsolidated entities in the consolidated balance sheets. 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 (loss) income and gain on disposition of unconsolidated entities in the consolidated statements of operations. During the three months ended March 31, 2017 and 2016, the Company recognized $419,000 and $122,000 of net loss, respectively, from the Cole REITs.

The table below presents certain information related to the Company’s investments in the Cole REITs as of March 31, 2017 (carrying amount in thousands):

	March 31, 2017
Cole REIT	% of Outstanding Shares Owned	Carrying Amount of Investment
CCPT V	0.86%	$	1,359
INAV	0.07%	135
CCIT II	0.44%	1,222
CCIT III	41.29%	961
CCPT IV	0.01%	111
Funds not yet in offering	100.00%	400
Total		$	4,188

44

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2017 (Unaudited) – (Continued)

Due to Affiliates

Due to affiliates, as reported in the accompanying consolidated balance sheets, was $7,000 and $16,000 as of March 31, 2017 and December 31, 2016, respectively, related to amounts due to the Cole REITs.

Due from Affiliates

As of March 31, 2017 and December 31, 2016, $7.2 million and $11.0 million, respectively, 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. On March 28, 2017, CCI III OP entered into a modification agreement in order to extend the maturity date of the Subordinate Promissory Note from September 22, 2017 to September 30, 2018. As of March 31, 2017, the Subordinate Promissory Note had an interest rate of 4.98% and $7.8 million was outstanding. As of December 31, 2016, the Subordinate Promissory Note had an interest rate of 5.12% and $10.3 million was outstanding.

Note 18 – Net 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 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 months ended March 31, 2017 and 2016 (dollar amounts in thousands):

	Three Months Ended March 31,
	2017			2016
Net income (loss) attributable to the General Partner	$	14,438		$	(113,086	)
Dividends to preferred shares and units	(17,973		)	(17,973		)
Net loss available to the General Partner	(3,535		)	(131,059		)
Earnings allocated to participating securities	(178		)	(125		)
Net loss available to common stockholders used in basic and diluted net loss per share	$	(3,713	)	$	(131,184	)
Weighted average number of common stock outstanding - basic and diluted	973,849,610			903,825,726
Basic and diluted net loss per share attributable to common stockholders	$	(0.00	)	$	(0.15	)

For the three months ended March 31, 2017, diluted net loss per share attributable to common stockholders excludes approximately 0.7 million of unvested Restricted Shares and Restricted Stock Units and approximately 23.7 million OP Units as the effect would have been antidilutive.

For the three months ended March 31, 2016, diluted net loss attributable to common stockholders excludes approximately 4.4 million of unvested Restricted Shares and Restricted Stock Units and approximately 23.8 million OP Units as the effect would have been antidilutive.

45

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2017 (Unaudited) – (Continued)

Net 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 months ended March 31, 2017 and 2016 (dollar amounts in thousands):

	Three Months Ended March 31,
	2017			2016
Net income (loss) attributable to the Operating Partnership	$	14,797		$	(116,041	)
Dividends to preferred units	(17,973		)	(17,973		)
Net loss available to the Operating Partnership	(3,176		)	(134,014		)
Earnings allocated to participating units	(178		)	(125		)
Net loss available to common unitholders used in basic and diluted net loss per unit	$	(3,354	)	$	(134,139	)
Weighted average number of common units outstanding - basic and diluted	997,597,957			927,589,523
Basic and diluted net loss per unit attributable to common unitholders	$	(0.00	)	$	(0.15	)

For the three months ended March 31, 2017, diluted net loss per unit attributable to common unitholders excludes approximately 0.7 million of unvested Restricted Shares and Restricted Stock Units as the effect would have been antidilutive.

For the three months ended March 31, 2016, diluted net loss attributable to common unitholders excludes approximately 4.4 million of unvested Restricted Shares and Restricted Stock Units as the effect would have been antidilutive.

Note 19 – 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, 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$1.1 million and a benefit of$1.3 million for the three months ended March 31, 2017 and 2016, respectively, which are included in provision for income taxes in the accompanying consolidated statements of operations.

REI Income Taxes

The REI segment recognized a provision of$3.1 million and $1.4 million for the three months ended March 31, 2017 and 2016, 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 three months ended March 31, 2017 and 2016. 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 2012.

As of March 31, 2017, 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, 2012 remain open to examination by the major taxing jurisdictions to which the OP, the General Partner, American Realty Capital Trust III, Inc., CapLease, Inc., American Realty Capital Trust IV, Inc., Cole Real Estate Investments, Inc., and Cole Credit Property Trust, Inc. are subject.

46

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2017 (Unaudited) – (Continued)

Note 20 – Subsequent Events

The following events occurred subsequent to March 31, 2017:

Real Estate Investment Activity

From April 1, 2017 through April 28, 2017, the Company sold five properties for an aggregate gross sales price of $16.9 million, of which our share was $14.7 million and an estimated gain of $1.8 million. In addition, the Company acquired two properties for an aggregate purchase price of $14.6 million.

Common Stock Dividend

On May 3, 2017, 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 second quarter of 2017 to stockholders of record as of June 30, 2017, which will be paid on July 17, 2017. An equivalent distribution by the Operating Partnership is applicable per OP unit.

Preferred Stock Dividend

On May 3, 2017, the Company’s board of directors declared a monthly cash dividend to holders of the Series F Preferred Stock for July 2017 through September 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 $0.1395833per 30-day month.

Period	Record Date	Payment Date
June 15, 2017 - July 14, 2017	July 1, 2017	July 17, 2017
July 15, 2017 - August 14, 2017	August 1, 2017	August 15, 2017
August 15, 2017 - September 14, 2017	September 1, 2017	September 15, 2017

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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, 2016. 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.

• 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 are subject to risks associated with pending government investigations relating to the findings of 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 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 (as defined in Note 10 –Debt), and the terms of the Credit Facility (as defined in Note 10 –Debt).

• 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 real estate investment trust (“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 (defined below) 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.

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

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, 2016.

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 4,107 properties comprising 93.5 million square feet, of which 97.8% was leased as of March 31, 2017, with a weighted-average remaining lease term of 9.6 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 March 31, 2017, the Cole REITs and other real estate programs’ assets under management were $7.5 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.

49

On an on-going basis, we evaluate the need for an allowance for doubtful accounts arising from estimated losses that could result 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.

Effective January 1, 2017, we determined that adjusted funds from operations (“AFFO”), a non-GAAP measure, and our real estate portfolio and economic metrics should exclude the impact of properties owned by the Company for which as of the reporting date, (i) the related mortgage loan is in default, and (ii) management has made a decision to transfer the properties to the lender in connection with settling the mortgage note obligation ("Excluded Properties") to better reflect our ongoing operations. Excluded Properties at March 31, 2017, included one vacant office property and one vacant industrial property, comprised of an aggregate of 578,000 square feet, which each secured a mortgage note payable, with aggregate debt outstanding of $41.8 million. The Company did not update data presented for prior periods for this change as it determined the impact on our prior periods was immaterial.

Without the Excluded Properties, our portfolio is comprised of 4,105 retail, restaurant, office and industrial real estate properties with an aggregate of 93.0 million square feet, of which 98.4% was leased as of March 31, 2017, with a weighted-average remaining lease term of 9.6 years.

Operating Highlights and Key Performance Indicators

2017 Activity

• Acquired controlling financial interests in 16 commercial properties and three land parcels for an aggregate purchase price of $101.5 million.

• Disposed of 50 properties for an aggregate sales price of $210.6 million, of which our share was $200.8 million, resulting in consolidated proceeds of $195.7 million after closing costs.

• Total secured debt decreased by $81.7 million, from $2.65 billion to $2.57 billion.

• Declared a quarterly dividend of $0.1375 per share of common stock for the first quarter of 2017, representing an annualized dividend rate of $0.55 per share.

50

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 March 31, 2017, based on annualized rental income of $1.2 billion, omitting the Excluded Properties.

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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 March 31, 2017 and 2016:

	March 31, 2017 (1)	March 31, 2016
Portfolio Metrics
Operating properties	4,105	4,378
Rentable square feet (in millions)	93.0	99.0
Economic occupancy rate (2)	98.4%	98.6%
Investment-grade tenants (3)	41.6%	42.1%

____________________________________

(1) Omits the impact of the Excluded Properties, if any.

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

(3) Investment-grade tenants are those with a credit rating of BBB- or higher by Standard & Poor’s Financial Services LLC or a credit rating of Baa3 or higher by Moody’s Investor Service, Inc. The ratings may reflect those assigned by Standard & Poor’s Financial Services LLC 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 March 31, 2017 and 2016:

	March 31, 2017 (1)	March 31, 2016
Economic Metrics
Weighted-average lease term (in years) (2)	9.6	10.4
Lease rollover (2)(3):
Annual average	4.4%	3.9%
Maximum for a single year	7.8%	4.6%

____________________________________

(1) Omits the impact of the Excluded Properties, if any.

(2) Based on annualized rental income of our real estate portfolio as of March 31, 2017.

(3) 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 March 31,
	2017			2016
Financial Metrics
REI Segment
Revenues	$	320,898		$	337,787
Operating income (loss)	$	75,808		$	(60,804	)
Net income (loss)	$	12,780		$	(115,534	)
Funds from operations (“FFO”) attributable to common stockholders and limited partners (1)	$	168,055		$	196,775
Adjusted funds from operations (“AFFO”) attributable to common stockholders and limited partners (1)	$	177,437		$	185,528
AFFO attributable to common stockholders and limited partners per diluted share (1)	$	0.18		$	0.20
Cole Capital Segment
Revenues	$	27,131		$	31,233
Operating income (loss)	$	3,028		$	(2,349	)
Net income (loss)	$	2,010		$	(546	)
FFO attributable to common stockholders and limited partners (1)	$	2,010		$	(546	)
AFFO attributable to common stockholders and limited partners (1)	$	9,884		$	7,147
AFFO attributable to common stockholders and limited partners per diluted share (1)	$	0.01		$	0.01
Consolidated
Revenues	$	348,029		$	369,020
Operating income (loss)	$	78,836		$	(63,153	)
Net income (loss)	$	14,790		$	(116,080	)
FFO attributable to common stockholders and limited partners (1)	$	170,065		$	196,229
AFFO attributable to common stockholders and limited partners (1)	$	187,321		$	192,675
Net loss attributable to common stockholders per diluted share (2)	$	(0.00	)	$	(0.15	)
AFFO attributable to common stockholders and limited partners per diluted share (1)	$	0.19		$	0.21

____________________________________

(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
	March 31, 2017		December 31, 2016
REI segment	$	15,110,337	$	15,337,623
Cole Capital segment	246,198		249,951
Total	$	15,356,535	$	15,587,574

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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 March 31,
	2017		2016		2017 vs 2016 Increase/(Decrease)
Revenues:
Rental income	$	293,739	$	313,971	$	(20,232	)
Direct financing lease income	433		569		(136		)
Operating expense reimbursements	26,726		23,247		3,479
Cole Capital revenue:
Offering-related fees and reimbursements	4,316		12,391		(8,075		)
Transaction service fees and reimbursements	4,097		2,384		1,713
Management fees and reimbursements	18,718		16,458		2,260
Total Cole Capital revenue	27,131		31,233		(4,102		)
Total revenues	$	348,029	$	369,020	$	(20,991	)

Rental Income

The decrease in rental income of $20.2 million during the three months ended March 31, 2017 as compared to the same period in 2016 was primarily due to the disposition of 351 consolidated properties subsequent to January 1, 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 months ended March 31, 2017 and 2016 (in thousands).

	Three Months Ended March 31,
	2017		2016		2017 vs 2016 Increase/(Decrease)
Offering-related fees and commissions	$	3,430	$	9,681	$	(6,251	)
Offering-related reimbursements	886		2,710		(1,824		)
Less: reallowed fees and commissions	2,660		8,068		(5,408		)
Offering-related fees and reimbursements, net of reallowed	$	1,656	$	4,323	$	(2,667	)

The decrease in offering-related fees and reimbursements, net of reallowed fees and commissions of $2.7 million during the three months ended March 31, 2017 was a direct result of a $77.9 million decrease in capital raise from $144.6 million to $66.7 million as compared to the same period in 2016. The decrease in capital raise was primarily due to the closing of Cole Office & Industrial REIT (CCIT II), Inc. (“CCIT II”) on September 17, 2016.

54

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 increase of $1.7 million during the three months ended March 31, 2017 was primarily due to an increase in property acquisitions from $102.1 million during the three months ended March 31, 2016, to $216.2 million for the three months ended March 31, 2017.

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 $2.3 million for the three months ended March 31, 2017 as compared to the same period in 2016 is primarily due to an increase in the average assets under management from $6.8 billion for the three months ended March 31, 2016 to $7.4 billion for the three months ended March 31, 2017 and an increase in reimbursement revenue of $0.6 million for the three months ended March 31, 2017 as compared to the same period in 2016.

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 March 31,
	2017		2016			2017 vs 2016 Increase/(Decrease)
Operating expenses:
Cole Capital reallowed fees and commissions	$	2,660	$	8,068		$	(5,408	)
Acquisition-related expenses	617		242			375
Litigation and other non-routine costs, net of insurance recoveries	12,875		(5,175		)	18,050
Property operating expenses	34,016		34,813			(797		)
General and administrative expenses	29,148		29,400			(252		)
Depreciation and amortization expenses	183,152		204,308			(21,156		)
Impairments	6,725		160,517			(153,792		)
Total operating expenses	$	269,193	$	432,173		$	(162,980	)

Acquisition-Related Expenses

Subsequent to the adoption of ASU 2017-01 as discussed in “Note 2 –Summary of Significant Accounting Policies” to our consolidated financial statements, acquisition-related expenses consist primarily of internal salaries allocated to acquisition-related activities as well as costs incurred for deals that were not consummated. The increase in acquisition-related expenses for the three months ended March 31, 2017 as compared to the same period in 2016 was primarily due to an increase in allocated internal salaries resulting from additional time spent on acquiring sixteen commercial properties and three land parcels for a purchase price of $101.9 million during the three months ended March 31, 2017 as compared to the acquisition of one property for an aggregate purchase price of $20.0 million during the three months ended March 31, 2016.

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

The increase of $18.1 million during the three months ended March 31, 2017 as compared to the same period in 2016 was due to an increase of $7.9 million in legal fees incurred related to the Audit Committee Investigation and related litigation and investigations during the three months ended March 31, 2017 as compared to the same period in 2016. Additionally, the Company recognized $10.0 million of insurance recoveries during the three months ended March 31, 2016. No insurance recoveries were recognized during the three months ended March 31, 2017.

55

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 March 31,
	2017		2016		2017 vs 2016 Increase/(Decrease)
Property operating expenses	$	34,016	$	34,813	$	(797	)
Less: Operating expense reimbursements	26,726		23,247		3,479
Property operating expenses, net of operating expense reimbursements	$	7,290	$	11,566	$	(4,276	)

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 $4.3 million during the three months ended March 31, 2017 as compared to the same period in 2016 was primarily due to the disposition of vacant properties and certain properties subject to double-net or modified gross leases. In addition, the Company recognized bad debt expense of $0.9 million related to Ovation Brands, Inc., which filed for Chapter 11 bankruptcy on March 7, 2016.

Depreciation and Amortization Expenses

The decrease of $21.2 million during the three months ended March 31, 2017 as compared to the same period in 2016 was primarily due to the disposition of 351 consolidated properties subsequent to January 1, 2016. The Company also recorded $6.7 million and $160.5 million of impairment charges on real estate investments during the three months ended March 31, 2017 and 2016, respectively, which reduced the carrying value being depreciated and amortized.

Impairments

The Company recorded impairment charges of $6.7 million related to 14 properties during the three months ended March 31, 2017. There were $160.5 million of impairment charges recorded during the three months ended March 31, 2016. The decrease in impairments of $153.8 million during the three months ended March 31, 2017 as compared to the same period in 2016 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.

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 March 31,
	2017			2016			2017 vs 2016 Increase/(Decrease)
Other expense and tax provision:
Interest expense	$	(73,743	)	$	(80,426	)	$	(6,683	)
Loss on extinguishment and forgiveness of debt, net	(70		)	—			(70		)
Other income, net	798			1,062			(264		)
Equity in (loss) income and gain on disposition of unconsolidated entities	(82		)	10,404			(10,486		)
Gain (loss) on derivative instruments, net	824			(1,086		)	1,910
Gain on disposition of real estate and held for sale assets, net	12,481			17,175			(4,694		)
Provision for income taxes	(4,254		)	(56		)	4,198

Interest Expense

The decrease of $6.7 million during the three months ended March 31, 2017 as compared to the same period in 2016 was primarily a result of a decrease in the total outstanding debt balance from $7.8 billion as of March 31, 2016 to $6.3 billion as of March 31, 2017, 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.

56

Other Income. net

The decrease of $0.3 million during the three months ended March 31, 2017 as compared to the same period in 2016 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 a CMBS reaching maturity and being paid in full subsequent to March 31, 2016.

Equity in (Loss) Income and Gain on Disposition of Unconsolidated Entities

The decrease of $10.5 million during the three months ended March 31, 2017 as compared to the same period in 2016 is primarily the result of a gain of $10.2 million recognized on the disposition of one unconsolidated joint venture owning one property during the three months ended March 31, 2016, with no comparable gain in 2017.

Gain (Loss) on Derivative Instruments, Net

The change during the three months ended March 31, 2017 from a loss of $1.1 million in 2016 as compared to a gain of $0.8 million during the same period in 2017, is primarily the result of an increase in the fair value of one interest rate derivative not designated as a hedging instrument as discussed in Note 11 –Derivatives and Hedging Activities to our consolidated financial statements.

Gain on Disposition of Real Estate and Held For Sale Assets, Net

The decrease in gain on disposition of real estate and held for sale assets, net of $4.7 million during three months ended March 31, 2017 as compared to the same period in 2016, is due to the Company’s disposition of 50 properties for an aggregate gross sales price of $210.6 million which resulted in a gain of $12.5 million during the three months ended March 31, 2017, as compared to the disposal of 58 properties for an aggregate sales price of $193.7 million during the same period in 2016 for a gain of $18.8 million. During the three months ended March 31, 2017, the Company also did not record a loss related to assets classified as held for sale, as compared to a loss of $1.7 million during the same period in 2016.

Provision for Income Taxes

The consolidated provision for income taxes of $4.3 million for the three months ended March 31, 2017 as compared to a provision of $0.1 million for the same period in 2016 reflects an overall increase in expense primarily related to net income in the taxable REIT subsidiary of the Cole Capital segment during the three months ended March 31, 2017 as compared to a net loss for the same period in 2016. During the three months ended March 31, 2017, the Company also recognized a taxable gain on the sale of certain Canadian properties.

57

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 expenses, litigation and other non-routine costs, gains or losses on sale of investment securities or mortgage notes receivable, legal settlements and insurance recoveries not in the ordinary course of business. We also exclude certain non-cash items such as impairments of goodwill and 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 and amortization of intangible assets, deferred financing costs, above-market lease assets and below-market lease liabilities. Effective January 1, 2017, we determined to omit the impact of the Excluded Properties and related non-recourse mortgage notes from AFFO. 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.

58

The table below presents FFO and AFFO for the three months ended March 31, 2017 and 2016 (in thousands, except share and per share data).

	Three Months Ended March 31,
Consolidated	2017			2016
Net income (loss)	$	14,790		$	(116,080	)
Dividends on non-convertible preferred stock	(17,973		)	(17,973		)
Gain on real estate assets and interest in joint venture, net	(12,481		)	(27,373		)
Depreciation and amortization of real estate assets	178,295			195,991
Impairment of real estate	6,725			160,517
Proportionate share of adjustments for unconsolidated entities	709			1,147
FFO attributable to common stockholders and limited partners	170,065			196,229
Acquisition-related expenses	617			242
Litigation and other non-routine costs, net of insurance recoveries	12,875			(5,175		)
(Gain) loss on derivative instruments, net	(824		)	1,086
Amortization of premiums and discounts on debt and investments, net	(847		)	(4,426		)
Amortization of above-market lease assets and deferred lease incentives, net of amortization of below-market lease liabilities	1,305			1,296
Net direct financing lease adjustments	621			559
Amortization and write-off of deferred financing costs	6,347			7,307
Amortization of management contracts	4,146			7,451
Deferred tax expense (benefit) (1)	1,649			(1,457		)
Loss on extinguishment and forgiveness of debt, net	70			—
Straight-line rent, net of bad debt expense related to straight-line rent	(12,797		)	(13,045		)
Equity-based compensation	3,111			1,730
Other amortization and non-cash charges	634			743
Proportionate share of adjustments for unconsolidated entities	55			135
Adjustments for Excluded Properties	294			—
AFFO attributable to common stockholders and limited partners	$	187,321		$	192,675
Weighted-average shares of common stock outstanding - basic	973,849,610			903,825,726
Limited Partner OP Units and effect of dilutive securities(2)	24,402,139			26,354,148
Weighted-average shares of common stock outstanding - diluted (3)	998,251,749			930,179,874
AFFO attributable to common stockholders and limited partners per diluted share	$	0.19		$	0.21

____________________________________

(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.

59

The table below presents FFO and AFFO for the REI segment for the three months ended March 31, 2017 and 2016 (in thousands, except share and per share data).

	Three Months Ended March 31,
REI segment:	2017			2016
Net income (loss)	$	12,780		$	(115,534	)
Dividends on non-convertible preferred stock	(17,973		)	(17,973		)
Gain on real estate assets and interest in joint venture, net	(12,481		)	(27,373		)
Depreciation and amortization of real estate assets	178,295			195,991
Impairment of real estate	6,725			160,517
Proportionate share of adjustments for unconsolidated entities	709			1,147
FFO attributable to common stockholders and limited partners	168,055			196,775
Acquisition-related expenses	617			217
Litigation and other non-routine costs, net of insurance recoveries	12,875			(5,175		)
(Gain) loss on derivative instruments, net	(824		)	1,086
Amortization of premiums and discounts on debt and investments, net	(847		)	(4,426		)
Amortization of above-market lease assets and deferred lease incentives, net of amortization of below-market lease liabilities	1,305			1,296
Net direct financing lease adjustments	621			559
Amortization and write-off of deferred financing costs	6,347			7,307
Loss on extinguishment and forgiveness of debt, net	70			—
Straight-line rent, net of bad debt expense related to straight-line rent	(12,797		)	(13,045		)
Equity-based compensation	1,664			799
Other amortization and non-cash charges	2			—
Proportionate share of adjustments for unconsolidated entities	55			135
Adjustments for Excluded Properties	294			—
AFFO attributable to common stockholders and limited partners	$	177,437		$	185,528
Weighted-average shares of common stock outstanding - basic	973,849,610			903,825,726
Limited Partner OP Units and effect of dilutive securities (1)	24,402,139			26,354,148
Weighted-average shares of common stock outstanding - diluted (2)	998,251,749			930,179,874
AFFO attributable to common stockholders and limited partners per diluted share	$	0.18		$	0.20

____________________________________

(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 months ended March 31, 2017 and 2016 (in thousands, except share and per share data).

	Three Months Ended March 31,
Cole Capital segment:	2017		2016
Net income (loss)	2,010		$	(546	)
FFO attributable to common stockholders and limited partners	2,010		(546		)
Acquisition-related expenses	—		25
Amortization of Management Contracts	4,146		7,451
Deferred tax expense (benefit) (1)	1,649		(1,457		)
Equity-based compensation	1,447		931
Other amortization and non-cash charges	632		743
AFFO attributable to common stockholders and limited partners	$	9,884	$	7,147
Weighted-average shares of common stock outstanding - basic	973,849,610		903,825,726
Limited Partner OP Units and effect of dilutive securities (2)	24,402,139		26,354,148
Weighted-average shares of common stock outstanding - diluted (3)	998,251,749		930,179,874
AFFO attributable to common stockholders and limited partners per diluted share	$	0.01	$	0.01

_________________________________

(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 costs; and

• fund 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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Continuous Equity Offering Program

On September 19, 2016, the Company registered 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 March 31, 2017, no shares of common stock have been issued pursuant to the Program.

Disposition Activity

As part of our effort to optimize our real estate portfolio by focusing on holding core assets, during the three months ended March 31, 2017, we disposed of 50 properties for an aggregate sales price of $210.6 million, of which our share was $200.8 million, resulting in consolidated proceeds of $195.7 million after disposition fees and debt assumptions. We expect to continue to explore opportunities to sell additional properties as we pay off outstanding debt, 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.

As of March 31, 2017, the Credit Facility allowed for maximum borrowings of $2.8 billion, consisting of the $0.5 billion 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 year ended December 31, 2016, the Company repaid all of the outstanding borrowings under its revolving credit facility and has no outstanding balance as of March 31, 2017. 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 March 31, 2017. As of March 31, 2017, 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 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.

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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 up to 30% of its unencumbered asset value in such calculation.

The Company believes that it was in compliance with the financial covenants pursuant to the Credit Agreement and is not restricted from accessing any borrowing availability under the Credit Facility as of March 31, 2017.

Corporate Bonds

Summary and Obligations

As of March 31, 2017, the OP had $2.25 billion aggregate principal amount of Senior Notes. The indentures governing the Senior Notes require 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 financial covenants of our Senior Notes during the three months ended March 31, 2017. As of March 31, 2017, the Company believes that it was in compliance with the financial covenants pursuant to the indenture governing the Senior Notes.

