10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

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

For the fiscal year ended December 31, 2014

	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 number: 000-55393

American Realty Capital New York City REIT, Inc.

(Exact name of registrant as specified in its charter)

Maryland	46-4380248
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
405 Park Ave., 14th Floor, New York, NY	10022
(Address of principal executive offices)	(Zip Code)

(212) 415-6500

(Registrant's telephone number, including area code)

Securities registered pursuant to section 12(b) of the Act: None

Securities registered pursuant to section 12 (g) of the Act: Common stock, $0.01 par value per share (Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No  x

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. x Yes ¨ No

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). x Yes ¨ No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  x

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

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ¨ Yes x No

There is no established public market for the registrant's shares of common stock. The registrant is currently conducting the ongoing initial public offering of its shares of common stock pursuant to its Registration Statement on Form S-11 (File No. 333-194135), which shares are being sold at $25.00 per share, with discounts available for certain categories of purchasers. The total market value of the registrant's common stock held by non-affiliates of the registrant as of June 30, 2014, the last business day of the registrant's most recently completed second fiscal quarter, was $75.4 million based on a per share value of $25.00 (or $23.75 for shares issued under the distribution reinvestment plan).

As of March 15, 2015, the registrant had 23,988,980 shares of common stock, $0.01 par value per share, outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of registrant's definitive proxy statement to be delivered to stockholders in connection with the registrant's 2015 Annual Meeting of Stockholders are incorporated by reference into Part III of this Form 10-K. The registrant intends to file its proxy statement within 120 days after its fiscal year end.

AMERICAN REALTY CAPITAL NEW YORK CITY REIT, INC.

FORM 10-K

Year Ended December 31, 2014

		Page
PART I
Item 1.	Business	1
Item 1A.	Risk Factors	5
Item 1B.	Unresolved Staff Comments	45
Item 2.	Properties	45
Item 3.	Legal Proceedings	47
Item 4.	Mine Safety Disclosures	47
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	48
Item 6.	Selected Financial Data	52
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	52
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	64
Item 8.	Financial Statements and Supplementary Data	64
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	64
Item 9A.	Controls and Procedures	64
Item 9B.	Other Information	65
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	65
Item 11.	Executive Compensation	65
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	65
Item 13.	Certain Relationships and Related Transactions, and Director Independence	65
Item 14.	Principal Accounting Fees and Services	65
PART IV
Item 15.	Exhibits and Financial Statement Schedules	65
Signatures		67

i

AMERICAN REALTY CAPITAL NEW YORK CITY REIT, INC.

FORM 10-K

Year Ended December 31, 2014

Forward-Looking Statements

Certain statements included in this Annual Report on Form 10-K are forward-looking statements. Those statements include statements regarding the intent, belief or current expectations of American Realty Capital New York City REIT, Inc. (the "Company," "we," "our" or "us") and members of our management team, as well as the assumptions on which such statements are based, and generally are identified by the use of words such as "may," "will," "seeks," "anticipates," "believes," "estimates," "expects," "plans," "intends," "should" or similar expressions. Actual results may differ materially from those contemplated by such forward-looking statements. Further, forward-looking statements speak only as of the date they are made, and we undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time, unless required by law.

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

• We have a limited operating history which makes our future performance difficult to predict.

• All of our executive officers are also officers, managers or holders of a direct or indirect controlling interest in our advisor, New York City Advisors, LLC (the "Advisor"), our dealer manager, Realty Capital Securities, LLC (the "Dealer Manager") and other entities affiliated with AR Capital, LLC (the "Parent of our Sponsor"). As a result, our executive officers, our Advisor and its affiliates face conflicts of interest, including significant conflicts created by our Advisor's compensation arrangements with us and other investment programs advised by affiliates of the Parent of our Sponsor and conflicts in allocating time among these investment programs and us. These conflicts could result in unanticipated actions.

• Because investment opportunities that are suitable for us may also be suitable for other investment programs advised by affiliates of the Parent of our Sponsor, our Advisor and its affiliates face conflicts of interest relating to the purchase of properties and other investments and such conflicts may not be resolved in our favor, meaning that we could invest in less attractive assets, which could reduce the investment return to our stockholders.

• No public market currently exists, or may ever exist, for shares of our common stock and our shares are, and may continue to be, illiquid.

• If we and our Advisor are unable to find suitable investments, then we may not be able to achieve our investment objectives, or pay distributions with cash flows from operations.

• If we raise substantially less than the maximum offering in our initial public offering (the "IPO" or "our offering"), we may not be able to invest in a diversified portfolio of real estate assets, which may cause the value of an investment in us to vary more widely with the performance of specific assets.

• We may be unable to pay or maintain cash distributions or increase distributions over time.

• We are obligated to pay fees which may be substantial to our Advisor and its affiliates.

• We depend on tenants for our revenue and, accordingly, our revenue is dependent upon the success and economic viability of our tenants.

• Increases in interest rates could increase the amount of our debt payments and limit our ability to pay distributions.

• We are permitted to pay distributions from unlimited amounts of any source. Until substantially all of the proceeds from our IPO are invested, we may use proceeds from our IPO and financings to fund distributions until we have sufficient cash flows from operations. There are no established limits on the amount of net proceeds and borrowings that we may use to fund distribution payments, except in accordance with our organizational documents and Maryland law.

• Any distributions may reduce the amount of capital we ultimately invest in properties and other permitted investments and negatively impact the value of your investment.

• We have not generated and may not generate cash flows from operations sufficient to pay our distributions to stockholders; as such, we may be forced to source distributions from borrowings, which may be at higher rates or depend on our Advisor or our property manager, New York City Properties, LLC (the "Property Manager") to waive fees or reimbursement of certain expenses and fees to fund our operations. There is no assurance that these entities will waive such amounts.

ii

AMERICAN REALTY CAPITAL NEW YORK CITY REIT, INC.

FORM 10-K

Year Ended December 31, 2014

• We are subject to risks associated with any dislocations or liquidity disruptions that may exist or occur in the credit markets of the United States from time to time.

• We may fail to qualify, or continue to qualify, to be treated as a real estate investment trust ("REIT") for United States federal income tax purposes, which would result in higher taxes, may adversely affect our operations and would reduce the value of an investment in our common stock and cash available for distributions.

• We may be deemed to be an investment company under the Investment Company Act of 1940, as amended (the "Investment Company Act"), and thus subject to regulation under the Investment Company Act.

• As of December 31, 2014, we owned only four properties and therefore have limited diversification.

iii

PART I

Item 1. Business

Organization

We were incorporated on December 19, 2013 as a Maryland corporation and intend to elect and qualify to be taxed as a REIT for U.S. federal income tax purposes beginning with our taxable year ended December 31, 2014. On April 24, 2014, we commenced our IPO on a "reasonable best efforts" basis of up to 30.0 million shares of common stock, $0.01 par value per share, at a price of $25.00 per share, subject to certain volume and other discounts, pursuant to our registration statement on Form S-11, as amended (File No. 333-194135) (the "Registration Statement") filed with the U.S. Securities and Exchange Commission (the "SEC") under the Securities Act of 1933, as amended (the "Securities Act"). The Registration Statement also covers up to 10.5 million shares available pursuant to a distribution reinvestment plan (the "DRIP") under which our common stockholders may elect to have their distributions reinvested in additional shares of our common stock at a price of $23.75 per share, which is equal to 95% of the offering price in the IPO.

On May 29, 2014, we received and accepted subscriptions in excess of the minimum offering amount for the IPO of $2.0 million in shares, broke general escrow and issued shares of common stock to initial investors who were admitted as stockholders. As of December 31, 2014, we had 20.6 million shares of common stock outstanding, including unvested restricted shares and shares issued pursuant to the DRIP, and had received total gross proceeds from the IPO of $509.9 million, inclusive of $4.5 million from the DRIP. Until the net asset value ("NAV") pricing date (as described below), the per share purchase price in the IPO will be up to $25.00 per share (including the maximum allowed to be charged for commissions and fees) and shares issued under the DRIP will be equal to $23.75 per share, which is equal to 95% of the offering price in the primary offering. Beginning with the NAV pricing date, the per share price for shares in the IPO and under the DRIP will vary quarterly and will be equal to the NAV per share, as determined by our Advisor, plus applicable commissions and fees, in the case of the primary offering, and the per share purchase price in the DRIP will be equal to the NAV per share. The NAV pricing date means the date we first publish an estimated per share NAV, which will be on or prior to October 26, 2016, which is 150 days following the second anniversary from the date we broke escrow in the IPO. We reserve the right to reallocate shares covered in the Registration Statement between the primary offering and the DRIP.

We were formed to invest our assets in properties in the five boroughs of New York City, with a focus on Manhattan. We may also purchase certain real estate assets that accompany office properties, including retail spaces and amenities, as well as hospitality assets, residential assets and other property types exclusively in New York City. All such properties may be acquired and owned by us alone or jointly with another party. As of December 31, 2014, we owned four properties consisting of 299,191 rentable square feet, which were 75.5% leased, with a weighted average remaining lease term of 7.3 years. Our four properties include one commercial property, one property consisting of three condominium units (one retail unit, a parking garage and one office unit), one parking garage and one institutional-quality office building.

Substantially all of our business is conducted through New York City Operating Partnership, L.P. (the “OP”), a Delaware limited partnership. We are the sole general partner and hold substantially all of the units of limited partner interests in the OP (“OP units”). The Advisor contributed $2,020 to the OP in exchange for 90 units of limited partner interest in the aggregate OP ownership, which represents a nominal percentage of the aggregate OP ownership. A holder of OP units has the right to convert OP units for the cash value of a corresponding number of shares of our common stock or, at the option of the OP, a corresponding number of shares of our common stock, in accordance with the limited partnership agreement of the OP, provided, however, that such OP units must have been outstanding for at least one year. The remaining rights of the limited partners in the OP 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.

We have no direct employees. We have retained our Advisor to manage our affairs on a day-to-day basis. We have retained New York City Properties, LLC (the “Property Manager”) to serve as our property manager. The Dealer Manager serves as the dealer manager of the IPO. The Advisor, Property Manager and Dealer Manager are under common control with the parent of American Realty Capital III, LLC (the "Sponsor"), as a result of which they are related parties, and each of which has received or will receive compensation, fees and expense reimbursements for services related to the IPO and the investment and management of our assets. The Advisor, New York City Special Limited Partner, LLC (the "Special Limited Partner"), Property Manager and Dealer Manager have also received or will also receive fees, distributions and other compensation during our offering, acquisition, operational and liquidation stages.

1

Investment Objectives

We are focused on helping our stockholders take advantage of the New York City real estate market. Our investment goals are as follows:

• New York City Focus - Acquire high-quality commercial real estate located in the five boroughs of New York City, and in particular, Manhattan;

• Cash Flow Generating Properties - Invest primarily in properties with 80% or greater occupancy at the time of purchase;

• Potential for Appreciation - Purchase properties valued using current market rents with potential for appreciation and endeavor to acquire properties below replacement cost;

• Low Leverage - Finance our portfolio opportunistically at a target leverage level of not more than 40% to 50% loan-to-value (calculated after the close of our offering and once we have invested substantially all the proceeds of our offering);

• Diversified Tenant Mix - Lease to a diversified group of tenants with a bias toward lease terms of five years or greater;

• Monthly Distributions - Pay distributions monthly, covered by cash flow from operations;

• 6-Year Exit - Exit within six years of the end of our IPO; and

• Maximize Total Returns - Maximize total returns to our stockholders through a combination of realized appreciation and current income.

Acquisition and Investment Policies

Primary Investment Focus

We have and intend to focus our investment activities on acquiring quality, income-producing commercial real estate located in the five boroughs of New York City and, in particular, properties located in Manhattan. We may also originate or acquire real estate debt backed by quality, income-producing commercial real estate located predominantly in New York City. The real estate debt we originate or acquire is expected to be primarily first mortgage debt but also may include bridge loans, mezzanine loans, preferred equity or securitized loans. Pursuant to the investment opportunity allocation agreement into which we entered with New York REIT, Inc., another REIT sponsored by our Sponsor, each proposed target investment (as defined in such agreement) sourced by our Advisor or its affiliates shall be subject to rotation as defined in the agreement.

Investing in Real Property

We have and expect to invest a majority of our assets in office properties located in New York City. We also intend to invest in real estate assets that accompany office space, including retail spaces and amenities, as well as hospitality assets, residential assets and other property types exclusively in New York City.

When evaluating prospective investments in real property, our management and our Advisor considers relevant real estate and financial factors, including the location of the property, the leases and other agreements affecting the property, the creditworthiness of major tenants, its income-producing capacity, its physical condition, its prospects for appreciation, its prospects for liquidity, tax considerations and other factors. In this regard, our Advisor has substantial discretion with respect to the selection of specific investments, subject to board approval.

The following table lists the tenants whose annualized rental income on a straight-line basis represented greater than 10% of total annualized rental income for all portfolio properties on a straight-line basis as of December 31, 2014:

		December 31,
Property Portfolio	Tenant	2014
400 E. 67th Street - Laurel Condominium	Cornell University	26.0%
400 E. 67th Street - Laurel Condominium	TD Bank, N.A.	10.9%

The termination, delinquency or non-renewal of these leases by the above tenants may have a material adverse effect on revenues. No other tenant represents greater than 10% of our annualized income for the period presented.

2

Real Estate-Related Loans and Debt Securities

Although not our primary focus, we may, from time to time, make investments in real estate-related loans and debt securities. We do not expect these types of assets to exceed 10.0% of our assets after the proceeds of our IPO have been fully invested, or represent a substantial portion of our assets at any one time. The other real estate-related debt investments in which we may invest include: mortgages; mezzanine; bridge and other loans; debt and derivative securities related to real estate assets, including mortgage-backed securities; collateralized debt obligations; debt securities issued by real estate companies; and credit default swaps. Our criteria for investing in loans are substantially the same as those involved in our investment in properties; however, we will also evaluate such investments based on the current income opportunities presented.

Investing in Equity Securities

We may make equity investments in other REITs and other real estate companies that operate assets meeting our investment objectives. We may purchase the common or preferred stock of these entities or options to acquire their stock. We will target a public company that owns commercial real estate or real estate-related assets when we believe its stock is trading at a discount to that company’s net asset value. We may eventually seek to acquire or gain a controlling interest in the companies that we target. We do not expect our non-controlling equity investments in other public companies to exceed 5.0% of the proceeds of our IPO, assuming we sell the maximum offering amount, or to represent a substantial portion of our assets at any one time. In addition, we do not expect our non-controlling equity investments in other public companies combined with our investments in real estate properties outside of our target investments and other real estate-related investments to exceed 10.0% of our portfolio.

Acquisition Structure

We intend to acquire real estate and real-estate related assets directly, for example, by acquiring fee interests in real property (a "fee interest" is the absolute, legal possession and ownership of land, property, or rights), or by purchasing interests, including controlling interests, in REITs or other "real estate operating companies," such as real estate management companies and real estate development companies, that own real property. We also may acquire real estate assets through investments in joint venture entities, including joint venture entities in which we may not own a controlling interest, or assets under ground leases. We anticipate that our assets generally will be held in wholly and majority-owned subsidiaries of the company, each formed to hold a particular asset.

Financing Strategies / Offerings

As of December 31, 2014, we did not have any debt. Financing for acquisitions and investments may be obtained at the time an asset is acquired or an investment is made or at a later time. In addition, debt financing may be used from time to time for property improvements, leasing commissions and other working capital needs. The form of our indebtedness will vary and could be long-term or short-term, secured or unsecured, or fixed-rate or floating rate. We will not enter into interest rate swaps or caps, or similar hedging transactions or derivative arrangements for speculative purposes but may do so in order to manage or mitigate our interest rate risks on variable rate debt.

Under our charter, the maximum amount of our total indebtedness may not exceed 300% of our total “net assets” (as defined in our charter) as of the date of any borrowing, which is generally expected to be approximately 75% of the cost of our investments; however, we may exceed that limit if such excess is approved by a majority of our independent directors and disclosed to stockholders in our next quarterly report following such borrowing along with justification for exceeding such limit. This charter limitation, however, does not apply to individual real estate assets or investments.

In addition, it is currently our intention to limit our aggregate borrowings to 40.0 – 50.0% of the aggregate fair market value of our assets, unless borrowing a greater amount is approved by a majority of our independent directors and disclosed to stockholders in our next quarterly report following such borrowing along with justification for borrowing such a greater amount. This limitation will be calculated after the close of our IPO and once we have invested substantially all the proceeds of our IPO. This limitation, however, will not apply to individual real estate assets or investments. At the date of acquisition of each asset, we anticipate that the cost of investment for such asset will be substantially similar to its fair market value. Subsequent events, including changes in the fair market value of our assets, could result in our exceeding these limits.

We will not borrow from our Sponsor, our Advisor, any of our directors or any of their respective affiliates unless a majority of our directors, including a majority of our independent directors, not otherwise interested in the transaction approves the transaction as being fair, competitive and commercially reasonable and no less favorable to us than comparable loans between unaffiliated parties.

Except with respect to the investment limitations contained in our charter, we may reevaluate and change our financing policies without a stockholder vote. Factors that we would consider when reevaluating or changing our debt policy include then-current economic conditions, the relative cost and availability of debt and equity capital, our expected investment opportunities, the ability of our investments to generate sufficient cash flow to cover debt service requirements and other similar factors.

3

Tax Status

 We intend to elect and qualify to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986 (the "Code"), effective for our taxable year ended December 31, 2014. We believe that, commencing with such taxable year, we are organized and operate in such a manner as to qualify for taxation as a REIT under the Code. We intend to continue to operate in such a manner to qualify for taxation as a REIT, but no assurance can be given that we will operate in a manner so as to qualify or remain qualified as a REIT. In order to qualify and continue to qualify for taxation as a REIT, we must distribute annually at least 90% of our REIT taxable income. REITs are also subject to a number of other organizational and operational requirements. Even if we qualify for taxation as a REIT, we may be subject to certain state and local taxes on our income and property, and federal income and excise taxes on our undistributed income and taxable REIT subsidiaries.

Competition

The office, retail, lodging, industrial and residential real estate markets are highly competitive. We compete with other owners and operators of properties in these same real estate segments. We compete based on a number of factors that include location, rental rates, security, suitability of the property's design to prospective tenants' needs and the manner in which the property is operated and marketed. The number of competing properties in New York City could have a material effect on our occupancy levels, rental rates and on the operating expenses of certain of our properties.

In addition, we compete with other entities engaged in real estate investment activities to locate suitable properties and to acquire and to locate tenants and purchasers for our properties. These competitors include other REITs, specialty finance companies, savings and loan associations, banks, mortgage bankers, insurance companies, mutual funds, institutional investors, investment banking firms, lenders, governmental bodies and other entities. There are also other REITs with asset acquisition objectives similar to ours, including New York REIT, Inc. and American Realty Capital New York City REIT II, Inc., which are also sponsored by our Sponsor. In addition, these same entities seek financing through similar channels. Therefore, we compete for financing in a market where funds for real estate financing may decrease.

Competition from these and other third party real estate investors may limit the number of suitable investment opportunities available. It also may result in higher prices, lower yields and a narrower spread of yields over our potential borrowing costs, making it more difficult for us to acquire new investments on attractive terms.