Convertible Debt

Summary and Obligations

As of March 31, 2017, the Company had $1.00 billion aggregate principal amount of Convertible Notes. The OP has issued corresponding identical convertible notes to the General Partner. There were no changes to the terms of our Convertible Notes during the three months ended March 31, 2017.

Mortgage Notes Payable and Other Debt

Summary and Obligations

As of March 31, 2017, we had non-recourse mortgage indebtedness of $2.6 billion, which was collateralized by 597 properties, reflecting a net decrease from December 31, 2016 of $76.6 million primarily resulting from our disposition activity during the three months ended March 31, 2017. Our mortgage indebtedness bore interest at the weighted-average rate of 4.99% 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.

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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 March 31, 2017, the Company believes that it was in compliance with the financial covenants under the mortgage loan agreements.

Other Debt

As of March 31, 2017, the Company had the secured KBC Loan with an outstanding principal balance of $15.8 million and remaining unamortized premium of $0.1 million. 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 March 31, 2017 are $2.5 million and $13.3 million for the years ended December 31, 2017 and 2018, respectively.

Dividends

On February 22, 2017, 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 first quarter of 2017 to stockholders of record as of March 31, 2017, which was paid on April 17, 2017. An equivalent distribution by the Operating Partnership is applicable 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 March 31, 2017, 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 March 31, 2017 (in thousands):

	Total		Less than 1 year		1-3 years		4-5 years		More than 5 years
Principal payments - mortgage notes and other debt	$	2,569,208	$	359,587	$	336,738	$	636,057	$	1,236,826
Interest payments - mortgage notes and other debt (1) (2)	545,903		118,842		204,774		147,975		74,312
Principal payments - Credit Facility	500,000		—		500,000		—		—
Interest payments - Credit Facility (1) (2)	20,560		16,459		4,101		—		—
Principal payments - corporate bonds	2,250,000		—		750,000		400,000		1,100,000
Interest payments - corporate bonds	535,924		91,250		156,563		123,750		164,361
Principal payments - convertible debt	1,000,000		—		597,500		402,500		—
Interest payments - convertible debt	79,831		33,019		36,163		10,649		—
Operating and ground lease commitments	304,984		13,858		36,278		34,803		220,045
Total	$	7,806,410	$	633,015	$	2,622,117	$	1,755,734	$	2,795,544

____________________________________

(1) As of March 31, 2017, we had $188.7 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 $13.7 million of variable rate debt payment obligations were calculated using a forward LIBOR curve.

Cash Flow Analysis

Operating Activities –During the three months ended March 31, 2017, net cash provided by operating activities increased$5.7 million to $184.3 million from $178.6 million during the same period in 2016. The increase was primarily due to lower interest payments during the three months ended March 31, 2017 as compared to the same period in 2016 as a result of a $1.5 billion reduction in debt outstanding subsequent to March 31, 2016. The increase was partially offset by a decrease in rental receipts related to the disposition of 351 consolidated properties subsequent to January 1, 2016 and a decrease in insurance recoveries related to the Audit Committee Investigation and related litigation of $10.0 million.

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Investing Activities –Net cash provided by investing activities for the three months ended March 31, 2017decreased$121.5 million to $79.9 million from $201.4 million during the same period in 2016. The decrease was primarily due to an increase in investments in real estate assets and real estate developments of $87.0 million and a decrease in cash receipts from affiliate line of credit repayments of $47.5 million. These decreases were partially offset by an increase in cash proceeds from the disposition of real estate assets of $19.6 million.

Financing Activities –Net cash used in financing activities of $235.1 million decreased $109.6 million during the three months ended March 31, 2017 from $344.6 million during the same period in 2016. The decrease was primarily related to a decrease in net debt repayments on the revolving credit facility during the three months ended March 31, 2017 as compared to the same period in 2016. This decrease was partially offset by an increase in payments on mortgage notes payable and other debt, including extinguishment costs of $62.3 million and an increase in distributions paid as a result of the issuance of Common Stock subsequent to March 31, 2016.

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, 2017.

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.

Related Party Transactions and Agreements

There have been no related party transactions to report during the three months ended March 31, 2017 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.

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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, 2016:

•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.

Interest Rate Risk

As of March 31, 2017, 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 $6.4 billion and $6.3 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 March 31, 2017 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 $225.8 million. A 100 basis point decrease in market interest rates would result in an increase in the fair value of our fixed-rate debt of $219.7 million.

As of March 31, 2017, our debt included variable-rate debt with a fair value and carrying value each of $13.7 million. The sensitivity analysis related to our variable-rate debt assumes an immediate 100 basis point move in interest rates from their March 31, 2017 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 March 31, 2017, our interest rate swaps had a fair value that resulted in an asset of $0.4 million and a liability of $2.0 million. See “Note 11 –Derivatives and Hedging Activities” to our consolidated financial statements for further discussion.

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As the information presented above includes only those exposures that existed as of March 31, 2017, 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.

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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 March 31, 2017 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 March 31, 2017 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 March 31, 2017 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 March 31, 2017 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 

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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, 2016.

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

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 first quarter of 2017, 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)
January 1, 2017 – January 31, 2017	1,104	$	8.46
February 1, 2017 – February 28, 2017	33,844	8.70
March 1, 2017 – March 31, 2017	30,025	8.49
Total	64,973	$	8.60

_______________________________________________

(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.

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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: May 3, 2017

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Exhibit Index

The following exhibits are included in this Quarterly Report on Form 10-Q for the quarter ended March 31, 2017 (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).

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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).
10.1*	Form of 2017 Deferred Stock Unit Award Agreement to be entered into with non-executive directors pursuant to the VEREIT, Inc. Equity Plan.
10.2*	Form of 2017 Deferred Stock Unit Award Agreement to be entered into with non-executive directors pursuant to the VEREIT, Inc. Equity Plan and the Independent Directors’ Deferred Compensation Program.
10.3	Amendment effective February 22, 2017, to the Amended and Restated Employment Letter, dated as of February 23, 2016, by and between VEREIT, Inc. and William C. Miller (Incorporated by reference to the Company's Annual Report on Form 10-K (File No. 001-35263), for the year ended December 31, 2016 filed with the SEC on February 23, 2017).
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.

72

EX-10.1

Exhibit 10.1

FORM OF

DEFERRED STOCK UNIT AWARD AGREEMENT

PURSUANT TO THE

VEREIT, INC.

EQUITY PLAN

THIS AGREEMENT (the “Agreement”) is made as of ___________, by and between VEREIT, Inc., a Maryland corporation with its principal office at 2325 E. Camelback Road, Phoenix, Arizona 85016 (the “Company”), and ___________ (the “Participant”).

WHEREAS, the Board of Directors of the Company (the “Board”) adopted the VEREIT, Inc. Equity Plan (approved by the Board on September 6, 2011) (as such plan may be amended from time to time, the “Plan”);

WHEREAS, the Plan provides that the Company, through the Compensation Committee of the Board, has the ability to grant awards of deferred stock units to directors, officers and employees of the Company, among certain others; and

WHEREAS, subject to the terms and conditions of this Agreement and the Plan, the Board has determined that the Participant, as a director of the Company, shall be awarded DSUs (defined below) in the amount set forth below.

NOW, THEREFORE, the Company and the Participant agree as follows:

1. Award of DSUs. Subject to the terms, conditions and restrictions of the Plan and this Agreement, the Company hereby awards to the Participant ______ deferred stock units (the “DSUs”) on the date hereof (the “Grant Date”). Subject to the terms of this Agreement, each DSU represents the right to receive one share of Common Stock of the Company, par value $0.01 (“Common Stock”). The Participant shall have no rights as a stockholder of the Company with respect to the shares of Common Stock subject to the DSUs until such time as the shares of Common Stock have been issued and delivered to the Participant in accordance with Section 5 of this Agreement. Any fractional amounts shall be rounded to the nearest whole share.

2. Vesting. The DSUs are fully vested on the Grant Date.

3. Dividend Equivalents. Prior to the Settlement Date, whenever the Company shall pay any dividend or distribution with respect to its Common Stock, the Company shall make a cash payment to the Participant in an amount equal to the per share dividend or distribution paid by the Company multiplied by the number of DSUs granted pursuant to this Agreement, as adjusted pursuant to the corporate reorganization provision of Section 5(b) of the Plan.

4. Settlement. On the earlier of the Participant’s Separation from Service (as defined in the Plan), death or the third anniversary of the Grant Date (the “Settlement Date”), the Company shall deliver to the Participant a number of shares of Common Stock equal to the number of

Exhibit 10.1

DSUs granted pursuant to this Agreement, as adjusted pursuant to the corporate reorganization provisions of Section 5(b) of the Plan.

5. Taxes. If applicable, no later than on the Settlement Date, (a) the Participant shall pay to the Company, or make arrangements satisfactory to the Company regarding payment of, the minimum statutory amount to satisfy any Federal, state or local income, employment, payroll or other taxes or obligations of any kind required by law to be withheld in respect of the DSUs vesting on the applicable Vesting Date and (b) if requested by the Participant by prior written instruction, the Company shall satisfy such liability by deducting from any settlement of shares of Common Stock and/or cash otherwise due to the Participant on the Settlement Date a number of shares of Common Stock and cash having an aggregate value equal to the minimum statutory amount of such taxes or obligations required by law to be withheld in respect of the DSUs.

6. No Obligation to Continue Service. Neither the execution of this Agreement nor the issuance of the DSUs hereunder constitutes an agreement by the Company or any of its affiliates to continue the Participant’s service during the entire, or any portion of, the term of this Agreement, including but not limited to any period during which any DSUs are outstanding.

7. Miscellaneous.

(a) This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, personal legal representatives, successors, trustees, administrators, distributees, devisees and legatees. The Company may assign to, and require, any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to expressly assume and agree in writing to perform this Agreement. Notwithstanding the foregoing, the Participant may not assign this Agreement or any of the Participant’s rights, interests or obligations hereunder.

(b) This award of DSUs shall not affect in any way the right or power of the Board or stockholders of the Company to make or authorize an adjustment, recapitalization or other change in the capital structure or the business of the Company, any merger or consolidation of the Company or subsidiaries, any issue of bonds, debentures, preferred or prior preference stock ahead of or affecting the DSUs, the dissolution or liquidation of the Company, any sale or transfer of all or part of its assets or business or any other corporate act or proceeding. The Board may make equitable adjustments to the DSUs pursuant to Section 5(b) of the Plan in the event that it determines that any corporate reorganization or similar event as described therein has affected the Common Stock.

(c) No modification or waiver of any of the provisions of this Agreement shall be effective unless in writing and signed by the party against whom it is sought to be enforced.

(d) This Agreement may be executed in one or more counterparts, all of which taken together shall constitute one contract.

(e) The failure of any party hereto at any time to require performance by another party of any provision of this Agreement shall not affect the right of such party to require performance of that provision, and any waiver by any party of any breach of any provision of this Agreement shall

Exhibit 10.1

not be construed as a waiver of any continuing or succeeding breach of such provision, a waiver of the provision itself, or a waiver of any right under this Agreement.

(f) The headings of the sections of this Agreement have been inserted for convenience of reference only and shall in no way restrict or modify any of the terms or provisions hereof.

(g) All notices, consents, requests, approvals, instructions and other communications provided for herein shall be in writing and validly given or made when delivered, or on the second succeeding business day after being mailed by registered or certified mail, whichever is earlier, to the persons entitled or required to receive the same, at the addresses set forth at the heading of this Agreement or to such other address as either party may designate by like notice. Notices to the Company shall be addressed to VEREIT, Inc. at 2325 E. Camelback Road, Phoenix, AZ 85016, Attn: Chief Financial Officer.

(h) This Agreement shall be construed, interpreted and governed and the legal relationships of the parties determined in accordance with the internal laws of the State of Maryland without reference to rules relating to conflicts of law.

8. Provisions of Plan Control. This Agreement is subject to all the terms, conditions and provisions of the Plan, including, without limitation, the amendment provisions thereof, and to such rules, regulations and interpretations relating to the Plan as may be adopted thereunder and as may be in effect from time to time. The Plan is incorporated herein by reference. A copy of the Plan has been delivered to the Participant. If and to the extent that this Agreement conflicts or is inconsistent with the terms, conditions and provisions of the Plan, the Plan shall control, and this Agreement shall be deemed to be modified accordingly. Unless otherwise indicated, any capitalized term used but not defined herein shall have the meaning ascribed to such term in the Plan. This Agreement contains the entire understanding of the parties with respect to the subject matter hereof (other than any other documents expressly contemplated herein or in the Plan) and supersedes any prior agreements between the Company and the Participant. Notwithstanding the foregoing, Section 8 (entitled “Excise Tax”) of the Plan shall not be applicable to the Participant with respect to the DSUs under this Agreement.

9. Consent to Electronic Delivery; Electronic Signature. In lieu of receiving documents in paper format, the Participant agrees, to the fullest extent permitted by law, to accept electronic delivery of any documents that the Company may be required to deliver (including, without limitation, prospectuses, prospectus supplements, grant or award notifications and agreements, account statements, annual and quarterly reports, and all other forms of communications) in connection with this and any other award made or offered by the Company. Electronic delivery may be via an electronic mail system or by reference to a location on the Company’s intranet to which the Participant has access. The Participant consents to any and all procedures the Company has established or may establish for an electronic signature system for delivery and acceptance of any such documents that the Company may be required to deliver, and agrees that his or her electronic signature is the same as, and shall have the same force and effect as, his or her manual signature.

[signature page(s) follow]

Exhibit 10.1

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written.

VEREIT, INC.

By: __________________________________________

Name:

Title:

Participant

_______________________________

EX-10.2

Exhibit 10.2

FORM OF

DEFERRED STOCK UNIT AWARD AGREEMENT

PURSUANT TO THE

VEREIT, INC.

EQUITY PLAN

THIS AGREEMENT (the “Agreement”) is made as of ___________, by and between VEREIT, Inc., a Maryland corporation with its principal office at 2325 E. Camelback Road, Phoenix, Arizona 85016 (the “Company”), and ___________ (the “Participant”).

WHEREAS, the Board of Directors of the Company (the “Board”) adopted the VEREIT, Inc. Equity Plan (approved by the Board on September 6, 2011) (as such plan may be amended from time to time, the “Plan”);

WHEREAS, the Plan provides that the Company, through the Compensation Committee of the Board, has the ability to grant awards of deferred stock units to directors, officers and employees of the Company, among certain others;

WHEREAS, the Participant has voluntarily elected to participate in the Independent Director’s Deferred Director Compensation Program for ___________; and

WHEREAS, subject to the terms and conditions of this Agreement and the Plan, the Board has determined that the Participant, as a director of the Company, shall be awarded DSUs (defined below) in the amount set forth below.

NOW, THEREFORE, the Company and the Participant agree as follows:

1. Award of DSUs. Subject to the terms, conditions and restrictions of the Plan and this Agreement, the Company hereby awards to the Participant ___________ deferred stock units (the “DSUs”) on the date hereof (the “Grant Date”). Subject to the terms of this Agreement, each DSU represents the right to receive one share of Common Stock of the Company, par value $0.01 (“Common Stock”). The Participant shall have no rights as a stockholder of the Company with respect to the shares of Common Stock subject to the DSUs until such time as the shares of Common Stock have been issued and delivered to the Participant in accordance with Section 5 of this Agreement. Any fractional amounts shall be rounded to the nearest whole share.

2. Vesting. The DSUs are fully vested on the Grant Date.

3. Dividend Equivalents. Prior to the Settlement Date (as defined below), whenever dividends (other than dividends payable only in shares of Common Stock) are paid with respect to Common Stock, the Participant shall be credited with a cash credit equal to the dividend value per share of Common Stock multiplied by the number of DSUs set forth in Section 1 of this Agreement, as adjusted pursuant to the corporate reorganization provision of Section 5(b) of the Plan (the “Dividend Credit”). On the last dividend payment date of a calendar year, an amount of DSUs

Exhibit 10.2

shall then be granted to Participant equaling the Dividend Credit for such calendar year through the last dividend payment date of such calendar year divided by the average of the closing prices of the Common Stock on each dividend payment date for such calendar year (including the last dividend payment date). Any fractional amounts shall be rounded to the nearest whole share.

4. Settlement. On the earlier of (a) the Participant’s Separation from Service (as defined in the Plan), (b) death, or (c) a change in the ownership or effective control of the Company, or in the ownership of a substantial portion of the assets of the Company, within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder (a “Change of Control”) (the “Settlement Date”), the Company shall deliver to the Participant a number of shares of Common Stock equal to the number of DSUs granted pursuant to this Agreement, as adjusted pursuant to the corporate reorganization provisions of Section 5(b) of the Plan. Notwithstanding the above, (i) upon a Separation of Service or death, any Dividend Credits contemplated by Section 3 hereof that have not been converted to DSUs as of the Settlement Date will be settled in Common Stock by dividing such Dividend Credits by the average of the closing prices of the Stock on the New York Stock Exchange on the respective dividend payments dates from that year in accordance with the formula set forth in Section 3 hereof, and (ii) upon a Change of Control, any Dividend Credits contemplated by Section 3 hereof that have not been converted to DSUs as of the Settlement Date shall become immediately payable in cash.

5. Taxes. If applicable, no later than on the Settlement Date, (a) the Participant shall pay to the Company, or make arrangements satisfactory to the Company regarding payment of, the minimum statutory amount to satisfy any Federal, state or local income, employment, payroll or other taxes or obligations of any kind required by law to be withheld in respect of the DSUs vesting on the applicable Vesting Date and (b) if requested by the Participant by prior written instruction, the Company shall satisfy such liability by deducting from any settlement of shares of Common Stock and/or cash otherwise due to the Participant on the Settlement Date a number of shares of Common Stock and cash having an aggregate value equal to the minimum statutory amount of such taxes or obligations required by law to be withheld in respect of the DSUs.

6. No Obligation to Continue Service. Neither the execution of this Agreement nor the issuance of the DSUs hereunder constitutes an agreement by the Company or any of its affiliates to continue the Participant’s service during the entire, or any portion of, the term of this Agreement, including but not limited to any period during which any DSUs are outstanding.

7. Miscellaneous.

(a) This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, personal legal representatives, successors, trustees, administrators, distributees, devisees and legatees. The Company may assign to, and require, any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to expressly assume and agree in writing to perform this Agreement. Notwithstanding the foregoing, the Participant may not assign this Agreement or any of the Participant’s rights, interests or obligations hereunder.

Exhibit 10.2

(b) This award of DSUs shall not affect in any way the right or power of the Board or stockholders of the Company to make or authorize an adjustment, recapitalization or other change in the capital structure or the business of the Company, any merger or consolidation of the Company or subsidiaries, any issue of bonds, debentures, preferred or prior preference stock ahead of or affecting the DSUs, the dissolution or liquidation of the Company, any sale or transfer of all or part of its assets or business or any other corporate act or proceeding. The Board may make equitable adjustments to the DSUs pursuant to Section 5(b) of the Plan in the event that it determines that any corporate reorganization or similar event as described therein has affected the Common Stock.

(c) No modification or waiver of any of the provisions of this Agreement shall be effective unless in writing and signed by the party against whom it is sought to be enforced.

(d) This Agreement may be executed in one or more counterparts, all of which taken together shall constitute one contract.

(e) The failure of any party hereto at any time to require performance by another party of any provision of this Agreement shall not affect the right of such party to require performance of that provision, and any waiver by any party of any breach of any provision of this Agreement shall not be construed as a waiver of any continuing or succeeding breach of such provision, a waiver of the provision itself, or a waiver of any right under this Agreement.

(f) The headings of the sections of this Agreement have been inserted for convenience of reference only and shall in no way restrict or modify any of the terms or provisions hereof.

(g) All notices, consents, requests, approvals, instructions and other communications provided for herein shall be in writing and validly given or made when delivered, or on the second succeeding business day after being mailed by registered or certified mail, whichever is earlier, to the persons entitled or required to receive the same, at the addresses set forth at the heading of this Agreement or to such other address as either party may designate by like notice. Notices to the Company shall be addressed to VEREIT, Inc. at 2325 E. Camelback Road, Phoenix, AZ 85016, Attn: Chief Financial Officer.

(h) This Agreement shall be construed, interpreted and governed and the legal relationships of the parties determined in accordance with the internal laws of the State of Maryland without reference to rules relating to conflicts of law.

8. Provisions of Plan Control. This Agreement is subject to all the terms, conditions and provisions of the Plan, including, without limitation, the amendment provisions thereof, and to such rules, regulations and interpretations relating to the Plan as may be adopted thereunder and as may be in effect from time to time. The Plan is incorporated herein by reference. A copy of the Plan has been delivered to the Participant. If and to the extent that this Agreement conflicts or is inconsistent with the terms, conditions and provisions of the Plan, the Plan shall control, and this Agreement shall be deemed to be modified accordingly. Unless otherwise indicated, any capitalized term used but not defined herein shall have the meaning ascribed to such term in the Plan. This Agreement contains the entire understanding of the parties with respect to the subject matter hereof (other than any other documents expressly contemplated herein or in the Plan) and supersedes any prior agreements between

Exhibit 10.2

the Company and the Participant. Notwithstanding the foregoing, Section 8 (entitled “Excise Tax”) of the Plan shall not be applicable to the Participant with respect to the DSUs under this Agreement.

9. Consent to Electronic Delivery; Electronic Signature. In lieu of receiving documents in paper format, the Participant agrees, to the fullest extent permitted by law, to accept electronic delivery of any documents that the Company may be required to deliver (including, without limitation, prospectuses, prospectus supplements, grant or award notifications and agreements, account statements, annual and quarterly reports, and all other forms of communications) in connection with this and any other award made or offered by the Company. Electronic delivery may be via an electronic mail system or by reference to a location on the Company’s intranet to which the Participant has access. The Participant consents to any and all procedures the Company has established or may establish for an electronic signature system for delivery and acceptance of any such documents that the Company may be required to deliver, and agrees that his or her electronic signature is the same as, and shall have the same force and effect as, his or her manual signature.

[signature page(s) follow]

Exhibit 10.2

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written.

VEREIT, INC.