Because we are organized as an umbrella partnership REIT, we believe we are well positioned to offer tax-sensitive sellers an opportunity to contribute their properties to our company in tax-deferred transactions.

Regulations

 Our investments are subject to various federal, state, local and foreign laws, ordinances and regulations, including, among other things, zoning regulations, land use controls, environmental controls relating to air and water quality, noise pollution and indirect environmental impacts such as increased motor vehicle activity.  We believe that we have all permits and approvals necessary under current law to operate our investments.

Environmental

 As an owner of real estate, we are subject to various environmental laws of federal, state and local governments. Compliance with existing laws has not had a material adverse effect on our financial condition or results of operations, and management does not believe it will have such an impact in the future.  However, we cannot predict the impact of unforeseen environmental contingencies or new or changed laws or regulations on properties in which we hold an interest, or on properties that may be acquired directly or indirectly in the future. To help guard against unforeseen environmental contingencies, we hire third parties to conduct Phase I environmental reviews of the real property that we intend to purchase.

Employees

 We have no direct employees.  The employees of our Advisor and other affiliates perform a full range of real estate services for us, including acquisitions, property management, accounting, legal, asset management, wholesale brokerage and investor relations services.

 We are dependent on these affiliates for services that are essential to us, including the sale of shares of our common stock, asset acquisition decisions, property management and other general administrative responsibilities.  In the event that any of these companies were unable to provide these services to us, we would be required to provide such services ourselves or obtain such services from other sources.

4

Financial Information About Industry Segments

  Our current business consists of acquiring, investing in, owning, managing, operating, leasing, and disposing of real estate assets.  All of our revenues are from our consolidated real estate properties.  We internally evaluate operating performance on an individual property level and view all of our real estate assets as one industry segment, and, accordingly, all of our properties are aggregated into one reportable segment. See our consolidated financial statements beginning on page F-1 for our revenues, net income or loss and other financial information.

Available Information

We electronically file annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to those reports, and proxy statements, with the SEC.  You may read and copy any materials we file with the SEC at the SEC's Public Reference Room at 100 F Street, NE, Washington, D.C. 20549, or you may obtain information by calling the SEC at 1-800-SEC-0330.  The SEC maintains an internet address at http://www.sec.gov that contains reports, proxy statements and information statements, and other information, which you may obtain free of charge.  In addition, copies of our filings with the SEC may be obtained from our website at www.newyorkcityreit.com.  Access to these filings is free of charge.  We are not incorporating our website or any information from the website into this Form 10-K.

Item 1A. Risk Factors.

Risks Related to an Investment in American Realty Capital New York City REIT, Inc.

We have limited operating history, and the prior performance of programs sponsored by affiliates of our Sponsor should not be used to predict our future results.

We have limited operating history. You should consider an investment in our shares in light of the risks, uncertainties and difficulties frequently encountered by other newly formed companies with similar objectives. To be successful in this market, we and our Advisor must, among other things:

• identify and acquire real estate assets consistent with our investment strategies;

• increase awareness of our name within the investment products market;

• attract, integrate, motivate and retain qualified personnel to manage our day-to-day operations; and

• continue to build and expand our operations structure to support our business.

You should not rely upon the past performance of other programs sponsored by affiliates of our Sponsor as an indicator of our future performance. There is no assurance that we will achieve our investment objectives.

Because no public trading market for our shares currently exists, it will be difficult for our stockholders to sell their shares and, if our stockholders are able to sell their shares, it will likely be at a substantial discount to the public offering price.

There is no regular established trading market for our shares of common stock. Our charter does not require our directors to seek stockholder approval to liquidate our assets by a specified date, nor does our charter require our directors to list our shares for trading on a national securities exchange by a specified date. We currently have no plans to list our shares on a national securities exchange. Until our shares are listed, if ever, stockholders may not sell their shares unless the buyer meets the applicable suitability and minimum purchase standards. In addition, our charter prohibits the ownership of more than 9.8% in value of the aggregate of outstanding shares of capital stock or more than 9.8% in value or number of shares, whichever is more restrictive, of any class or series of our stock, unless exempted (prospectively or retroactively) by our board of directors, which may inhibit large investors from purchasing our stockholders' shares. In its sole discretion, our board of directors could amend, suspend or terminate our share repurchase program ("SRP") upon 30 days’ notice. Further, the SRP includes numerous restrictions that would limit a stockholder’s ability to sell his or her shares. Therefore, it is difficult for our stockholders to sell their shares promptly or at all. If a stockholder is able to sell his or her shares, it would likely be at a substantial discount to the public offering price. It is also likely that our shares would not be accepted as the primary collateral for a loan. Because of the illiquid nature of our shares, investors should purchase our shares only as a long-term investment and be prepared to hold them for an indefinite period of time.

5

Purchases of common stock by our directors, our officers, officers and employees of our Dealer Manager, other affiliates and Friends in our IPO should not influence investment decisions of independent, unaffiliated investors.

Our directors, our officers, officers and employees of our Dealer Manager, other affiliates and Friends may purchase shares of our common stock. “Friends” mean those individuals who have prior business and/or personal relationships with our executive officers, directors or Sponsor, including, without limitation, any service provider. There are no written or other binding commitments with respect to the acquisition of shares by these parties, and there can be no assurance as to the amount, if any, of shares of common stock these parties may acquire in the offering. Any shares purchased by directors, officers, officers and employees of our Dealer Manager, other affiliates or Friends of ours will be purchased for investment purposes only. However, the investment decisions made by any such directors, officers, officers and employees of our Dealer Manager, other affiliates or Friends should not influence your decision to invest in shares of our common stock, and you should make your own independent investment decision concerning the risks and benefits of an investment in our common stock.

Because our IPO is a blind pool offering, our stockholders will not have the opportunity to evaluate our investments before we make them, which makes an investment in us more speculative.

As of December 31, 2014, we had acquired only four properties. Additionally, stockholders are not provided with information to evaluate our investments prior to the time an acquisition becomes probable but must instead rely on our board of directors and our Advisor to implement our investment strategy.

Our stockholders may be more likely to sustain a loss on their investment because our Sponsor does not have as strong an economic incentive to avoid losses as does a sponsor who has made significant equity investments in its company.

The Special Limited Partner, which is wholly owned by our Sponsor and wholly owns our Advisor, has invested only $0.2 million in us through the purchase of 8,888 shares of our common stock at $22.50 per share, reflecting the fact that selling commissions and dealer manager fees were not paid on the sale. The Special Limited Partner may not sell this initial investment while our Sponsor remains our sponsor but it may transfer such shares to affiliates. Therefore, if we are successful in raising enough proceeds to be able to reimburse our Advisor for our significant organization and offering expenses, our Sponsor will have little exposure to loss in the value of our shares. Without this exposure, our investors may be at a greater risk of loss because our Sponsor may have less to lose from a decrease in the value of our shares as does a sponsor that makes more significant equity investments in its company.

Our stockholders' interests in us may be diluted if the price we pay in respect of shares repurchased under our SRP exceeds the net asset value of our shares.

The prices we may pay for shares repurchased under our SRP may exceed the NAV of the shares at the time of repurchase, or exceed the price at which our stockholders purchased shares, either of which may dilute our stockholders' interest in us or reduce the NAV of the remaining shares.

We established the offering price on an arbitrary basis; as a result, the actual value of our stockholders' investments may be substantially less than what they pay.

Our board of directors has arbitrarily determined the initial selling price of the shares in our IPO and did not base the price on our book value, or to any other established criteria for valuing shares. Because the offering price is not based upon any independent valuation, the offering price is not indicative of the proceeds that our stockholders would receive upon liquidation.

Our ability to implement our investment strategy is dependent, in part, upon the ability of our Dealer Manager to successfully conduct our IPO, which makes an investment in us more speculative.

We have retained our Dealer Manager, which is owned by an entity under common control with the Parent of our Sponsor, to conduct our IPO. The success of our IPO, and our ability to implement our business strategy, is dependent upon the ability of our Dealer Manager to build and maintain a network of broker-dealers to sell our shares to their clients. If our Dealer Manager is not successful in establishing, operating and managing this network of broker-dealers, our ability to raise proceeds through our IPO will be limited and we may not have adequate capital to implement our investment strategy. If we are unsuccessful in implementing our investment strategy, our stockholders could lose all or a part of their investment.

6

Disclosures made by American Realty Capital Properties, Inc. ("ARCP"), an entity previously sponsored by the Parent of our Sponsor may adversely affect our ability to raise substantial funds.

On October 29, 2014, ARCP announced that its audit committee had concluded that the previously issued financial statements and other financial information contained in certain public filings should no longer be relied upon. This conclusion was based on the preliminary findings of an investigation conducted by ARCP’s audit committee which concluded that certain accounting errors were made by ARCP personnel that were not corrected after being discovered, resulting in an overstatement of AFFO and an understatement of ARCP’s net loss for the three and six months ended June 30, 2014. ARCP also announced the resignation of its chief accounting officer and its chief financial officer. ARCP’s former chief financial officer is one of the non-controlling owners of the Parent of our Sponsor, but does not have a role in managing our business or our Sponsor's business. In December 2014, ARCP announced the resignation of its executive chairman, who was also the chairman of our board of directors until his resignation on December 29, 2014. This individual also is one of the controlling members of the Parent of our Sponsor.

On March 2, 2015, ARCP announced the completion of its audit committee’s investigation and filed amendments to its Form 10-K for the year ended December 31, 2013 and its Form 10-Q for the quarters ended March 31, 2014 and June 30, 2014. According to these filings, these amendments corrected errors in ARCP’s financial statements and in its calculation of AFFO that resulted in overstatements of AFFO for the years ended December 31, 2011, 2012 and 2013 and the quarters ended March 31, 2013 and 2014 and June 30, 2014 and described certain results of its investigations, including matters relating to payments to, and transactions with, affiliates of the Parent of our Sponsor and certain equity awards to certain officers and directors. In addition, ARCP disclosed that the audit committee investigation had found material weaknesses in ARCP’s internal control over financial reporting and its disclosure controls and procedures. ARCP also disclosed that the SEC has commenced a formal investigation, that the United States Attorney’s Office for the Southern District of New York contacted counsel for both ARCP’s audit committee and ARCP with respect to the matter and that the Secretary of the Commonwealth of Massachusetts has issued a subpoena for various documents. On March 30, 2015, ARCP filed its form 10-K for the year ended December 31, 2014. ARCP's filings with the SEC are available at the internet site maintained by the SEC, www.sec.gov.

Since the initial announcement in October 2014, a number of participating broker-dealers temporarily suspended their participation in the distribution of our IPO. Although certain of these broker-dealers have reinstated their participation, we cannot predict the length of time the remaining temporary suspensions will continue or whether all participating broker-dealers will reinstate their participation in the distribution of our offering. As a result, our ability to raise substantial funds may be adversely impacted.

If our Dealer Manager terminates its dealer manager relationship with us, our ability to successfully complete our IPO and implement our investment strategy would be significantly impaired.

Our Dealer Manager has the right to terminate its relationship with us if, among other things, any of the following occur: (1) our voluntary or involuntary bankruptcy; (2) we materially change our business; (3) we become subject to a material action, suit, proceeding or investigation; (4) we materially reduce the rate of any dividend we may pay in the future without its prior written consent; (5) we suspend or terminate our SRP without its prior written consent; (6) the value of our common shares materially adversely changes; (7) a material breach of the dealer manager agreement by us (which breach has not been cured within the required timeframe); (8) our willful misconduct or a willful or grossly negligent breach of our obligations under the dealer manager agreement; (9) the issuance of a stop order suspending the effectiveness of our Registration Statement of which our prospectus forms a part by the SEC and not rescinded within 10 business days of its issuance; or (10) the occurrence of any event materially adverse to us and our prospects or our ability to perform our obligations under the dealer manager agreement. If our Dealer Manager elects to terminate its relationship with us, our ability to complete our IPO and implement our investment strategy would be significantly impaired and would increase the likelihood that our stockholders could lose all or a part of their investment.

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Distributions paid from sources other than our cash flows from operations, particularly from proceeds of our IPO, will result in us having fewer funds available for the acquisition of properties and other real estate-related investments and may dilute our stockholders’ interests in us, which may adversely affect our ability to fund future distributions with cash flows from operations and may adversely affect our stockholders’ overall return.

Our cash flows used in operations were $5.0 million for the year endedDecember 31, 2014 and, as such, our distributions were paid with cash proceeds from our IPO and proceeds from our IPO which were reinvested in common stock issued under our DRIP. We started to accrue distributions on June 13, 2014, the date of our first property acquisition and the distributions were first paid out in July 2014. During the year endedDecember 31, 2014, we paid distributions of $7.8 million, of which $3.3 million, or 42.3%, was funded from cash proceeds from the IPO and $4.5 million, or 57.7%, was funded from proceeds from our IPO which were reinvested in common stock issued under our DRIP. During the year endedDecember 31, 2014 cash flows from operations included an increase in accounts payable and accrued expenses of $1.0 million, as reflected on the statement of cash flows. Accordingly, if these accounts payable and accrued expenses had been paid during the year endedDecember 31, 2014, there would have been $1.0 million less in cash flows from operations available to pay distributions. Using offering proceeds to pay distributions, especially if the distributions are not reinvested through our DRIP, reduces cash available for investment in assets or other purposes. We may continue to use net offering proceeds to fund distributions.

Until we are generating operating cash flow from properties or other real estate-related investments sufficient to pay distributions to our stockholders, we intend to pay all or a substantial portion of our distributions from the proceeds of our IPO or from borrowings, including possible borrowings from our Advisor or its affiliates, the sale of additional securities, advances from our Advisor, and our Advisor’s deferral, suspension or waiver of its fees and expense reimbursements. We may pay distributions that exceed our cashflows from operations as well as our funds from operations ("FFO") a non-GAAP measure that we use as a performance measure. Distributions in excess of FFO may indicate that the level of distributions may not be sustainable going forward. Distributions funded from offering proceeds are a return of capital to stockholders, from which we will have already paid offering expenses in connection with our IPO. Moreover, our board of directors may change our distribution policy, in its sole discretion, at any time. We have not established any limit on the amount of proceeds from our IPO that may be used to fund distributions, except that, in accordance with our organizational documents and Maryland law, we may not make distributions that would: (1) cause us to be unable to pay our debts as they become due in the usual course of business; (2) cause our total assets to be less than the sum of our total liabilities plus senior liquidation preferences, if any; or (3) jeopardize our ability to qualify as a REIT.

Funding distributions from the proceeds of our IPO reduces the funds available for acquiring properties or other real estate-related investments. As a result, the return our stockholders realize on their investments may be reduced. Funding distributions from borrowings could restrict the amount we can borrow for investments, which may affect our profitability and also reduce the amount that we may invest. Funding distributions with the net proceeds from the sale of assets or the proceeds of our IPO may affect our ability to generate cash flows from operations. Funding distributions from the sale of additional securities could dilute our stockholders' interest in us if we sell shares of our common stock or securities convertible or exercisable into shares of our common stock to third-party investors. Using offering proceeds to pay distributions, especially if the distributions are not reinvested through our DRIP, reduces cash available for investment in assets or other purposes. Payment of distributions from sources other than cash flow from operations could also affect our profitability or affect the distributions payable to our stockholders upon a liquidity event, any or all of which may have an adverse effect on the value of our stockholders' investment.

If we are unable to find suitable investments, we may not be able to achieve our investment objectives or pay distributions.

Our ability to achieve our investment objectives and to pay distributions depends primarily upon the performance of our Advisor with respect to the acquisition of our investments, including the ability to source loan origination opportunities for us. Competition from competing entities may reduce the number of suitable investment opportunities offered to us or increase the bargaining power of property owners seeking to sell. In addition, if we pay fees to lock in an interest rate, falling interest rates or other factors could require us to forfeit these fees. If we acquire properties and other investments at peak prices or by using cumbersome capital structures, our returns will be lower and the value of our assets may decrease significantly below the amount we paid for such assets.

We are also subject to competition in seeking to acquire real estate-related investments. The more shares we sell in our IPO, the greater our challenge will be to invest all of the net offering proceeds on attractive terms. We can give no assurance that our Advisor will be successful in obtaining suitable further investments on financially attractive terms or that our objectives will be achieved. If we are unable to find suitable investments promptly, we will hold the proceeds from our IPO in an interest-bearing account or invest the proceeds in short-term assets, which could generate a lower yield. If we would continue to be unsuccessful in locating suitable investments, we may ultimately decide to liquidate. In the event we are unable to timely locate suitable investments, we may be unable or limited in our ability to pay distributions and we may not be able to meet our investment objectives.

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We may suffer from delays in locating suitable investments, which could limit our ability to make distributions and lower the overall return on our stockholders' investment.

We rely upon our Sponsor and the real estate professionals affiliated with our Sponsor, to identify suitable investments. To the extent that our Sponsor and the real estate professionals employed by our Advisor face competing demands upon their time at times when we have capital ready for investment, we may face delays in locating suitable further investments. Further, the more money we raise in our IPO, the more difficult it will be to invest the net offering proceeds promptly and on attractive terms. Therefore, the potentially large size of our IPO and the continuing high demand for the types of properties and other investments we desire to purchase increase the risk of delays in investing our net offering proceeds. Delays we encounter in the selection and acquisition or origination of income-producing assets would likely limit our ability to pay distributions to our stockholders and lower their overall returns. Further, if we acquire properties prior to the start of construction or during the early stages of construction, it will typically take several months to complete construction and rent available space, further reducing our cash flow from operations.

We expect that our real estate investments will be concentrated in New York City, making us dependent upon the economic climate of this market and potentially more vulnerable economically than if our investments were less concentrated in any particular market.

We focus on the acquisition and ownership of real estate assets located, or secured by assets located, in New York City, specifically in Manhattan. We are subject to risks generally inherent in concentrating investments in a certain geography. These risks resulting from a lack of diversification may become even greater in the event of a downturn in the commercial real estate industry and could significantly adversely affect the value of our properties. A downturn in New York City’s economy, in a submarket within New York City, or in the overall national economy, could result in reduced demand for office or lodging space. For example, declines in the financial services or media sectors may have a disproportionate adverse effect on the New York City real estate market. These adverse effects could be more pronounced than if we diversified our investments outside of New York City.

We have no investment criteria limiting the size of each investment we make. Any individual real estate investment could represent a material percentage of our assets, and if that investment experiences a loss, the value of our stockholders' investment in us could be significantly diminished.

Due to what we anticipate will be a relatively small asset base and an anticipated high concentration of our total assets in relatively large individual real estate assets, the value of our stockholders' investment could vary more widely with the performance of specific assets than if the offering amount were greater or if we invested in a more diverse portfolio of properties. Because of this potential asset concentration, even modest changes in the value of our real estate assets could have a significant impact on the value of our stockholders' investment.

We may change our targeted investments without stockholder consent.