By: __________________________________________

Name:

Title:

Participant

_______________________________

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:	May 3, 2017	/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:	May 3, 2017	/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:	May 3, 2017	/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:	May 3, 2017	/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 March 31, 2017 (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:	May 3, 2017	/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 March 31, 2017 (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:	May 3, 2017	/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 March 31, 2017 (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:	May 3, 2017	/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 March 31, 2017 (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:	May 3, 2017	/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	3 Months Ended
	Mar. 31, 2017	May 02, 2017
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	Mar. 31, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q1
Amendment Flag	false
Entity Common Stock, Shares Outstanding		974,311,931
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	Mar. 31, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q1
Amendment Flag	false
Entity Current Reporting Status	Yes

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Real estate investments, at cost:
Land	$ 2,868,447	$ 2,895,625
Buildings, fixtures and improvements	10,630,598	10,644,296
Intangible lease assets	2,017,739	2,044,521
Total real estate investments, at cost	15,516,784	15,584,442
Less: accumulated depreciation and amortization	2,494,811	2,331,643
Total real estate investments, net	13,021,973	13,252,799
Investment in unconsolidated entities	45,145	46,077
Investment in direct financing leases, net	34,909	39,455
Investment securities, at fair value	42,630	47,215
Mortgage notes receivable, net	22,545	22,764
Cash and cash equivalents	285,586	256,452
Restricted cash	46,712	45,018
Intangible assets, net	20,464	24,609
Rent and tenant receivables and other assets, net	346,898	330,705
Goodwill	1,462,585	1,462,203
Due from affiliates	15,007	21,349
Real estate assets held for sale, net	12,081	38,928
Total assets	15,356,535	15,587,574
LIABILITIES AND EQUITY
Mortgage notes payable and other debt, net	2,586,917	2,671,106
Corporate bonds, net	2,227,307	2,226,224
Convertible debt, net	976,031	973,340
Credit facility, net	497,148	496,578
Below-market lease liabilities, net	217,721	224,023
Accounts payable and accrued expenses	135,817	146,137
Deferred rent, derivative and other liabilities	68,196	68,039
Distributions payable	165,765	162,578
Due to affiliates	7	16
Total liabilities	6,874,909	6,968,041
Commitments and contingencies (Note 14)
EQUITY
Preferred stock, $0.01 par value, 100,000,000 shares authorized and 42,834,138 issued and outstanding as of each of March 31, 2017 and December 31, 2016	428	428
Common stock, $0.01 par value, 1,500,000,000 shares authorized and 974,238,458 and 974,146,650 issued and outstanding as of March 31, 2017 and December 31, 2016, respectively	9,742	9,741
Additional paid-in-capital	12,642,099	12,640,171
Accumulated other comprehensive loss	(1,795)	(2,556)
Accumulated deficit	(4,338,029)	(4,200,423)
Total stockholders’ equity	8,312,445	8,447,361
Non-controlling interests	169,181	172,172
Total equity	8,481,626	8,619,533
Total liabilities and equity	15,356,535	15,587,574
VEREIT Operating Partnership, L.P. [Member]
Real estate investments, at cost:
Land	2,868,447	2,895,625
Buildings, fixtures and improvements	10,630,598	10,644,296
Intangible lease assets	2,017,739	2,044,521
Total real estate investments, at cost	15,516,784	15,584,442
Less: accumulated depreciation and amortization	2,494,811	2,331,643
Total real estate investments, net	13,021,973	13,252,799
Investment in unconsolidated entities	45,145	46,077
Investment in direct financing leases, net	34,909	39,455
Investment securities, at fair value	42,630	47,215
Mortgage notes receivable, net	22,545	22,764
Cash and cash equivalents	285,586	256,452
Restricted cash	46,712	45,018
Intangible assets, net	20,464	24,609
Rent and tenant receivables and other assets, net	346,898	330,705
Goodwill	1,462,585	1,462,203
Due from affiliates	15,007	21,349
Real estate assets held for sale, net	12,081	38,928
Total assets	15,356,535	15,587,574
LIABILITIES AND EQUITY
Mortgage notes payable and other debt, net	2,586,917	2,671,106
Corporate bonds, net	2,227,307	2,226,224
Convertible debt, net	976,031	973,340
Credit facility, net	497,148	496,578
Below-market lease liabilities, net	217,721	224,023
Accounts payable and accrued expenses	135,817	146,137
Deferred rent, derivative and other liabilities	68,196	68,039
Distributions payable	165,765	162,578
Due to affiliates	7	16
Total liabilities	6,874,909	6,968,041
Commitments and contingencies (Note 14)
EQUITY
Total partners’ equity	8,479,290	8,617,130
Non-controlling interests	2,336	2,403
Total equity	8,481,626	8,619,533
Total liabilities and equity	15,356,535	15,587,574
VEREIT Operating Partnership, L.P. [Member] | Preferred Units [Member]
EQUITY
General Partners' capital account	835,884	853,821
Limited Partners' capital account	3,135	3,171
VEREIT Operating Partnership, L.P. [Member] | Common Stock [Member]
EQUITY
General Partners' capital account	7,476,561	7,593,540
Limited Partners' capital account	$ 163,710	$ 166,598

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Mar. 31, 2017	Dec. 31, 2016
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)	974,238,458	974,146,650
Common stock, shares outstanding (shares)	974,238,458	974,146,650
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)	974,238,458	974,146,650
General partners', units outstanding (shares)	974,238,458	974,146,650
Limited partners', units issued (shares)	23,748,347	23,748,347
Limited partners', units outstanding (shares)	23,748,347	23,748,347

XML

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands		3 Months Ended
		Mar. 31, 2017	Mar. 31, 2016
Revenues:
Rental income		$ 293,739	$ 313,971
Direct financing lease income		433	569
Operating expense reimbursements		26,726	23,247
Cole Capital revenue		27,131	31,233
Total revenues		348,029	369,020
Operating expenses:
Cole Capital reallowed fees and commissions		2,660	8,068
Acquisition-related		617	242
Litigation and other non-routine costs, net of insurance recoveries		12,875	(5,175)
Property operating		34,016	34,813
General and administrative		29,148	29,400
Depreciation and amortization		183,152	204,308
Impairments		6,725	160,517
Total operating expenses		269,193	432,173
Operating income (loss)		78,836	(63,153)
Other (expense) income:
Interest expense		(73,743)	(80,426)
Loss on extinguishment and forgiveness of debt, net		(70)	0
Other income, net		798	1,062
Equity in (loss) income and gain on disposition of unconsolidated entities		(82)	10,404
Gain (loss) on derivative instruments, net		824	(1,086)
Total other expenses, net		(72,273)	(70,046)
Income (loss) before taxes and real estate dispositions		6,563	(133,199)
Gain on disposition of real estate and held for sale assets, net		12,481	17,175
Income (loss) before taxes		19,044	(116,024)
Provision for income taxes		(4,254)	(56)
Net income (loss)		14,790	(116,080)
Net (income) loss attributable to non-controlling interests	[1]	(352)	2,994
Net income (loss) attributable to the General Partner / OP		$ 14,438	$ (113,086)
Basic and diluted net loss per share attributable to common stockholders (in dollars per share)		$ 0.00	$ (0.15)
Distributions declared per common share / unit (in dollars per share)		$ 0.14	$ 0.14
VEREIT Operating Partnership, L.P. [Member]
Revenues:
Rental income		$ 293,739	$ 313,971
Direct financing lease income		433	569
Operating expense reimbursements		26,726	23,247
Cole Capital revenue		27,131	31,233
Total revenues		348,029	369,020
Operating expenses:
Cole Capital reallowed fees and commissions		2,660	8,068
Acquisition-related		617	242
Litigation and other non-routine costs, net of insurance recoveries		12,875	(5,175)
Property operating		34,016	34,813
General and administrative		29,148	29,400
Depreciation and amortization		183,152	204,308
Impairments		6,725	160,517
Total operating expenses		269,193	432,173
Operating income (loss)		78,836	(63,153)
Other (expense) income:
Interest expense		(73,743)	(80,426)
Loss on extinguishment and forgiveness of debt, net		(70)	0
Other income, net		798	1,062
Equity in (loss) income and gain on disposition of unconsolidated entities		(82)	10,404
Gain (loss) on derivative instruments, net		824	(1,086)
Total other expenses, net		(72,273)	(70,046)
Income (loss) before taxes and real estate dispositions		6,563	(133,199)
Gain on disposition of real estate and held for sale assets, net		12,481	17,175
Income (loss) before taxes		19,044	(116,024)
Provision for income taxes		(4,254)	(56)
Net income (loss)		14,790	(116,080)
Net (income) loss attributable to non-controlling interests	[2]	7	39
Net income (loss) attributable to the General Partner / OP		$ 14,797	$ (116,041)
Basic and diluted net loss per unit attributable to common unitholders (in dollars per share)		$ 0.00	$ (0.15)
Distributions declared per common share / unit (in dollars per share)		$ 0.14	$ 0.14

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

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

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands		3 Months Ended
		Mar. 31, 2017	Mar. 31, 2016
Net income (loss)		$ 14,790	$ (116,080)
Other comprehensive income (loss):
Unrealized gain (loss) on interest rate derivatives		504	(9,702)
Reclassification of previous unrealized loss on interest rate derivatives into net income (loss)		470	2,099
Unrealized loss on investment securities, net		(194)	(1,961)
Total other comprehensive income (loss)		780	(9,564)
Total comprehensive income (loss)		15,570	(125,644)
Comprehensive (income) loss attributable to non-controlling interests	[1]	(371)	3,238
Total comprehensive income (loss) attributable to the General Partner / OP		15,199	(122,406)
VEREIT Operating Partnership, L.P. [Member]
Net income (loss)		14,790	(116,080)
Other comprehensive income (loss):
Unrealized gain (loss) on interest rate derivatives		504	(9,702)
Reclassification of previous unrealized loss on interest rate derivatives into net income (loss)		470	2,099
Unrealized loss on investment securities, net		(194)	(1,961)
Total other comprehensive income (loss)		780	(9,564)
Total comprehensive income (loss)		15,570	(125,644)
Comprehensive (income) loss attributable to non-controlling interests	[2]	7	39
Total comprehensive income (loss) attributable to the General Partner / OP		$ 15,577	$ (125,605)

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

[2] Represents 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 Loss [Member]	Accumulated Deficit [Member]	Accumulated Deficit [Member] Series D Preferred Stock [Member]	Accumulated Deficit [Member] Preferred Stock [Member]	Non-Controlling Interests [Member]	Non-Controlling Interests [Member] Preferred Stock [Member]
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Cumulative effect adjustment for equity-based compensation forfeitures									$ 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]
Repurchases of common stock to settle tax obligation (shares)								(127,741)
Repurchases of common stock to settle tax obligation	(1,024)			(1,024)				$ (1)	(1,023)
Equity-based compensation, net (shares)								712
Equity-based compensation, net	1,730			1,730				$ 0	1,730
Contributions from non-controlling interest holders	675													675
Distributions declared on common stock	(124,285)			(124,285)							(124,285)
Distributions to non-controlling interest holders	(3,299)													(3,299)
Distributions		$ (125)	$ (17,973)		$ (125)	$ (17,937)						$ (125)	$ (17,937)	(36)
Net income (loss)	(116,080)			(113,086)							(113,086)			(2,994)
Other comprehensive income (loss)	(9,564)			(9,320)						(9,320)				(244)
Ending balance (shares) at Mar. 31, 2016							42,834,138	904,757,365
Ending balance at Mar. 31, 2016	8,444,014			8,259,940			$ 428	$ 9,048	11,932,859	(11,345)	(3,671,050)			184,074
Beginning balance (shares) at Dec. 31, 2016							42,834,138	974,146,650
Beginning balance at Dec. 31, 2016	8,619,533			8,447,361			$ 428	$ 9,741	12,640,171	(2,556)	(4,200,423)			172,172
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Repurchases of common stock to settle tax obligation (shares)								(140,832)
Repurchases of common stock to settle tax obligation	(1,184)			(1,184)				$ (1)	(1,183)
Equity-based compensation, net (shares)								232,640
Equity-based compensation, net	3,113			3,113				$ 2	3,111
Distributions declared on common stock	(133,929)			(133,929)							(133,929)
Distributions to non-controlling interest holders	(3,326)													(3,326)
Distributions		$ (178)	$ (17,973)		$ (178)	$ (17,937)						$ (178)	$ (17,937)		$ (36)
Net income (loss)	14,790			14,438							14,438			352
Other comprehensive income (loss)	780			761						761				19
Ending balance (shares) at Mar. 31, 2017							42,834,138	974,238,458
Ending balance at Mar. 31, 2017	$ 8,481,626			$ 8,312,445			$ 428	$ 9,742	$ 12,642,099	$ (1,795)	$ (4,338,029)			$ 169,181

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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, 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]
Repurchases of Common OP Units to settle tax obligation (shares)							(127,741)
Repurchases of common OP Units to settle tax obligation	$ (1,024)		(1,024)	(1,024)			$ (1,024)
Equity-based compensation, net (shares)							712
Equity-based compensation, net			1,730	1,730			$ 1,730
Contributions from non-controlling interest holders	675		675						675
Distributions to Common OP Units and non-controlling interest holders	(3,299)		(127,709)	(127,679)			(124,410)	(3,269)	(30)
Distributions			(17,973)	(17,973)	$ (17,937)	$ (36)
Net loss	(116,080)		(116,080)	(116,041)			(113,086)	(2,955)	(39)
Other comprehensive income	(9,564)		(9,564)	(9,564)			$ (9,320)	$ (244)
Ending balance (shares) at Mar. 31, 2016					42,834,138	86,874	904,757,365	23,763,797
Ending balance at Mar. 31, 2016			8,444,014	8,441,551	$ 907,632	$ 3,279	$ 7,352,308	$ 178,332	2,463
Beginning balance (shares) at Dec. 31, 2016					42,834,138	86,874	974,146,650	23,748,347
Beginning balance at Dec. 31, 2016			8,619,533	8,617,130	$ 853,821	$ 3,171	$ 7,593,540	$ 166,598	2,403
Increase (Decrease) in Partners' Capital [Roll Forward]
Repurchases of Common OP Units to settle tax obligation (shares)		(140,832)					(140,832)
Repurchases of common OP Units to settle tax obligation	(1,184)		(1,184)	(1,184)			$ (1,184)
Equity-based compensation, net (shares)							232,640
Equity-based compensation, net			3,113	3,113			$ 3,113
Distributions to Common OP Units and non-controlling interest holders	(3,326)		(137,433)	(137,373)			(134,107)	(3,266)	(60)
Distributions			(17,973)	(17,973)	$ (17,937)	$ (36)
Net loss	14,790		14,790	14,797			14,438	359	(7)
Other comprehensive income	$ 780		780	780			$ 761	$ 19
Ending balance (shares) at Mar. 31, 2017					42,834,138	86,874	974,238,458	23,748,347
Ending balance at Mar. 31, 2017			$ 8,481,626	$ 8,479,290	$ 835,884	$ 3,135	$ 7,476,561	$ 163,710	$ 2,336

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Cash flows from operating activities:
Net income (loss)	$ 14,790	$ (116,080)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	189,880	208,362
Gain on real estate assets and joint venture, net	(12,481)	(27,373)
Impairments	6,725	160,517
Equity-based compensation	3,111	1,730
Equity in loss (income) of unconsolidated entities	82	(206)
Distributions from unconsolidated entities	851	1,491
(Gain) loss on derivative instruments, net	(824)	1,086
Loss on extinguishment and forgiveness of debt, net	70	0
Changes in assets and liabilities:
Investment in direct financing leases	621	701
Rent and tenant receivables and other assets, net	(20,939)	(13,024)
Due from affiliates	3,792	(984)
Accounts payable and accrued expenses	(3,269)	(32,556)
Deferred rent, derivative and other liabilities	1,935	(4,822)
Due to affiliates	(9)	(230)
Net cash provided by operating activities	184,335	178,612
Cash flows from investing activities:
Investments in real estate assets	(101,914)	(19,952)
Capital expenditures and leasing costs	(6,960)	(5,388)
Real estate developments	(5,615)	(554)
Principal repayments received from borrowers	3,672	3,863
Proceeds from disposition of real estate and joint venture	195,730	176,137
Investment in leasehold improvements and other assets	(99)	(574)
Deposits for real estate assets	(13,532)	(3,818)
Uses and refunds of deposits for real estate assets	7,717	2,019
Line of credit repayments from affiliates	2,550	50,000
Change in restricted cash	(1,694)	(365)
Net cash provided by investing activities	79,855	201,368
Cash flows from financing activities:
Proceeds from mortgage notes payable	2,403	206
Payments on mortgage notes payable and other debt, including extinguishment costs	(84,261)	(21,948)
Proceeds from credit facility	0	203,000
Payments on credit facility	0	(383,000)
Payments of deferred financing costs	(3)	(240)
Repurchases of common stock / units to settle tax obligations	(976)	(801)
Contributions from non-controlling interest holders	0	675
Distributions paid	(152,219)	(142,525)
Net cash used in financing activities	(235,056)	(344,633)
Net change in cash and cash equivalents	29,134	35,347
Cash and cash equivalents, beginning of period	256,452	69,103
Cash and cash equivalents, end of period	285,586	104,450
VEREIT Operating Partnership, L.P. [Member]
Cash flows from operating activities:
Net income (loss)	14,790	(116,080)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	189,880	208,362
Gain on real estate assets and joint venture, net	(12,481)	(27,373)
Impairments	6,725	160,517
Equity-based compensation	3,111	1,730
Equity in loss (income) of unconsolidated entities	82	(206)
Distributions from unconsolidated entities	851	1,491
(Gain) loss on derivative instruments, net	(824)	1,086
Loss on extinguishment and forgiveness of debt, net	70	0
Changes in assets and liabilities:
Investment in direct financing leases	621	701
Rent and tenant receivables and other assets, net	(20,939)	(13,024)
Due from affiliates	3,792	(984)
Accounts payable and accrued expenses	(3,269)	(32,556)
Deferred rent, derivative and other liabilities	1,935	(4,822)
Due to affiliates	(9)	(230)
Net cash provided by operating activities	184,335	178,612
Cash flows from investing activities:
Investments in real estate assets	(101,914)	(19,952)
Capital expenditures and leasing costs	(6,960)	(5,388)
Real estate developments	(5,615)	(554)
Principal repayments received from borrowers	3,672	3,863
Proceeds from disposition of real estate and joint venture	195,730	176,137
Investment in leasehold improvements and other assets	(99)	(574)
Deposits for real estate assets	(13,532)	(3,818)
Uses and refunds of deposits for real estate assets	7,717	2,019
Line of credit repayments from affiliates	2,550	50,000
Change in restricted cash	(1,694)	(365)
Net cash provided by investing activities	79,855	201,368
Cash flows from financing activities:
Proceeds from mortgage notes payable	2,403	206
Payments on mortgage notes payable and other debt, including extinguishment costs	(84,261)	(21,948)
Proceeds from credit facility	0	203,000
Payments on credit facility	0	(383,000)
Payments of deferred financing costs	(3)	(240)
Repurchases of common stock / units to settle tax obligations	(976)	(801)
Contributions from non-controlling interest holders	0	675
Distributions paid	(152,219)	(142,525)
Net cash used in financing activities	(235,056)	(344,633)
Net change in cash and cash equivalents	29,134	35,347
Cash and cash equivalents, beginning of period	256,452	69,103
Cash and cash equivalents, end of period	$ 285,586	$ 104,450

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Organization

3 Months Ended

Mar. 31, 2017

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. 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 March 31, 2017 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

3 Months Ended

Mar. 31, 2017

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 months ended March 31, 2017 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, 2016 of the Company, which are included in the Company’s Annual Report on Form 10-K filed on February 23, 2017. There have been no significant changes to the Company’s significant accounting policies during the three months ended March 31, 2017, except the Company adopted Accounting Standards Update (“ASU”) 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (“ASU 2017-01”), as disclosed within the “Acquisition-Related Expenses and Litigation and Other Non-routine Costs” and “Recent Accounting Pronouncements” sections herein. 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 both March 31, 2017 and December 31, 2016, there were approximately 23.75 million Limited Partner OP Units outstanding.

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.

Acquisition-Related Expenses and Litigation and Other Non-routine Costs

As further disclosed in the “Recent Accounting Pronouncements” section herein, in January 2017, the Company elected to early adopt ASU 2017-01 which clarifies the definition of a business by adding guidance to assist entities in evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. During the three months ended March 31, 2017, all real estate acquisitions qualified as asset acquisitions, and external acquisition costs related to these asset acquisitions were capitalized. Prior to January 1, 2017, external costs related to property acquisitions were expensed as incurred. Internal costs, such as employee salaries, related to activities necessary to complete, or affect, self-originating asset acquisitions or business combinations are classified as acquisition-related expenses in the accompanying consolidated statements of operations. Any costs incurred as a result of a business combination will be classified as acquisition-related expenses or other non-routine transaction related expenses and expensed as incurred.

External acquisition-related costs incurred in relation to mergers 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 March 31,
	2017		2016
Litigation and other non-routine costs:
Audit Committee Investigation and related matters (1)	$	12,671	$	4,742
Legal fees and expenses (2)	204		83
Total costs incurred	12,875		4,825
Insurance recoveries	—		(10,000		)
Total	$	12,875	$	(5,175	)

___________________________________

(1) Includes all fees and costs associated with the previously-announced investigation conducted by the audit committee (the “Audit Committee”) of the Company’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) Includes legal fees and expenses associated with litigation resulting from prior mergers.

Recent Accounting Pronouncements

In May 2014, the U.S. Financial Accounting Standards Board (“FASB”) issued ASU 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which supersedes the revenue recognition requirements in Revenue Recognition, Accounting Standards Codification (Topic 605) and will require 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, was issued to defer the effective date for all entities by one year. For public business entities, the guidance should be applied to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Companies may use either a full retrospective or a modified retrospective approach to adopt ASU 2014-09. The Company is currently assessing the adoption methodology. In accordance with the Company’s plan for the adoption of ASU 2014-09, the Company’s implementation team has identified the Company’s revenue streams and is performing an in-depth review of the Company’s revenue contracts to identify the related performance obligations and to evaluate the impact on the Company’s financial statements and internal accounting processes and controls. 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 will have a material impact on its consolidated financial statements.

In January 2016, the FASB issued ASU 2016-01, Financial Instruments(Subtopic 825-10), which will require 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 the 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 consolidated 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’s implementation team is developing an inventory of all leases, as well as identifying any non-lease components in the lease arrangements, and evaluating the impact to the Company, both as lessor and lessee, and its consolidated financial statements.

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 recognition 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 under current U.S. 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. The Company plans to adopt ASU 2016-15 during the fourth quarter of fiscal year 2017.

In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (“ASU 2016-18”), which provides guidance on the presentation of restricted cash and restricted cash equivalents in the statement of cash flows. In accordance with ASU 2016-18, restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period amounts shown on the statements of cash flows. The amendments of ASU 2016-18 are effective for reporting periods beginning after December 15, 2017, with early adoption permitted. The Company is currently evaluating the impact this amendment will have on its consolidated financial statements.

In January 2017, the FASB issued ASU 2017-01, which clarifies the definition of a business by adding guidance to assist entities in evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those periods, with early adoption permitted, and is required to be applied prospectively to any transactions occurring within the period of adoption. The Company has elected to early adopt ASU 2017-01 effective January 1, 2017. As the Company expects that a majority of its real estate acquisitions will be considered asset acquisitions, external acquisition costs related to these asset acquisitions will be capitalized. Prior to 2017, all acquisition-related costs were expensed as incurred. The adoption of this pronouncement resulted in capitalization of $0.4 million of external acquisitions-related costs during the three months ended March 31, 2017. Internal costs, such as employee salaries, related to activities necessary to complete, or affect, self-originating asset acquisitions or business combinations are classified as acquisition-related expenses in the accompanying consolidated statements of operations. Upon adoption of ASU 2017-01, the Company's real estate dispositions qualify as asset dispositions and as such, no portion of the Company’s REI segment’s goodwill was allocated to the cost basis of these assets in determining the gain or loss on disposition of real estate and held for sale assets. Prior to January 1, 2017, when the Company disposed of a property or classified a property as held for sale, it constituted a business per U.S. GAAP and the Company allocated a portion of the REI segment's goodwill to the cost basis of that property in determining the gain or loss on the disposition of real estate and held for sale assets.

In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Others (Topic 350): Simplifying the Test for Goodwill Impairment (“ASU 2017-04”), which simplifies the measurement of goodwill impairment by eliminating Step 2 from the goodwill impairment test (comparing the implied fair value of goodwill with the carrying amount of goodwill). ASU 2017-04 is effective for public business entities for fiscal years beginning after December 15, 2019, 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 February 2017, the FASB issued ASU 2017-05, Other Income – Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets (“ASU 2017-05”), which clarifies the following: 1) nonfinancial assets within the scope of Subtopic 610-20 may include nonfinancial assets transferred within a legal entity to a counterparty; 2) an entity should allocate consideration to each distinct asset by applying the guidance in Topic 606 on allocating the transaction price to performance obligations; and 3) requires entities to derecognize a distinct nonfinancial asset or distinct in substance nonfinancial asset in a partial sale transaction when it (a) does not have (or ceases to have) a controlling financial interest in the legal entity that holds the asset in accordance with Subtopic 810 and (b) transfers control of the asset in accordance with Topic 606. ASU 2017-05 is effective for annual periods, and interim periods therein, beginning after December 15, 2017. Early adoption is permitted. The Company is currently evaluating the impact this amendment will have on its consolidated financial statements.

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Segment Reporting

3 Months Ended

Mar. 31, 2017

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 March 31, 2017, the Company owned 4,107 properties comprising 93.5 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 97.8% leased with a weighted-average remaining lease term of 9.6 years. In addition, as of March 31, 2017, 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, 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 March 31,
	2017			2016
REI segment:
Revenues:
Rental income	$	293,739		$	313,971
Direct financing lease income	433			569
Operating expense reimbursements	26,726			23,247
Total real estate investment revenues	320,898			337,787
Operating expenses:
Acquisition-related	617			217
Litigation and other non-routine costs, net of insurance recoveries	12,875			(5,175		)
Property operating	34,016			34,813
General and administrative	12,560			12,228
Depreciation and amortization	178,297			195,991
Impairment of real estate	6,725			160,517
Total operating expenses	245,090			398,591
Operating income (loss)	75,808			(60,804		)
Other (expense) income:
Interest expense	(73,743		)	(80,426		)
Loss on extinguishment and forgiveness of debt, net	(70		)	—
Other income, net	670			568
Equity in (loss) income and gain on disposition of unconsolidated entities	(82		)	10,404
Gain (loss) on derivative instruments, net	824			(1,086		)
Total other expenses, net	(72,401		)	(70,540		)
Income (loss) before taxes and real estate dispositions	3,407			(131,344		)
Gain on disposition of real estate and held for sale assets, net	12,481			17,175
Income (loss) before taxes	15,888			(114,169		)
Provision for income taxes	(3,108		)	(1,365		)
Net income (loss)	$	12,780		$	(115,534	)

	Three Months Ended March 31,
	2017			2016
Cole Capital segment:
Revenues:
Offering-related fees and reimbursements	$	4,316		$	12,391
Transaction service fees and reimbursements	4,097			2,384
Management fees and reimbursements	18,718			16,458
Total Cole Capital revenues	27,131			31,233
Operating expenses:
Cole Capital reallowed fees and commissions	2,660			8,068
Acquisition-related	—			25
General and administrative	16,588			17,172
Depreciation and amortization	4,855			8,317
Total operating expenses	24,103			33,582
Operating income (loss)	3,028			(2,349		)
Total other income, net	128			494
Income (loss) before taxes	3,156			(1,855		)
(Provision for) benefit from income taxes	(1,146		)	1,309
Net income (loss)	$	2,010		$	(546	)
Total Company:
Total revenues	$	348,029		$	369,020
Total operating expenses	$	(269,193	)	$	(432,173	)
Total other expense, net	$	(72,273	)	$	(70,046	)
Net income (loss)	$	14,790		$	(116,080	)

	Total Assets
	March 31, 2017		December 31, 2016
REI segment	$	15,110,337	$	15,337,623
Cole Capital segment	246,198		249,951
Total Company	$	15,356,535	$	15,587,574

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Goodwill and Other Intangibles

3 Months Ended

Mar. 31, 2017

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.