We have invested and intend to invest in a portfolio of office properties and other property types located in the five boroughs of New York City, specifically Manhattan. We do not expect to allocate more than 10.0% of our portfolio to other real estate properties and real estate-related loans and securities such as mortgage, mezzanine, bridge and other loans; debt and derivative securities related to real estate assets, including mortgage-backed securities; collateralized debt obligations; debt securities issued by real estate companies; credit default swaps; and the equity securities of other REITs and real estate companies. Non-controlling equity investments in other public companies may exceed 5.0% of the proceeds of our IPO if we do not sell the maximum offering amount. We may make adjustments to our target portfolio based on real estate market conditions and investment opportunities, and we may change our targeted investments and investment guidelines at any time without the consent of our stockholders, which could result in our making investments that are different from, and possibly riskier than, our current targeted investments. A change in our targeted investments or investment guidelines may increase our exposure to interest rate risk, default risk and real estate market fluctuations, all of which could adversely affect the value of our common stock and our ability to make distributions to our stockholders.

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If we raise substantially less than the maximum offering in our IPO, we will be limited in the number and type of investments we may make and the value of our stockholders' investment in us will fluctuate with the performance of the specific properties we acquire.

Our IPO is being made on a reasonable best efforts basis, whereby the brokers participating in the offering are only required to use their reasonable best efforts to sell our shares and have no firm commitment or obligation to purchase any of the shares. As a result, the amount of proceeds we raise in our IPO may be substantially less than the amount we would need to achieve a broadly diversified property portfolio. In such event, the likelihood of our profitability being affected by the performance of any one of our investments will increase. Additionally, we are not limited in the number or size of our investments or the percentage of net proceeds we may dedicate to a single investment. Our stockholders' investment in our shares will be subject to greater risk to the extent that we lack a diversified portfolio of investments. In addition, our inability to raise substantial funds would increase our fixed operating expenses as a percentage of gross income, and our financial condition and ability to pay distributions could be adversely affected.

Because we are dependent upon our Advisor, our Property Manager and their affiliates to conduct our operations, and we may engage third-party property managers to manage certain properties, any adverse changes in the financial health of our Advisor, our Property Manager or third-party property managers or their affiliates or our relationship with them could hinder our operating performance and the return on our stockholders’ investments.

We are dependent on our Advisor and our Property Manager, which are responsible for our day-to-day operations and are primarily responsible for the selection of our investments to be recommended to our board of directors. We are also dependent on our Property Manager to manage certain of our real estate assets. Our Advisor and our Property Manager have a limited operating history. Our Advisor depends upon the fees and other compensation that it receives from us in connection with the purchase, management and sale of assets to conduct its operations. Additionally, we may engage third-party property managers to manage certain other properties we own. Any adverse changes in the financial condition of such entities or certain of their affiliates or in our relationship with them could hinder its or their ability to successfully manage our operations and our portfolio of investments.

The loss of or the inability to obtain key real estate professionals at our Advisor or our Dealer Manager could delay or hinder implementation of our investment strategies, which could limit our ability to make distributions and decrease the value of our stockholders' investment.

Our success depends to a significant degree upon the contributions of Messrs. Happel and Sullivan at our Advisor and William E. Dwyer III and Louisa H. Quarto at our Dealer Manager. These individuals may not remain associated with us. If any of these persons were to cease their association with us, our ability to achieve our investment objectives could be materially impacted in an adverse manner. We do not have key person life insurance on any person. Our future success depends, in large part, upon our Advisor’s and its affiliates' ability to hire and retain highly skilled managerial, operational and marketing professionals. Competition for such professionals is intense, and our Advisor and its affiliates may be unsuccessful in attracting and retaining such skilled individuals. Maintaining relationships with firms that have special expertise in certain services or detailed knowledge regarding real properties in New York City, particularly Manhattan, will be important for us to effectively compete with other investors for properties in this region. We may be unsuccessful in establishing and retaining such relationships. If we lose or are unable to obtain the services of highly skilled professionals or do not establish or maintain appropriate strategic relationships, our ability to implement our investment strategies could be delayed or hindered, and the value of our stockholders’ investments may decline.

In the event we are able to quickly raise a substantial amount of capital, we may have difficulty investing it in properties.

If we are able to quickly raise a substantial amount of capital during our IPO, we may have difficulty identifying and purchasing suitable properties on attractive terms, and there could be a delay between the time we receive net proceeds from the sale of shares of our common stock in our IPO and the time we invest the net proceeds. This could cause a substantial delay in the time it takes for our stockholders' investment to realize its full potential return and could adversely affect our ability to pay distributions to our stockholders. Failure to minimize the amount of time between receipt of the net proceeds and investment in real estate assets consistent with our investment objectives would have a material adverse effect on our ability to pay distributions to our stockholders and the value of their investment.

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We may be unable to pay or maintain cash distributions or increase distributions over time.

There are many factors that can affect the availability and timing of cash distributions to stockholders, including the amount of cash flow from operations and FFO. Distributions will be based principally on cash available from our operations. The amount of cash available for distributions is affected by many factors, such as our ability to buy properties as offering proceeds become available, operating income from such properties and our operating expense levels, as well as many other variables. Actual cash available for distributions may vary substantially from estimates. With limited operating history, we cannot assure you that we will be able to pay or maintain our current level of distributions or that distributions will increase over time. We cannot give any assurance that rents from the properties will increase, that the securities we buy will increase in value or provide constant or increased distributions over time, or that future acquisitions of real properties, mortgage, bridge or mezzanine loans or any investments in securities will increase our cash available for distributions to stockholders. Our actual results may differ significantly from the assumptions used by our board of directors in establishing the distribution rate to stockholders. We may not have sufficient cash from operations to make a distribution required to qualify for or maintain our REIT status, which may materially adversely affect our stockholders' investment.

Our organizational documents permit us to pay distributions from any source. Any distributions may reduce the amount of capital we invest in properties.

We may pay distributions of unlimited amounts from any source, including borrowing funds, using proceeds from our IPO, issuing additional securities or selling assets. We have not established any limit on the amount of proceeds from our IPO that may be used to fund distributions, except in accordance with our organizational documents and Maryland law. Distributions from the proceeds of our IPO or from borrowings could reduce the amount of capital we have to invest in properties and other real estate assets. This, in turn, would reduce the value of our stockholders' investment.

Our rights and the rights of our stockholders to recover claims against our directors are limited, which could reduce our stockholders’ recovery, as well as our recovery, against them if they negligently cause us to incur losses.

Maryland law provides that a director has no liability for monetary damage in that capacity if he or she performs his or her duties in good faith, in a manner he or she reasonably believes to be in our best interests and with the care that an ordinarily prudent person in a like position would use under similar circumstances. Our charter generally provides that no director will be liable to us or our stockholders for monetary damages and that we will indemnify them for losses unless they are grossly negligent or engage in willful misconduct. As a result, we and our stockholders may have more limited rights against our directors than might otherwise exist under common law, which could reduce our stockholders’ and our recovery from these persons if they act in a negligent manner. In addition, we may be obligated to fund the defense costs incurred by our directors (as well as by our officers, employees (if we ever have employees) and agents) in some cases, which would decrease the cash otherwise available for distribution to our stockholders.

Commencing with the NAV pricing date, the offering price for shares in our primary offering and pursuant to our DRIP, as well as the repurchase price for our shares under our share repurchase program, will vary quarterly and will be based on NAV, which will be based upon subjective estimates, judgments, assumptions and opinions about future events, and also may not accurately reflect the value of our assets and liabilities at a particular time for other reasons.

Commencing with the NAV pricing date, the offering price for shares in our primary offering (to the extent we are still offering shares in our primary offering) and pursuant to our DRIP, as well as the repurchase price for our shares under our share repurchase program, will vary quarterly and will be based on NAV. Our Advisor, with the material assistance of an independent third party valuer, will calculate NAV quarterly by estimating the market value of our assets and liabilities, many of which may be illiquid.

In calculating NAV, our independent valuer will appraise our properties regularly, and our Advisor will review each appraisal. Our Advisor will also determine the valuation of our properties and will compare each appraisal to its own determinations. If in our Advisor’s opinion the appraisals prepared by the independent valuer are materially higher or lower than our Advisor’s determinations of value, our Advisor will discuss the appraisals with the independent valuer. If our Advisor determines that the appraisals are still materially higher or lower than its valuations, a valuation committee, comprised of our independent directors, will review the appraisals and valuations, and make a final determination of value. The valuations used by the independent valuer, our Advisor and our board of directors may not be precise because the valuation methodologies used to value a real estate portfolio involve subjective judgments, assumptions and opinions about future events, such as comparable sales, rental and operating expense data, capitalization or discount rate, and projections of future rent and expenses. If different judgments, assumptions or opinions were used, a different estimate would likely result.

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Each property will be appraised at least annually and appraisals will be spread out over the course of a year so that approximately 25% of all properties are appraised each quarter. Because each property will be appraised only annually, there may be changes in the course of the year that are not fully reflected in the quarterly NAV. As a result, the published NAV may not fully reflect changes in value that may have occurred since the prior quarterly valuation. Moreover, appraised value of a particular property may be greater or less than its potential realizable value, which would cause our estimated NAV to be greater or less than the potential realizable NAV. Any resulting disparity may benefit the selling or non-selling stockholders or purchasers. Further, valuations do not necessarily represent the price at which we would be able to sell an asset.

In addition, our NAV may suddenly change if the appraised values of our properties materially change or the actual operating results differ from what we originally budgeted for that quarter. For example, if a material lease is unexpectedly terminated or renewed, or a property experiences an unanticipated structural or environmental event, the value of a property may materially change. Furthermore, if we cannot immediately quantify the financial impact of any extraordinary events, our NAV as published on any given quarter will not reflect such events. As a result, the NAV published after the announcement of a material event may differ significantly from our actual NAV until we are able to quantify the financial impact of such events and our NAV is appropriately adjusted on a going forward basis.

NAV does not represent the fair value of our assets less liabilities under GAAP. NAV is not a representation, warranty or guarantee of: (a) what a stockholder would ultimately realize upon a liquidation of our assets and settlement of our liabilities or upon any other liquidity event, (b) that the shares of our common stock would trade at NAV on a national securities exchange, (c) what any third party in an arm’s-length transaction would offer to purchase all or substantially all of our shares of common stock at NAV, and (d) that NAV would equate to a market price for an open-end real estate fund. We will not retroactively adjust the valuation of such assets, the price of our common stock, the price we paid to repurchase shares of our common stock or NAV-based fees we paid to our advisor and dealer manager.

Prior to the NAV pricing date, our stockholders will not be able to determine the NAV of their shares.

We will not publish our NAV until the NAV pricing date. Because the price our stockholders will pay for shares of our common stock in this offering, and the price at which their shares may be repurchased by us pursuant to our share repurchase program, will be based on our estimated NAV commencing with the NAV pricing date, our stockholders may pay more than realizable value or receive less than realizable value for their investment.

We rely significantly on six major tenants and therefore, are subject to tenant credit concentrations that make us more susceptible to adverse events with respect to these tenants.

As of December 31, 2014, the following six tenants represented 5% or more of our total annualized rental income on a straight-line basis:

Tenant	Percentage of Straight-Line Rental Income
Cornell University	26.0%
TD Bank, N.A.	10.9%
Quik Park East 67th Street LLC	9.0%
NY Loves Us, Inc.	6.5%
Gibson Guitar Corporation	6.4%
200 Riverside Parking LLC	6.2%

The financial failure of any or all of these tenants is likely to have a material adverse effect on our results of operations and our financial condition. In addition, the values of these investments are driven in part by the credit quality of the underlying tenants, and an adverse change in the tenants’ financial conditions or a decline in the credit rating of such tenants may result in a decline in the value of our investments and have a material adverse effect on our results from operations.

The occurrence of cyber incidents, or a deficiency in our cybersecurity, could negatively impact our business by causing a disruption to our operations, a compromise of corruption of our confidential information, and/or damages to our business relationships, all of which could negatively impact our financial results.

A cyber incident is considered to be any adverse event that threatens the confidentiality, integrity or availability of our information resources. More specifically, a cyber incident is an intentional attack or an unintentional event that can include gaining unauthorized access to systems to disrupt operations, corrupt data or steal confidential information. As our reliance on technology has increased, so have the risks posed to our systems, both internal and those we have outsourced. In addition, the risk of a cyber incident, including by computer hackers, foreign governments and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and instructions from around the world have increased.

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Our remediation costs and lost revenues could be significant if we fall victim to a cyber incident. We may be required to expend significant resources to repair system damage, protect against the threat of future security breaches or to alleviate problems, including reputational harm, loss of revenues and litigation, caused by any breaches. Security breaches could also result in and could subject us to significant liability or loss that may not be covered by insurance, damage to our reputation, or a loss of confidence in our security measures, which could harm our business. We also may be found liable for any stolen assets or misappropriated confidential information. Although we intend to continue to implement industry-standard security measures, we cannot assure you that those measures will be sufficient.

Risks Related to Conflicts of Interest

Our Advisor and its affiliates, including some of our executive officers, directors and other key real estate professionals, face conflicts of interest caused by their compensation arrangements with us, which could result in actions that are not in the long-term best interests of our stockholders.

Our Advisor and its affiliates receive fees from us, which could be substantial. These fees could influence our Advisor’s advice to us as well as its judgment with respect to:

• the continuation, renewal or enforcement of our agreements with affiliates of our Sponsor, including the advisory agreement, the property management agreement and the dealer manager agreement;

• public offerings of equity by us, which will likely entitle our Advisor to increased acquisition fees and potentially increase the asset management subordinated participation interest assuming the triggers are satisfied;

• sales of properties and other investments to third parties, which entitle our Advisor and the Special Limited Partner to real estate commissions and possible subordinated incentive distributions, respectively;

• acquisitions of properties and other investments from other programs sponsored directly or indirectly by the Parent of our Sponsor, which may entitle affiliates of our Sponsor to real estate commissions and possibly subordinated incentive fees and distributions in connection with its services for the seller;

• acquisitions of properties and other investments from third parties and loan originations to third parties, which entitle our Advisor to acquisition fees;

• borrowings to acquire properties and other investments and to originate loans, which borrowings generate financing coordination fees and increase the acquisition fees and asset management subordinated participation interests payable to our Advisor assuming the triggers are satisfied;

• whether and when we seek to list our common stock on a national securities exchange, which listing could entitle the Special Limited Partner to a subordinated incentive listing distribution; and

• whether and when we seek to sell the company or its assets, which sale could entitle our Advisor to a subordinated participation in net sales proceeds.

The fees our Advisor receives in connection with transactions involving the acquisition of assets are based initially on the purchase price of the investment, including the amount of any loan originations, and are not based on the quality of the investment or the quality of the services rendered to us. This may influence our Advisor to recommend riskier transactions to us, and our Advisor may have an incentive to incur a high level of leverage. In addition, because the fees are based on the purchase price of the investment, it may create an incentive for our Advisor to recommend that we purchase assets at higher prices. In addition, from time to time, subject to the approval of a majority of our independent directors, we may engage one or more entities under common control with the Parent of our Sponsor or our Advisor to provide services not provided under existing agreements that are outside of our ordinary course of operations which may create similar incentives.

Our Property Manager is an affiliate of our Advisor and therefore we may face conflicts of interest in determining whether to assign certain operating assets to our Property Manager or an unaffiliated property manager.

Our Property Manager is an affiliate of our Advisor. As we acquire each asset, our Advisor will assign such asset to a property manager in the ordinary course of business; however, because our Property Manager is affiliated with our Advisor, our Advisor faces certain conflicts of interest in making this decision because of the compensation that will be paid to our Property Manager.

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Because other real estate programs sponsored directly or indirectly by the Parent of our Sponsor and offered through our Dealer Manager may conduct offerings concurrently with our offering, our Sponsor and our Dealer Manager face potential conflicts of interest arising from competition among us and these other programs for investors and investment capital, and such conflicts may not be resolved in our favor.

The Parent of our Sponsor is the sponsor of several other non-traded REITs for which affiliates of our Advisor are also advisors that are raising capital in ongoing public offerings of common stock. Our Dealer Manager, which is owned by an entity under common control with the Parent of our Sponsor, is the dealer manager or is named in the registration statement as the dealer manager in a number of ongoing public offerings by non-traded REITs, including some offerings sponsored directly or indirectly by the Parent of our Sponsor. In addition, our Sponsor may decide to Sponsor future programs that would seek to raise capital through public offerings conducted concurrently with our IPO.

As a result, our Sponsor and our Dealer Manager may face conflicts of interest arising from potential competition with these other programs for investors and investment capital. There may be periods during which one or more programs sponsored directly or indirectly by the Parent of our Sponsor will be raising capital and might compete with us for investment capital. Such conflicts may not be resolved in our favor, and our stockholders will not have the opportunity to evaluate the manner in which these conflicts of interest are resolved before or after making their investment.

We also will compete for investors with these other programs, and the overlap of these offerings with our offering could adversely affect our ability to raise all the capital we seek in our IPO, the timing of sales of our shares and the amount of proceeds we have to invest in real estate assets.

Our Advisor will face conflicts of interest relating to joint ventures that we may form with affiliates of our Sponsor, which conflicts could result in a disproportionate benefit to the other venture partners at our expense.

If approved by a majority of our board of directors, including a majority of our independent directors not otherwise interested in the transaction, we may enter into joint venture agreements with other sponsor-affiliated programs or entities for the acquisition, development or improvement of properties or other investments. All of our executive officers, some of our directors and the key real estate professionals assembled by our Advisor are also executive officers, directors, managers, key professionals or holders of a direct or indirect controlling interest in our Advisor, our Property Manager, our Dealer Manager or other sponsor-affiliated entities. These persons will face conflicts of interest in determining which sponsor-affiliated program should enter into any particular joint venture agreement. These persons may also face a conflict in structuring the terms of the relationship between our interests and the interests of the sponsor-affiliated co-venturer and in managing the joint venture. Any joint venture agreement or transaction between us and a sponsor-affiliated co-venturer will not have the benefit of arm’s-length negotiation of the type normally conducted between unrelated co-venturers. The sponsor-affiliated co-venturer may have economic or business interests or goals that are or may become inconsistent with our business interests or goals. These co-venturers may thus benefit to our and our stockholders' detriment.

All of our executive officers, some of our directors and the key real estate and other professionals assembled by our Advisor, our Property Manager and our Dealer Manager face conflicts of interest related to their positions or interests in affiliates of our Sponsor, which could hinder our ability to implement our business strategy and to generate returns to our stockholders.

All of our executive officers, some of our directors and the key real estate and other professionals assembled by our Advisor, Property Manager and Dealer Manager are also executive officers, directors, managers, key professionals or holders of a direct or indirect controlling interests in our Advisor, our Property Manager, our Dealer Manager or other sponsor-affiliated entities.

Through our Sponsor’s affiliates, some of these persons work on behalf of programs sponsored directly or indirectly by the Parent of our Sponsor that are currently raising capital publicly. As a result, they have loyalties to each of these entities, which loyalties could conflict with the fiduciary duties they owe to us and could result in action or inaction detrimental to our business. Conflicts with our business and interests are most likely to arise from (a) allocation of new investments and management time and services between us and the other entities, (b) our purchase of properties from, or sale of properties to, affiliated entities, (c) development of our properties by affiliates, (d) investments with affiliates of our Advisor, (e) compensation to our Advisor and (f) our relationship with our Advisor, our Dealer Manager and our Property Manager. If we do not successfully implement our business strategy, we may be unable to generate the cash needed to make distributions to our stockholders and to maintain or increase the value of our assets.

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The management of multiple REITs by certain of the officers of our Advisor may significantly reduce the amount of time such officers of our Advisor are able to spend on activities related to us and may cause other conflicts of interest, which may cause our operating results to suffer.

Certain officers of our Advisor are part of the senior management or are key personnel of several other REITs sponsored directly or indirectly by the Parent of our Sponsor and its advisors and their respective affiliates. Some of these REITs have registration statements that became effective in the past twelve months. As a result, such REITs will have concurrent overlapping fundraising, acquisition, operational and disposition and liquidation phases as us, which may cause conflicts of interest to arise throughout the life of our company with respect to, among other things, selling our shares, locating and acquiring properties, entering into leases and disposing of properties. Additionally, based on the experience of the Parent of our Sponsor, a significantly greater time commitment is required of senior management during the development stage when the REIT is being organized, funds are initially being raised and funds are initially being invested, and less time is required as additional funds are raised and the offering matures. The conflicts of interest each of the officers of our Advisor faces may delay our fundraising and the investment of our proceeds due to the competing time demands.

The conflicts of interest inherent in the incentive fee structure of our arrangements with our Advisor and its affiliates could result in actions that are not necessarily in the long-term best interests of our stockholders, including required payments if we terminate the advisory agreement, even for poor performance by our Advisor.

Under our advisory agreement and the limited partnership agreement of our operating partnership, or the partnership agreement, the Special Limited Partner and its affiliates are entitled to fees, distributions and other amounts that are structured in a manner intended to provide incentives to our Advisor to perform in our best interests. However, because our Advisor does not maintain a significant equity interest in us and is entitled to receive substantial minimum compensation regardless of performance, its interests may not be wholly aligned with those of our stockholders. In that regard, our Advisor could be motivated to recommend riskier or more speculative investments in order for us to generate the specified levels of performance or sales proceeds that would entitle it or the Special Limited Partner to fees. In addition, the Special Limited Partner and its affiliates’ entitlement to fees and distributions upon the sale of our assets and to participate in sale proceeds could result in our Advisor recommending sales of our investments at the earliest possible time at which sales of investments would produce the level of return that would entitle our Advisor and its affiliates, including the Special Limited Partner, to compensation relating to such sales, even if continued ownership of those investments might be in our best long-term interest.

Moreover, the partnership agreement requires our operating partnership to pay a performance-based termination distribution to the Special Limited Partner or its assignees if we terminate the advisory agreement, even for poor performance by our Advisor, prior to the listing of our shares for trading on an exchange or, absent such listing, in respect of its participation in net sales proceeds. To avoid paying this distribution, our independent directors may decide against terminating the advisory agreement prior to our listing of our shares or disposition of our investments even if, but for the termination distribution, termination of the advisory agreement would be in our best interest. Similarly, because this distribution will still be due even if we terminate the advisory agreement for poor performance, our Advisor may be incentivized to focus its resources and attention on other matters or otherwise fail to use its best efforts on our behalf.

In addition, the requirement to pay the distribution to the Special Limited Partner or its assignees at termination could cause us to make different investment or disposition decisions than we would otherwise make, in order to satisfy our obligation to pay the distribution to the Special Limited Partner or its assignees. Moreover, our Advisor has the right to terminate the advisory agreement upon a change of control of our company and thereby trigger the payment of the termination distribution, which could have the effect of delaying, deferring or preventing the change of control. In addition, our Advisor is entitled to an annual subordinated performance fee such that for any year in which investors receive payment of a 6.0% annual cumulative, pre-tax, non-compounded return on the capital contributed by investors, our Advisor is entitled to 15.0% of the amount in excess of such 6.0% per annum return, provided that the amount paid to our Advisor may not exceed 10.0% of the aggregate return for such year, and that the amount, while accruing annually in each year the 6.0% return is attained, will not actually be paid to our Advisor unless investors receive a return of capital contributions, which could encourage our Avisor to recommend riskier or more speculative investments.

We compete for REIT investors with other programs of the Parent of our Sponsor, which could adversely affect the amount of capital we have to invest.

The Parent of our Sponsor, is currently the sponsor of several other public offerings of non-traded REIT shares most of which will be ongoing during a significant portion of our offering period. These programs all have effective registration statements for their offerings of common stock and intend to elect to be taxed as REITs or have elected to be taxed as a REIT. The offerings are occurring concurrently with our offering, and the Parent of our Sponsor is likely to sponsor other offerings during our offering period. Our Dealer Manager is the dealer manager for all of these other current offerings. We compete for investors with these other programs, and the overlap of these offerings with our offering could adversely affect our ability to raise all the capital we seek in our IPO, the timing of sales of our shares and the amount of proceeds we have to invest in real estate investments.

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There is no separate counsel for us, our Advisor and its affiliates, which could result in conflicts of interest, and such conflicts may not be resolved in our favor, which could adversely affect the value of our stockholders' investment.

Proskauer Rose LLP acts as legal counsel to us and also represents our Advisor and some of its affiliates. There is a possibility in the future that the interests of the various parties may become adverse and, under the code of professional responsibility of the legal profession, Proskauer Rose LLP may be precluded from representing any one or all such parties. If any situation arises in which our interests appear to be in conflict with those of our Advisor or its affiliates, additional counsel may be retained by one or more of the parties to assure that their interests are adequately protected. Moreover, should a conflict of interest not be readily apparent, Proskauer Rose LLP may inadvertently act in derogation of the interest of the parties which could affect our ability to meet our investment objectives.

American National Stock Transfer, LLC, our affiliated transfer agent, has a limited operating history and a failure by our transfer agent to perform its functions for us effectively may adversely affect our operations.

Our transfer agent is a related party of our Sponsor that has been providing certain transfer agency services for programs sponsored directly or indirectly by AR Capital, LLC since 2013. Because of its limited experience, there is no assurance that our transfer agent will be able to effectively provide transfer agency and registrar services to us. Furthermore, our transfer agent is responsible for supervising third party service providers who may, at times, be responsible for executing certain transfer agency and registrar services. If our transfer agent fails to perform its functions for us effectively, our operations may be adversely affected.

Our Dealer Manager signed a Letter of Acceptance, Waiver and Consent with the Financial Industry Regulatory Authority (“FINRA”); any further action, proceeding or litigation with respect to the substance of the Letter of Acceptance, Waiver and Consent, or in connection with any other similar action, proceeding or litigation that may occur, could adversely affect this offering or the pace at which we raise proceeds.

In April 2013, our Dealer Manager received notice and a proposed Letter of Acceptance, Waiver and Consent (“AWC”) from FINRA, the self-regulatory organization that oversees broker dealers, that certain violations of SEC and FINRA rules, including Rule 10b-9 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and FINRA Rule 2010, occurred in connection with its activities as a co-dealer manager for a public offering. Without admitting or denying the findings, our Dealer Manager submitted an AWC, which FINRA accepted on June 4, 2013. In connection with the AWC, our Dealer Manager consented to the imposition of a censure and a fine of $60,000.

To the extent any action would be taken against our Dealer Manager in connection with the above AWC, or in connection with any other similar action, proceeding or litigation that may occur, our Dealer Manager could be adversely affected.

Risks Related to Our IPO and Our Corporate Structure

We disclose FFO and modified funds from operations, each a non-GAAP financial measure, in communications with investors, including documents filed with the SEC; however, FFO and modified funds from operations are not equivalent to our net income or loss of cash flow from operations as determined under GAAP, and you should consider GAAP measures to be more relevant to our operating performance.

We use, and we intend to continue disclosing to investors, FFO and modified funds from operations ("MFFO"), which are non-GAAP financial measures. FFO and MFFO are not equivalent to our net income or loss or cash flow from operations as determined in accordance with GAAP, and investors should consider GAAP measures to be more relevant to evaluating our operating performance and ability to pay distributions. FFO and MFFO and GAAP net income differ because FFO and MFFO exclude gains or losses from sales of property and asset impairment write-downs, and add back depreciation and amortization and adjust for unconsolidated partnerships and joint ventures. MFFO further excludes acquisition-related expenses, amortization of above- and below-market leases, fair value adjustments of derivative financial instruments, deferred rent receivables and the adjustments of such items related to non-controlling interests.

In addition, FFO and MFFO are not indicative of cash flow available to fund cash needs and investors should not consider FFO and MFFO as alternatives to cash flows from operations or an indication of our liquidity, or indicative of funds available to fund our cash needs, including our ability to pay distributions to our stockholders. Neither the SEC nor any other regulatory body has passed judgment on the acceptability of the adjustments that we use to calculate FFO and MFFO. Also, because not all companies calculate FFO and MFFO the same way, comparisons with other companies may not be meaningful.

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The limit on the number of shares a person may own may discourage a takeover that could otherwise result in a premium price to our stockholders.

Our charter, with certain exceptions, authorizes our directors to take such actions as are necessary and desirable to preserve our qualification as a REIT. Unless exempted (prospectively or retroactively) by our board of directors, no person may own more than 9.8% in value of the aggregate of our outstanding shares of stock or more than 9.8% (in value or in number of shares, whichever is more restrictive) of any class or series of shares of our stock. This restriction may have the effect of delaying, deferring or preventing a change in control of us, including an extraordinary transaction (such as a merger, tender offer or sale of all or substantially all our assets) that might provide a premium price for holders of our common stock.

Our charter permits our board of directors to issue stock that may dilute our stockholders’ interests in us and containing terms that may subordinate the rights of our common stockholders or discourage a third party from acquiring us for a premium price, any of which could reduce the overall value of our stockholders' investment.

Our common stockholders do not have preemptive rights to any shares we issue in the future. Our charter permits our board of directors to issue up to 350.0 million shares of capital stock, of which 300.0 million shares are classified as common stock and 50.0 million shares are classified as preferred stock. Our board of directors, without any action by our stockholders, may amend our charter from time to time to increase or decrease the aggregate number of shares or the number of shares of any class or series of stock that we have authority to issue. In addition, our board may elect to (1) sell additional shares in this or future public offerings, (2) issue equity interests in private offerings, (3) issue share-based awards to our independent directors or to our officers or employees or to the officers or employees of our Advisor or any of its affiliates, (4) issue shares to our Advisor, or its successors or assigns, in payment of an outstanding fee obligation, or (5) issue shares of our common stock to sellers of properties or assets we acquire in connection with an exchange of limited partnership interests of the operating partnership. To the extent we issue additional equity interests, our stockholders’ percentage ownership interest in us will be diluted. Our stockholders may also experience dilution in the book value and fair value of their shares depending on the terms and pricing of any additional offerings and the value of our real estate investments.

In addition, our board of directors may classify or reclassify any unissued common stock or preferred stock into other classes or series of stock and establish the preferences, conversion or other rights, voting powers, restrictions, qualifications, limitations as to dividends or other distributions, and terms or conditions of redemption of any such stock. Thus, our board of directors could authorize the issuance of preferred stock with terms and conditions that could (i) have a priority as to distributions and amounts payable upon liquidation over the rights of the holders of our common stock, and/or (ii) delay, defer or prevent a change in control of us, including an extraordinary transaction (such as a merger, tender offer or sale of all or substantially all our assets) that might provide a premium price for holders of our common stock.

Maryland law prohibits certain business combinations, which may make it more difficult for us to be acquired and may limit our stockholders' ability to exit the investment.

Under Maryland law, “business combinations” between a Maryland corporation and an interested stockholder or an affiliate of an interested stockholder are prohibited for five years after the most recent date on which the interested stockholder becomes an interested stockholder. These business combinations include a merger, consolidation, share exchange or, in circumstances specified in the statute, an asset transfer or issuance or reclassification of equity securities. An interested stockholder is defined as:

• any person who beneficially owns, directly or indirectly, 10% or more of the voting power of the corporation’s outstanding voting stock; or

• an affiliate or associate of the corporation who, at any time within the two-year period prior to the date in question, was the beneficial owner of 10% or more of the voting power of the then outstanding stock of the corporation.

A person is not an interested stockholder under the statute if our board of directors approved in advance the transaction by which the person otherwise would have become an interested stockholder. However, in approving a transaction, our board of directors may provide that its approval is subject to compliance, at or after the time of the approval, with any terms and conditions determined by our board of directors.

After the five-year prohibition, any such business combination between the Maryland corporation and an interested stockholder generally must be recommended by our board of directors of the corporation and approved by the affirmative vote of at least:

• 80% of the votes entitled to be cast by holders of outstanding voting stock of the corporation; and

• two-thirds of the votes entitled to be cast by holders of voting stock of the corporation other than shares held by the interested stockholder with whom or with whose affiliate the business combination is to be effected or held by an affiliate or associate of the interested stockholder.

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These super-majority vote requirements do not apply if the corporation’s common stockholders receive a minimum price, as defined under Maryland law, for their shares in the form of cash or other consideration in the same form as previously paid by the interested stockholder for its shares. The business combination statute permits various exemptions from its provisions, including business combinations that are exempted by our board of directors prior to the time that the interested stockholder becomes an interested stockholder. Pursuant to the statute, our board of directors has exempted any business combination involving our Advisor, any affiliate of our Advisor or any REIT formed and organized by our Sponsor. Consequently, the five-year prohibition and the super-majority vote requirements will not apply to business combinations between us and our Advisor or any affiliate of our Advisor, or any other REITs sponsored by affiliates of our Sponsor. As a result, our Advisor and any affiliate of our Advisor may be able to enter into business combinations with us that may not be in the best interest of our stockholders, without compliance with the super-majority vote requirements and the other provisions of the statute. The business combination statute may discourage others from trying to acquire control of us and increase the difficulty of consummating any offer.

Maryland law limits the ability of a third party to buy a large stake in us and exercise voting power in electing directors, which may discourage a takeover that could otherwise result in a premium price to our stockholders.

The Maryland Control Share Acquisition Act provides that a holder of “control shares” of a Maryland corporation acquired in a “control share acquisition” has no voting rights with respect to such shares except to the extent approved by the affirmative vote of stockholders entitled to cast two-thirds of the votes entitled to be cast on the matter. Shares of stock owned by the acquirer, by officers or by employees who are directors of the acquiror, are excluded from shares entitled to vote on the matter. “Control shares” are voting shares of stock which, if aggregated with all other shares of stock owned by the acquirer or in respect of which the acquirer can exercise or direct the exercise of voting power (except solely by virtue of a revocable proxy), would entitle the acquirer to exercise voting power in electing directors within specified ranges of voting power. Control shares do not include shares the acquiring person is then entitled to vote as a result of having previously obtained stockholder approval or shares acquired directly from the corporation. A “control share acquisition” means, subject to certain exceptions, the acquisition of issued and outstanding control shares. The control share acquisition statute does not apply (a) to shares acquired in a merger, consolidation or share exchange if the corporation is a party to the transaction, or (b) to acquisitions approved or exempted by the charter or bylaws of the corporation. Our bylaws contain a provision exempting from the Maryland Control Share Acquisition Act any and all acquisitions of our stock by any person. There can be no assurance that this provision will not be amended or eliminated at any time in the future.

Our stockholders have limited voting rights under our charter and Maryland law.

Pursuant to Maryland law and our charter, our stockholders are entitled to vote only on the following matters: (a) election or removal of directors; (b) amendment of the charter, as provided in Article XIII of the charter; (c) dissolution of us; and (d) to the extent required under Maryland law, merger or consolidation of us or the sale or other disposition of all or substantially all of our assets. With respect to all matters other than the election or removal of directors, our board of directors must first adopt a resolution declaring that a proposed action is advisable and direct that such matter be submitted to our stockholders for approval or ratification. These limitations on voting rights may limit our stockholders’ ability to influence decisions regarding our business.

Our stockholders' investment return may be reduced if we are required to register as an investment company under the Investment Company Act.

We are not registered, and do not intend to register ourself or any of our subsidiaries, as an investment company under the Investment Company Act. If we become obligated to register ourselves or any of our subsidiaries as an investment company, the registered entity would have to comply with a variety of substantive requirements under the Investment Company Act imposing, among other things:

• limitations on capital structure;

• restrictions on specified investments;

• prohibitions on transactions with affiliates; and

• requirements to comply with reporting, record keeping, voting, proxy disclosure and other rules and regulations that would significantly change our operations.

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We intend to conduct our operations, directly and through wholly or majority-owned subsidiaries, so that we and each of our subsidiaries is not an investment company under the Investment Company Act. Under Section 3(a)(1)(A) of the Investment Company Act, a company is deemed to be an “investment company” if it is, or holds itself out as being, engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting or trading in securities. Under Section 3(a)(1)(C) of the Investment Company Act, a company is deemed to be an “investment company” if it is engaged, or proposes to engage, in the business of investing, reinvesting, owning, holding or trading in securities and owns or proposes to acquire “investment securities” having a value exceeding 40% of the value of its total assets (exclusive of government securities and cash items) on an unconsolidated basis, which we refer to as the “40% test.” “Investment securities” excludes (A) government securities, (B) securities issued by employees’ securities companies, and (C) securities issued by majority-owned subsidiaries which (i) are not investment companies, and (ii) are not relying on the exception from the definition of investment company under Section 3(c)(1) or 3(c)(7) of the Investment Company Act.

Since we will be primarily engaged in the business of acquiring real estate, we believe that we and most, if not all, of our wholly and majority-owned subsidiaries will not be considered investment companies under either Section 3(a)(1)(A) or Section 3(a)(1)(C) of the Investment Company Act. If we or any of our wholly or majority-owned subsidiaries would ever inadvertently fall within one of the definitions of “investment company,” we intend to rely on the exception provided by Section 3(c)(5)(C) of the Investment Company Act.

Under Section 3(c)(5)(C), the SEC staff generally requires us to maintain at least 55% of its assets directly in qualifying assets and at least 80% of the entity’s assets in qualifying assets and in a broader category of real estate related assets to qualify for this exception. Mortgage-related securities may or may not constitute such qualifying assets, depending on the characteristics of the mortgage-related securities, including the rights that we have with respect to the underlying loans. Our ownership of mortgage-related securities, therefore, is limited by provisions of the Investment Company Act and SEC staff interpretations.

The method we use to classify our assets for purposes of the Investment Company Act will be based in large measure upon no-action positions taken by the SEC staff in the past. These no-action positions were issued in accordance with factual situations that may be substantially different from the factual situations we may face, and a number of these no-action positions were issued more than ten years ago. No assurance can be given that the SEC staff will concur with our classification of our assets. In addition, the SEC staff may, in the future, issue further guidance that may require us to re-classify our assets for purposes of qualifying for an exclusion from regulation under the Investment Company Act. If we are required to re-classify our assets, we may no longer be in compliance with the exclusion from the definition of an “investment company” provided by Section 3(c)(5)(C) of the Investment Company Act.