As of each of March 31, 2017 and December 31, 2016, $1.3 billion and $124.8 million of goodwill was allocated to the REI segment and the Cole Capital segment, respectively. During the three months ended March 31, 2017, one property classified as held for sale as of December 31, 2016 was classified as held and used, resulting in an increase to the goodwill allocated to the REI segment of $0.4 million. During the three months ended March 31, 2016, the Company allocated $13.5 million of goodwill to dispositions and held for sale assets, which was included in gain on disposition of real estate and held for sale assets, net in the consolidated statement of operations.

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 Company’s annual testing date is 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 continue 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 continue 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 three months ended March 31, 2017 and 2016, 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 remained more likely than not that the fair value of the reporting unit was greater than its carrying value.

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 remaining useful life of approximately three 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 three months ended March 31, 2017 or 2016.

The Company recorded $4.1 million and $7.5 million of amortization expense related to the intangible assets for the three months ended March 31, 2017 and 2016, respectively. The estimated amortization expense is expected to be $12.4 million for the remainder of the year ending December 31, 2017, $4.0 million for the year ending December 31, 2018 and $3.8 million for the nine months ending September 30, 2019. The intangible assets were $20.5 million and $24.6 million, net of accumulated amortization of $33.7 million and $29.6 million, respectively, as of March 31, 2017 and December 31, 2016.

Intangible Lease Assets and Liabilities

Intangible lease assets and liabilities of the Company consisted of the following as of March 31, 2017 and December 31, 2016 (amounts in thousands, except weighted-average useful life):

	Weighted-Average Useful Life	March 31, 2017		December 31, 2016
Intangible lease assets:
In-place leases, net of accumulated amortization of $525,079 and $494,131, respectively	14.7	$	1,148,158	$	1,192,756
Leasing commissions, net of accumulated amortization of $2,158 and $1,836, respectively	10.3	10,570		10,231
Above-market lease assets and deferred lease incentives, net of accumulated amortization of $74,206 and $69,670, respectively	16.1	257,568		275,897
Total intangible lease assets, net		$	1,416,296	$	1,478,884
Intangible lease liabilities:
Below-market leases, net of accumulated amortization of $61,631 and $56,891, respectively	18.1	$	217,721	$	224,023

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 March 31, 2017 (amounts in thousands):

	April 1, 2017 - December 31, 2017		2018		2019		2020		2021
In-place leases:
Total projected to be included in amortization expense	$	111,195	$	136,056	$	124,895	$	116,752	$	107,913
Leasing commissions:
Total projected to be included in amortization expense	1,008		1,164		1,098		1,076		1,038
Above-market lease assets and deferred lease incentives:
Total projected to be deducted from rental income	18,533		24,098		22,184		21,748		21,234
Below-market lease liabilities:
Total projected to be included in rental income	16,204		19,672		18,939		17,775		16,425

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Real Estate Investments

3 Months Ended

Mar. 31, 2017

Real Estate [Abstract]

Real Estate Investments

Real Estate Investments

During the three months ended March 31, 2017, the Company acquired controlling financial interests in 16 commercial properties and three land parcels for an aggregate purchase price of $101.9 million, which includes $0.4 million of external acquisition-related expenses that were capitalized in accordance with ASU 2017-01. Prior to the adoption of ASU 2017-01, costs related to property acquisitions were expensed as incurred. During the three months ended March 31, 2016, the Company acquired a controlling interest in one commercial property for a purchase price of $20.0 million.

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

	Three Months Ended March 31,
	2017			2016
Real estate investments, at cost:
Land	$	24,107		$	4,215
Buildings, fixtures and improvements	59,261			14,555
Total tangible assets	83,368			18,770
Acquired intangible assets:
In-place leases	15,916			1,182
Above-market leases	2,815			—
Assumed intangible liabilities:
Below-market leases	(185		)	—
Total purchase price of assets acquired	$	101,914		$	19,952

The Company has not included pro forma information or revenue and earnings for the Company’s 2016 acquisitions that were classified as business combinations prior to the adoption of ASU 2017-01, as they did not have a material impact on its consolidated financial position or results of operations. 

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)
April 1, 2017 - December 31, 2017	$	812,431	$	2,599
2018	1,086,126		3,016
2019	1,049,422		2,397
2020	1,013,348		2,023
2021	971,437		1,899
Thereafter	6,300,003		3,993
Total	$	11,232,767	$	15,927

____________________________________

(1) 29 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 March 31, 2017 and December 31, 2016 are as follows (in thousands):

	March 31, 2017			December 31, 2016
Future minimum lease payments receivable	$	15,927		$	17,147
Unguaranteed residual value of property	23,700			27,450
Unearned income	(4,718		)	(5,142		)
Net investment in direct financing leases	$	34,909		$	39,455

Property Dispositions and Held for Sale Assets

During the three months ended March 31, 2017, the Company disposed of 50 properties for an aggregate gross sales price of $210.6 million, of which our share was $200.8 million after the profit participation payment related to the disposition of 14 Red Lobster properties. The dispositions resulted in proceeds of $195.7 million after closing costs. Additionally, the Company’s tax provision for the three months ended March 31, 2017 included $1.7 million of Canadian tax on the gain on sale of certain Canadian properties. The Company recorded a gain of $12.5 million related to the sales which is included in gain on disposition of real estate and held for sale assets, net in the accompanying consolidated statements of operations. During the three months ended March 31, 2016, the Company disposed of 58 properties for an aggregate gross sales price of $193.7 million, of which our share was $193.1 million after the profit participation payment related to the disposition of one Red Lobster. The dispositions resulted in proceeds of $133.8 million after a debt assumption of $55.0 million and closing costs. The Company recorded a gain of $18.8 million, which included $11.3 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 three months ended March 31, 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 (loss) income and gain on disposition of unconsolidated entities in the accompanying consolidated statements of operations.

As of March 31, 2017, there were seven 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. There was no loss related to held for sale properties, nor any goodwill allocated to the cost basis for three additional properties classified as held for sale during the three months ended March 31, 2017. During the three months ended March 31, 2016, the Company recorded a loss of $1.7 million related to properties classified as held for sale during the respective period, which included $2.2 million of goodwill allocated to the cost basis of such properties. The loss on properties held for sale is included in gain on disposition of real estate and held for sale assets, net in the accompanying consolidated statements of operations.

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.

As part of the Company’s quarterly impairment review procedures and considering the factors mentioned above, real estate assets with carrying values totaling $16.6 million were deemed to be impaired and their carrying values were reduced to their estimated fair values of $9.9 million resulting in impairment charges of $6.7 million during the three months ended March 31, 2017. During the three months ended March 31, 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 restaurants filed for bankruptcy. As a result, during the three months ended March 31, 2016, real estate assets with carrying values totaling $623.0 million were deemed to be impaired and their carrying values were reduced to their estimated fair values of $462.5 million, resulting in impairment charges of $160.5 million.

Consolidated Joint Ventures

The Company had interests in two joint ventures that owned two properties as of each of March 31, 2017 and December 31, 2016, respectively (the “Consolidated Joint Ventures”). As of March 31, 2017 and December 31, 2016, the Consolidated Joint Ventures had total assets of $67.4 million and $64.8 million, respectively, of which $58.8 million were real estate investments, net of accumulated depreciation and amortization, for each of the respective periods. One property is secured by a mortgage note payable of $13.9 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’ loss was $7,000 and $39,000 for the three months ended March 31, 2017 and 2016, respectively, and is included in net loss attributable to non-controlling interests in the consolidated statements of operations.

Unconsolidated Joint Ventures

The Company’s investment in unconsolidated joint venture arrangements (the “Unconsolidated Joint Ventures”) consisted of interests in two joint ventures that owned two properties as of each of March 31, 2017 and December 31, 2016. As of March 31, 2017 and December 31, 2016, the Company owned aggregate equity investments of $41.0 million and $41.3 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 March 31, 2017, the Company’s maximum exposure to risk was $41.0 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 $20.4 million as of March 31, 2017, 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 (loss) income and gain on disposition of unconsolidated entities in the consolidated statements of operations. During each of the three months ended March 31, 2017 and 2016, the Company recognized $0.3 million of net income from two 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 March 31, 2017 (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%	$	5,839
Cole/Faison JV Bethlehem GA, LLC	Faison-Winder Investors, LLC	90%	35,119
			$	40,958

_______________________________________________

(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 $6.3 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

3 Months Ended

Mar. 31, 2017

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 March 31, 2017 and December 31, 2016 (in thousands):

	March 31, 2017
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
CMBS	$	43,906	$	1,039	$	(2,315	)	$	42,630

	December 31, 2016
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
CMBS	$	48,297	$	1,248	$	(2,330	)	$	47,215

As of each of March 31, 2017 and December 31, 2016, the Company owned eight CMBS with an estimated aggregate fair value of $42.6 million and $47.2 million, respectively. The Company generally receives monthly payments of principal and interest on the CMBS. As of March 31, 2017, the Company earned interest on the CMBS at rates ranging between 5.88% and 8.95%. As of March 31, 2017, 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 March 31, 2017, the Company had no other-than-temporary impairment losses.

The scheduled maturity of the Company’s CMBS as of March 31, 2017 are as follows (in thousands):

	March 31, 2017
	Amortized Cost		Fair Value
Due within one year	$	—	$	—
Due after one year through five years	18,142		18,638
Due after five years through 10 years	11,955		9,685
Due after 10 years	13,809		14,307
Total	$	43,906	$	42,630

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Mortgage Notes Receivable

3 Months Ended

Mar. 31, 2017

Receivables [Abstract]

Mortgage Notes Receivable

Mortgage Notes Receivable

As of March 31, 2017, the Company owned nine mortgage notes receivable with a weighted-average interest rate of 6.3% and weighted-average years to maturity of 12.8 years. The following table details the mortgage notes receivable as of March 31, 2017 (dollar amounts in thousands):

Outstanding Balance		Carrying Value		Interest Rate Range				Maturity Date Range
$	24,574	$	22,545	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 March 31, 2017 (in thousands):

	Outstanding Balance
Due within one year	$	1,122
Due after one year through five years	5,378
Due after five years through 10 years	7,034
Due after 10 years(1)	14,832
Total	$	28,366

____________________________________

(1) Includes additional $3.8 million of interest that will be capitalized into the outstanding balance of the mortgage note receivable subsequent to March 31, 2017.

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Rent and Tenant Receivables and Other Assets, Net

3 Months Ended

Mar. 31, 2017

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 March 31, 2017 and December 31, 2016 (in thousands):

	March 31, 2017		December 31, 2016
Accounts receivable, net (1)	$	48,477	$	49,148
Straight-line rent receivable	207,420		201,584
Deferred costs, net (2)	13,548		16,154
Prepaid expenses	11,600		6,814
Leasehold improvements, property and equipment, net (3)	14,056		14,702
Restricted escrow deposits	11,555		5,741
Deferred tax asset and tax receivable	32,976		31,113
Program development costs, net (4)	3,182		3,161
Interest rate swap assets, at fair value	371		199
Other assets	3,713		2,089
Total	$	346,898	$	330,705

___________________________________

(1) Allowance for doubtful accounts was $8.1 million and $6.0 million as of March 31, 2017 and December 31, 2016, respectively.

(2) Amortization expense for deferred costs related to the revolving credit facility totaled $2.6 million for each of the three months ended March 31, 2017 and 2016. Accumulated amortization for deferred costs related to the revolving credit facility were $32.4 million and $29.8 million as of March 31, 2017 and December 31, 2016, respectively.

(3) Amortization expense for leasehold improvements totaled $0.3 million for each of the three months ended March 31, 2017 and 2016. Accumulated amortization was $3.8 million and $3.5 million as of March 31, 2017 and December 31, 2016, respectively. Depreciation expense for property and equipment totaled $0.4 million and $0.5 million for the three months ended March 31, 2017 and 2016. Accumulated depreciation was $4.3 million and $3.9 million as of March 31, 2017 and December 31, 2016, respectively.

(4) As of March 31, 2017 and December 31, 2016, the Company had reserves of $33.8 million and $31.7 million, respectively, relating to the program development costs.

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Fair Value Measures

3 Months Ended

Mar. 31, 2017

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 three months ended March 31, 2017. 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 March 31, 2017 and December 31, 2016, 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 March 31, 2017
Assets:
CMBS	$	—	$	—		$	42,630	$	42,630
Derivative assets	—		371			—		371
Total assets	$	—	$	371		$	42,630	$	43,001
Liabilities:
Derivative liabilities	$	—	$	(1,996	)	$	—	$	(1,996	)
	Level 1		Level 2			Level 3		Balance as of December 31, 2016
Assets:
CMBS	$	—	$	—		$	47,215	$	47,215
Derivative assets	—		199			—		199
Total assets	$	—	$	199		$	47,215	$	47,414
Liabilities:
Derivative liabilities	$	—	$	(3,547	)	$	—	$	(3,547	)

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 March 31, 2017, 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 three months ended March 31, 2017 and 2016 (in thousands):

	CMBS
Balance as of December 31, 2016	$	47,215
Total gains and losses
Unrealized loss included in other comprehensive income, net	(194		)
Purchases, issuance, settlements
Return of principal received	(3,469		)
Amortization included in net income, net	(922		)
Ending Balance, March 31, 2017	$	42,630

	CMBS
Balance as of December 31, 2015	$	53,304
Total gains and losses
Unrealized loss included in other comprehensive loss, net	(1,961		)
Purchases, issuance, settlements
Return of principal received	(3,217		)
Accretion included in net loss, net	36
Ending Balance, March 31, 2016	$	48,162

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 March 31, 2017		Fair Value at March 31, 2017		Carrying Amount at December 31, 2016		Fair Value at December 31, 2016
Assets:
Mortgage notes receivable	3	$	22,545	$	30,355	$	22,764	$	30,460
Liabilities (1):
Mortgage notes payable and other debt, net	2	$	2,602,733	$	2,644,244	$	2,687,739	$	2,713,155
Corporate bonds, net	2	2,248,239		2,305,877		2,248,063		2,273,850
Convertible debt, net	2	988,367		1,007,731		987,106		1,004,733
Credit facility	2	500,000		500,000		500,000		500,000
Total liabilities		$	6,339,339	$	6,457,852	$	6,422,908	$	6,491,738

_______________________________________________

(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 three months ended March 31, 2017, net real estate assets related to 14 properties were deemed to be impaired and their carrying values were reduced to their estimated fair value of $9.9 million, resulting in impairment charges of $6.7 million. During the three months ended March 31, 2016, net real estate assets related to 125 properties were deemed to be impaired and their carrying values totaling $623.0 million were reduced to their estimated fair values of $462.5 million, resulting in impairment charges of $160.5 million. 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 the Company’s impairment tests for the real estate assets during the three months ended March 31, 2017, the Company used a discount rate of 7.8% and capitalization rates from 7.2% to 7.5% with a weighted-average rate of 7.4%.

The following table presents the impairment charges by asset class recorded during the three months ended March 31, 2017 (dollar amounts in thousands):

	Three Months Ended March 31, 2017
Properties impaired (1)	14
Asset classes impaired:
Investment in real estate assets, net	$	6,748
Below-market lease liabilities, net	(23		)
Total impairment loss	$	6,725

_______________________________________________

(1) None of these properties were disposed of during the three months ended March 31, 2017.

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Debt

3 Months Ended

Mar. 31, 2017

Debt Disclosure [Abstract]

Debt

Debt

As of March 31, 2017, the Company had $6.3 billion of debt outstanding, including net premiums and net deferred financing costs, with a weighted-average years to maturity of 4.2 years and a weighted-average interest rate of 4.3%. The following table summarizes the carrying value of debt as of March 31, 2017 and December 31, 2016, and the debt activity for the three months ended March 31, 2017 (in thousands):

					Three Months Ended March 31, 2017
		Balance as of December 31, 2016			Debt Issuances		Repayments, Extinguishment and Assumptions			Accretion and Amortization			Balance as of March 31, 2017
Mortgage notes payable:
	Outstanding balance	$	2,629,949		$	2,403	$	(78,966	)	$	—		$	2,553,386		(1)
	Net premiums (2)	36,751			—		—			(3,290		)	33,461
	Deferred costs	(16,633		)	—		—			817			(15,816		)
Other debt:
	Outstanding balance	20,947			—		(5,125		)	—			15,822
	Premium (2)	92			—		—			(28		)	64
Mortgages and other debt, net		2,671,106			2,403		(84,091		)	(2,501		)	2,586,917
Corporate bonds:
	Outstanding balance	2,250,000			—		—			—			2,250,000
	Discount (3)	(1,937		)	—		—			176			(1,761		)
	Deferred costs	(21,839		)	—		—			907			(20,932		)
Corporate bonds, net		2,226,224			—		—			1,083			2,227,307
Convertible debt:
	Outstanding balance	1,000,000			—		—			—			1,000,000
	Discount (3)	(12,894		)	—		—			1,261			(11,633		)
	Deferred costs	(13,766		)	—		—			1,430			(12,336		)
Convertible debt, net		973,340			—		—			2,691			976,031
Credit facility:
	Outstanding balance	500,000			—		—			—			500,000
	Deferred costs (4)	(3,422		)	—		—			570			(2,852		)
Credit facility, net		496,578			—		—			570			497,148
Total debt		$	6,367,248		$	2,403	$	(84,091	)	$	1,843		$	6,287,403

____________________________________

(1) Includes $41.8 million related to two mortgage notes payable in default.

(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 March 31, 2017 (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)	596	$	4,949,078	$	2,539,726	4.99	%	4.6
Variable-rate debt	1	30,846		13,660		3.79	%	0.4
Total (4)	597	$	4,979,924	$	2,553,386	4.99	%	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 March 31, 2017.

(3) Includes $188.7 million of variable-rate debt fixed by way of interest rate swap arrangements. 

(4) The table above does not include the loan amount associated with an Unconsolidated Joint Venture of $20.4 million, none of which is recourse to the Company. The loan represents a secured fixed rate of 5.20% and a maturity of July 2021.

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 March 31, 2017, except for the loans in default described below, the Company believes it was in compliance with the financial covenants under the mortgage loan agreements and had no restrictions on the payment of dividends.

During the three months ended March 31, 2017, the Company received two notices of default from the lenders of two non-recourse loans each secured by one property, which had an aggregate outstanding balance of $41.8 million on the notice date, due to the Company’s intentional non-repayment of the respective loan balances at maturity.

On December 30, 2016, the Company received a notice of default from the lender of a non-recourse loan secured by 16 properties, which had an outstanding balance of $11.6 million on the notice date, due to the Company's non-repayment of the loan balance at maturity. During the three months ended March 31, 2017, the Company cured the default by fully repaying the outstanding loan balance.

The following table summarizes the scheduled aggregate principal repayments due on mortgage notes subsequent to March 31, 2017 (in thousands):

	Total
April 1, 2017 - December 31, 2017 (1)	$	340,411
2018	108,694
2019	228,107
2020	280,668
2021	356,849
Thereafter	1,238,657
Total	$	2,553,386

____________________________________

(1) Includes $41.8 million of outstanding balances on mortgage notes payable, excluding accrued interest, related to two mortgage notes payable in default.

Other Debt

As of March 31, 2017, the Company had a secured term loan from KBC Bank, N.V. with an outstanding principal balance of $15.8 million and remaining unamortized premium of less than $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 March 31, 2017 are $2.5 million and $13.3 million for the years ended December 31, 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 March 31, 2017 (in thousands):

	Outstanding Balance		Collateral Carrying Value
Mortgage notes receivable	$	5,598	$	18,936
Intercompany mortgage loans	404		1,240
CMBS	9,820		30,688
Total	$	15,822	$	50,864

Corporate Bonds

As of March 31, 2017, 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 March 31, 2017		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	%

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. If the redemption date is 30 or fewer days prior to the maturity date with respect to the 2019 Senior Notes and the 2021 Senior Notes or is 90 or fewer days prior to the maturity date with respect to the 2024 Senior Notes and the 2026 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 indenture governing our Senior Notes requires us to maintain financial ratios which include maintaining (i) a maximum limitation on incurrence of total debt less than or equal to 65% of Total Assets (as defined in the indenture), (ii) maximum limitation on incurrence of secured debt less than or equal to 40% of Total Assets (as defined in the indenture), (iii) a minimum debt service coverage ratio of at least 1.5x and (iv) a minimum unencumbered asset value of at least 150% of the aggregate principal amount of all of the outstanding Unsecured Debt (as defined in the indenture). The Company believes it was in compliance with the financial covenants pursuant to the indenture governing the Senior Notes as of March 31, 2017.

Convertible Debt

The following table presents each of the Company’s $597.5 million aggregate principal amount of convertible senior notes due 2018 (the “2018 Convertible Notes”) and $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”) with their respective terms (dollar amounts in thousands). The OP has issued corresponding identical convertible notes to the General Partner.

	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 $11.6 million as of March 31, 2017. The discount will be amortized over the remaining weighted average term of 2.3 years.

(2) Conversion rate represents the amount of the General Partner OP Units per $1,000 principal amount of Convertible Notes converted as of March 31, 2017, 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 financial covenants pursuant to the indenture governing the Convertible Notes as of March 31, 2017.

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 March 31, 2017, 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 year ended December 31, 2016, the Company repaid all of the outstanding borrowings under its revolving credit facility and has no outstanding balance as of March 31, 2017. The interest rate on 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 the outstanding balance was 3.25% at March 31, 2017. As of March 31, 2017, 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 30% of which may be comprised of restaurant properties from December 31, 2016 on). The Company believes it was in compliance with the financial covenants pursuant to the Credit Agreement and is not restricted from accessing any borrowing availability under the Credit Facility as of March 31, 2017.

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Derivatives and Hedging Activities

3 Months Ended

Mar. 31, 2017

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 three months ended March 31, 2017 and 2016, such derivatives were used to hedge the variable cash flows associated with variable-rate debt. During the three months ended March 31, 2017, the Company reclassified $0.3 million from accumulated other comprehensive income into interest expense as a result of the hedged forecasted transactions affecting earnings. The Company also reclassified $0.2 million from accumulated other comprehensive income into interest expense associated with previously settled interest rate derivatives.

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 months ended March 31, 2017, the Company recorded a gain of $0.7 million in earnings related to the ineffective portion of the change in fair value of derivatives designated that qualify as cash flow hedges which is included in gain (loss) on derivative instruments, net in the accompanying consolidated statements of operations. The ineffectiveness is primarily attributable to the designation of acquired interest rate swaps with a non-zero fair value at inception associated with the Cole Merger.

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 $0.3 million will be reclassified from other comprehensive income as an increase to interest expense.

As of March 31, 2017, 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	March 31, 2017		December 31, 2016
Number of Instruments	11		14
Notional Amount	$	637,304	$	690,816

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 March 31, 2017 and December 31, 2016 (in thousands):

Derivatives Designated as Hedging Instruments	Balance Sheet Location	March 31, 2017			December 31, 2016
Interest rate swaps	Rent and tenant receivables and other assets, net	$	7		$	3
Interest rate swaps	Deferred rent, derivative and other liabilities	$	(1,996	)	$	(3,547	)

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 $0.1 million related to the change in the fair value of derivatives not designated as hedging instruments was recorded in gain (loss) on derivative instruments, net in the accompanying consolidated statements of operations for the three months ended March 31, 2017. The Company recorded a loss of $1.1 million for the three months ended March 31, 2016.

As of March 31, 2017, 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	March 31, 2017		December 31, 2016
Number of Instruments	1		1
Notional Amount	$	51,400	$	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 March 31, 2017 and December 31, 2016 (in thousands):

Derivatives Not Designated as Hedging Instruments	Balance Sheet Location	March 31, 2017		December 31, 2016
Interest rate swaps	Rent and tenant receivables and other assets, net	$	364	$	196

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 March 31, 2017 and December 31, 2016 (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
March 31, 2017	$	371	$	(1,996	)	$	—	$	371	$	(1,996	)	$	—	$	—	$	(1,625	)
December 31, 2016	$	199	$	(3,547	)	$	—	$	199	$	(3,547	)	$	—	$	—	$	(3,348	)

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 March 31, 2017, 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 $2.4 million. As of March 31, 2017, 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 $2.4 million at March 31, 2017.

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Supplemental Cash Flow Disclosures

3 Months Ended

Mar. 31, 2017

Supplemental Cash Flow Elements [Abstract]

Supplemental Cash Flow Disclosures

Supplemental Cash Flow Disclosures

Supplemental cash flow information was as follows for the three months ended March 31, 2017 and 2016 (in thousands):

	Three Months Ended March 31,
	2017		2016
Supplemental Disclosures:
Cash paid for interest	$	68,908	$	93,713
Cash paid for income taxes	$	4,503	$	10,848
Non-cash investing and financing activities:
Accrued capital expenditures and real estate developments	$	720	$	1,327
Accrued repurchases of common stock to settle tax obligation	$	208	$	223
Distributions declared and unpaid	$	140,232	$	130,494
Mortgage notes payable assumed in real estate disposition	$	—	$	55,000

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Accounts Payable and Accrued Expenses

3 Months Ended

Mar. 31, 2017

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 March 31, 2017 and December 31, 2016 (in thousands):

	March 31, 2017		December 31, 2016
Accrued interest	$	43,472	$	43,188
Accrued real estate taxes	37,392		38,877
Accrued legal fees	28,159		17,827
Accounts payable	2,132		5,030
Accrued other	24,662		41,215
Total	$	135,817	$	146,137

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2017

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 Company has 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. The former Chief Financial Officer has pleaded not guilty, and his trial is currently scheduled to commence on June 12, 2017. Also on September 8, 2016, 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 in the SEC Civil Action granted the motion to intervene and granted the motion to stay with respect to all witness-related discovery, with some limited exceptions, as clarified in a subsequent ruling on December 15, 2016.

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 were not required to file new answers. Document production is substantially complete. Plaintiffs in the SDNY Consolidated Securities Class Action filed a motion for class certification on March 15, 2017 and defendants are required to respond to the motion by May 5, 2017. A status conference before the court is scheduled for May 16, 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; 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; Atlas Master Fund et al. v. American Realty Capital Properties, Inc. et al., No. 16-cv-05475; and Eton Park Fund, L.P. v. American Realty Capital Properties, Inc., et al., No. 16-cv-09393 (the “Eton Park 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 has filed answers to the complaints in all of the Opt-Out Actions. Document production in the Opt-Out Actions is being coordinated with production in the SDNY Consolidated Securities Class Action, except that there has been no discovery in the Eton Park Action during the pendency of motions to dismiss filed by certain defendants. On April 18, 2017, an additional individual securities fraud action was filed in the United States District Court for the Southern District of New York captioned Reliance Standard Life Insurance Company, et al, v. American Realty Capital Properties, Inc. et al, No. 17-cv-02796. The Company is not yet required to respond to the complaint.

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 filed an answer to the complaint on November 4, 2016. Discovery is ongoing.

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. 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. 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, 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. By order dated November 4, 2016, the Frampton Action was stayed pending resolution of the SDNY Derivative Action.

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, 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 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”). An amended complaint was filed on January 17, 2017. The Meloche Action seeks money damages and other relief on behalf of the Company for alleged breaches of fiduciary duty and negligence. The Company filed a motion to transfer or stay the action on March 24, 2017. Plaintiffs’ response is due on May 26, 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. The ultimate resolution of these matters, the timing of which is unknown, may materially impact the Company’s business, financial condition, liquidity and results of operations.

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 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
April 1, 2017 - December 31, 2017	$	10,575	$	3,283
2018	13,832		4,298
2019	13,789		4,359
2020	13,317		4,381
2021	12,738		4,367
Thereafter	211,630		8,415
Total	$	275,881	$	29,103

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 March 31, 2017, Cole Capital was a party to ten purchase and sale agreements with unaffiliated third-party sellers to purchase a 100% interest in 18 properties, subject to meeting certain criteria, for an aggregate purchase price of $275.8 million, exclusive of closing costs. As of March 31, 2017, Cole Capital had $11.1 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

3 Months Ended

Mar. 31, 2017

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 March 31, 2017, 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 March 31, 2017, corresponding to the General Partner’s outstanding shares of Common Stock.

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. As of March 31, 2017, no shares of Common Stock have been issued pursuant to the Program.

Preferred Stock and Preferred OP Units

Series F Preferred Stock

As of March 31, 2017, 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 both March 31, 2017 and December 31, 2016, the Operating Partnership had approximately 23.75 million Limited Partner OP Units outstanding.

As of March 31, 2017, 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 shares of Common Stock. 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 February 22, 2017, 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 first quarter of 2017 to stockholders of record as of March 31, 2017, which was paid on April 17, 2017. 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 three months ended March 31, 2017, the General Partner repurchased 140,832 shares to satisfy the federal and state tax withholding obligations on behalf of employees.

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Equity-based Compensation

3 Months Ended

Mar. 31, 2017

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”), deferred stock units (“Deferred 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 provide 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 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 or Deferred 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 March 31, 2017, the General Partner had cumulatively awarded under its Equity Plan approximately 4.0 million Restricted Shares, net of the forfeiture of 3.6 million Restricted Shares through that date, 4.9 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 9.1 million shares of Common Stock. Accordingly, as of such date, approximately 90.7 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 months ended March 31, 2017, the Company recorded $0.4 million 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 three months ended March 31, 2017:

	Restricted Shares		Weighted-Average Grant Date Fair Value
Unvested shares, December 31, 2016	562,406		$	13.78
Vested	(178,046	)	14.01
Forfeited	(36,346	)	13.88
Unvested shares, March 31, 2017	348,014		$	13.65

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 months ended March 31, 2017, the Company recorded $1.1 million 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 (or upon a change of control). 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 months ended March 31, 2017, the Company recorded approximately $42,800 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 three months ended March 31, 2017.

	Time-Based Restricted Stock Units		Weighted-Average Grant Date Fair Value		Deferred Stock Units		Weighted-Average Grant Date Fair Value
Unvested units, December 31, 2016	1,085,914		$	8.43	—		$	—
Granted	673,381		8.90		12,006		8.67
Vested	(244,915	)	7.87		(12,006	)	8.67
Unvested units, March 31, 2017	1,514,380		$	8.73	—		$	—

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 months ended March 31, 2017, the Company recorded $1.5 million 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 LTI Target Awards during the three months ended March 31, 2017.

	LTI Target Awards	Weighted-Average Grant Date Fair Value
Unvested units, December 31, 2016	1,522,487	$	9.00
Granted	726,867	8.96
Unvested units, March 31, 2017	2,249,354	$	8.99

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Related Party Transactions and Arrangements

3 Months Ended

Mar. 31, 2017

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, 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 and distribution and stockholder servicing 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. 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 each of March 31, 2017 and December 31, 2016, 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 $3.2 million, which were net of reserves of $33.8 million and $31.7 million, respectively.

The following table shows the offering fee summary information for the Cole REITs as of March 31, 2017:

	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	3%	2%		1%	(4)
INAV
Wrap Class Shares	—%	0.55%	(5)	—%
Advisor Class Shares	up to 3.75%	0.55%	(5)	0.5%	(5)
Institutional Class Shares	—%	0.25%	(5)	—%
CCIT III
Class A Shares	7%	2%		—%
Class T Shares	3%	2%		1%	(4)

_______________________________________________

(1) The Company reallowed 100% of selling commissions to participating broker-dealers during the three months ended March 31, 2017 and 2016.

(2) The Company may reallow all or a portion of its dealer manager fee and/or 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) 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. Distribution and stockholder servicing fees continue to be paid after the offering closes if the 4.0% maximum has not been met.

(5) Fees are accrued daily in the amount of 1/365th of a percentage of the estimated per share NAV and payable monthly in arrears.

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 March 31, 2017:

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 of 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 March 31, 2017:

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 months ended March 31, 2017 and 2016 (in thousands).

	Three Months Ended March 31,
	2017		2016
Offering-related fees and reimbursements
Selling commissions (1)	$	2,177	$	7,041
Dealer manager and distribution fees (2)	1,253		2,640
Reimbursement revenue	886		2,710
Offering-related fees and reimbursements	4,316		12,391
Transaction service fees and reimbursements
Acquisition fees	3,272		1,702
Reimbursement revenues	734		682
Transaction service fees and reimbursements	4,006		2,384
Management fees and reimbursements
Asset and property management fees and leasing fees	53		55
Advisory and performance fee revenue	13,624		12,050
Reimbursement revenues	4,767		4,123
Management fees and reimbursements	18,444		16,228
Interest income on Affiliate Lines of Credit	124		308
Total related party revenues(3)	$	26,890	$	31,311

___________________________________

(1) The Company reallowed 100% of selling commissions to participating broker-dealers during the three months ended March 31, 2017 and 2016.

(2) During the three months ended March 31, 2017 and 2016, the Company reallowed $0.5 million and $1.0 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.

(3) Total related party revenues excludes fees earned from 1031 real estate programs of $0.4 million and $0.2 million, for the three months ended March 31, 2017 and 2016, respectively.

Investment in the Cole REITs

As of March 31, 2017 and December 31, 2016, the Company owned aggregate equity investments of $4.2 million and $4.7 million, respectively, in the Cole REITs and other affiliated offerings, presented in investment in unconsolidated entities in the consolidated balance sheets. 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 (loss) income and gain on disposition of unconsolidated entities in the consolidated statements of operations. During the three months ended March 31, 2017 and 2016, the Company recognized $419,000 and $122,000 of net loss, respectively, from the Cole REITs.

The table below presents certain information related to the Company’s investments in the Cole REITs as of March 31, 2017 (carrying amount in thousands):

	March 31, 2017
Cole REIT	% of Outstanding Shares Owned	Carrying Amount of Investment
CCPT V	0.86%	$	1,359
INAV	0.07%	135
CCIT II	0.44%	1,222
CCIT III	41.29%	961
CCPT IV	0.01%	111
Funds not yet in offering	100.00%	400
Total		$	4,188

Due to Affiliates

Due to affiliates, as reported in the accompanying consolidated balance sheets, was $7,000 and $16,000 as of March 31, 2017 and December 31, 2016, respectively, related to amounts due to the Cole REITs.

Due from Affiliates

As of March 31, 2017 and December 31, 2016, $7.2 million and $11.0 million, respectively, 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. On March 28, 2017, CCI III OP entered into a modification agreement in order to extend the maturity date of the Subordinate Promissory Note from September 22, 2017 to September 30, 2018. As of March 31, 2017, the Subordinate Promissory Note had an interest rate of 4.98% and $7.8 million was outstanding. As of December 31, 2016, the Subordinate Promissory Note had an interest rate of 5.12% and $10.3 million was outstanding.

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Net Loss Per Share/Unit

3 Months Ended

Mar. 31, 2017

Earnings Per Share [Abstract]

Net Loss Per Share/Unit

Net 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 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 months ended March 31, 2017 and 2016 (dollar amounts in thousands):

	Three Months Ended March 31,
	2017			2016
Net income (loss) attributable to the General Partner	$	14,438		$	(113,086	)
Dividends to preferred shares and units	(17,973		)	(17,973		)
Net loss available to the General Partner	(3,535		)	(131,059		)
Earnings allocated to participating securities	(178		)	(125		)
Net loss available to common stockholders used in basic and diluted net loss per share	$	(3,713	)	$	(131,184	)
Weighted average number of common stock outstanding - basic and diluted	973,849,610			903,825,726
Basic and diluted net loss per share attributable to common stockholders	$	(0.00	)	$	(0.15	)

For the three months ended March 31, 2017, diluted net loss per share attributable to common stockholders excludes approximately 0.7 million of unvested Restricted Shares and Restricted Stock Units and approximately 23.7 million OP Units as the effect would have been antidilutive.

For the three months ended March 31, 2016, diluted net loss attributable to common stockholders excludes approximately 4.4 million of unvested Restricted Shares and Restricted Stock Units and approximately 23.8 million OP Units as the effect would have been antidilutive.

Net 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 months ended March 31, 2017 and 2016 (dollar amounts in thousands):

	Three Months Ended March 31,
	2017			2016
Net income (loss) attributable to the Operating Partnership	$	14,797		$	(116,041	)
Dividends to preferred units	(17,973		)	(17,973		)
Net loss available to the Operating Partnership	(3,176		)	(134,014		)
Earnings allocated to participating units	(178		)	(125		)
Net loss available to common unitholders used in basic and diluted net loss per unit	$	(3,354	)	$	(134,139	)
Weighted average number of common units outstanding - basic and diluted	997,597,957			927,589,523
Basic and diluted net loss per unit attributable to common unitholders	$	(0.00	)	$	(0.15	)

For the three months ended March 31, 2017, diluted net loss per unit attributable to common unitholders excludes approximately 0.7 million of unvested Restricted Shares and Restricted Stock Units as the effect would have been antidilutive.

For the three months ended March 31, 2016, diluted net loss attributable to common unitholders excludes approximately 4.4 million of unvested Restricted Shares and Restricted Stock Units as the effect would have been antidilutive.

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Income Taxes

3 Months Ended

Mar. 31, 2017

Income Tax Disclosure [Abstract]

Income Taxes

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, 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$1.1 million and a benefit of$1.3 million for the three months ended March 31, 2017 and 2016, respectively, which are included in provision for income taxes in the accompanying consolidated statements of operations.

REI Income Taxes

The REI segment recognized a provision of$3.1 million and $1.4 million for the three months ended March 31, 2017 and 2016, 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 three months ended March 31, 2017 and 2016. 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 2012.

As of March 31, 2017, 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, 2012 remain open to examination by the major taxing jurisdictions to which the OP, the General Partner, American Realty Capital Trust III, Inc., CapLease, Inc., American Realty Capital Trust IV, Inc., Cole Real Estate Investments, Inc., and Cole Credit Property Trust, Inc. are subject.

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Subsequent Events

3 Months Ended

Mar. 31, 2017

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

The following events occurred subsequent to March 31, 2017:

Real Estate Investment Activity

From April 1, 2017 through April 28, 2017, the Company sold five properties for an aggregate gross sales price of $16.9 million, of which our share was $14.7 million and an estimated gain of $1.8 million. In addition, the Company acquired two properties for an aggregate purchase price of $14.6 million.

Common Stock Dividend

On May 3, 2017, 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 second quarter of 2017 to stockholders of record as of June 30, 2017, which will be paid on July 17, 2017. An equivalent distribution by the Operating Partnership is applicable per OP unit.

Preferred Stock Dividend

On May 3, 2017, the Company’s board of directors declared a monthly cash dividend to holders of the Series F Preferred Stock for July 2017 through September 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 $0.1395833per 30-day month.

Period	Record Date	Payment Date
June 15, 2017 - July 14, 2017	July 1, 2017	July 17, 2017
July 15, 2017 - August 14, 2017	August 1, 2017	August 15, 2017
August 15, 2017 - September 14, 2017	September 1, 2017	September 15, 2017

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2017

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 months ended March 31, 2017 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, 2016 of the Company, which are included in the Company’s Annual Report on Form 10-K filed on February 23, 2017. There have been no significant changes to the Company’s significant accounting policies during the three months ended March 31, 2017, except the Company adopted Accounting Standards Update (“ASU”) 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (“ASU 2017-01”), as disclosed within the “Acquisition-Related Expenses and Litigation and Other Non-routine Costs” and “Recent Accounting Pronouncements” sections herein. 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 both March 31, 2017 and December 31, 2016, there were approximately 23.75 million Limited Partner OP Units outstanding.

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.

Acquisition-Related Expenses and Litigation and Other Non-routine Costs

As further disclosed in the “Recent Accounting Pronouncements” section herein, in January 2017, the Company elected to early adopt ASU 2017-01 which clarifies the definition of a business by adding guidance to assist entities in evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. During the three months ended March 31, 2017, all real estate acquisitions qualified as asset acquisitions, and external acquisition costs related to these asset acquisitions were capitalized. Prior to January 1, 2017, external costs related to property acquisitions were expensed as incurred. Internal costs, such as employee salaries, related to activities necessary to complete, or affect, self-originating asset acquisitions or business combinations are classified as acquisition-related expenses in the accompanying consolidated statements of operations. Any costs incurred as a result of a business combination will be classified as acquisition-related expenses or other non-routine transaction related expenses and expensed as incurred.

External acquisition-related costs incurred in relation to mergers 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.

Recent Accounting Pronouncements

In May 2014, the U.S. Financial Accounting Standards Board (“FASB”) issued ASU 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which supersedes the revenue recognition requirements in Revenue Recognition, Accounting Standards Codification (Topic 605) and will require 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, was issued to defer the effective date for all entities by one year. For public business entities, the guidance should be applied to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Companies may use either a full retrospective or a modified retrospective approach to adopt ASU 2014-09. The Company is currently assessing the adoption methodology. In accordance with the Company’s plan for the adoption of ASU 2014-09, the Company’s implementation team has identified the Company’s revenue streams and is performing an in-depth review of the Company’s revenue contracts to identify the related performance obligations and to evaluate the impact on the Company’s financial statements and internal accounting processes and controls. 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 will have a material impact on its consolidated financial statements.

In January 2016, the FASB issued ASU 2016-01, Financial Instruments(Subtopic 825-10), which will require 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 the 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 consolidated 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’s implementation team is developing an inventory of all leases, as well as identifying any non-lease components in the lease arrangements, and evaluating the impact to the Company, both as lessor and lessee, and its consolidated financial statements.

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 recognition 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 under current U.S. 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. The Company plans to adopt ASU 2016-15 during the fourth quarter of fiscal year 2017.

In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (“ASU 2016-18”), which provides guidance on the presentation of restricted cash and restricted cash equivalents in the statement of cash flows. In accordance with ASU 2016-18, restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period amounts shown on the statements of cash flows. The amendments of ASU 2016-18 are effective for reporting periods beginning after December 15, 2017, with early adoption permitted. The Company is currently evaluating the impact this amendment will have on its consolidated financial statements.

In January 2017, the FASB issued ASU 2017-01, which clarifies the definition of a business by adding guidance to assist entities in evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those periods, with early adoption permitted, and is required to be applied prospectively to any transactions occurring within the period of adoption. The Company has elected to early adopt ASU 2017-01 effective January 1, 2017. As the Company expects that a majority of its real estate acquisitions will be considered asset acquisitions, external acquisition costs related to these asset acquisitions will be capitalized. Prior to 2017, all acquisition-related costs were expensed as incurred. The adoption of this pronouncement resulted in capitalization of $0.4 million of external acquisitions-related costs during the three months ended March 31, 2017. Internal costs, such as employee salaries, related to activities necessary to complete, or affect, self-originating asset acquisitions or business combinations are classified as acquisition-related expenses in the accompanying consolidated statements of operations. Upon adoption of ASU 2017-01, the Company's real estate dispositions qualify as asset dispositions and as such, no portion of the Company’s REI segment’s goodwill was allocated to the cost basis of these assets in determining the gain or loss on disposition of real estate and held for sale assets. Prior to January 1, 2017, when the Company disposed of a property or classified a property as held for sale, it constituted a business per U.S. GAAP and the Company allocated a portion of the REI segment's goodwill to the cost basis of that property in determining the gain or loss on the disposition of real estate and held for sale assets.

In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Others (Topic 350): Simplifying the Test for Goodwill Impairment (“ASU 2017-04”), which simplifies the measurement of goodwill impairment by eliminating Step 2 from the goodwill impairment test (comparing the implied fair value of goodwill with the carrying amount of goodwill). ASU 2017-04 is effective for public business entities for fiscal years beginning after December 15, 2019, 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 February 2017, the FASB issued ASU 2017-05, Other Income – Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets (“ASU 2017-05”), which clarifies the following: 1) nonfinancial assets within the scope of Subtopic 610-20 may include nonfinancial assets transferred within a legal entity to a counterparty; 2) an entity should allocate consideration to each distinct asset by applying the guidance in Topic 606 on allocating the transaction price to performance obligations; and 3) requires entities to derecognize a distinct nonfinancial asset or distinct in substance nonfinancial asset in a partial sale transaction when it (a) does not have (or ceases to have) a controlling financial interest in the legal entity that holds the asset in accordance with Subtopic 810 and (b) transfers control of the asset in accordance with Topic 606. ASU 2017-05 is effective for annual periods, and interim periods therein, beginning after December 15, 2017. Early adoption is permitted. 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)

3 Months Ended

Mar. 31, 2017

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 March 31,
	2017		2016
Litigation and other non-routine costs:
Audit Committee Investigation and related matters (1)	$	12,671	$	4,742
Legal fees and expenses (2)	204		83
Total costs incurred	12,875		4,825
Insurance recoveries	—		(10,000		)
Total	$	12,875	$	(5,175	)

___________________________________

(1) Includes all fees and costs associated with the previously-announced investigation conducted by the audit committee (the “Audit Committee”) of the Company’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) Includes legal fees and expenses associated with litigation resulting from prior mergers.

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Segment Reporting (Tables)

3 Months Ended

Mar. 31, 2017

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 March 31,
	2017			2016
REI segment:
Revenues:
Rental income	$	293,739		$	313,971
Direct financing lease income	433			569
Operating expense reimbursements	26,726			23,247
Total real estate investment revenues	320,898			337,787
Operating expenses:
Acquisition-related	617			217
Litigation and other non-routine costs, net of insurance recoveries	12,875			(5,175		)
Property operating	34,016			34,813
General and administrative	12,560			12,228
Depreciation and amortization	178,297			195,991
Impairment of real estate	6,725			160,517
Total operating expenses	245,090			398,591
Operating income (loss)	75,808			(60,804		)
Other (expense) income:
Interest expense	(73,743		)	(80,426		)
Loss on extinguishment and forgiveness of debt, net	(70		)	—
Other income, net	670			568
Equity in (loss) income and gain on disposition of unconsolidated entities	(82		)	10,404
Gain (loss) on derivative instruments, net	824			(1,086		)
Total other expenses, net	(72,401		)	(70,540		)
Income (loss) before taxes and real estate dispositions	3,407			(131,344		)
Gain on disposition of real estate and held for sale assets, net	12,481			17,175
Income (loss) before taxes	15,888			(114,169		)
Provision for income taxes	(3,108		)	(1,365		)
Net income (loss)	$	12,780		$	(115,534	)

	Three Months Ended March 31,
	2017			2016
Cole Capital segment:
Revenues:
Offering-related fees and reimbursements	$	4,316		$	12,391
Transaction service fees and reimbursements	4,097			2,384
Management fees and reimbursements	18,718			16,458
Total Cole Capital revenues	27,131			31,233
Operating expenses:
Cole Capital reallowed fees and commissions	2,660			8,068
Acquisition-related	—			25
General and administrative	16,588			17,172
Depreciation and amortization	4,855			8,317
Total operating expenses	24,103			33,582
Operating income (loss)	3,028			(2,349		)
Total other income, net	128			494
Income (loss) before taxes	3,156			(1,855		)
(Provision for) benefit from income taxes	(1,146		)	1,309
Net income (loss)	$	2,010		$	(546	)
Total Company:
Total revenues	$	348,029		$	369,020
Total operating expenses	$	(269,193	)	$	(432,173	)
Total other expense, net	$	(72,273	)	$	(70,046	)
Net income (loss)	$	14,790		$	(116,080	)

	Total Assets
	March 31, 2017		December 31, 2016
REI segment	$	15,110,337	$	15,337,623
Cole Capital segment	246,198		249,951
Total Company	$	15,356,535	$	15,587,574

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Goodwill and Other Intangibles (Tables)

3 Months Ended

Mar. 31, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Intangible Assets

Intangible lease assets and liabilities of the Company consisted of the following as of March 31, 2017 and December 31, 2016 (amounts in thousands, except weighted-average useful life):

	Weighted-Average Useful Life	March 31, 2017		December 31, 2016
Intangible lease assets:
In-place leases, net of accumulated amortization of $525,079 and $494,131, respectively	14.7	$	1,148,158	$	1,192,756
Leasing commissions, net of accumulated amortization of $2,158 and $1,836, respectively	10.3	10,570		10,231
Above-market lease assets and deferred lease incentives, net of accumulated amortization of $74,206 and $69,670, respectively	16.1	257,568		275,897
Total intangible lease assets, net		$	1,416,296	$	1,478,884
Intangible lease liabilities:
Below-market leases, net of accumulated amortization of $61,631 and $56,891, respectively	18.1	$	217,721	$	224,023

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 March 31, 2017 (amounts in thousands):

	April 1, 2017 - December 31, 2017		2018		2019		2020		2021
In-place leases:
Total projected to be included in amortization expense	$	111,195	$	136,056	$	124,895	$	116,752	$	107,913
Leasing commissions:
Total projected to be included in amortization expense	1,008		1,164		1,098		1,076		1,038
Above-market lease assets and deferred lease incentives:
Total projected to be deducted from rental income	18,533		24,098		22,184		21,748		21,234
Below-market lease liabilities:
Total projected to be included in rental income	16,204		19,672		18,939		17,775		16,425

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Real Estate Investments (Tables)

3 Months Ended

Mar. 31, 2017

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):

	Three Months Ended March 31,
	2017			2016
Real estate investments, at cost:
Land	$	24,107		$	4,215
Buildings, fixtures and improvements	59,261			14,555
Total tangible assets	83,368			18,770
Acquired intangible assets:
In-place leases	15,916			1,182
Above-market leases	2,815			—
Assumed intangible liabilities:
Below-market leases	(185		)	—
Total purchase price of assets acquired	$	101,914		$	19,952

Schedule of Future Minimum Operating Lease Base Rent 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)
April 1, 2017 - December 31, 2017	$	812,431	$	2,599
2018	1,086,126		3,016
2019	1,049,422		2,397
2020	1,013,348		2,023
2021	971,437		1,899
Thereafter	6,300,003		3,993
Total	$	11,232,767	$	15,927

____________________________________

(1) 29 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
April 1, 2017 - December 31, 2017	$	10,575	$	3,283
2018	13,832		4,298
2019	13,789		4,359
2020	13,317		4,381
2021	12,738		4,367
Thereafter	211,630		8,415
Total	$	275,881	$	29,103

Schedule of Future Minimum Direct Financing 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)
April 1, 2017 - December 31, 2017	$	812,431	$	2,599
2018	1,086,126		3,016
2019	1,049,422		2,397
2020	1,013,348		2,023
2021	971,437		1,899
Thereafter	6,300,003		3,993
Total	$	11,232,767	$	15,927

____________________________________

(1) 29 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 March 31, 2017 and December 31, 2016 are as follows (in thousands):

	March 31, 2017			December 31, 2016
Future minimum lease payments receivable	$	15,927		$	17,147
Unguaranteed residual value of property	23,700			27,450
Unearned income	(4,718		)	(5,142		)
Net investment in direct financing leases	$	34,909		$	39,455

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 March 31, 2017 (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%	$	5,839
Cole/Faison JV Bethlehem GA, LLC	Faison-Winder Investors, LLC	90%	35,119
			$	40,958

_______________________________________________

(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 $6.3 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)

3 Months Ended

Mar. 31, 2017

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 March 31, 2017 and December 31, 2016 (in thousands):

	March 31, 2017
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
CMBS	$	43,906	$	1,039	$	(2,315	)	$	42,630

	December 31, 2016
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
CMBS	$	48,297	$	1,248	$	(2,330	)	$	47,215

Schedule of Maturity of CMBS

The scheduled maturity of the Company’s CMBS as of March 31, 2017 are as follows (in thousands):

	March 31, 2017
	Amortized Cost		Fair Value
Due within one year	$	—	$	—
Due after one year through five years	18,142		18,638
Due after five years through 10 years	11,955		9,685
Due after 10 years	13,809		14,307
Total	$	43,906	$	42,630

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Mortgage Notes Receivable (Tables)

3 Months Ended

Mar. 31, 2017

Receivables [Abstract]

Schedule of Mortgage Notes Receivable

The following table details the mortgage notes receivable as of March 31, 2017 (dollar amounts in thousands):

Outstanding Balance		Carrying Value		Interest Rate Range				Maturity Date Range
$	24,574	$	22,545	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 March 31, 2017 (in thousands):

	Outstanding Balance
Due within one year	$	1,122
Due after one year through five years	5,378
Due after five years through 10 years	7,034
Due after 10 years(1)	14,832
Total	$	28,366

____________________________________

(1) Includes additional $3.8 million of interest that will be capitalized into the outstanding balance of the mortgage note receivable subsequent to March 31, 2017.