A change in the value of any of our assets could cause us or one or more of our wholly or majority-owned subsidiaries to fall within the definition of “investment company” and negatively affect our ability to maintain our exemption from regulation under the Investment Company Act. To avoid being required to register ourselves or any of our subsidiaries as an investment company under the Investment Company Act, we may be unable to sell assets we would otherwise want to sell and may need to sell assets we would otherwise wish to retain. In addition, we may have to acquire additional income- or loss-generating assets that we might not otherwise have acquired or may have to forgo opportunities to acquire interests in companies that we would otherwise want to acquire and would be important to our investment strategy.

If we were required to register ourselves as an investment company but failed to do so, we would be prohibited from engaging in our business, and civil actions could be brought against us. In addition, our contracts would be unenforceable unless a court required enforcement, and a court could appoint a receiver to take control of us and liquidate our business.

We are an “emerging growth company” under the federal securities laws and will be subject to reduced public company reporting requirements.

In April 2012, President Obama signed into law the Jumpstart Our Business Startups Act (the "JOBS Act"). We are an “emerging growth company,” as defined in the JOBS Act, and are eligible to take advantage of certain exemptions from, or reduced disclosure obligations relating to, various reporting requirements that are normally applicable to public companies.

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We could remain an “emerging growth company” for up to five years, or until the earliest of (1) the last day of the first fiscal year in which we have total annual gross revenue of $1 billion or more, (2) December 31 of the fiscal year that we become a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act (which would occur if the market value of our common stock held by non-affiliates exceeds $700 million, measured as of the last business day of our most recently completed second fiscal quarter, and we have been publicly reporting for at least 12 months) or (3) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three-year period. Under the JOBS Act, emerging growth companies are not required to (1) provide an auditor’s attestation report on management’s assessment of the effectiveness of internal control over financial reporting, pursuant to Section 404 of the Sarbanes-Oxley Act, (2) comply with new audit rules adopted by the PCAOB, (3) provide certain disclosures relating to executive compensation generally required for larger public companies or (4) hold shareholder advisory votes on executive compensation. We have not yet made a decision as to whether to take advantage of any or all of the JOBS Act exemptions that are applicable to us. If we do take advantage of any of these exemptions, we do not know if some investors will find our common stock less attractive as a result.

Additionally, the JOBS Act provides that an “emerging growth company” may take advantage of an extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies. This means an “emerging growth company” can delay adopting certain accounting standards until such standards are otherwise applicable to private companies. However, we are electing to “opt out” of such extended transition period, and will therefore comply with new or revised accounting standards on the applicable dates on which the adoption of such standards is required for non-emerging growth companies. Section 107 of the JOBS Act provides that our decision to opt out of such extended transition period for compliance with new or revised accounting standards is irrevocable.

Payment of fees to our Advisor and its affiliates reduces cash available for investment and distribution and increases the risk that our stockholders will not be able to recover the amount of their investment in our shares.

Our Advisor, its affiliates and entities under common control with our Advisor perform services for us in connection with the sale of shares in our IPO, the performance of transfer agency services, the selection and acquisition of our investments, the coordination of financing, the management and leasing of our properties, the administration of our other investments, as well as the performance of other administrative responsibilities for us including accounting services, transaction management services and investor relations. We pay them fees for these services, which could be substantial, and which may reduce the value of our stockholders' investment and reduces the amount of cash available for investment in assets or distribution to stockholders.

If we are unable to obtain funding for future capital needs, cash distributions to our stockholders and the value of our investments could decline.

If we need additional capital in the future to improve or maintain our properties or for any other reason, we may have to obtain financing from sources, beyond our cash flow from operations, such as borrowings or future equity offerings. These sources of funding may not be available on attractive terms or at all. If we cannot procure additional funding for capital improvements, our investments may generate lower cash flows or decline in value, or both, which would limit our ability to make distributions to our stockholders and could reduce the value of our stockholders' investment.

Our board of directors may change our investment policies without stockholder approval, which could alter the nature of our stockholders' investments.

Our charter requires that our independent directors review our investment policies at least annually to determine that the policies we are following are in the best interest of the stockholders. These policies may change over time. The methods of implementing our investment policies also may vary, as new real estate development trends emerge and new investment techniques are developed. Our investment policies, the methods for their implementation, and our other objectives, policies and procedures may be altered by our board of directors without the approval of our stockholders. As a result, the nature of our stockholders' investment could change without their consent.

Our stockholders are limited in their ability to sell their shares pursuant to our SRP and may have to hold their shares for an indefinite period of time.

Our board of directors may amend the terms of our SRP without stockholder approval. Our board of directors also is free to suspend or terminate the program upon 30 days’ notice or to reject any request for repurchase. In addition, the SRP includes numerous restrictions that would limit our stockholders' ability to sell their shares, including limits on the total number of shares that may be repurchased in a given year.

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Prior to the NAV pricing date, unless waived by our board of directors, our stockholders must have held their shares for at least one year in order to participate in our SRP. Further, subject to funds being available, the purchase price for shares repurchased under our SRP will be as set forth below (unless such repurchase is in connection with a stockholder’s death or disability): (a) for stockholders who have continuously held their shares of our common stock for at least one year, the price will be the lower of $23.13 and 92.5% of the amount paid for each such share and (b) for stockholders who have continuously held their shares of our common stock for at least two years, the price will be the lower of $23.75 and 95.0% of the amount paid for each such share (in each case, as adjusted for any stock dividends, combinations, splits, recapitalizations and the like with respect to our common stock). These restrictions severely limit our stockholders' ability to sell their shares should they require liquidity, and limit our stockholders' ability to recover the value they invested or the fair market value of their shares.

After the NAV pricing date, stockholders may make daily requests that we repurchase all or a portion (but generally at least 25% of a stockholder’s shares) of their shares pursuant to our SRP and the repurchase price will vary quarterly and will be based on NAV. At such time, we will limit shares repurchased during any calendar year to 5% of the weighted average number of shares outstanding during the prior calendar year. Accordingly, following the NAV pricing date, in order to provide liquidity for repurchases, we intend to maintain 5% of our NAV in excess of $1.0 billion in cash, cash equivalents and other short-term investments and certain types of real estate related assets that can be liquidated more readily than properties, or collectively, liquid assets. There can be no assurance, however, that we will maintain this level of liquid assets, and our stockholders will only be able to have their shares repurchased to the extent that we have sufficient liquid assets to repurchase them. Accordingly, there can be no assurance we will be able to satisfy all repurchase requests made after the NAV pricing date.

Future offerings of equity securities which are senior to our common stock for purposes of dividend distributions or upon liquidation, may adversely affect the value of our common stock.

In the future, we may attempt to increase our capital resources by making additional offerings of equity securities. Under our charter, we may issue, without stockholder approval, preferred stock or other classes of common stock with rights that could dilute the value of our stockholders' shares of common stock. Any issuance of preferred stock must be approved by a majority of our independent directors not otherwise interested in the transaction, who will have access, at our expense, to our legal counsel or to independent legal counsel. Upon liquidation, holders of our shares of preferred stock will be entitled to receive our available assets prior to distribution to the holders of our common stock. Additionally, any convertible, exercisable or exchangeable securities that we issue in the future may have rights, preferences and privileges more favorable than those of our common stock and may result in dilution to owners of our common stock. Holders of our common stock are not entitled to preemptive rights or other protections against dilution. Our preferred stock, if issued, could have a preference on liquidating distributions or a preference on dividend payments that could limit our ability to pay dividends or other distributions to the holders of our common stock. Because our decision to issue securities in any future offering will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of our future offerings. Thus, our stockholders bear the risk of our future offerings which may reduce the per share value of our common stock and reduce their interest in us.

Because we conduct all of our operations through the operating partnership, we depend on it and its subsidiaries for cash flow and we are structurally subordinated in right of payment to the obligations of the operating partnership and its subsidiaries, which could adversely affect our ability to make distributions to our stockholders.

We receive cash to pay distributions only from our operating partnership and its subsidiaries. We cannot assure you that our operating partnership or its subsidiaries will be able to, or be permitted to, make distributions to us that will enable us to make distributions to our stockholders. Each of our operating partnership’s subsidiaries is a distinct legal entity and, under certain circumstances, legal and contractual restrictions may limit our ability to obtain cash from such entities. Any claim our stockholders may have as stockholders will be structurally subordinated to all existing and future liabilities and obligations of our operating partnership and its subsidiaries. Therefore, in the event of our bankruptcy, liquidation or reorganization, our assets and those of our operating partnership and its subsidiaries will be able to satisfy our stockholders' claims as stockholders only after all of our and our operating partnerships and its subsidiaries liabilities and obligations have been paid in full.

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General Risks Related to Investments in Real Estate

Our operating results will be affected by economic and regulatory changes that have an adverse impact on the real estate market in general, and we cannot assure you that we will be profitable or that we will realize growth in the value of our real estate properties.

Our operating results are subject to risks generally incident to the ownership of real estate, including:

• changes in general economic or local conditions;

• changes in supply of or demand for similar or competing properties in an area;

• changes in interest rates and availability of permanent mortgage funds that may render the sale of a property difficult or unattractive;

• changes in tax, real estate, environmental and zoning laws; and

• periods of high interest rates and tight money supply.

These and other reasons may prevent us from being profitable or from realizing growth or maintaining the value of our real estate properties.

Our growth will partially depend upon our ability to successfully acquire future properties, and we may be unable to enter into and consummate property acquisitions on advantageous terms or our property acquisitions may not perform as we expect.

We compete with many other entities engaged in real estate investment activities particularly for properties located in New York City. The competition may significantly increase the price we pay and reduce the returns that we earn. Our potential acquisition targets may find our competitors to be more attractive because they may have greater resources, may be willing to pay more for the properties or may have a more compatible operating philosophy. In particular, larger REITs may enjoy significant competitive advantages that result from, among other things, a lower cost of capital and enhanced operating efficiencies. Because of an increased interest in single-property acquisitions among tax-motivated individual purchasers, we may pay higher prices if we purchase single properties in comparison with portfolio acquisitions. In addition:

• we may acquire properties that are not accretive and we may not successfully manage and lease those properties to meet our expectations;

• we may be unable to generate sufficient cash from operations, or obtain the necessary debt or equity financing to consummate an acquisition or, if obtainable, financing may not be on satisfactory terms;

• we may need to spend more than budgeted amounts to make necessary improvements or renovations to acquired properties;

• agreements for the acquisition of properties are typically subject to customary conditions to closing, including satisfactory completion of due diligence investigations, and we may spend significant time and money on potential acquisitions that we do not consummate;

• the process of acquiring or pursuing the acquisition of a new property may divert the attention of our management team from our existing business operations;

• we may be unable to quickly and efficiently integrate new acquisitions, particularly acquisitions of portfolios of properties, into our existing operations;

• market conditions may result in future vacancies and lower-than expected rental rates; and

• we may acquire properties without recourse, or with only limited recourse, for liabilities, whether known or unknown, such as cleanup of environmental contamination, claims by tenants, vendors or other persons against the former owners of the properties and claims for indemnification by general partners, directors, officers and others indemnified by the former owners of the properties.

We rely on our Advisor to acquire properties on our behalf. Because the management personnel of our Advisor are also engaged in the process of acquiring properties for other entities formed and managed by affiliates of our Advisor, we could suffer delays in locating suitable investments or may miss out on opportunities. If our Advisor is unable to obtain further suitable investments, we will not be able to continue to increase our asset base.

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Part of our strategy for building our portfolio may involve acquiring assets opportunistically. This strategy will involve a higher risk of loss than more conservative investment strategies.

In order to meet our investment objectives, we may acquire assets which we can reposition, redevelop or remarket to create value enhancement and capital appreciation opportunistically. Our strategy for acquiring properties may involve the acquisition of properties in markets that are depressed. As a result of our investment in these types of assets, we will face increased risks relating to changes in the New York City economy and increased competition for similar properties in this market, as well as increased risks that the economic trends and demand for office space and other real estate in this market will not persist and the value of our properties will not increase, or will decrease, over time. For these and other reasons, we cannot assure you that we will be profitable or that we will realize growth in the value of our real estate properties, and as a result, our ability to make distributions to our stockholders could be affected. Our intended approach to acquiring and operating income-producing hotel properties involves more risk than comparable real estate programs that have a targeted holding period for investments that is longer than ours, utilize leverage to a lesser degree or employ more conservative investment strategies.

We may obtain only limited warranties when we purchase a property and would have only limited recourse if our due diligence did not identify any issues that lower the value of our property, which could adversely affect our financial condition and ability to make distributions to our stockholders.

We may purchase properties on an “as is” condition on a “where is” basis and “with all faults,” without any warranties of merchantability or fitness for a particular use or purpose. In addition, purchase agreements may contain only limited warranties, representations and indemnifications that will only survive for a limited period after the closing. The purchase of properties with limited warranties increases the risk that we may lose some or all our invested capital in the property as well as the loss of rental income from that property.

We may be unable to secure funds for future capital needs, which could adversely impact our ability to pay cash distributions to our stockholders.

We will likely be responsible for any major structural repairs, such as repairs to the foundation, exterior walls and rooftops. We may reserve up to 0.1% of the gross proceeds from this our IPO for future capital needs. Accordingly, if we need additional capital in the future to improve or maintain our properties or for any other reason, we will have to obtain financing from other sources, such as cash flow from operations, borrowings, property sales or future equity offerings. These sources of funding may not be available on attractive terms or at all. If we cannot procure additional funding for capital improvements, our investments may generate lower cash flows or decline in value, or both.

Our inability to sell a property when we desire to do so could adversely impact our ability to pay cash distributions to our stockholders.

The real estate market is affected by many factors, such as general economic conditions, availability of financing, interest rates and other factors, including supply and demand, that are beyond our control. We cannot predict whether we will be able to sell any property for the price or on the terms set by us, or whether any price or other terms offered by a prospective purchaser would be acceptable to us. We cannot predict the length of time needed to find a willing purchaser and to close the sale of a property.

We may be required to expend funds to correct defects or to make improvements before a property can be sold. We cannot assure you that we will have funds available to correct such defects or to make such improvements. Moreover, in acquiring a property, we may agree to restrictions that prohibit the sale of that property for a period of time or impose other restrictions, such as a limitation on the amount of debt that can be placed or repaid on that property. These provisions would restrict our ability to sell a property.

We may not be able to sell our properties at a price equal to, or greater than, the price for which we purchased such property, which may lead to a decrease in the value of our assets.

The value of a property to a potential purchaser may not increase over time, which may restrict our ability to sell a property, or if we are able to sell such property, may lead to a sale price less than the price that we paid to purchase the property.

We may be unable to renew leases or re-lease space as leases expire.

If tenants do not renew their leases upon expiration, we may be unable to re-lease the vacated space. Even if the tenants do re-lease the lease or we are able to re-lease to a new tenant, the terms and conditions of the new lease may not be as favorable as the terms and conditions of the expired lease.

In addition, one or more of our properties may incur a vacancy either by the continued default of a tenant under its lease or the expiration of one of our leases. The resale value of a property could be diminished because the market value of a particular property will depend principally upon the value of the cash flow generated from the property which in the case of vacancies, will be reduced.

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Our properties may be subject to impairment charges.

We will periodically evaluate our real estate investments for impairment indicators. The judgment regarding the existence of impairment indicators is based on factors such as market conditions, tenant performance and legal structure. For example, the early termination of, or default under, a lease by a tenant may lead to an impairment charge. If we determine that an impairment has occurred, we would be required to make a downward adjustment to the net carrying value of the property. Impairment charges also indicate a potential permanent adverse change in the fundamental operating characteristics of the impaired property. There is no assurance that these adverse changes will be reversed in the future and the decline in the impaired property’s value could be permanent.

If a tenant declares bankruptcy, we may be unable to collect balances due under relevant leases, which could adversely affect our financial condition and ability to pay distributions.

Any of our tenants, or any guarantor of a tenant's lease obligations, could be subject to a bankruptcy proceeding pursuant to Title 11 of the bankruptcy laws of the United States. A bankruptcy filing by one of our tenants or any guarantor of a tenant's lease obligations would bar all efforts by us to collect pre-bankruptcy debts from these entities or their properties, unless we receive an enabling order from the bankruptcy court. There is no assurance the tenant or its trustee would agree to assume the lease. If a lease is rejected by a tenant in bankruptcy, we would have a general unsecured claim for damages and it is unlikely we would receive any payments from the tenant.

A tenant or lease guarantor bankruptcy could delay efforts to collect past due balances under the relevant leases, and could ultimately preclude full collection of these sums. A tenant or lease guarantor bankruptcy could cause a decrease or cessation of rental payments that would mean a reduction in our cash flow and the amount available to pay distributions.

If a sale-leaseback transaction is re-characterized in a tenant's bankruptcy proceeding, our financial condition and ability to make distributions to our stockholders could be adversely affected.

We may enter into sale-leaseback transactions, whereby we would purchase a property and then lease the same property back to the person from whom we purchased it. In the event of the bankruptcy of a tenant, a transaction structured as a sale- leaseback may be re-characterized as either a financing or a joint venture, either of which outcomes could adversely affect our business. If the sale-leaseback were re-characterized as a financing, we might not be considered the owner of the property, and as a result would have the status of a creditor in relation to the tenant. In that event, we would no longer have the right to sell or encumber our ownership interest in the property. Instead, we would have a claim against the tenant for the amounts owed under the lease, with the claim arguably secured by the property. The tenant/debtor might have the ability to propose a plan restructuring the term, interest rate and amortization schedule of its outstanding balance. If confirmed by the bankruptcy court, we could be bound by the new terms, and prevented from foreclosing our lien on the property. If the sale-leaseback were re- characterized as a joint venture, our lessee and we could be treated as co-venturers with regard to the property. As a result, we could be held liable, under some circumstances, for debts incurred by the lessee relating to the property.

Potential changes in U.S. accounting standards regarding operating leases may make the leasing of our properties less attractive to our potential tenants, which could reduce overall demand for our leasing services.

Under current authoritative accounting guidance for leases, a lease is classified by a tenant as a capital lease if the significant risks and rewards of ownership are considered to reside with the tenant. Under capital lease accounting for a tenant, both the leased asset and liability are reflected on their balance sheet. If the lease does not meet any of the criteria for a capital lease, the lease is considered an operating lease by the tenant, and the obligation does not appear on the tenant’s balance sheet; rather, the contractual future minimum payment obligations are only disclosed in the footnotes thereto. Thus, entering into an operating lease can appear to enhance a tenant’s balance sheet in comparison to direct ownership. The Financial Accounting Standards Board (the "FASB") and the International Accounting Standards Board (the "IASB") conducted a joint project to reevaluate lease accounting. In June 2013, the FASB and the IASB jointly finalized exposure drafts of a proposed accounting model that would significantly change lease accounting. In March 2014, the FASB and the IASB redeliberated aspects of the joint project, including the lessee and lessor accounting models, lease term, and exemptions and simplifications. The timing of the issuance of the final standards is uncertain. Changes to the accounting guidance could affect both our accounting for leases as well as that of our current and potential tenants. These changes may affect how the real estate leasing business is conducted. For example, if the accounting standards regarding the financial statement classification of operating leases are revised, then companies may be less willing to enter into leases in general or desire to enter into leases with shorter terms because the apparent benefits to their balance sheets could be reduced or eliminated. This in turn could cause a delay in investing our offering proceeds and make it more difficult for us to enter into leases on terms we find favorable.

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We may acquire or finance properties with lock-out provisions, which may prohibit us from selling a property, or may require us to maintain specified debt levels for a period of years on some properties, which could have an adverse effect on our stockholders' investment.

Lock-out provisions could materially restrict us from selling or otherwise disposing of or refinancing properties. These provisions would affect our ability to turn our investments into cash and thus affect cash available for distributions to our stockholders. Lock out provisions may prohibit us from reducing the outstanding indebtedness with respect to any properties, refinancing such indebtedness on a non-recourse basis at maturity, or increasing the amount of indebtedness with respect to such properties. Lock-out provisions could impair our ability to take other actions during the lock-out period that could be in the best interests of our stockholders and, therefore, may have an adverse impact on the value of the shares, relative to the value that would result if the lock-out provisions did not exist. In particular, lock-out provisions could preclude us from participating in major transactions that could result in a disposition of our assets or a change in control even though that disposition or change in control might be in the best interests of our stockholders.

We may be unable to adjust our portfolio in response to changes in economic or other conditions or sell a property if or when we decide to do so, limiting our ability to pay cash distributions to our stockholders.

Many factors that are beyond our control affect the real estate market and could affect our ability to sell properties for the price, on the terms or within the time frame that we desire. These factors include general economic conditions, the availability of financing, interest rates and other factors, including supply and demand. Because real estate investments are relatively illiquid, we have a limited ability to vary our portfolio in response to changes in economic or other conditions. Further, before we can sell a property on the terms we want, it may be necessary to expend funds to correct defects or to make improvements. However, we can give no assurance that we will have the funds available to correct such defects or to make such improvements. We may be unable to sell our properties at a profit. Our inability to sell properties at the time and on the terms we want could reduce our cash flow and limit our ability to make distributions to our stockholders and could reduce the value of our stockholders' investment. Moreover, in acquiring a property, we may agree to restrictions that prohibit the sale of that property for a period of time or impose other restrictions, such as a limitation on the amount of debt that can be placed or repaid on that property. We cannot predict the length of time needed to find a willing purchaser and to close the sale of a property. Our inability to sell a property when we desire to do so may cause us to reduce our selling price for the property. Any delay in our receipt of proceeds, or a diminished amount, from the sale of a property could adversely impact our ability to pay distributions to our stockholders.

If we sell a property by providing financing to the purchaser, we will bear the risk of default by the purchaser, which could delay or reduce the distributions available to our stockholders.

In some instances, we may sell our properties by providing financing to purchasers. When we provide financing to a purchaser, we will bear the risk that the purchaser may default, which could reduce operating cash flow and our ability to fund distributions to stockholders. Even in the absence of a purchaser default, the distribution of the proceeds of the sale to our stockholders, or the reinvestment of the proceeds in other assets, will be delayed until the promissory notes or other property we may accept upon a sale are actually paid, sold, refinanced or otherwise disposed. In some cases, we may receive initial down payments in cash and other property in the year of sale in an amount less than the selling price, and subsequent payments will be spread over a number of years.

Joint venture investments could be adversely affected by our lack of sole decision-making authority, our reliance on the financial condition of co-venturers and disputes between us and our co-venturers.

We may enter into joint ventures, partnerships and other co-ownership arrangements (including preferred equity investments) for the purpose of making investments. In such event, we would not be in a position to exercise sole decision-making authority regarding the joint venture. Investments in joint ventures may, under certain circumstances, involve risks not present were a third party not involved, including the possibility that partners or co-venturers might become bankrupt or fail to fund their required capital contributions. Co-venturers may have economic or other business interests or goals which are inconsistent with our business interests or goals, and may be in a position to take actions contrary to our policies or objectives. Such investments may also have the potential risk of impasses on decisions, such as a sale, because neither we nor the co-venturer would have full control over the joint venture. In addition, to the extent our participation represents a minority interest, a majority of the participants may be able to take actions which are not in our best interests because of our lack of full control. Disputes between us and co-venturers may result in litigation or arbitration that would increase our expenses and prevent our officers and/or directors from focusing their time and effort on our business. Consequently, actions by or disputes with co-venturers might result in subjecting properties owned by the joint venture to additional risk. In addition, we may in certain circumstances be liable for the actions of our co-venturers.

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Covenants, conditions and restrictions may restrict our ability to operate a property, which may adversely affect our operating costs and reduce the amount of funds available to pay distributions to our stockholders.

Some of our properties may be contiguous to other parcels of real property, comprising part of the same commercial center. In connection with such properties, there are significant covenants, conditions and restrictions ("CC&Rs") restricting the operation of such properties and any improvements on such properties, and related to granting easements on such properties. Moreover, the operation and management of the contiguous properties may impact such properties. Compliance with CC&Rs may adversely affect our operating costs and reduce the amount of funds that we have available to pay distributions.

Our real properties are subject to property taxes that may increase in the future, which could adversely affect our cash flow.

Our real properties are subject to real property taxes that may increase as tax rates change and as the real properties are assessed or reassessed by taxing authorities. We anticipate that certain of our leases will generally provide that the property taxes, or increases therein, are charged to the lessees as an expense related to the real properties that they occupy, while other leases will generally provide that we are responsible for such taxes. In any case, as the owner of the properties, we are ultimately responsible for payment of the taxes to the applicable government authorities. If real property taxes increase, lessees may be unable to make the required tax payments, ultimately requiring us to pay the taxes even if otherwise stated under the terms of the lease. If we fail to pay any such taxes, the applicable taxing authority may place a lien on the real property and the real property may be subject to a tax sale. In addition, we are generally responsible for real property taxes related to any vacant space.

Uninsured losses relating to real property or excessively expensive premiums for insurance coverage, including due to the future non-renewal of the Terrorism Risk Insurance Act of 2002, or the TRIA, could reduce our cash flows and the return on our stockholders’ investments.

There are types of losses, generally catastrophic in nature, such as losses due to wars, acts of terrorism, earthquakes, floods, hurricanes, pollution or environmental matters, that are uninsurable or not economically insurable, or may be insured subject to limitations, such as large deductibles or co-payments. Insurance risks associated with such catastrophic events could sharply increase the premiums we pay for coverage against property and casualty claims.

This risk is particularly relevant with respect to potential acts of terrorism. The TRIA, under which the U.S. federal government bears a significant portion of insured losses caused by terrorism, will expire on December 31, 2020, and there can be no assurance that Congress will act to renew or replace the TRIA following its expiration. In the event the TRIA is not renewed or replaced, terrorism insurance may become difficult or impossible to obtain at reasonable costs or at all, which may result in adverse impacts and additional costs to us.

Changes in the cost or availability of insurance due to the non-renewal of the TRIA or for other reasons could expose us to uninsured casualty losses. If any of our properties incurs a casualty loss that is not fully insured, the value of our assets will be reduced by any such uninsured loss, which may reduce the value of our stockholders’ investments. In addition, other than any working capital reserve or other reserves we may establish, we have no source of funding to repair or reconstruct any uninsured property. Also, to the extent we must pay unexpectedly large amounts for insurance, we could suffer reduced earnings that would result in lower distributions to stockholders.

Additionally, mortgage lenders insist in some cases that commercial property owners purchase coverage against terrorism as a condition for providing mortgage loans. Accordingly, to the extent terrorism risk insurance policies are not available at reasonable costs, if at all, our ability to finance or refinance our properties could be impaired. In such instances, we may be required to provide other financial support, either through financial assurances or self-insurance, to cover potential losses. We may not have adequate, or any, coverage for such losses.

Terrorist attacks and other acts of violence, civilian unrest or war may affect the markets in which we operate, our operations and our profitability.

In addition, any kind of terrorist activity or violent criminal acts, including terrorist acts against public institutions or buildings or modes of public transportation (including airlines, trains or buses) could have a negative effect on our business. These events may directly impact the value of our assets through damage, destruction, loss or increased security costs. Although we may obtain terrorism insurance, we may not be able to obtain sufficient coverage to fund any losses we may incur. The TRIA, which was designed for a sharing of terrorism losses between insurance companies and the federal government, will expire on December 31, 2020, and there can be no assurance that Congress will act to renew or replace it. See “-Uninsured losses relating to real property or excessively expensive premiums for insurance coverage, including due to the non-renewal of the Terrorism Risk Insurance Act of 2002, or the TRIA, could reduce our cash flows and the return on our stockholders’ investments.”

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More generally, any terrorist attack, other act of violence or war, including armed conflicts, could result in increased volatility in, or damage to, the worldwide financial markets and economy. Increased economic volatility could adversely affect our hotel properties’ ability to conduct their operations profitably or our ability to borrow money or issue capital stock at acceptable prices and have a material adverse effect on our financial condition, results of operations and ability to pay distributions to our stockholders.

Competition with third parties in acquiring properties and other investments may reduce our profitability and the return on our stockholders' investment.

We compete with many other entities engaged in real estate investment activities, including individuals, corporations, bank and insurance company investment accounts, other REITs, real estate limited partnerships, and other entities engaged in real estate investment activities, many of which have greater resources than we do. Larger REITs may enjoy significant competitive advantages that result from, among other things, a lower cost of capital and enhanced operating efficiencies. In addition, the number of entities and the amount of funds competing for suitable investments may increase. Any such increase would result in increased demand for these assets and therefore increased prices paid for them. If we pay higher prices for properties and other investments, our profitability will be reduced and our stockholders may experience a lower return on their investment.

Failure to succeed in new markets or in new property classes may have adverse consequences on our performance.

We may from time to time make acquisitions outside of our existing market areas or the property classes of our primary focus if appropriate opportunities arise. The experience of affiliates of our Sponsor in our existing markets in owning and operating certain classes of property does not ensure that we will be able to operate successfully in new markets, should we choose to enter them, or that we will be successful in new property classes, should we choose to acquire them. We may be exposed to a variety of risks if we choose to enter new markets, including an inability to evaluate accurately local market conditions or to identify appropriate acquisition opportunities, or to hire and retain key personnel, and a lack of familiarity with local governmental and permitting procedures. In addition, we may abandon opportunities to enter new markets or acquire new classes of property that we have begun to explore for any reason and may, as a result, fail to recover expenses already incurred.

Acquiring or attempting to acquire multiple properties in a single transaction may adversely affect our operations.

From time to time, we may attempt to acquire multiple properties in a single transaction. Portfolio acquisitions are more complex and expensive than single-property acquisitions, and the risk that a multiple-property acquisition does not close may be greater than in a single-property acquisition. Portfolio acquisitions also may result in us owning investments in geographically dispersed markets, placing additional demands on our ability to manage the properties in the portfolio. In addition, a seller may require that a group of properties be purchased as a package even though we may not want to purchase one or more properties in the portfolio. In these situations, if we are unable to identify another person or entity to acquire the unwanted properties, we may be required to operate or attempt to dispose of these properties. To acquire multiple properties in a single transaction we may be required to accumulate a large amount of cash. We would expect the returns that we earn on such cash to be less than the ultimate returns in real property and therefore, accumulating such cash could reduce the funds available for distributions. Any of the foregoing events may have an adverse effect on our operations.

Our Property Manager’s failure to integrate its subcontractors into its operations in an efficient manner could reduce the return on our stockholders' investment.

Our Property Manager may rely on multiple subcontractors for on-site property management of our properties. If our Property Manager is unable to integrate these subcontractors into its operations in an efficient manner, our Property Manager may have to expend substantial time and money coordinating with these subcontractors, which could have a negative impact on the revenues generated from such properties.

Discovery of previously undetected environmentally hazardous conditions may adversely affect our operating results.

Under various federal, state and local environmental laws, ordinances and regulations (including those of foreign jurisdictions), a current or previous owner or operator of real property may be liable for the cost of removal or remediation of hazardous or toxic substances on, under or in such property. The costs of removal or remediation could be substantial. Such laws often impose liability whether or not the owner or operator knew of, or was responsible for, the presence of such hazardous or toxic substances. Environmental laws also may impose restrictions on the manner in which property may be used or businesses may be operated, and these restrictions may require substantial expenditures. Environmental laws provide for sanctions for noncompliance and may be enforced by governmental agencies or, in certain circumstances, by private parties. Certain environmental laws and common law principles could be used to impose liability for release of and exposure to hazardous substances, including asbestos-containing materials into the air, and third parties may seek recovery from owners or operators of real properties for personal injury or property damage associated with exposure to released hazardous substances.

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In addition, when excessive moisture accumulates in buildings or on building materials, mold growth may occur, particularly if the moisture problem remains undiscovered or is not addressed over a period of time. Some molds may produce airborne toxins or irritants. Concern about indoor exposure to mold has been increasing, as exposure to mold may cause a variety of adverse health effects and symptoms, including allergic or other reactions. As a result, the presence of significant mold at any of our projects could require us to undertake a costly remediation program to contain or remove the mold from the affected property or development project, which would adversely affect our operating results.

The cost of defending against claims of liability, of compliance with environmental regulatory requirements, of remediating any contaminated property, or of paying personal injury claims could materially adversely affect our business, assets or results of operations and, consequently, amounts available for distribution to our stockholders.

Environmental laws also may impose liens on property or restrictions on the manner in which property may be used or businesses may be operated, and these restrictions may require substantial expenditures or prevent us or our Property Manager and its assignees from operating such properties. Some of these laws and regulations have been amended so as to require compliance with new or more stringent standards as of future dates. Compliance with new or more stringent laws or regulations or stricter interpretation of existing laws may require us to incur material expenditures. Future laws, ordinances or regulations may impose material environmental liability.

Our Property Manager’s failure to integrate their subcontractors into their operations in an efficient manner could reduce the return on our stockholders' investment.

Our Property Manager may rely on multiple subcontractors for on-site property management of our properties. If our Property Manager is unable to integrate these subcontractors into their operations in an efficient manner, our Property Manager may have to expend substantial time and money coordinating with these subcontractors, which could have a negative impact on the revenues generated from such properties.

Delays in acquisitions of properties may have an adverse effect on our stockholders' investment.

There may be a substantial period of time before the proceeds of our IPO are invested. Delays we encounter in the selection, acquisition and/or development of properties could adversely affect our stockholders' returns. Where properties are acquired prior to the start of construction or during the early stages of construction, it will typically take several months to complete construction and rent available space. Therefore, our stockholders could suffer delays in the payment of cash distributions attributable to those particular properties.

Our recovery of an investment in a mortgage, bridge or mezzanine loan that has defaulted may be limited, resulting in losses to us and reducing the amount of funds available to pay distributions to our stockholders.

There is no guarantee that the mortgage, loan or deed of trust securing an investment will, following a default, permit us to recover the original investment and interest that would have been received absent a default. The security provided by a mortgage, deed of trust or loan is directly related to the difference between the amount owed and the appraised market value of the property. Although we intend to rely on a current real estate appraisal when we make the investment, the value of the property is affected by factors outside our control, including general fluctuations in the real estate market, rezoning, neighborhood changes, highway relocations and failure by the borrower to maintain the property. In addition, we may incur the costs of litigation in our efforts to enforce our rights under defaulted loans.

Costs associated with complying with the Americans with Disabilities Act of 1990 may decrease cash available for distributions.

Our properties may be subject to the Americans with Disabilities Act of 1990, as amended (the "Disabilities Act"). Under the Disabilities Act, all places of public accommodation are required to comply with federal requirements related to access and use by disabled persons. The Disabilities Act has separate compliance requirements for “public accommodations” and “commercial facilities” that generally require that buildings and services be made accessible and available to people with disabilities. The Disabilities Act’s requirements could require removal of access barriers and could result in the imposition of injunctive relief, monetary penalties or, in some cases, an award of damages. We cannot assure our stockholders that we will be able to acquire properties or allocate responsibilities in this manner. Any of our funds used for Disabilities Act compliance will reduce our net income and the amount of cash available for distributions to our stockholders.

The failure of any bank in which we deposit our funds could reduce the amount of cash we have available to pay distributions and make additional investments.

We intend to diversify our cash and cash equivalents among several banking institutions in an attempt to minimize exposure to any one of these entities. However, the Federal Deposit Insurance Corporation (the "FDIC"), only insures amounts up to $250,000 per depositor per insured bank. We expect to have cash and cash equivalents and restricted cash deposited in certain financial institutions in excess of federally insured levels. If any of the banking institutions in which we have deposited funds ultimately fails, we may lose our deposits over $250,000. The loss of our deposits could reduce the amount of cash we have available to distribute or invest and could result in a decline in the value of our stockholders’ investments.

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The continued recovery of real estate markets from the recent recession is dependent upon forecasted moderate economic growth, which if significantly slower than expected could have a negative impact on the performance of our investment portfolio.

The U.S. economy is in the process of recovering from a severe global recession and real estate markets have also stabilized and begun to recover. Based on moderate economic growth in the future and historically low levels of new supply in the commercial real estate pipeline, a stronger recovery is forecasted for all property sectors. Nevertheless, this ongoing economic recovery remains fragile and could be slowed or halted by significant external events. As a result, real estate markets could perform lower than expected. There can be no assurance that our real estate investments will not be adversely impacted by a severe slowing of the economy or renewed recession. Fluctuations in interest rates, limited availability of capital and other economic conditions beyond our control could negatively impact our portfolio and decrease the value of our stockholders' investment.

Lodging Industry Risks

The hotel industry is very competitive and seasonal and has been affected by economic slowdowns, terrorist attacks and other world events.

The hotel industry is intensely competitive and seasonal in nature and has been affected by the current economic slowdown, terrorist attacks, military activity in the Middle East, natural disasters and other world events impacting the global economy and the travel and hotel industries, and, as a result, our lodging properties may be adversely affected. Since the hotel industry is intensely competitive, our Property Manager and our sub-property manager may be unable to compete successfully. Additionally, if our competitors’ marketing strategies are more effective, our results of operations, financial condition, and cash flows including our ability to service debt and to make distributions to our stockholders, may be adversely affected. In particular, as a result of terrorist attacks around the world and the effects of the economic recession, the lodging industry has experienced a significant decline in business caused by a reduction in both business and leisure travel. Our lodging properties may continue to be affected by such events, including our hotel occupancy levels and average daily rates, and, as a result, our revenues may decrease or not increase to levels we expect.

Since we do not intend to operate our lodging properties, our revenues depend on the ability of our Property Manager and our sub-property manager to compete successfully with other hotels. Some of our competitors may have substantially greater marketing and financial resources than we do. If our Property Manager or sub-property manager are unable to compete successfully or if our competitors’ marketing strategies are effective, our results of operations, financial condition, ability to service debt and ability to make distributions to our stockholders may be adversely affected.

In addition, the seasonality of the hotel industry can be expected to cause quarterly fluctuations in our revenues and also may be adversely affected by factors outside our control, such as extreme or unexpectedly mild weather conditions or natural disasters, terrorist attacks or alerts, outbreaks of contagious diseases, airline strikes, economic factors and other considerations affecting travel. To the extent that cash flows from operations are insufficient during any quarter, due to temporary or seasonal fluctuations in revenues, we may attempt to borrow in order to make distributions to our stockholders or be required to reduce other expenditures or distributions to stockholders.

Our profitability may be adversely affected by unstable market and business conditions and insufficient demand for lodging due to reduced business and leisure travel.