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Rent and Tenant Receivables and Other Assets, Net (Tables)

3 Months Ended

Mar. 31, 2017

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 March 31, 2017 and December 31, 2016 (in thousands):

	March 31, 2017		December 31, 2016
Accounts receivable, net (1)	$	48,477	$	49,148
Straight-line rent receivable	207,420		201,584
Deferred costs, net (2)	13,548		16,154
Prepaid expenses	11,600		6,814
Leasehold improvements, property and equipment, net (3)	14,056		14,702
Restricted escrow deposits	11,555		5,741
Deferred tax asset and tax receivable	32,976		31,113
Program development costs, net (4)	3,182		3,161
Interest rate swap assets, at fair value	371		199
Other assets	3,713		2,089
Total	$	346,898	$	330,705

___________________________________

(1) Allowance for doubtful accounts was $8.1 million and $6.0 million as of March 31, 2017 and December 31, 2016, respectively.

(2) Amortization expense for deferred costs related to the revolving credit facility totaled $2.6 million for each of the three months ended March 31, 2017 and 2016. Accumulated amortization for deferred costs related to the revolving credit facility were $32.4 million and $29.8 million as of March 31, 2017 and December 31, 2016, respectively.

(3) Amortization expense for leasehold improvements totaled $0.3 million for each of the three months ended March 31, 2017 and 2016. Accumulated amortization was $3.8 million and $3.5 million as of March 31, 2017 and December 31, 2016, respectively. Depreciation expense for property and equipment totaled $0.4 million and $0.5 million for the three months ended March 31, 2017 and 2016. Accumulated depreciation was $4.3 million and $3.9 million as of March 31, 2017 and December 31, 2016, respectively.

(4) As of March 31, 2017 and December 31, 2016, the Company had reserves of $33.8 million and $31.7 million, respectively, relating to the program development costs.

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Fair Value Measures (Tables)

3 Months Ended

Mar. 31, 2017

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 March 31, 2017 and December 31, 2016, 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 March 31, 2017
Assets:
CMBS	$	—	$	—		$	42,630	$	42,630
Derivative assets	—		371			—		371
Total assets	$	—	$	371		$	42,630	$	43,001
Liabilities:
Derivative liabilities	$	—	$	(1,996	)	$	—	$	(1,996	)
	Level 1		Level 2			Level 3		Balance as of December 31, 2016
Assets:
CMBS	$	—	$	—		$	47,215	$	47,215
Derivative assets	—		199			—		199
Total assets	$	—	$	199		$	47,215	$	47,414
Liabilities:
Derivative liabilities	$	—	$	(3,547	)	$	—	$	(3,547	)

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 three months ended March 31, 2017 and 2016 (in thousands):

	CMBS
Balance as of December 31, 2016	$	47,215
Total gains and losses
Unrealized loss included in other comprehensive income, net	(194		)
Purchases, issuance, settlements
Return of principal received	(3,469		)
Amortization included in net income, net	(922		)
Ending Balance, March 31, 2017	$	42,630

	CMBS
Balance as of December 31, 2015	$	53,304
Total gains and losses
Unrealized loss included in other comprehensive loss, net	(1,961		)
Purchases, issuance, settlements
Return of principal received	(3,217		)
Accretion included in net loss, net	36
Ending Balance, March 31, 2016	$	48,162

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 three months ended March 31, 2017 and 2016 (in thousands):

	CMBS
Balance as of December 31, 2016	$	47,215
Total gains and losses
Unrealized loss included in other comprehensive income, net	(194		)
Purchases, issuance, settlements
Return of principal received	(3,469		)
Amortization included in net income, net	(922		)
Ending Balance, March 31, 2017	$	42,630

	CMBS
Balance as of December 31, 2015	$	53,304
Total gains and losses
Unrealized loss included in other comprehensive loss, net	(1,961		)
Purchases, issuance, settlements
Return of principal received	(3,217		)
Accretion included in net loss, net	36
Ending Balance, March 31, 2016	$	48,162

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 March 31, 2017		Fair Value at March 31, 2017		Carrying Amount at December 31, 2016		Fair Value at December 31, 2016
Assets:
Mortgage notes receivable	3	$	22,545	$	30,355	$	22,764	$	30,460
Liabilities (1):
Mortgage notes payable and other debt, net	2	$	2,602,733	$	2,644,244	$	2,687,739	$	2,713,155
Corporate bonds, net	2	2,248,239		2,305,877		2,248,063		2,273,850
Convertible debt, net	2	988,367		1,007,731		987,106		1,004,733
Credit facility	2	500,000		500,000		500,000		500,000
Total liabilities		$	6,339,339	$	6,457,852	$	6,422,908	$	6,491,738

_______________________________________________

(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 three months ended March 31, 2017 (dollar amounts in thousands):

	Three Months Ended March 31, 2017
Properties impaired (1)	14
Asset classes impaired:
Investment in real estate assets, net	$	6,748
Below-market lease liabilities, net	(23		)
Total impairment loss	$	6,725

_______________________________________________

(1) None of these properties were disposed of during the three months ended March 31, 2017.

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Debt (Tables)

3 Months Ended

Mar. 31, 2017

Debt Instrument [Line Items]

Schedule of Debt

The following table summarizes the carrying value of debt as of March 31, 2017 and December 31, 2016, and the debt activity for the three months ended March 31, 2017 (in thousands):

					Three Months Ended March 31, 2017
		Balance as of December 31, 2016			Debt Issuances		Repayments, Extinguishment and Assumptions			Accretion and Amortization			Balance as of March 31, 2017
Mortgage notes payable:
	Outstanding balance	$	2,629,949		$	2,403	$	(78,966	)	$	—		$	2,553,386		(1)
	Net premiums (2)	36,751			—		—			(3,290		)	33,461
	Deferred costs	(16,633		)	—		—			817			(15,816		)
Other debt:
	Outstanding balance	20,947			—		(5,125		)	—			15,822
	Premium (2)	92			—		—			(28		)	64
Mortgages and other debt, net		2,671,106			2,403		(84,091		)	(2,501		)	2,586,917
Corporate bonds:
	Outstanding balance	2,250,000			—		—			—			2,250,000
	Discount (3)	(1,937		)	—		—			176			(1,761		)
	Deferred costs	(21,839		)	—		—			907			(20,932		)
Corporate bonds, net		2,226,224			—		—			1,083			2,227,307
Convertible debt:
	Outstanding balance	1,000,000			—		—			—			1,000,000
	Discount (3)	(12,894		)	—		—			1,261			(11,633		)
	Deferred costs	(13,766		)	—		—			1,430			(12,336		)
Convertible debt, net		973,340			—		—			2,691			976,031
Credit facility:
	Outstanding balance	500,000			—		—			—			500,000
	Deferred costs (4)	(3,422		)	—		—			570			(2,852		)
Credit facility, net		496,578			—		—			570			497,148
Total debt		$	6,367,248		$	2,403	$	(84,091	)	$	1,843		$	6,287,403

____________________________________

(1) Includes $41.8 million related to two mortgage notes payable in default.

(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 March 31, 2017 (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)	596	$	4,949,078	$	2,539,726	4.99	%	4.6
Variable-rate debt	1	30,846		13,660		3.79	%	0.4
Total (4)	597	$	4,979,924	$	2,553,386	4.99	%	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 March 31, 2017.

(3) Includes $188.7 million of variable-rate debt fixed by way of interest rate swap arrangements. 

(4) The table above does not include the loan amount associated with an Unconsolidated Joint Venture of $20.4 million, none of which is recourse to the Company. The loan represents a secured fixed rate of 5.20% and a maturity of July 2021.

Schedule of Aggregate Principal Payments of Mortgages

The following table summarizes the scheduled aggregate principal repayments due on mortgage notes subsequent to March 31, 2017 (in thousands):

	Total
April 1, 2017 - December 31, 2017 (1)	$	340,411
2018	108,694
2019	228,107
2020	280,668
2021	356,849
Thereafter	1,238,657
Total	$	2,553,386

____________________________________

(1) Includes $41.8 million of outstanding balances on mortgage notes payable, excluding accrued interest, related to two mortgage notes payable in default.

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 March 31, 2017 (in thousands):

	Outstanding Balance		Collateral Carrying Value
Mortgage notes receivable	$	5,598	$	18,936
Intercompany mortgage loans	404		1,240
CMBS	9,820		30,688
Total	$	15,822	$	50,864

Corporate Bonds [Member]

Debt Instrument [Line Items]

Schedule of Debt

As of March 31, 2017, 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 March 31, 2017		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 Company’s $597.5 million aggregate principal amount of convertible senior notes due 2018 (the “2018 Convertible Notes”) and $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”) with their respective terms (dollar amounts in thousands). The OP has issued corresponding identical convertible notes to the General Partner.

	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 $11.6 million as of March 31, 2017. The discount will be amortized over the remaining weighted average term of 2.3 years.

(2) Conversion rate represents the amount of the General Partner OP Units per $1,000 principal amount of Convertible Notes converted as of March 31, 2017, as adjusted in accordance with the applicable indentures as a result of cash dividend payments.

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Derivatives and Hedging Activities (Tables)

3 Months Ended

Mar. 31, 2017

Designated as Hedging Instrument [Member]

Derivative Instruments and Hedging Activities Disclosures [Line Items]

Schedule of Interest Rate Derivatives

As of March 31, 2017, 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	March 31, 2017		December 31, 2016
Number of Instruments	11		14
Notional Amount	$	637,304	$	690,816

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 March 31, 2017 and December 31, 2016 (in thousands):

Derivatives Designated as Hedging Instruments	Balance Sheet Location	March 31, 2017			December 31, 2016
Interest rate swaps	Rent and tenant receivables and other assets, net	$	7		$	3
Interest rate swaps	Deferred rent, derivative and other liabilities	$	(1,996	)	$	(3,547	)

Not Designated as Hedging Instrument [Member]

Derivative Instruments and Hedging Activities Disclosures [Line Items]

Schedule of Interest Rate Derivatives

As of March 31, 2017, 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	March 31, 2017		December 31, 2016
Number of Instruments	1		1
Notional Amount	$	51,400	$	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 March 31, 2017 and December 31, 2016 (in thousands):

Derivatives Not Designated as Hedging Instruments	Balance Sheet Location	March 31, 2017		December 31, 2016
Interest rate swaps	Rent and tenant receivables and other assets, net	$	364	$	196

Schedule of Offsetting Assets

The table below details a gross presentation, the effects of offsetting and a net presentation of the Company’s derivatives as of March 31, 2017 and December 31, 2016 (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
March 31, 2017	$	371	$	(1,996	)	$	—	$	371	$	(1,996	)	$	—	$	—	$	(1,625	)
December 31, 2016	$	199	$	(3,547	)	$	—	$	199	$	(3,547	)	$	—	$	—	$	(3,348	)

Schedule of Offsetting Liabilities

The table below details a gross presentation, the effects of offsetting and a net presentation of the Company’s derivatives as of March 31, 2017 and December 31, 2016 (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
March 31, 2017	$	371	$	(1,996	)	$	—	$	371	$	(1,996	)	$	—	$	—	$	(1,625	)
December 31, 2016	$	199	$	(3,547	)	$	—	$	199	$	(3,547	)	$	—	$	—	$	(3,348	)

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Supplemental Cash Flow Disclosures (Tables)

3 Months Ended

Mar. 31, 2017

Supplemental Cash Flow Elements [Abstract]

Supplemental Cash Flow Disclosures

Supplemental cash flow information was as follows for the three months ended March 31, 2017 and 2016 (in thousands):

	Three Months Ended March 31,
	2017		2016
Supplemental Disclosures:
Cash paid for interest	$	68,908	$	93,713
Cash paid for income taxes	$	4,503	$	10,848
Non-cash investing and financing activities:
Accrued capital expenditures and real estate developments	$	720	$	1,327
Accrued repurchases of common stock to settle tax obligation	$	208	$	223
Distributions declared and unpaid	$	140,232	$	130,494
Mortgage notes payable assumed in real estate disposition	$	—	$	55,000

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Accounts Payable and Accrued Expenses (Tables)

3 Months Ended

Mar. 31, 2017

Payables and Accruals [Abstract]

Schedule of Accrued Liabilities

Accounts payable and accrued expenses consisted of the following as of March 31, 2017 and December 31, 2016 (in thousands):

	March 31, 2017		December 31, 2016
Accrued interest	$	43,472	$	43,188
Accrued real estate taxes	37,392		38,877
Accrued legal fees	28,159		17,827
Accounts payable	2,132		5,030
Accrued other	24,662		41,215
Total	$	135,817	$	146,137

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Commitments and Contingencies (Tables)

3 Months Ended

Mar. 31, 2017

Commitments and Contingencies Disclosure [Abstract]

Schedule of Future Minimum Rental Payments for Operating Leases

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)
April 1, 2017 - December 31, 2017	$	812,431	$	2,599
2018	1,086,126		3,016
2019	1,049,422		2,397
2020	1,013,348		2,023
2021	971,437		1,899
Thereafter	6,300,003		3,993
Total	$	11,232,767	$	15,927

____________________________________

(1) 29 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
April 1, 2017 - December 31, 2017	$	10,575	$	3,283
2018	13,832		4,298
2019	13,789		4,359
2020	13,317		4,381
2021	12,738		4,367
Thereafter	211,630		8,415
Total	$	275,881	$	29,103

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Equity-based Compensation (Tables)

3 Months Ended

Mar. 31, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of Activity for Share-based Compensation

The following table details the activity of the LTI Target Awards during the three months ended March 31, 2017.

	LTI Target Awards	Weighted-Average Grant Date Fair Value
Unvested units, December 31, 2016	1,522,487	$	9.00
Granted	726,867	8.96
Unvested units, March 31, 2017	2,249,354	$	8.99

The following table details the activity of the Time-Based Restricted Stock Units and Deferred Stock Units during the three months ended March 31, 2017.

	Time-Based Restricted Stock Units		Weighted-Average Grant Date Fair Value		Deferred Stock Units		Weighted-Average Grant Date Fair Value
Unvested units, December 31, 2016	1,085,914		$	8.43	—		$	—
Granted	673,381		8.90		12,006		8.67
Vested	(244,915	)	7.87		(12,006	)	8.67
Unvested units, March 31, 2017	1,514,380		$	8.73	—		$	—

The following table details the activity of the Restricted Shares during the three months ended March 31, 2017:

	Restricted Shares		Weighted-Average Grant Date Fair Value
Unvested shares, December 31, 2016	562,406		$	13.78
Vested	(178,046	)	14.01
Forfeited	(36,346	)	13.88
Unvested shares, March 31, 2017	348,014		$	13.65

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Related Party Transactions and Arrangements (Tables)

3 Months Ended

Mar. 31, 2017

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 March 31, 2017:

	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	3%	2%		1%	(4)
INAV
Wrap Class Shares	—%	0.55%	(5)	—%
Advisor Class Shares	up to 3.75%	0.55%	(5)	0.5%	(5)
Institutional Class Shares	—%	0.25%	(5)	—%
CCIT III
Class A Shares	7%	2%		—%
Class T Shares	3%	2%		1%	(4)

_______________________________________________

(1) The Company reallowed 100% of selling commissions to participating broker-dealers during the three months ended March 31, 2017 and 2016.

(2) The Company may reallow all or a portion of its dealer manager fee and/or 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) 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. Distribution and stockholder servicing fees continue to be paid after the offering closes if the 4.0% maximum has not been met.

(5) Fees are accrued daily in the amount of 1/365th of a percentage of the estimated per share NAV and payable monthly in arrears.

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 March 31, 2017:

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 of 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 March 31, 2017:

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 months ended March 31, 2017 and 2016 (in thousands).

	Three Months Ended March 31,
	2017		2016
Offering-related fees and reimbursements
Selling commissions (1)	$	2,177	$	7,041
Dealer manager and distribution fees (2)	1,253		2,640
Reimbursement revenue	886		2,710
Offering-related fees and reimbursements	4,316		12,391
Transaction service fees and reimbursements
Acquisition fees	3,272		1,702
Reimbursement revenues	734		682
Transaction service fees and reimbursements	4,006		2,384
Management fees and reimbursements
Asset and property management fees and leasing fees	53		55
Advisory and performance fee revenue	13,624		12,050
Reimbursement revenues	4,767		4,123
Management fees and reimbursements	18,444		16,228
Interest income on Affiliate Lines of Credit	124		308
Total related party revenues(3)	$	26,890	$	31,311

___________________________________

(1) The Company reallowed 100% of selling commissions to participating broker-dealers during the three months ended March 31, 2017 and 2016.

(2) During the three months ended March 31, 2017 and 2016, the Company reallowed $0.5 million and $1.0 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.

(3) Total related party revenues excludes fees earned from 1031 real estate programs of $0.4 million and $0.2 million, for the three months ended March 31, 2017 and 2016, 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 March 31, 2017 (carrying amount in thousands):

	March 31, 2017
Cole REIT	% of Outstanding Shares Owned	Carrying Amount of Investment
CCPT V	0.86%	$	1,359
INAV	0.07%	135
CCIT II	0.44%	1,222
CCIT III	41.29%	961
CCPT IV	0.01%	111
Funds not yet in offering	100.00%	400
Total		$	4,188

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Net Loss Per Share/Unit (Tables)

3 Months Ended

Mar. 31, 2017

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 share computation for the General Partner for the three months ended March 31, 2017 and 2016 (dollar amounts in thousands):

	Three Months Ended March 31,
	2017			2016
Net income (loss) attributable to the General Partner	$	14,438		$	(113,086	)
Dividends to preferred shares and units	(17,973		)	(17,973		)
Net loss available to the General Partner	(3,535		)	(131,059		)
Earnings allocated to participating securities	(178		)	(125		)
Net loss available to common stockholders used in basic and diluted net loss per share	$	(3,713	)	$	(131,184	)
Weighted average number of common stock outstanding - basic and diluted	973,849,610			903,825,726
Basic and diluted net loss per share attributable to common stockholders	$	(0.00	)	$	(0.15	)

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 months ended March 31, 2017 and 2016 (dollar amounts in thousands):

	Three Months Ended March 31,
	2017			2016
Net income (loss) attributable to the Operating Partnership	$	14,797		$	(116,041	)
Dividends to preferred units	(17,973		)	(17,973		)
Net loss available to the Operating Partnership	(3,176		)	(134,014		)
Earnings allocated to participating units	(178		)	(125		)
Net loss available to common unitholders used in basic and diluted net loss per unit	$	(3,354	)	$	(134,139	)
Weighted average number of common units outstanding - basic and diluted	997,597,957			927,589,523
Basic and diluted net loss per unit attributable to common unitholders	$	(0.00	)	$	(0.15	)

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Subsequent Events (Tables)

3 Months Ended

Mar. 31, 2017

Subsequent Events [Abstract]

Schedule of Record and Payments Dates for Preferred Stock Dividends

On May 3, 2017, the Company’s board of directors declared a monthly cash dividend to holders of the Series F Preferred Stock for July 2017 through September 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 $0.1395833per 30-day month.

Period	Record Date	Payment Date
June 15, 2017 - July 14, 2017	July 1, 2017	July 17, 2017
July 15, 2017 - August 14, 2017	August 1, 2017	August 15, 2017
August 15, 2017 - September 14, 2017	September 1, 2017	September 15, 2017

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Organization (Details)	3 Months Ended
	Mar. 31, 2017 segment $ / shares	Dec. 31, 2016 $ / 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 Millions	3 Months Ended
	Mar. 31, 2017	Dec. 31, 2016
Accounting Standards Update 2017-01 [Member] | New Accounting Pronouncement, Early Adoption, Effect [Member]
Principles of Consolidation and Basis of Presentation
Capitalized acquisition costs	$ 0.4
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	23,748,347

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Summary of Significant Accounting Policies - Litigation and Other Non-Routine Costs (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Litigation and other non-routine costs:
Audit Committee Investigation and related matters	$ 12,671	$ 4,742
Legal fees and expenses	204	83
Total costs incurred	12,875	4,825
Insurance recoveries	0	(10,000)
Total	$ 12,875	$ (5,175)

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Segment Reporting - Narrative (Details) ft² in Millions	3 Months Ended
	Mar. 31, 2017 ft² property security state segment loan	Dec. 31, 2016 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	8
REI Segment [Member] | Consolidated Properties [Member]
Segment Reporting Information [Line Items]
Number of properties owned | property	4,107
Square feet of property | ft²	93.5
Number of states in which entity operates | state	49
Percentage of rentable space leased	97.80%
Real estate property, weighted average remaining lease term	9 years 7 months 6 days

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Segment Reporting - Schedule of Financial Results by Segment (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Revenues:
Rental income	$ 293,739	$ 313,971
Direct financing lease income	433	569
Operating expense reimbursements	26,726	23,247
Total revenues	348,029	369,020
Operating expenses:
Cole Capital reallowed fees and commissions	2,660	8,068
Acquisition-related	617	242
Litigation and other non-routine costs, net of insurance recoveries	12,875	(5,175)
Property operating	34,016	34,813
General and administrative	29,148	29,400
Depreciation and amortization	183,152	204,308
Impairment of real estate	6,725	160,517
Total operating expenses	269,193	432,173
Operating income (loss)	78,836	(63,153)
Other (expense) income:
Interest expense	(73,743)	(80,426)
Loss on extinguishment and forgiveness of debt, net	(70)	0
Other income, net	798	1,062
Equity in (loss) income and gain on disposition of unconsolidated entities	(82)	10,404
Gain (loss) on derivative instruments, net	824	(1,086)
Total other expenses, net	(72,273)	(70,046)
Income (loss) before taxes and real estate dispositions	6,563	(133,199)
Income (loss) before taxes	19,044	(116,024)
(Provision for) benefit from income taxes	(4,254)	(56)
Net income (loss)	14,790	(116,080)
Company Total [Abstract]
Total revenues	348,029	369,020
Total operating expenses	(269,193)	(432,173)
Total other expenses, net	(72,273)	(70,046)
Net income (loss)	14,790	(116,080)
Total Assets	15,356,535		$ 15,587,574
REI segment [Member]
Revenues:
Rental income	293,739	313,971
Direct financing lease income	433	569
Operating expense reimbursements	26,726	23,247
Total revenues	320,898	337,787
Operating expenses:
Acquisition-related	617	217
Litigation and other non-routine costs, net of insurance recoveries	12,875	(5,175)
Property operating	34,016	34,813
General and administrative	12,560	12,228
Depreciation and amortization	178,297	195,991
Impairment of real estate	6,725	160,517
Total operating expenses	245,090	398,591
Operating income (loss)	75,808	(60,804)
Other (expense) income:
Interest expense	(73,743)	(80,426)
Loss on extinguishment and forgiveness of debt, net	(70)	0
Other income, net	670	568
Equity in (loss) income and gain on disposition of unconsolidated entities	(82)	10,404
Gain (loss) on derivative instruments, net	824	(1,086)
Total other expenses, net	(72,401)	(70,540)
Income (loss) before taxes and real estate dispositions	3,407	(131,344)
Gain on disposition of real estate and held for sale assets, net	12,481	17,175
Income (loss) before taxes	15,888	(114,169)
(Provision for) benefit from income taxes	(3,108)	(1,365)
Net income (loss)	12,780	(115,534)
Company Total [Abstract]
Total revenues	320,898	337,787
Total operating expenses	(245,090)	(398,591)
Total other expenses, net	(72,401)	(70,540)
Net income (loss)	12,780	(115,534)
Total Assets	15,110,337		15,337,623
Cole Capital segment [Member]
Revenues:
Offering-related fees and reimbursements	4,316	12,391
Transaction service fees and reimbursements	4,097	2,384
Management fees and reimbursements	18,718	16,458
Total revenues	27,131	31,233
Operating expenses:
Cole Capital reallowed fees and commissions	2,660	8,068
Acquisition-related	0	25
General and administrative	16,588	17,172
Depreciation and amortization	4,855	8,317
Total operating expenses	24,103	33,582
Operating income (loss)	3,028	(2,349)
Other (expense) income:
Total other expenses, net	128	494
Income (loss) before taxes	3,156	(1,855)
(Provision for) benefit from income taxes	(1,146)	1,309
Net income (loss)	2,010	(546)
Company Total [Abstract]
Total revenues	27,131	31,233
Total operating expenses	(24,103)	(33,582)
Total other expenses, net	128	494
Net income (loss)	2,010	$ (546)
Total Assets	$ 246,198		$ 249,951