Our hotels will be subject to all the risks common to the hotel industry and subject to market conditions that affect all hotel properties. These risks could adversely affect hotel occupancy and the rates that can be charged for hotel rooms as well as hotel operating expenses, and generally include:

• increases in supply of hotel rooms that exceed increases in demand;

• increases in energy costs and other travel expenses that reduce business and leisure travel;

• reduced business and leisure travel due to continued geo-political uncertainty, including terrorism;

• adverse effects of declines in general and local economic activity;

• adverse effects of a downturn in the hotel industry; and

• risks generally associated with the ownership of hotels and real estate, as discussed below.

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We do not have control over the market and business conditions that affect the value of our lodging properties, and adverse changes with respect to such conditions could have an adverse effect on our results of operations, financial condition and cash flows. Hotel properties are subject to varying degrees of risk generally common to the ownership of hotels, many of which are beyond our control, including the following:

• increased competition from other existing hotels in our markets;

• new hotels entering our markets, which may adversely affect the occupancy levels and average daily rates of our lodging properties;

• declines in business and leisure travel;

• increases in energy costs, increased threat of terrorism, terrorist events, airline strikes or other factors that may affect travel patterns and reduce the number of business and leisure travelers;

• increases in operating costs due to inflation and other factors that may not be offset by increased room rates;

• changes in, and the related costs of compliance with, governmental laws and regulations, fiscal policies and zoning ordinances; and

• adverse effects of international, national, regional and local economic and market conditions.

Adverse changes in any or all of these factors could have an adverse effect on our results of operations, financial condition and cash flows, thereby adversely impacting our ability to service debt and to make distributions to our stockholders.

As a REIT, we cannot directly operate our lodging properties, which could adversely affect our results of operations, financial condition and our cash flows, which could impact our ability to service debt and make distributions to our stockholders.

We cannot and will not directly operate our lodging properties and, as a result, our results of operations, financial position, ability to service debt and our ability to make distributions to stockholders are dependent on the ability of our Property Manager and any third-party sub-property manager that may be retained, to operate our hotel properties successfully. In order for us to satisfy certain REIT qualification rules, we cannot directly operate any lodging properties we may acquire or actively participate in the decisions affecting their daily operations. Instead, through a taxable REIT subsidiary, we must enter into management agreements with a third-party management company, which may include our Property Manager, or we must lease our lodging properties to third-party tenants on a triple net lease basis. We cannot and will not control any such third-party management company or tenants who operate and are responsible for maintenance and other day to day management of our lodging properties, including, but not limited to, the implementation of significant operating decisions. Thus, even if we believe our lodging properties are being operated inefficiently or in a manner that does not result in satisfactory operating results, we may not be able to require the third-party management company or the tenants to change their method of operation of our lodging properties. Our results of operations, financial position, cash flows and our ability to service debt and to make distributions to stockholders are, therefore, dependent on the ability of our Property Manager and other third-party property managers to operate our lodging properties successfully. Any negative publicity or other adverse developments that affect that operator and/or its affiliated brands generally may adversely affect our results of operations, financial condition, and consequently cash flows thereby impacting our ability to service debt, and to make distributions to our stockholders. There can be no assurance that our affiliate continues to manage any lodging properties we acquire.

We will rely on our Property Manager and any third-party property manager that may be retained, to establish and maintain adequate internal controls over financial reporting at our lodging properties. In doing so, our Property Manager, and any third-party property manager that may be retained, should have policies and procedures in place which allow it to effectively monitor and report to us the operating results of our lodging properties which ultimately are included in our consolidated financial statements. When the operations of our lodging properties become a component of our consolidated financial statements, we will evaluate the effectiveness of the internal controls over financial reporting at all our properties, including our lodging properties, in connection with the certifications we provide in our quarterly and annual reports on Form 10-Q and Form 10-K, respectively. If such controls are not effective, the accuracy of the results of our operations that we report could be affected. Accordingly, our ability to conclude that, as a company, our internal controls are effective is significantly dependent upon the effectiveness of internal controls that our Property Manager and any third-party property manager that may be retained, will implement at our lodging properties. It is possible that we could have a significant deficiency or material weakness as a result of the ineffectiveness of the internal controls at one or more of our lodging properties.

If we replace our Property Manager or a tenant or terminate a third-party property manager that we hired in the future, we may be required by the terms of the relevant management agreement or lease to pay substantial termination fees, and we may experience significant disruptions at the affected lodging properties. We may not be able to make arrangements with a third-party management company or tenants with substantial prior lodging experience in the future. If we experience such disruptions, it may adversely affect our results of operations, financial condition and our cash flows, including our ability to service debt and to make distributions to our stockholders.

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Our use of the taxable REIT subsidiary structure will increase our expenses.

A taxable REIT subsidiary structure will subject us to the risk of increased lodging operating expenses. The performance of our taxable REIT subsidiaries will be based on the operations of our lodging properties. Our operating risks will include not only changes in hotel revenues and changes to our taxable REIT subsidiaries’ ability to pay the rent due to us under the leases, but also increased hotel operating expenses, including, but not limited to, the following cost elements:

• wage and benefit costs;

• repair and maintenance expenses;

• energy costs;

• property taxes;

• insurance costs; and

• other operating expenses.

Any increases in one or more these operating expenses could have a significant adverse impact on our results of operations, cash flows and financial position.

Failure to maintain franchise licenses could decrease our revenues.

The inability to maintain franchise licenses could decrease our revenues. Maintenance of franchise licenses for our lodging properties is subject to maintaining our franchisor’s operating standards and other terms and conditions. Franchisors periodically inspect lodging properties to ensure that such lodging properties are maintained in accordance with their standards. Failure to maintain our lodging properties in accordance with these standards or comply with other terms and conditions of the applicable franchise agreement could result in a franchise license being canceled. If a franchise license terminates due to our failure to make required improvements or to otherwise comply with its terms, we may also be liable to the franchisor for a termination fee. As a condition to the maintenance of a franchise license, our franchisor could also require usto make capital expenditures, even if we do not believe the capital improvements are necessary, desirable, or likely to result in an acceptable return on our investment. We may risk losing a franchise license if we do not make franchisor-required capital expenditures.

If our franchisor terminates the franchise license, we may try either to obtain a suitable replacement franchise or to operate the lodging property without a franchise license. The loss of a franchise license could materially and adversely affect the operations or the underlying value of the lodging property because of the loss associated with the brand recognition and/or the marketing support and centralized reservation systems provided by the franchisor. A loss of a franchise license for one or more lodging properties could materially and adversely affect our results of operations, financial condition and our cash flows, including our ability to service debt and make distributions to our stockholders.

There are risks associated with employing hotel employees.

We will generally be subject to risks associated with the employment of hotel employees. Any lodging properties we acquire will be leased to one or more taxable REIT subsidiaries and be subject to management agreements with our Property Manager or a third-party property manager to operate the properties that we do not lease to a third party under a net lease. Hotel operating revenues and expenses for these properties will be included in our consolidated results of operations. As a result, although we do not directly employ or manage the labor force at our lodging properties, we are subject to many of the costs and risks generally associated with the hotel labor force. Our Property Manager or a third-party property manager will be responsible for hiring and maintaining the labor force at each of our lodging properties and for establishing and maintaining the appropriate processes and controls over such activities. From time to time, the operations of our lodging properties may be disrupted through strikes, public demonstrations or other labor actions and related publicity. We may also incur increased legal costs and indirect labor costs as a result of the aforementioned disruptions, or contract disputes or other events. A third-party property manager may be targeted by union actions or adversely impacted by the disruption caused by organizing activities. Significant adverse disruptions caused by union activities or increased costs affiliated with such activities could materially and adversely affect our results of operations, financial condition and our cash flows, including our ability to service debt and make distributions to our stockholders.

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The expanding use of internet travel websites by customers can adversely affect our profitability.

The increasing use of internet travel intermediaries by consumers may experience fluctuations in operating performance during the year and otherwise adversely affect our profitability and cash flows. Our Property Manager and any third-party property manager will rely upon Internet travel intermediaries such as Travelocity.com, Expedia.com, Orbitz.com, Hotels.com and Priceline.com to generate demand for our lodging properties. As Internet bookings increase, these intermediaries may be able to obtain higher commissions, reduced room rates or other significant contract concessions from our Property Manager or any third-party property manager. Moreover, some of these Internet travel intermediaries are attempting to offer hotel rooms as a commodity, by increasing the importance of price and general indicators of quality (such as “three-star downtown hotel”) at the expense of brand identification. Consumers may eventually develop brand loyalties to their reservations system rather than to our Property Manager or any third-party property manager and/or our brands, which could have an adverse effect on our business because we will rely heavily on brand identification. If the amount of sales made through Internet intermediaries increases significantly and our Property Manager or a third-party property manager fails to appropriately price room inventory in a manner that maximizes the opportunity for enhanced profit margins, room revenues may flatten or decrease and our profitability may be adversely affected.

Risks Related to Real Estate-Related Investments

Our investments in mortgage, mezzanine, bridge and other loans as well as our investments in mortgage-backed securities, collateralized debt obligations and other debt may be affected by unfavorable real estate market conditions, which could decrease the value of those assets and the return on our stockholders' investment.

If we make or invest in mortgage, mezzanine or other real estate-related loans, we will be at risk of defaults by the borrowers on those loans. These defaults may be caused by many conditions beyond our control, including interest rate levels and local and other economic conditions affecting real estate values. We will not know whether the values of the properties ultimately securing our loans will remain at the levels existing on the dates of origination of those loans. If the values of the underlying properties drop, our risk will increase because of the lower value of the security associated with such loans. Our investments in mortgage-backed securities, collateralized debt obligations and other real estate-related debt will be similarly affected by real estate market conditions.

If we make or invest in mortgage, mezzanine, bridge or other real estate-related loans, our loans will be subject to interest rate fluctuations that will affect our returns as compared to market interest rates; accordingly, the value of our stockholders' investment would be subject to fluctuations in interest rates.

If we make or invest in fixed-rate, long-term loans and interest rates rise, the loans could yield a return that is lower than then-current market rates. If interest rates decrease, we will be adversely affected to the extent that loans are prepaid because we may not be able to make new loans at the higher interest rate. If we invest in variable-rate loans and interest rates decrease, our revenues will also decrease. For these reasons, if we invest in mortgage, mezzanine, bridge or other real estate-related loans, our returns on those loans and the value of our stockholders' investment will be subject to fluctuations in interest rates.

We have not established investment criteria requiring a minimum credit quality of borrowers.

We have not established investment criteria requiring a minimum credit quality of borrowers of uninsured mortgage assets acquired or originated by us. As a result, the underlying borrowers of our uninsured mortgage assets may have low credit quality. We may experience losses due to such low credit quality.

Mortgage investments that are not United States government insured and non-investment-grade mortgage assets involve risk of loss.

We may originate and acquire uninsured and non-investment-grade mortgage loans and mortgage assets, including mezzanine loans, as part of our investment strategy. While holding these interests, we will be subject to risks of borrower defaults, bankruptcies, fraud and losses and special hazard losses that are not covered by standard hazard insurance. Also, the costs of financing the mortgage loans could exceed the return on the mortgage loans. In the event of any default under mortgage loans held by us, we will bear the risk of loss of principal and non-payment of interest and fees to the extent of any deficiency between the value of the mortgage collateral and the principal amount of the mortgage loan. To the extent we suffer such losses with respect to our investments in mortgage loans, the value of our stockholders’ investments may be adversely affected.

We may invest in non-recourse loans, which will limit our recovery to the value of the mortgaged property.

Our mortgage loan assets may be non-recourse loans. With respect to our non-recourse mortgage loan assets, in the event of a borrower default, the specific mortgaged property and other assets, if any, pledged to secure the relevant mortgage loan, may be less than the amount owed under the mortgage loan. As to those mortgage loan assets that provide for recourse against the borrower and its assets generally, we cannot assure our stockholders that the recourse will provide a recovery in respect of a defaulted mortgage loan greater than the liquidation value of the mortgaged property securing that mortgage loan.

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Interest rate fluctuations will affect the value of our mortgage assets, net income and common stock.

Interest rates are highly sensitive to many factors, including governmental monetary and tax policies, domestic and international economic and political considerations and other factors beyond our control. Interest rate fluctuations can adversely affect our income in many ways and present a variety of risks including the risk of variances in the yield curve, a mismatch between asset yields and borrowing rates, and changing prepayment rates.

Variances in the yield curve may reduce our net income. The relationship between short-term and longer-term interest rates is often referred to as the “yield curve.” Short-term interest rates are ordinarily lower than longer-term interest rates. If short-term interest rates rise disproportionately relative to longer-term interest rates (a flattening of the yield curve), our borrowing costs may increase more rapidly than the interest income earned on our assets. Because our assets may bear interest based on longer-term rates than our borrowings, a flattening of the yield curve would tend to decrease our net income and the market value of our mortgage loan assets. Additionally, to the extent cash flows from investments that return scheduled and unscheduled principal are reinvested in mortgage loans, the spread between the yields of the new investments and available borrowing rates may decline, which would likely decrease our net income. It is also possible that short-term interest rates may exceed longer-term interest rates (a yield curve inversion), in which event our borrowing costs may exceed our interest income and we could incur operating losses.

Prepayment rates on our mortgage loans may adversely affect our yields.

The value of our mortgage loan assets may be affected by prepayment rates on investments. Prepayment rates are influenced by changes in current interest rates and a variety of economic, geographic and other factors beyond our control, and consequently, such prepayment rates cannot be predicted with certainty. For investments that we acquire but do not originate, we may be unable to secure protection from prepayment in the form of prepayment lock out periods or prepayment penalties. In periods of declining mortgage interest rates, prepayments on mortgages generally increase. If general interest rates decline as well, the proceeds of such prepayments received during such periods are likely to be reinvested by us in assets yielding less than the yields on the investments that were prepaid. In addition, the market value of mortgage investments may, because of the risk of prepayment, benefit less from declining interest rates than from other fixed-income securities. Conversely, in periods of rising interest rates, prepayments on mortgages generally decrease, in which case we would not have the prepayment proceeds available to invest in assets with higher yields. Under certain interest rate and prepayment scenarios, we may fail to fully recoup our cost of acquisition of certain investments.

No assurances can be given that we can make an accurate assessment of the yield to be produced by an investment. Many factors beyond our control are likely to influence the yield on the investments, including, but not limited to, competitive conditions in the local real estate market, local and general economic conditions and the quality of management of the underlying property. Our inability to accurately assess investment yields may result in our purchasing assets that do not perform as well as expected, which may adversely affect the value of our stockholders’ investments.

Volatility of values of mortgaged properties may adversely affect our mortgage loans.

Real estate property values and net operating income derived from real estate properties are subject to volatility and may be affected adversely by a number of factors, including the risk factors described in this Form 10-K relating to general economic conditions and owning real estate investments. In the event its net operating income decreases, a borrower may have difficulty paying our mortgage loan, which could result in losses to us. In addition, decreases in property values reduce the value of the collateral and the potential proceeds available to a borrower to repay our mortgage loans, which could also cause us to suffer losses.

Mezzanine loans involve greater risks of loss than senior loans secured by income producing properties.

We may make and acquire mezzanine loans. These types of mortgage loans are considered to involve a higher degree of risk than long-term senior mortgage lending secured by income-producing real property due to a variety of factors, including the loan being entirely unsecured or, if secured, becoming unsecured as a result of foreclosure by the senior lender. We may not recover some or all of our investment in these loans. In addition, mezzanine loans may have higher loan-to-value ratios than conventional mortgage loans resulting in less equity in the property and increasing the risk of loss of principal.

Our investments in subordinated loans and subordinated mortgage-backed securities may be subject to losses.

We may acquire or originate subordinated loans and invest in subordinated mortgage-backed securities. In the event a borrower defaults on a subordinated loan and lacks sufficient assets to satisfy our loan, we may suffer a loss of principal or interest. In the event a borrower declares bankruptcy, we may not have full recourse to the assets of the borrower, or the assets of the borrower may not be sufficient to satisfy the loan. If a borrower defaults on our loan or on debt senior to our loan, or in the event of a borrower bankruptcy, our loan will be satisfied only after the senior debt is paid in full. Where debt senior to our loan exists, the presence of intercreditor arrangements may limit our ability to amend our loan documents, assign our loans, accept prepayments, exercise our remedies (through “standstill periods”), and control decisions made in bankruptcy proceedings relating to borrowers.

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We may invest in CMBS, which may increase our exposure to credit and interest rate risk.

We may invest in CMBS, which may increase our exposure to credit and interest rate risk. We have not adopted, and do not expect to adopt, any formal policies or procedures designed to manage risks associated with our investments in CMBS. In this context, credit risk is the risk that borrowers will default on the mortgages underlying the CMBS. While we may invest in CMBS guaranteed by U.S. government agencies, such as the Government National Mortgage Association or U.S. government sponsored enterprises, such as the Federal National Mortgage Association, or the Federal Home Loan Mortgage Corporation, there is no guarantee that such will be available or continue to be guaranteed by the U.S. government. Interest rate risk occurs as prevailing market interest rates change relative to the current yield on the CMBS. For example, when interest rates fall, borrowers are more likely to prepay their existing mortgages to take advantage of the lower cost of financing. As prepayments occur, principal is returned to the holders of the CMBS sooner than expected, thereby lowering the effective yield on the investment. On the other hand, when interest rates rise, borrowers are more likely to maintain their existing mortgages. As a result, prepayments decrease, thereby extending the average maturity of the mortgages underlying the CMBS. If we are unable to manage these risks effectively, our results of operations, financial condition and ability to pay distributions to our stockholders will be adversely affected.

Any real estate debt security that we originate or purchase is subject to the risks of delinquency and foreclosure.

We may originate and purchase real estate debt securities, which are subject to numerous risks including delinquency and foreclosure and risks of loss. Typically, we will not have recourse to the personal assets of our borrowers. The ability of a borrower to repay a real estate debt security secured by an income-producing property depends primarily upon the successful operation of the property, rather than upon the existence of independent income or assets of the borrower.

We bear the risks of loss of principal to the extent of any deficiency between the value of the collateral and the principal and accrued interest of the real estate debt security, which could have a material adverse effect on our cash flow from operations and limit amounts available for distribution to our stockholders. In the event of the bankruptcy of a borrower, the real estate debt security to that borrower will be deemed to be collateralized only to the extent of the value of the underlying collateral at the time of bankruptcy (as determined by the bankruptcy court), and the lien securing the real estate debt security will be subject to the avoidance powers of the bankruptcy trustee or debtor-in-possession to the extent the lien is unenforceable under state law. Foreclosure of a real estate debt security can be an expensive and lengthy process that could have a substantial negative effect on our anticipated return on the foreclosed real estate debt security. We also may be forced to foreclose on certain properties, be unable to sell these properties and be forced to incur substantial expenses to improve operations at the property.