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Goodwill and Other Intangibles - Goodwill Narrative (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2017 USD ($) property segment	Mar. 31, 2016 USD ($)	Dec. 31, 2016 USD ($) property
Goodwill [Line Items]
Number of segments | segment	2
Goodwill	$ 1,462,585		$ 1,462,203
REI Segment [Member]
Goodwill [Line Items]
Number of segments | segment	1
Goodwill	$ 1,300,000		$ 1,300,000
Number of properties classified held for sale | property			1
Number of properties classified as held for use | property	1
Increase to goodwill	$ 400
Goodwill allocated to dispositions and held for sale assets		$ 13,500
Cole Capital Segment [Member]
Goodwill [Line Items]
Number of segments | segment	1
Goodwill	$ 124,800		$ 124,800

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Goodwill and Other Intangibles - Intangible Lease Assets Narrative (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Related Party Transaction [Line Items]
Amortization expense	$ 4,100	$ 7,500
Intangible assets	$ 20,464		$ 24,609
Cole REITs [Member] | Management And Advisory Contracts [Member]
Related Party Transaction [Line Items]
Estimated useful life	3 years
Estimated amortization expense for remainder of 2017	$ 12,400
Estimated amortization expense for 2018	4,000
Estimated amortization expense for nine months ended 30th September 2019	3,800
Intangible assets	20,500		24,600
Accumulated amortization	$ 33,700		$ 29,600

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Goodwill and Other Intangibles - Intangible Lease Assets and Liabilities (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Dec. 31, 2016
Intangible lease liabilities:
Accumulated amortization	$ 61,631	$ 56,891
Weighted-Average Useful Life	18 years 1 month 13 days
Intangible lease liabilities, net	$ 217,721	224,023
Total Intangible Lease Assets [Member]
Intangible lease assets:
Intangible lease assets, net	1,416,296	1,478,884
In-Place Leases [Member]
Intangible lease assets:
Accumulated amortization	$ 525,079	494,131
Weighted-Average Useful Life	14 years 8 months 15 days
Intangible lease assets, net	$ 1,148,158	1,192,756
Leasing Commissions [Member]
Intangible lease assets:
Accumulated amortization	$ 2,158	1,836
Weighted-Average Useful Life	10 years 4 months 2 days
Intangible lease assets, net	$ 10,570	10,231
Above-Market Leases [Member]
Intangible lease assets:
Accumulated amortization	$ 74,206	69,670
Weighted-Average Useful Life	16 years 1 month 6 days
Intangible lease assets, net	$ 257,568	$ 275,897

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Goodwill and Other Intangibles - Projected Amortization Expense and Adjustments (Details) $ in Thousands	Mar. 31, 2017 USD ($)
Below-market lease liabilities:
April 1, 2017 - December 31 2017	$ 16,204
2018	19,672
2019	18,939
2020	17,775
2021	16,425
In-Place Leases [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
April 1, 2017 - December 31, 2017	111,195
2018	136,056
2019	124,895
2020	116,752
2021	107,913
Leasing Commissions [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
April 1, 2017 - December 31, 2017	1,008
2018	1,164
2019	1,098
2020	1,076
2021	1,038
Above-Market Lease Assets [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
April 1, 2017 - December 31, 2017	18,533
2018	24,098
2019	22,184
2020	21,748
2021	$ 21,234

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Real Estate Investments - Narrative (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2017 USD ($) property land_parcel	Mar. 31, 2016 USD ($) property
2017 Acquisitions [Member]
Business Acquisition [Line Items]
Number of properties acquired | property	16
Number of land parcels acquired | land_parcel	3
Total purchase price of assets acquired	$ 101,914
2016 Acquisitions [Member]
Business Acquisition [Line Items]
Number of properties acquired | property		1
Total purchase price of assets acquired		$ 19,952
Accounting Standards Update 2017-01 [Member] | New Accounting Pronouncement, Early Adoption, Effect [Member]
Business Acquisition [Line Items]
Capitalized acquisition costs	$ 400

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Real Estate Investments - Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
2017 Acquisitions [Member]
Real estate investments, at cost:
Land	$ 24,107
Buildings, fixtures and improvements	59,261
Total tangible assets	83,368
Assumed intangible liabilities:
Total purchase price of assets acquired	101,914
2017 Acquisitions [Member] | In-place leases [Member]
Acquired intangible assets:
Acquired intangible assets	15,916
2017 Acquisitions [Member] | Above-market leases [Member]
Acquired intangible assets:
Acquired intangible assets	2,815
2017 Acquisitions [Member] | Below-market leases [Member]
Assumed intangible liabilities:
Below-market leases	$ (185)
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

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Real Estate Investments - Future Lease Payments (Details) $ in Thousands	Mar. 31, 2017 USD ($) property
Future Minimum Operating Lease Base Rent Payments
April 1, 2017 - December 31, 2017	$ 812,431
2018	1,086,126
2019	1,049,422
2020	1,013,348
2021	971,437
Thereafter	6,300,003
Total	11,232,767
Future Minimum Direct Financing Lease Payments
April 1, 2017 - December 31, 2017	2,599
2018	3,016
2019	2,397
2020	2,023
2021	1,899
Thereafter	3,993
Total	$ 15,927
Number of properties subject to direct financing leases | property	29

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Real Estate Investments - Investment in Direct Financing Leases, Net (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Real Estate [Abstract]
Future minimum lease payments receivable	$ 15,927	$ 17,147
Unguaranteed residual value of property	23,700	27,450
Unearned income	(4,718)	(5,142)
Net investment in direct financing leases	$ 34,909	$ 39,455

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Real Estate Investments - Property Dispositions and Held for Sale Assets Narrative (Details)	3 Months Ended
	Mar. 31, 2017 USD ($) property	Mar. 31, 2016 USD ($) property
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Number of real estate properties disposed | property	0
Proceeds after debt assumptions and closing costs	$ 195,730,000	$ 176,137,000
Foreign Tax Authority [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Tax provision for the gain on sale of property	$ 1,700,000
Consolidated Property Dispositions, 2017 [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Number of real estate properties disposed | property	50
Aggregate proceeds	$ 210,600,000
Company's share of proceeds	200,800,000
Proceeds after debt assumptions and closing costs	195,700,000
Gain related to sale, including goodwill	$ 12,500,000
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	14	1
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		58
Aggregate proceeds		$ 193,700,000
Company's share of proceeds		193,100,000
Proceeds after debt assumptions and closing costs		133,800,000
Debt assumed		55,000,000
Gain related to sale, including goodwill		18,800,000
Goodwill included in sale		11,300,000
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		$ 102,100,000
Number of disposed properties owned by unconsolidated joint ventures | property		1
Net proceeds		$ 113,500,000
Proceeds from after debt repayments and closing costs		42,300,000
Debt repayments		57,000,000
Gain related to sale of unconsolidated entities		10,200,000
Property Dispositions, 2017 [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Number of properties classified held for sale | property	7
Net gain (loss) on sale of properties	$ 0
Goodwill allocated to dispositions and held for sale assets	$ 0
2016 Property Dispositions [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Net gain (loss) on sale of properties		(1,700,000)
Goodwill allocated to dispositions and held for sale assets		$ 2,200,000

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Real Estate Investments - Impairment of Real Estate Investments Narrative (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2017 USD ($)	Mar. 31, 2016 USD ($) restaurant
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impairment charges	$ 6,725	$ 160,500
Tenant file for bankruptcy, number of restaurants | restaurant		59
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	16,600	$ 623,000
Estimated fair value of real estate assets deemed to be impaired	$ 9,900	$ 462,500
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		12 Months Ended
		Mar. 31, 2017 USD ($) property joint_venture	Mar. 31, 2016 USD ($)	Dec. 31, 2016 USD ($) property joint_venture
Schedule of Equity Method Investments [Line Items]
Total assets		$ 15,356,535		$ 15,587,574
Real estate investments, net		13,021,973		13,252,799
Net income (loss) attributable to non-controlling interests	[1]	352	$ (2,994)
VEREIT Operating Partnership, L.P. [Member]
Schedule of Equity Method Investments [Line Items]
Total assets		15,356,535		15,587,574
Real estate investments, net		13,021,973		$ 13,252,799
Net income (loss) attributable to non-controlling interests	[2]	$ (7)	$ (39)
Mortgages [Member]
Schedule of Equity Method Investments [Line Items]
Number of properties owned | property		597
Joint ventures [Member]
Schedule of Equity Method Investments [Line Items]
Number of joint ventures | joint_venture		2		2
Total assets		$ 67,400		$ 64,800
Real estate investments, net		$ 58,800		$ 58,800
Number of properties with secured mortgage note payable | property		1
Joint ventures [Member] | Mortgages [Member]
Schedule of Equity Method Investments [Line Items]
Mortgage note payable		$ 13,900
Joint ventures [Member] | Consolidated Properties [Member]
Schedule of Equity Method Investments [Line Items]
Number of properties owned | property		2		2

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

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

XML

Real Estate Investments - Unconsolidated Joint Ventures Narrative (Details)	3 Months Ended
	Mar. 31, 2017 USD ($) property joint_venture	Mar. 31, 2016 USD ($) property	Dec. 31, 2016 USD ($) property joint_venture
Schedule of Equity Method Investments [Line Items]
Aggregate equity investments	$ 45,145,000		$ 46,077,000
Net (loss) income	$ (82,000)	$ 206,000
Mortgages [Member]
Schedule of Equity Method Investments [Line Items]
Number of properties owned | property	597
Aggregate balance outstanding	$ 2,553,386,000		2,629,949,000
Unconsolidated Joint Venture [Member]
Schedule of Equity Method Investments [Line Items]
Aggregate equity investments	41,000,000		$ 41,300,000
Net (loss) income	300,000	$ 300,000
Unconsolidated Joint Venture [Member] | Mortgages [Member]
Schedule of Equity Method Investments [Line Items]
Aggregate balance outstanding	20,400,000
Unconsolidated Joint Venture [Member] | Mortgages [Member] | Recourse debt [Member]
Schedule of Equity Method Investments [Line Items]
Aggregate balance outstanding	$ 0
Unconsolidated Properties [Member] | REI segment [Member]
Schedule of Equity Method Investments [Line Items]
Number of unconsolidated joint ventures | joint_venture	2		2
Number of properties owned | property	2	2	2

XML

Real Estate Investments - Ownership and Carrying Amounts for Unconsolidated Ventures (Details) $ in Thousands	Mar. 31, 2017 USD ($)
Schedule of Equity Method Investments [Line Items]
Ownership %	100.00%
Carrying value of Investment	$ 40,958
Underlying equity in net assets	$ 6,300
Cole/Mosaic JV South Elgin IL, LLC [Member]
Schedule of Equity Method Investments [Line Items]
Ownership %	50.00%
Carrying value of Investment	$ 5,839
Cole/Faison JV Bethlehem GA, LLC [Member]
Schedule of Equity Method Investments [Line Items]
Ownership %	90.00%
Carrying value of Investment	$ 35,119

XML

Investment Securities, at Fair Value - Unrealized Gains and Losses (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Schedule of Available-for-sale Securities [Line Items]
Fair Value	$ 42,630	$ 47,215
CMBS [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	43,906	48,297
Gross Unrealized Gains	1,039	1,248
Gross Unrealized Losses	(2,315)	(2,330)
Fair Value	$ 42,630	$ 47,215

XML

Investment Securities, at Fair Value - Narrative (Details)	3 Months Ended
	Mar. 31, 2017 USD ($) security	Dec. 31, 2016 USD ($) security
Schedule of Available-for-sale Securities [Line Items]
Investment securities, at fair value	$ 42,630,000	$ 47,215,000
CMBS [Member]
Schedule of Available-for-sale Securities [Line Items]
Number of securities owned | security	8	8
Investment securities, at fair value	$ 42,630,000	$ 47,215,000
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%

XML

Investment Securities, at Fair Value - Scheduled Maturity of CMBS (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Fair Value
Total	$ 42,630	$ 47,215
CMBS [Member]
Amortized Cost
Due within one year	0
Due after one year through five years	18,142
Due after five years through 10 years	11,955
Due after 10 years	13,809
Amortized Cost	43,906	48,297
Fair Value
Due within one year	0
Due after one year through five years	18,638
Due after five years through 10 years	9,685
Due after 10 years	14,307
Total	$ 42,630	$ 47,215

XML

Mortgage Notes Receivable - Narrative (Details)	3 Months Ended
	Mar. 31, 2017 loan
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of mortgage notes receivable	9
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	12 years 9 months 18 days
Number of mortgage notes with capitalized principal and interest	1

XML

Mortgage Notes Receivable - Schedule of Mortgage Notes Receivable (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Accounts, Notes, Loans and Financing Receivable [Line Items]
Carrying Value	$ 22,545	$ 22,764
Mortgage notes receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding Balance	24,574
Carrying Value	$ 22,545
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] $ in Thousands	3 Months Ended
	Mar. 31, 2017 USD ($)
Subsequent Event [Line Items]
Due within one year	$ 1,122
Due after one year through five years	5,378
Due after five years through 10 years	7,034
Due after 10 years	14,832
Total	28,366
Interest scheduled to be capitalized	$ 3,800

XML

Rent and Tenant Receivables and Other Assets, Net (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Property, Plant and Equipment [Line Items]
Accounts receivable, net	$ 48,477		$ 49,148
Straight-line rent receivable	207,420		201,584
Deferred costs, net	13,548		16,154
Prepaid expenses	11,600		6,814
Leasehold improvements, property and equipment, net	14,056		14,702
Restricted escrow deposits	11,555		5,741
Deferred tax asset and tax receivable	32,976		31,113
Program development costs, net	3,182		3,161
Interest rate swap assets, at fair value	371		199
Other assets	3,713		2,089
Total	346,898		330,705
Allowance for doubtful accounts	8,100		6,000
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	33,800		31,700
Leasehold Improvements [Member]
Property, Plant and Equipment [Line Items]
Amortization expense	300	$ 300
Accumulated amortization and depreciation	3,800		3,500
Property and Equipment [Member]
Property, Plant and Equipment [Line Items]
Accumulated amortization and depreciation	4,300		3,900
Depreciation expense	400	500
Line of Credit [Member]
Property, Plant and Equipment [Line Items]
Amortization expense	2,600	$ 2,600
Accumulated amortization for deferred costs	$ 32,400		$ 29,800

XML

Fair Value Measures - Fair Value of Assets and Liabilities, Measured on a Recurring Basis (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Assets:
Derivative assets	$ 371	$ 199
Liabilities:
Derivative liabilities	(1,996)	(3,547)
Fair Value, Measurements, Recurring [Member]
Assets:
CMBS	42,630	47,215
Derivative assets	371	199
Total assets	43,001	47,414
Liabilities:
Derivative liabilities	(1,996)	(3,547)
Fair Value, Measurements, Recurring [Member] | Level 1 [Member]
Assets:
CMBS	0	0
Derivative assets	0	0
Total assets	0	0
Liabilities:
Derivative liabilities	0	0
Fair Value, Measurements, Recurring [Member] | Level 2 [Member]
Assets:
CMBS	0	0
Derivative assets	371	199
Total assets	371	199
Liabilities:
Derivative liabilities	(1,996)	(3,547)
Fair Value, Measurements, Recurring [Member] | Level 3 [Member]
Assets:
CMBS	42,630	47,215
Derivative assets	0	0
Total assets	42,630	47,215
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	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance	$ 47,215	$ 53,304
Total gains and losses
Unrealized loss included in other comprehensive income (loss), net	(194)	(1,961)
Purchases, issuance, settlements
Return of principal received	(3,469)	(3,217)
Accretion (Amortization) included in net loss, net	(922)	36
Ending balance	$ 42,630	$ 48,162

XML

Fair Value Measures - Fair Value of Financial Instruments by Balance Sheet Location (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Carrying Amount [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total liabilities	$ 6,339,339	$ 6,422,908
Fair Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total liabilities	6,457,852	6,491,738
Level 3 [Member] | Carrying Amount [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Assets:	22,545	22,764
Level 3 [Member] | Fair Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Assets:	30,355	30,460
Level 2 [Member] | Mortgages [Member] | Carrying Amount [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total liabilities	2,602,733	2,687,739
Level 2 [Member] | Mortgages [Member] | Fair Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total liabilities	2,644,244	2,713,155
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	2,248,239	2,248,063
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	2,305,877	2,273,850
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	988,367	987,106
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	1,007,731	1,004,733
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	500,000
Level 2 [Member] | Credit Facility [Member] | Credit Facilities [Member] | Fair Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total liabilities	$ 500,000	$ 500,000

XML

Fair Value Measures - Narrative (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2017 USD ($) property	Mar. 31, 2016 USD ($) property
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Properties impaired | property	14	125
Impairment charges	$ 6,725	$ 160,500
Minimum [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Discount rates	7.80%
Capitalization rates	7.20%
Maximum [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Capitalization rates	7.50%
Weighted Average [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Capitalization rates	7.40%
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	$ 9,900	462,500
Carrying value of real estate assets deemed to be impaired	$ 16,600	$ 623,000

XML

Fair Value Measures - Impairment Charges by Asset Class (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2017 USD ($) property	Mar. 31, 2016 USD ($) property
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Properties impaired | property	14	125
Total impairment loss	$ 6,725	$ 160,500
Number of properties disposed of | property	0
Investment in Real Estate Assets, Net [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total impairment loss	$ 6,748
Below-Market Lease Liabilities, Net [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total impairment loss	$ (23)

XML

Debt - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Dec. 31, 2016
Debt Disclosure [Abstract]
Debt outstanding	$ 6,287,403	$ 6,367,248
Weighted-average years to maturity	4 years 2 months 12 days
Weighted-average interest rate	4.30%

XML

Debt - Schedule of Debt (Details)	3 Months Ended
	Mar. 31, 2017 USD ($) note_payable	Dec. 30, 2016 USD ($)
Debt [Roll Forward]
Total debt, Beginning balance	$ 6,367,248,000
Debt Issuances, Net	2,403,000
Repayments, Extinguishment and Assumptions, Net	(84,091,000)
Accretion and Amortization	1,843,000
Total debt, Ending balance	6,287,403,000
Mortgages and Other Debt [Member]
Debt [Roll Forward]
Total debt, Beginning balance	2,671,106,000
Debt Issuances, Net	2,403,000
Repayments, Extinguishment and Assumptions, Net	(84,091,000)
Accretion and Amortization	(2,501,000)
Total debt, Ending balance	2,586,917,000
Mortgage Notes Payable [Member]
Debt [Roll Forward]
Outstanding balance, Beginning balance	2,629,949,000
Net premiums (discount), Beginning balance	36,751,000
Deferred costs, Beginning balance	(16,633,000)
Debt Issuances	2,403,000
Repayments, Extinguishment and Assumptions	(78,966,000)
Accretion and Amortization, (Premiums) Discount	(3,290,000)
Accretion and Amortization, Deferred costs	817,000
Outstanding balance, Ending balance	2,553,386,000
Net premiums (discount), Ending balance	33,461,000
Deferred costs, Ending balance	(15,816,000)
Mortgage notes in connection with default from non-recourse loan	$ 41,800,000	$ 11,600,000
Number of mortgage notes payable in default | note_payable	2
Other Debt [Member]
Debt [Roll Forward]
Outstanding balance, Beginning balance	$ 20,947,000
Net premiums (discount), Beginning balance	92,000
Repayments, Extinguishment and Assumptions	(5,125,000)
Accretion and Amortization, (Premiums) Discount	(28,000)
Outstanding balance, Ending balance	15,822,000
Net premiums (discount), Ending balance	64,000
Corporate Bonds [Member]
Debt [Roll Forward]
Outstanding balance, Beginning balance	2,250,000,000
Net premiums (discount), Beginning balance	(1,937,000)
Deferred costs, Beginning balance	(21,839,000)
Total debt, Beginning balance	2,226,224,000
Accretion and Amortization, (Premiums) Discount	176,000
Accretion and Amortization, Deferred costs	907,000
Accretion and Amortization	1,083,000
Outstanding balance, Ending balance	2,250,000,000
Net premiums (discount), Ending balance	(1,761,000)
Deferred costs, Ending balance	(20,932,000)
Total debt, Ending balance	2,227,307,000
Convertible Debt [Member]
Debt [Roll Forward]
Outstanding balance, Beginning balance	1,000,000,000
Net premiums (discount), Beginning balance	(12,894,000)
Deferred costs, Beginning balance	(13,766,000)
Total debt, Beginning balance	973,340,000
Accretion and Amortization, (Premiums) Discount	1,261,000
Accretion and Amortization, Deferred costs	1,430,000
Accretion and Amortization	2,691,000
Outstanding balance, Ending balance	1,000,000,000
Net premiums (discount), Ending balance	(11,633,000)
Deferred costs, Ending balance	(12,336,000)
Total debt, Ending balance	976,031,000
Credit Facility [Member]
Debt [Roll Forward]
Outstanding balance, Beginning balance	500,000,000
Deferred costs, Beginning balance	(3,422,000)
Total debt, Beginning balance	496,578,000
Accretion and Amortization, Deferred costs	570,000
Accretion and Amortization	570,000
Outstanding balance, Ending balance	500,000,000
Deferred costs, Ending balance	(2,852,000)
Total debt, Ending balance	$ 497,148,000

XML

Debt - Mortgage Notes Payable (Details)	3 Months Ended
	Mar. 31, 2017 USD ($) property	Dec. 31, 2016 USD ($)
Debt Instrument [Line Items]
Weighted-Average Interest Rate	4.30%
Weighted-Average Years to Maturity	4 years 2 months 12 days
Mortgage Notes Payable [Member]
Debt Instrument [Line Items]
Encumbered Properties | property	597
Gross Carrying Value of Collateralized Properties	$ 4,979,924,000
Outstanding Balance	$ 2,553,386,000	$ 2,629,949,000
Weighted-Average Interest Rate	4.99%
Mortgage Notes Payable [Member] | Unconsolidated Joint Venture [Member]
Debt Instrument [Line Items]
Outstanding Balance	$ 20,400,000
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] | 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	596
Gross Carrying Value of Collateralized Properties	$ 4,949,078,000
Outstanding Balance	$ 2,539,726,000
Weighted-Average Interest Rate	4.99%
Mortgage Notes Payable [Member] | Fixed-rate debt [Member] | Interest Rate Swap [Member]
Debt Instrument [Line Items]
Outstanding Balance	$ 188,700,000
Mortgage Notes Payable [Member] | Fixed-rate debt [Member] | Weighted-Average [Member]
Debt Instrument [Line Items]
Weighted-Average Years to Maturity	4 years 7 months 5 days
Mortgage Notes Payable [Member] | Variable-rate debt [Member]
Debt Instrument [Line Items]
Encumbered Properties | property	1
Gross Carrying Value of Collateralized Properties	$ 30,846,000
Outstanding Balance	$ 13,660,000
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	4 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 Millions	3 Months Ended
	Mar. 31, 2017 USD ($) property loan default_notice	Dec. 30, 2016 USD ($) property
Debt Instrument [Line Items]
Number of properties secured by each non-recourse loan | property	1
Mortgage Notes Payable [Member]
Debt Instrument [Line Items]
Number of default notices | default_notice	2
Number of non-recourse loan secured properties	2	16
Mortgage notes in connection with default from non-recourse loan | $	$ 41.8	$ 11.6

XML

Debt - Aggregate Principal Repayments on Mortgage Notes (Details) - Mortgage Notes Payable [Member] $ in Thousands	Mar. 31, 2017 USD ($) note_payable	Dec. 31, 2016 USD ($)	Dec. 30, 2016 USD ($)
Debt Instrument [Line Items]
April 1, 2017 - December 31, 2017	$ 340,411
2018	108,694
2019	228,107
2020	280,668
2021	356,849
Thereafter	1,238,657
Total	2,553,386	$ 2,629,949
Mortgage notes in connection with default from non-recourse loan	$ 41,800		$ 11,600
Number of mortgage notes payable in default | note_payable	2

XML

Debt - Other Debt Narrative (Details) - Other Debt [Member] - USD ($)	Mar. 31, 2017	Dec. 31, 2016
Debt Instrument [Line Items]
Outstanding Balance	$ 15,822,000	$ 20,947,000
Unamortized net premium (less than)	$ 64,000	$ 92,000
Interest rate	5.81%
Scheduled principal repayments, 2017	$ 2,500,000
Scheduled principal repayments, 2018	$ 13,300,000

XML

Debt - Summary of Outstanding and Carrying Value of Collateral by Asset Type (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Debt Instrument [Line Items]
Outstanding Balance	$ 6,287,403	$ 6,367,248
Other Debt [Member]
Debt Instrument [Line Items]
Collateral Carrying Value	50,864
Long-term Debt, Gross	15,822	$ 20,947
Other Debt [Member] | Mortgage notes receivable [Member]
Debt Instrument [Line Items]
Outstanding Balance	5,598
Collateral Carrying Value	18,936
Other Debt [Member] | Intercompany mortgage loans [Member]
Debt Instrument [Line Items]
Outstanding Balance	404
Collateral Carrying Value	1,240
Other Debt [Member] | CMBS [Member]
Debt Instrument [Line Items]
Outstanding Balance	9,820
Collateral Carrying Value	$ 30,688

XML

Debt - Corporate Bonds Narrative (Details) - Corporate Bonds [Member] $ in Thousands	3 Months Ended
	Mar. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)
Debt Instrument [Line Items]
Aggregate balance outstanding	$ 2,250,000	$ 2,250,000
Covenant terms, maximum limitation on incurrence of total debt, percentage of total assets	65.00%
Covenant terms, maximum limitation on incurrence of secured debt, percentage of total assets	40.00%
Covenant terms, minimum debt service coverage ratio	1.5
Covenant terms, minimum unencumbered asset value, percentage	150.00%
VEREIT Operating Partnership, L.P. [Member]
Debt Instrument [Line Items]
Aggregate balance outstanding	$ 2,250,000
VEREIT Operating Partnership, L.P. [Member] | 2019 Senior Notes [Member]
Debt Instrument [Line Items]
Aggregate balance outstanding	$ 750,000
Redemption price, percentage of principal	100.00%

XML

Debt - Corporate Bonds (Details) - Corporate Bonds [Member] - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Debt Instrument [Line Items]
Outstanding Balance	$ 2,250,000	$ 2,250,000
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 ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Debt Instrument [Line Items]
Aggregate balance outstanding	$ 1,000,000	$ 1,000,000
2018 Convertible Notes [Member]
Debt Instrument [Line Items]
Aggregate balance outstanding	597,500
2020 Convertible Notes [Member]
Debt Instrument [Line Items]
Aggregate balance outstanding	$ 402,500

XML

Debt - Convertible Debt (Details)	3 Months Ended
	Mar. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)
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	$ 11,633,000	$ 12,894,000
Remaining amortization period	2 years 3 months 15 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	0.0605997
VEREIT Operating Partnership, L.P. [Member] | Convertible Debt [Member] | 2020 Convertible Notes [Member]
Debt Instrument [Line Items]
Conversion Rate	0.0667249

XML

Debt - Credit Facility Narrative (Details) - USD ($)	3 Months Ended
	Mar. 31, 2017	Dec. 31, 2016
Line of Credit Facility [Line Items]
Outstanding balance	$ 497,148,000	$ 496,578,000
VEREIT Operating Partnership, L.P. [Member]
Line of Credit Facility [Line Items]
Outstanding balance	497,148,000	496,578,000
Credit Facility [Member]
Line of Credit Facility [Line Items]
Maximum borrowing capacity	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%
Minimum fixed charge coverage ratio (of at least)	1.5
Secured leverage ratio (less than or equal to)	45.00%
Unencumbered asset value ratio (less than or equal to)	60.00%
Minimum tangible net worth covenant (of at least)	$ 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
Credit Facility [Member] | VEREIT Operating Partnership, L.P. [Member]
Line of Credit Facility [Line Items]
Maximum remaining borrowing capacity	$ 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
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] | Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Current borrowing capacity	$ 2,300,000,000
Outstanding balance		$ 0
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
Line of credit, amount bearing fixed interest rate, percentage	3.25%
Credit Facility [Member] | Unencumbered Asset [Member] | Tranche One [Member]
Line of Credit Facility [Line Items]
Unencumbered Asset Value ratio	30.00%

XML

Derivatives and Hedging Activities - Narrative (Details) - Interest Rate Swap [Member] - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Derivative [Line Items]
Amount of gain (loss) related to change in fair value and other ineffectiveness	$ 0.1	$ (1.1)
Fair value interest rate derivatives	2.4
Aggregate termination value had provisions been breached	2.4
Cash Flow Hedging [Member]
Derivative [Line Items]
Gain in earnings related to ineffective portion	0.7
Cash Flow Hedging [Member] | Interest Expense [Member]
Derivative [Line Items]
Reclassified from AOCI into interest expense	0.3
Reclassified from AOCI interest expense in relation to previously settled interest rate derivatives	0.2
Derivative gain (loss) to be reclassified during next 12 months	$ 0.3

XML

Derivatives and Hedging Activities - Schedule of Interest Rate Derivatives (Details) - Interest Rate Swap [Member] $ in Thousands	Mar. 31, 2017 USD ($) derivative	Dec. 31, 2016 USD ($) derivative
Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member]
Derivative [Line Items]
Number of Instruments | derivative	11	14
Notional Amount | $	$ 637,304	$ 690,816
Not Designated as Hedging Instrument [Member]
Derivative [Line Items]
Number of Instruments | derivative	1	1
Notional Amount | $	$ 51,400	$ 51,400

XML

Derivatives and Hedging Activities - Schedule of Derivative Instruments in Statement of Financial Position, Fair Value (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Derivatives, Fair Value [Line Items]
Derivative assets	$ 371	$ 199
Derivative liabilities	(1,996)	(3,547)
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	364	196
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	7	3
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	$ (1,996)	$ (3,547)

XML

Derivatives and Hedging Activities - Tabular Disclosure Offsetting Derivatives (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Gross Amounts of Recognized Assets	$ 371	$ 199
Gross Amounts of Recognized Liabilities	(1,996)	(3,547)
Gross Amounts Offset in the Consolidated Balance Sheets	0	0
Net Amounts of Assets Presented in the Consolidated Balance Sheets	371	199
Net Amounts of Liabilities Presented in the Consolidated Balance Sheets	(1,996)	(3,547)
Financial Instruments	0	0
Cash Collateral Received	0	0
Net Amount	$ (1,625)	$ (3,348)

XML

Supplemental Cash Flow Disclosures (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Supplemental Disclosures:
Cash paid for interest	$ 68,908	$ 93,713
Cash paid for income taxes	4,503	10,848
Non-cash investing and financing activities:
Accrued capital expenditures and real estate developments	720	1,327
Accrued repurchases of common stock to settle tax obligation	208	223
Distributions declared and unpaid	140,232	130,494
Mortgage notes payable assumed in real estate disposition	$ 0	$ 55,000

XML

Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Payables and Accruals [Abstract]
Accrued interest	$ 43,472	$ 43,188
Accrued real estate taxes	37,392	38,877
Accrued legal fees	28,159	17,827
Accounts payable	2,132	5,030
Accrued other	24,662	41,215
Accounts payable and accrued expenses	$ 135,817	$ 146,137

XML

Commitments and Contingencies - Litigation Narrative (Details) $ in Thousands		1 Months Ended
	Sep. 08, 2016 plaintiff	Dec. 31, 2013 USD ($)	Jan. 20, 2015 lawsuit
SDNY Actions [Member] | Pending Litigation [Member]
Loss Contingencies [Line Items]
Number of claims | lawsuit			10
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 | plaintiff	2

XML

Commitments and Contingencies - Future Obligations (Details) $ in Thousands	Mar. 31, 2017 USD ($)
Ground Leases [Member]
Operating Leased Assets [Line Items]
April 1, 2017 - December 31, 2017	$ 10,575
2018	13,832
2019	13,789
2020	13,317
2021	12,738
Thereafter	211,630
Total	275,881
Office Leases [Member]
Operating Leased Assets [Line Items]
April 1, 2017 - December 31, 2017	3,283
2018	4,298
2019	4,359
2020	4,381
2021	4,367
Thereafter	8,415
Total	$ 29,103

XML

Commitments and Contingencies - Purchase Commitments Narrative (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2017 USD ($) property real_estate_investment_trust agreement	Dec. 31, 2016 USD ($)
Unrecorded Unconditional Purchase Obligation [Line Items]
Escrow deposits	$ 11,555	$ 5,741
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	10
Percentage of voting interests acquired	100.00%
Number of properties acquired | property	18
Aggregate purchase price	$ 275,800
Escrow deposits	$ 11,100

XML

Equity - Common Stock and General Partner Common OP Units (Details) - shares	Mar. 31, 2017	Dec. 31, 2016
Class of Stock [Line Items]
Common stock, shares authorized (shares)	1,500,000,000	1,500,000,000
Common stock, shares outstanding (shares)	974,238,458	974,146,650
Common stock, shares issued (shares)	974,238,458	974,146,650
VEREIT Operating Partnership, L.P. [Member] | Common Stock [Member]
Class of Stock [Line Items]
General partners', units outstanding (shares)	974,238,458	974,146,650
General partners', units issued (shares)	974,238,458	974,146,650
VEREIT Operating Partnership, L.P. [Member] | Common Stock [Member] | General Partner [Member]
Class of Stock [Line Items]
General partners', units issued (shares)	974,200,000

XML

Equity - Common Stock Continuous Offering Program (Details) - Common Stock [Member] - USD ($)	Mar. 31, 2017	Sep. 19, 2016
Class of Stock [Line Items]
Distribution agreement gross sales price (up to)		$ 750,000,000
Distribution agreement stock issued	$ 0

XML

Equity - Series F Preferred Stock (Details) - $ / shares	3 Months Ended
	Mar. 31, 2017	Dec. 31, 2016
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
Series F Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock, shares issued (shares)	42,800,000
Preferred stock, dividend rate (percent)	6.70%
Preferred stock, liquidation preference per share (in dollars per share)	$ 25.00
Dividend rate (in dollars per share)	$ 1.675
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
General partners', units outstanding (shares)	42,834,138	42,834,138
Series F preferred units (shares)	86,874	86,874
Limited partners', units outstanding (shares)	86,874	86,874

XML

Equity - Limited Partner OP Units (Details) - VEREIT Operating Partnership, L.P. [Member] - Common Stock [Member] - shares	3 Months Ended
	Mar. 31, 2017	Dec. 31, 2016
Class of Stock [Line Items]
Limited partners', units outstanding (shares)	23,748,347	23,748,347
Limited Partner [Member]
Class of Stock [Line Items]
Limited partners', units outstanding (shares)	23,750,000	23,750,000
Number of units requested for redemption (shares)	13,100,000

XML

Equity - Common Stock Dividends (Details) - $ / shares		3 Months Ended
	Feb. 22, 2017	Mar. 31, 2017	Mar. 31, 2016
Equity [Abstract]
Quarterly dividend of common stock declared (in dollars per share)	$ 0.1375	$ 0.14	$ 0.14
Annualized dividend rate (in dollars per share)	$ 0.55

XML

Equity - Common Stock Repurchases (Details)	3 Months Ended
	Mar. 31, 2017 shares
General Partner [Member]
Class of Stock [Line Items]
Common stock repurchases (shares)	140,832

XML

Equity-based Compensation - Equity Plan Narrative (Details) - Equity Plan [Member] shares in Millions	3 Months Ended
	Mar. 31, 2017 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)	90.7
Common Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Cumulative Restricted share awards (shares)	4.0
Cumulative Restricted share awards forfeited (shares)	3.6
Cumulative Restricted Stock Units (shares)	4.9
Cumulative Restricted Stock Units forfeited (shares)	0.5
Cumulative Deferred Stock Units (shares)	0.2
Shares issued in period (shares)	9.1

XML

Equity-based Compensation - Restricted Shares Narrative (Details) $ in Millions	3 Months Ended
	Mar. 31, 2017 USD ($)
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

XML

Equity-based Compensation - Summary of Restricted Shares Activity (Details) - Equity Plan [Member] - Restricted Stock [Member]	3 Months Ended
	Mar. 31, 2017 $ / shares shares
Number of Shares/Units
Unvested shares, Beginning Balance (shares) | shares	562,406
Vested (shares) | shares	(178,046)
Forfeited (shares) | shares	(36,346)
Unvested shares, Ending Balance (shares) | shares	348,014
Weighted-Average Grant Date Fair Value
Unvested shares, Beginning Balance (in dollars per share) | $ / shares	$ 13.78
Vested (in dollars per share) | $ / shares	14.01
Forfeited (in dollars per share) | $ / shares	13.88
Unvested shares, Ending Balance (in dollars per share) | $ / shares	$ 13.65

XML

Equity-based Compensation - Time-Based Restricted Stock Units Narrative (Details) - Time-Based Restricted Stock Units [Member] - Equity Plan [Member] $ in Millions	3 Months Ended
	Mar. 31, 2017 USD ($)
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	$ 1.1

XML

Equity-based Compensation - Deferred Stock Units Narrative (Details) - Equity Plan [Member] - Deferred Stock Units [Member]	3 Months Ended
	Mar. 31, 2017 USD ($) shares
General and Administrative Expense [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense | $	$ 42,800
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

XML

Equity-based Compensation - Time-Based Restricted Stock Units and Deferred Stock Units (Details) - Equity Plan [Member]	3 Months Ended
	Mar. 31, 2017 $ / shares shares
Time-Based Restricted Stock Units [Member]
Number of Shares/Units
Unvested shares, Beginning Balance (shares) | shares	1,085,914
Granted (shares) | shares	673,381
Vested (shares) | shares	(244,915)
Unvested shares, Ending Balance (shares) | shares	1,514,380
Weighted-Average Grant Date Fair Value
Unvested shares, Beginning Balance (in dollars per share) | $ / shares	$ 8.43
Granted (in dollars per share) | $ / shares	8.90
Vested (in dollars per share) | $ / shares	7.87
Unvested shares, Ending Balance (in dollars per share) | $ / shares	$ 8.73
Deferred Stock Units [Member]
Number of Shares/Units
Unvested shares, Beginning Balance (shares) | shares	0
Granted (shares) | shares	12,006
Vested (shares) | shares	(12,006)
Unvested shares, Ending Balance (shares) | shares	0
Weighted-Average Grant Date Fair Value
Unvested shares, Beginning Balance (in dollars per share) | $ / shares	$ 0.00
Granted (in dollars per share) | $ / shares	8.67
Vested (in dollars per share) | $ / shares	8.67
Unvested shares, Ending Balance (in dollars per share) | $ / shares	$ 0.00

XML

Equity-based Compensation - Long-Term Incentive Awards Narrative (Details) - Equity Plan [Member] - Long Term Incentive Target Awards [Member] $ in Millions	3 Months Ended
	Mar. 31, 2017 USD ($)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	3 years
General and Administrative Expense [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense	$ 1.5

XML

Equity-based Compensation - LTI Target Awards (Details) - Equity Plan [Member] - LTI Target Awards [Member]	3 Months Ended
	Mar. 31, 2017 $ / shares shares
Number of Shares/Units
Unvested shares, Beginning Balance (shares) | shares	1,522,487
Granted (shares) | shares	726,867
Unvested shares, Ending Balance (shares) | shares	2,249,354
Weighted-Average Grant Date Fair Value
Unvested shares, Beginning Balance (in dollars per share) | $ / shares	$ 9.00
Granted (in dollars per share) | $ / shares	8.96
Unvested shares, Ending Balance (in dollars per share) | $ / shares	$ 8.99

XML

Related Party Transactions and Arrangements- Offering-Related Revenue Narrative (Details) - USD ($) $ in Millions	Mar. 31, 2017	Dec. 31, 2016	Mar. 31, 2016
Selling Commissions Allowable [Member]
Related Party Transaction [Line Items]
Revenue from related party, percentage	100.00%		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	$ 33.8	$ 31.7
Cole REITs [Member] | Selling Commissions Allowable [Member]
Related Party Transaction [Line Items]
Revenue from related party, percentage	100.00%		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	$ 3.2	3.2
Reserves related to program development costs	$ 33.8	$ 31.7

XML

Related Party Transactions and Arrangements - Offering Fee Summary (Details)	Mar. 31, 2017	Mar. 31, 2016
Selling Commissions Allowable [Member]
Related Party Transaction [Line Items]
Revenue from related party, percentage	100.00%	100.00%
Cole REITs [Member] | Selling Commissions Allowable [Member]
Related Party Transaction [Line Items]
Revenue from related party, percentage	100.00%	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	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%
CCIT III [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%

XML

Related Party Transactions and Arrangements - Transaction Service Revenue (Details)	3 Months Ended
	Mar. 31, 2017 property
Cole REITs [Member] | Acquisition and Disposition Fee Revenue [Member]
Related Party Transaction [Line Items]
Number (or more) of properties to earn disposition fees	1
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%

XML

Related Party Transactions and Arrangements - Management Service Revenue (Details)	Mar. 31, 2017
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 - Schedule of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Related Party Transaction [Line Items]
Related-party revenues	$ 26,890	$ 31,311
Affiliated Entity [Member] | Revolving Credit Facility [Member] | Credit Facility [Member]
Related Party Transaction [Line Items]
Interest income	124	308
Offering-related fees and reimbursements [Member]
Related Party Transaction [Line Items]
Related-party revenues	4,316	12,391
Selling commissions [Member]
Related Party Transaction [Line Items]
Related-party revenues	2,177	7,041
Dealer manager and distribution fees [Member]
Related Party Transaction [Line Items]
Related-party revenues	1,253	2,640
Reimbursement revenue [Member]
Related Party Transaction [Line Items]
Related-party revenues	886	2,710
Transaction service fees and reimbursements [Member]
Related Party Transaction [Line Items]
Related-party revenues	4,006	2,384
Acquisition fees [Member]
Related Party Transaction [Line Items]
Related-party revenues	3,272	1,702
Reimbursement revenues [Member]
Related Party Transaction [Line Items]
Related-party revenues	734	682
Management fees and reimbursements [Member]
Related Party Transaction [Line Items]
Related-party revenues	18,444	16,228
Asset and property management fees and leasing fees [Member]
Related Party Transaction [Line Items]
Related-party revenues	53	55
Advisory and performance fee revenue [Member]
Related Party Transaction [Line Items]
Related-party revenues	13,624	12,050
Reimbursement revenues [Member]
Related Party Transaction [Line Items]
Related-party revenues	$ 4,767	$ 4,123
Selling commissions allowable [Member]
Related Party Transaction [Line Items]
Selling commissions reallowed	100.00%	100.00%
Selling commissions allowable [Member] | Cole REITs [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	$ 500	$ 1,000
Revenue from Managed Real Estate Investment Trusts, Excluding Fees from Real Estate Programs [Member]
Related Party Transaction [Line Items]
Related-party revenues	$ 400	$ 200

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Related Party Transactions and Arrangements - Investment in the Cole REITs Narrative (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Related Party Transaction [Line Items]
Aggregate equity investments	$ 45,145		$ 46,077
Net (loss) income	(82)	$ 206
Cole REITs [Member]
Related Party Transaction [Line Items]
Aggregate equity investments	4,188
Net (loss) income	(419)	$ (122)
Cole REITs [Member]
Related Party Transaction [Line Items]
Aggregate equity investments	$ 4,200		$ 4,700

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Related Party Transactions and Arrangements - Schedule of Investment in the Cole REITs (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Related Party Transaction [Line Items]
% of Outstanding Shares Owned	100.00%
Carrying Amount of Investment	$ 45,145	$ 46,077
Funds not yet in offering	400
Cole REITs [Member]
Related Party Transaction [Line Items]
Carrying Amount of Investment	$ 4,188
CCPT V [Member]
Related Party Transaction [Line Items]
% of Outstanding Shares Owned	0.86%
Carrying Amount of Investment	$ 1,359
INAV [Member]
Related Party Transaction [Line Items]
% of Outstanding Shares Owned	0.07%
Carrying Amount of Investment	$ 135
CCIT II [Member]
Related Party Transaction [Line Items]
% of Outstanding Shares Owned	0.44%
Carrying Amount of Investment	$ 1,222
CCIT III [Member]
Related Party Transaction [Line Items]
% of Outstanding Shares Owned	41.29%
Carrying Amount of Investment	$ 961
CCPT IV [Member]
Related Party Transaction [Line Items]
% of Outstanding Shares Owned	0.01%
Carrying Amount of Investment	$ 111

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Related Party Transactions and Arrangements - Due To Affiliates Narrative (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Related Party Transaction [Line Items]
Due to affiliates	$ 7	$ 16
Cole REITs [Member]
Related Party Transaction [Line Items]
Due to affiliates	$ 7	$ 16

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Related Party Transactions and Arrangements - Due from Affiliates Narrative (Details) - USD ($)		3 Months Ended
	Sep. 23, 2016	Mar. 31, 2017	Dec. 31, 2016
Related Party Transaction [Line Items]
Due from affiliates		$ 15,007,000	$ 21,349,000
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		$ 7,800,000	$ 10,300,000
Maximum borrowing capacity	$ 30,000,000
Interest rate		4.98%	5.12%
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%
Excluding balances from Cole REITs [Member]
Related Party Transaction [Line Items]
Due from affiliates		$ 7,200,000	$ 11,000,000

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Net Loss Per Share/Unit - Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Earnings Per Share [Abstract]
Net income (loss) attributable to the General Partner	$ 14,438	$ (113,086)
Dividends to preferred shares and units	(17,973)	(17,973)
Net loss available to the General Partner	(3,535)	(131,059)
Earnings allocated to participating securities	(178)	(125)
Net Income (loss) attributable to common stockholders/unitholders and limited partners used in basic and diluted net income (loss) per share/unit	$ (3,713)	$ (131,184)
Weighted average number of common stock/units outstanding - basic and diluted (shares)	973,849,610	903,825,726
Basic and diluted net loss per share attributable to common stockholders (in dollars per share)	$ 0.00	$ (0.15)

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Net Loss Per Share/Unit - Narrative (Details) - shares shares in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
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)	0.7	4.4
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)	0.7	4.4
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)	23.7	23.8

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Net Loss Per Share/Unit - Schedule of Earnings Per Share, Basic and Diluted, Operating Partnership (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Net income (loss) attributable to the Operating Partnership	$ 14,438	$ (113,086)
Dividends to preferred units	(17,973)	(17,973)
Net Income (loss) attributable to common stockholders/unitholders and limited partners used in basic and diluted net income (loss) per share/unit	$ (3,713)	$ (131,184)
Weighted average number of common stock/units outstanding - basic and diluted (shares)	973,849,610	903,825,726
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	$ 14,797	$ (116,041)
Dividends to preferred units	(17,973)	(17,973)
Net loss available to the Operating Partnership	(3,176)	(134,014)
Earnings allocated to participating units	(178)	(125)
Net Income (loss) attributable to common stockholders/unitholders and limited partners used in basic and diluted net income (loss) per share/unit	$ (3,354)	$ (134,139)
Weighted average number of common stock/units outstanding - basic and diluted (shares)	997,597,957	927,589,523
Basic and diluted net loss per unit attributable to common unitholders (in dollars per share)	$ 0.00	$ (0.15)

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Income Taxes (Details) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Segment Reporting Information [Line Items]
(Provision for) benefit from income taxes	$ (4,254,000)	$ (56,000)
Unrecognized tax benefits	0	0
Cole Capital Segment [Member]
Segment Reporting Information [Line Items]
(Provision for) benefit from income taxes	(1,146,000)	1,309,000
REI Segment [Member]
Segment Reporting Information [Line Items]
(Provision for) benefit from income taxes	$ (3,108,000)	$ (1,365,000)

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Subsequent Events - Real Estate Investment Activity (Details) $ in Thousands	1 Months Ended	3 Months Ended
	Apr. 28, 2017 USD ($) property	Mar. 31, 2017 USD ($) property
Subsequent Event [Line Items]
Number of real estate properties disposed | property		0
2017 Acquisitions [Member]
Subsequent Event [Line Items]
Number of properties acquired | property		16
Aggregate purchase price		$ 101,914
Subsequent Event [Member] | 2017 Acquisitions [Member]
Subsequent Event [Line Items]
Number of properties acquired | property	2
Aggregate purchase price	$ 14,600
Subsequent Event [Member] | Property Dispositions, 2017 [Member]
Subsequent Event [Line Items]
Number of real estate properties disposed | property	5
Aggregate gross sales price	$ 16,900
Company's share of proceeds	14,700
Estimated gain on sale of properties	$ 1,800

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Subsequent Events - Common Stock Dividend (Details) - $ / shares			3 Months Ended
	May 03, 2017	Feb. 22, 2017	Mar. 31, 2017	Mar. 31, 2016
Subsequent Event [Line Items]
Quarterly dividend of common stock declared (in dollars per share)		$ 0.1375	$ 0.14	$ 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]	May 03, 2017 $ / 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 (in dollars per share)	$ 0.1395833