In addition, the value of mortgage loan investments is impacted by changes in the value of underlying collateral (if any), interest rates, volatility and prepayment rates, among other things. For example:

• interest rate increases will reduce the amount of payments leaving us with a debt security generating less than market yields and reducing the value of our real estate debt;

• prepayment rates may increase if interest rates decline causing us to reinvest the proceeds in potentially lower yielding investments;

• decreases in the collateral for a non-recourse mortgage loan will likely reduce the value of the investment even if the borrower is current on payments;

• mezzanine loans investments may be even more volatile because, among other things, the senior lender may be able to exercise remedies that protect the senior lenders but that result in us losing our investment.

Our investments in real estate related common equity securities will be subject to specific risks relating to the particular issuer of the securities and may be subject to the general risks of investing in subordinated real estate securities, which may result in losses to us.

We may make equity investments in other REITs and other real estate companies. If we make such investments, we will target a public company that owns commercial real estate or real estate-related assets when we believe its stock is trading at a discount to that company’s net asset value.

We may eventually seek to acquire or gain a controlling interest in the companies that we target. We do not expect our non-controlling equity investments in other public companies to exceed 5.0% of the proceeds of our IPO, assuming we sell the maximum offering amount, or to represent a substantial portion of our assets at any one time. Our investments in real estate-related common equity securities will involve special risks relating to the particular issuer of the equity securities, including the financial condition and business outlook of the issuer. Issuers of real estate-related common equity securities generally invest in real estate or real estate-related assets and are subject to the inherent risks associated with real estate-related investments discussed in this Form 10-K.

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Real estate-related common equity securities are generally unsecured and may also be subordinated to other obligations of the issuer. As a result, investments in real estate-related common equity securities are subject to risks of: (1) limited liquidity in the secondary trading market; (2) substantial market price volatility resulting from changes in prevailing interest rates; (3) subordination to the prior claims of banks and other senior lenders to the issuer; (4) the operation of mandatory sinking fund or call/redemption provisions during periods of declining interest rates that could cause the issuer to reinvest redemption proceeds in lower yielding assets; (5) the possibility that earnings of the issuer may be insufficient to meet its debt service and distribution obligations; and (6) the declining creditworthiness and potential for insolvency of the issuer during periods of rising interest rates and economic downturn. These risks may adversely affect the value of outstanding real estate-related common equity securities and the ability of the issuers thereof to make distribution payments.

Risks Associated with Debt Financing

We may incur mortgage indebtedness and other borrowings, which we have broad authority to incur, that may increase our business risks and decrease the value of our stockholders' investment.

We expect that in most instances, we will acquire real properties by using either existing financing or borrowing new funds. In addition, we may incur mortgage debt and pledge all or some of our real properties as security for that debt to obtain funds to acquire additional real properties. We may borrow if we need funds to satisfy the REIT tax qualification requirement that we generally distribute annually to our stockholders at least 90% of our REIT taxable income (which does not equal net income as calculated in accordance with GAAP), determined without regard to the deduction for dividends paid and excluding net capital gain. We also may borrow if we otherwise deem it necessary or advisable to assure that we maintain our qualification as a REIT.

There is no limitation on the amount we may borrow against any single improved property. Under our charter, our borrowings may not exceed 300% of our total “net assets” (as defined in our charter) as of the date of any borrowing, which is generally expected to be approximately 75% of the cost of our investments; however, we may exceed that limit if such excess is approved by a majority of our independent directors and disclosed to stockholders in our next quarterly report following such borrowing along with justification for exceeding such limit. This charter limitation, however, does not apply to individual real estate assets or investments. In addition, it is currently our intention to limit our borrowings to 40.0% - 50.0% of the aggregate fair market value of our assets, unless excess borrowing is approved by a majority of the independent directors and disclosed to stockholders in our next quarterly report following such borrowing along with justification for such excess borrowing. This limitation will be calculated after the close of our IPO and once we have invested substantially all the proceeds of the primary offering and does not apply to individual real estate assets or investments. However, subsequent events, including changes in the fair market value of our assets, could result in our exceeding these limits. We expect that during the period of our IPO we seek independent director approval of borrowings in excess of these limitations since we will then be in the process of raising our equity capital to acquire our portfolio. As a result, we expect that our debt levels will be higher until we have invested most of our capital. High debt levels would cause us to incur higher interest charges, would result in higher debt service payments and could be accompanied by restrictive covenants. These factors could limit the amount of cash we have available to distribute and could result in a decline in the value of our stockholders' investment.

If there is a shortfall between the cash flow from a property and the cash flow needed to service mortgage debt on a property, then the amount available for distributions to stockholders may be reduced. In addition, incurring mortgage debt increases the risk of loss since defaults on indebtedness secured by a property may result in lenders initiating foreclosure actions. In that case, we could lose the property securing the loan that is in default, thus reducing the value of our stockholders' investment. For U.S. federal income tax purposes, a foreclosure of any of our properties would be treated as a sale of the property for a purchase price equal to the outstanding balance of the debt secured by the mortgage. If the outstanding balance of the debt secured by the mortgage exceeds our tax basis in the property, we would recognize taxable income on foreclosure, but would not receive any cash proceeds. In such event, we may be unable to pay the amount of distributions required in order to maintain our REIT status. We may give full or partial guarantees to lenders of mortgage debt to the entities that own our properties. When we provide a guaranty on behalf of an entity that owns one of our properties, we will be responsible to the lender for satisfaction of the debt if it is not paid by such entity. If any mortgages contain cross-collateralization or cross-default provisions, a default on a single property could affect multiple properties. If any of our properties are foreclosed upon due to a default, our ability to pay cash distributions to our stockholders will be adversely affected which could result in our losing our REIT status and would result in a decrease in the value of our stockholders' investment.

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Volatility or disruption in debt markets could have a material adverse impact on our earnings and financial condition.

Volatility or disruption in debt markets could result in lenders increasing the cost for debt financing. If our overall cost of borrowings increases, either by increases in the index rates or by increases in lender spreads, we will need to factor such increases into the economics of future acquisitions. This may result in future acquisitions generating lower overall economic returns and potentially reducing future cash flow available for distribution. If debt markets experience volatility or disruptions, our ability to borrow monies to finance the purchase of, or other activities related to, real estate assets will be negatively impacted. If we are unable to borrow monies on terms and conditions that we find acceptable, we likely will have to reduce the number of properties we can purchase, and the return on the properties we do purchase may be lower. In addition, we may find it difficult, costly or impossible to refinance indebtedness which is maturing.

In addition, the state of the debt markets could have an impact on the overall amount of capital investing in real estate which may result in price or value decreases of real estate assets. Although this may benefit us for future acquisitions, it could negatively impact the current value of our existing assets.

We cannot predict the impact future actions by regulators or government bodies, including the U.S. Federal Reserve, will have on real estate debt markets or on our business, and any such actions may negatively impact us.

Regulators and U.S. government bodies have a major impact on our business. The U.S. Federal Reserve is a major participant in, and its actions significantly impact, the commercial real estate debt markets. For example, quantitative easing, a program implemented by the U.S. Federal Reserve to keep long-term interest rates low and stimulate the U.S. economy, has had the effect of reducing the difference between short-term and long-term interest rates. However, there have been discussions surrounding a “tapering” of quantitative easing, which could increase long-term interest rates and the cost of borrowing. This may result in future acquisitions by us generating lower overall economic returns and potentially reducing future cash flow available for distribution. We cannot predict or control the impact future actions by regulators or government bodies, such as the U.S. Federal Reserve, will have on our business. Such actions could materially and adversely affect our financial condition, results of operations and ability to pay distributions to our stockholders.

Increases in interest rates could increase the amount of our debt payments and adversely affect our ability to pay distributions to our stockholders.

We expect that we will incur indebtedness in the future. To the extent that we incur variable rate debt, increases in interest rates would increase our interest costs, which could reduce our cash flows and our ability to pay distributions to our stockholders. In addition, if we need to repay existing debt during periods of rising interest rates, we could be required to liquidate one or more of our investments in properties at times that may not permit realization of the maximum return on such investments.

We may not be able to access financing sources on attractive terms, which could adversely affect our ability to execute our business plan.

We may finance our assets over the long-term through a variety of means, including repurchase agreements, credit facilities, issuance of commercial mortgage-backed securities, collateralized debt obligations and other structured financings. Our ability to execute this strategy will depend on various conditions in the markets for financing in this manner that are beyond our control, including lack of liquidity and greater credit spreads. We cannot be certain that these markets will remain an efficient source of long-term financing for our assets. If our strategy is not viable, we will have to find alternative forms of long-term financing for our assets, as secured revolving credit facilities and repurchase facilities may not accommodate long-term financing. This could subject us to more recourse indebtedness and the risk that debt service on less efficient forms of financing would require a larger portion of our cash flows, thereby reducing cash available for distribution to our stockholders and funds available for operations as well as for future business opportunities.

Lenders may require us to enter into restrictive covenants relating to our operations, which could limit our ability to make distributions to our stockholders.

When providing financing, a lender may impose restrictions on us that affect our distribution and operating policies and our ability to incur additional debt. Loan agreements we enter may contain covenants that limit our ability to further mortgage a property, discontinue insurance coverage or replace our Advisor. In addition, loan documents may limit our ability to replace a property’s property manager or terminate certain operating or lease agreements related to a property. These or other limitations would decrease our operating flexibility and our ability to achieve our operating objectives.

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Our derivative financial instruments that we may use to hedge against interest rate fluctuations may not be successful in mitigating our risks associated with interest rates and could reduce the overall returns on our stockholders’ investments.

We may use derivative financial instruments to hedge exposures to changes in interest rates on loans secured by our assets, but no hedging strategy can protect us completely. We cannot assure our stockholders that our hedging strategy and the derivatives that we use will adequately offset the risk of interest rate volatility or that our hedging transactions will not result in losses. In addition, the use of such instruments may reduce the overall return on our investments. These instruments may also generate income that may not be treated as qualifying REIT income for purposes of the 75% Gross Income Test or 95% Gross Income Test.

Interest-only and adjustable rate indebtedness may increase our risk of default and ultimately may reduce our funds available for distribution to our stockholders.

We may finance our property acquisitions using interest-only mortgage indebtedness. During the interest-only period, the amount of each scheduled payment will be less than that of a traditional amortizing mortgage loan. The principal balance of the mortgage loan will not be reduced (except in the case of prepayments) because there are no scheduled monthly payments of principal during this period. After the interest-only period, we will be required either to make scheduled payments of amortized principal and interest or to make a lump-sum or “balloon” payment at maturity. These required principal or balloon payments will increase the amount of our scheduled payments and may increase our risk of default under the related mortgage loan. Our ability to make a balloon payment at maturity is uncertain and may depend upon our ability to obtain additional financing or our ability to sell the property. At the time the balloon payment is due, we may or may not be able to refinance the balloon payment on terms as favorable as the original loan or sell the property at a price sufficient to make the balloon payment. The effect of a refinancing or sale could affect the rate of return to stockholders and the projected time of disposition of our assets. In addition, payments of principal and interest made to service our debts may leave us with insufficient cash to pay the distributions that we are required to pay to maintain our qualification as a REIT. Any of these results would have a significant, negative impact on our stockholders’ investments.

Finally, if the mortgage loan has an adjustable interest rate, the amount of our scheduled payments also may increase at a time of rising interest rates. Increased payments and substantial principal or balloon maturity payments will reduce the funds available for distribution to our stockholders because cash otherwise available for distribution will be required to pay principal and interest associated with these mortgage loans.

U.S. Federal Income Tax Risks

Our failure to qualify or remain qualified as a REIT would subject us to U.S. federal income tax and potentially state and local tax, and would adversely affect our operations and the market price of our common stock.

We intend to elect and qualify to be taxed as a REIT commencing with our taxable year ending December 31, 2014 and intend to operate in a manner that would allow us to continue to qualify as a REIT. However, we may terminate our REIT qualification, if our board of directors determines that not qualifying as a REIT is in our best interests, or inadvertently. Our qualification as a REIT depends upon our satisfaction of certain asset, income, organizational, distribution, stockholder ownership and other requirements on a continuing basis. The REIT qualification requirements are extremely complex and interpretation of the U.S. federal income tax laws governing qualification as a REIT is limited. Furthermore, any opinion of our counsel, including tax counsel, as to our eligibility to qualify or remain qualified as a REIT is not binding on the IRS and is not a guarantee that we will qualify, or continue to qualify, as a REIT. Accordingly, we cannot be certain that we will be successful in operating so we can qualify or remain qualified as a REIT. Our ability to satisfy the asset tests depends on our analysis of the characterization and fair market values of our assets, some of which are not susceptible to a precise determination, and for which we will not obtain independent appraisals. Our compliance with the REIT income or quarterly asset requirements also depends on our ability to successfully manage the composition of our income and assets on an ongoing basis. Accordingly, if certain of our operations were to be recharacterized by the IRS, such recharacterization would jeopardize our ability to satisfy all requirements for qualification as a REIT. Furthermore, future legislative, judicial or administrative changes to the U.S. federal income tax laws could be applied retroactively, which could result in our disqualification as a REIT.

If we fail to qualify as a REIT for any taxable year, and we do not qualify for certain statutory relief provisions, we will be subject to U.S. federal income tax on our taxable income at corporate rates. In addition, we would generally be disqualified from treatment as a REIT for the four taxable years following the year of losing our REIT qualification. Losing our REIT qualification would reduce our net earnings available for investment or distribution to stockholders because of the additional tax liability. In addition, distributions to stockholders would no longer qualify for the dividends paid deduction, and we would no longer be required to make distributions. If this occurs, we might be required to borrow funds or liquidate some investments in order to pay the applicable tax.

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Even if we qualify as a REIT, in certain circumstances, we may incur tax liabilities that would reduce our cash available for distribution to our stockholders.

Even if we qualify and maintain our status as a REIT, we may be subject to U.S. federal, state and local income taxes. For example, net income from the sale of properties that are “dealer” properties sold by a REIT (a “prohibited transaction” under the Code) will be subject to a 100% tax. We may not make sufficient distributions to avoid excise taxes applicable to REITs. We also may decide to retain net capital gain we earn from the sale or other disposition of our property and pay U.S. federal income tax directly on such income. In that event, our stockholders would be treated as if they earned that income and paid the tax on it directly. However, stockholders that are tax-exempt, such as charities or qualified pension plans, would have no benefit from their deemed payment of such tax liability unless they file U.S. federal income tax returns and thereon seek a refund of such tax. We also will be subject to corporate tax on any undistributed REIT taxable income. We also may be subject to state and local taxes on our income or property, including franchise, payroll and transfer taxes, either directly or at the level of our operating partnership or at the level of the other companies through which we indirectly own our assets, such as our taxable REIT subsidiaries, which are subject to full U.S. federal, state, local and foreign corporate-level income taxes. Any taxes we pay directly or indirectly will reduce our cash available for distribution to our stockholders.

To qualify as a REIT we must meet annual distribution requirements, which may force us to forgo otherwise attractive opportunities or borrow funds during unfavorable market conditions. This could delay or hinder our ability to meet our investment objectives and reduce our stockholders' overall return.

In order to qualify as a REIT, we must distribute annually to our stockholders at least 90% of our REIT taxable income (which does not equal net income as calculated in accordance with GAAP), determined without regard to the deduction for dividends paid and excluding net capital gain. We will be subject to U.S. federal income tax on our undistributed REIT taxable income and net capital gain and to a 4% nondeductible excise tax on any amount by which distributions we pay with respect to any calendar year are less than the sum of (a) 85% of our ordinary income, (b) 95% of our capital gain net income and (c) 100% of our undistributed income from prior years. These requirements could cause us to distribute amounts that otherwise would be spent on investments in real estate assets and it is possible that we might be required to borrow funds, possibly at unfavorable rates, or sell assets to fund these distributions. It is possible that we might not always be able to make distributions sufficient to meet the annual distribution requirements and to avoid U.S. federal income and excise taxes on our earnings while we qualify as a REIT.

Certain of our business activities are potentially subject to the prohibited transaction tax, which could reduce the return on our stockholders' investment.

For so long as we qualify as a REIT, our ability to dispose of property during the first few years following acquisition may be restricted to a substantial extent as a result of our REIT qualification. Under applicable provisions of the Code regarding prohibited transactions by REITs, while we qualify as a REIT, we will be subject to a 100% penalty tax on any gain recognized on the sale or other disposition of any property (other than foreclosure property) that we own, directly or indirectly through any subsidiary entity, including our operating partnership, but generally excluding taxable REIT subsidiaries, that is deemed to be inventory or property held primarily for sale to customers in the ordinary course of a trade or business. Whether property is inventory or otherwise held primarily for sale to customers in the ordinary course of a trade or business depends on the particular facts and circumstances surrounding each property. During such time as we qualify as a REIT, we intend to avoid the 100% prohibited transaction tax by (a) conducting activities that may otherwise be considered prohibited transactions through a taxable REIT subsidiary (but such taxable REIT subsidiary will incur corporate rate income taxes with respect to any income or gain recognized by it), (b) conducting our operations in such a manner so that no sale or other disposition of an asset we own, directly or through any subsidiary, will be treated as a prohibited transaction, or (c) structuring certain dispositions of our properties to comply with the requirements of the prohibited transaction safe harbor available under the Code for properties that, among other requirements, have been held for at least two years. No assurance can be given that any particular property we own, directly or through any subsidiary entity, including our operating partnership, but generally excluding taxable REIT subsidiaries, will not be treated as inventory or property held primarily for sale to customers in the ordinary course of a trade or business.

Our taxable REIT subsidiaries are subject to corporate-level taxes and our dealings with our taxable REIT subsidiaries may be subject to 100% excise tax.

A REIT may own up to 100% of the stock of one or more taxable REIT subsidiaries. Both the subsidiary and the REIT must jointly elect to treat the subsidiary as a taxable REIT subsidiary. A corporation of which a taxable REIT subsidiary directly or indirectly owns more than 35% of the voting power or value of the stock will automatically be treated as a taxable REIT subsidiary. Overall, no more than 25% of the gross value of a REIT’s assets may consist of stock or securities of one or more taxable REIT subsidiaries.

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A taxable REIT subsidiary may hold assets and earn income that would not be qualifying assets or income if held or earned directly by a REIT, including gross income from operations pursuant to management contracts. We must operate our “qualified lodging facilities” through one or more taxable REIT subsidiaries that leases such properties from us. We may use our taxable REIT subsidiaries generally for other activities as well, such as to hold properties for sale in the ordinary course of a trade or business or to hold assets or conduct activities that we cannot conduct directly as a REIT. A taxable REIT subsidiary will be subject to applicable U.S. federal, state, local and foreign income tax on its taxable income. In addition, the rules, which are applicable to us as a REIT, also impose a 100% excise tax on certain transactions between a taxable REIT subsidiary and its parent REIT that are not conducted on an arm’s-length basis.

If our leases to our taxable REIT subsidiaries are not respected as true leases for U.S. federal income tax purposes, we would likely fail to qualify as a REIT.

To qualify as a REIT, we must satisfy two gross income tests, under which specified percentages of our gross income must be derived from certain sources, such as “rents from real property.” In order for such rent to qualify as “rents from real property” for purposes of the REIT gross income tests, the leases must be respected as true leases for U.S. federal income tax purposes and not be treated as service contracts, joint ventures or some other type of arrangement. If our leases are not respected as true leases for U.S. federal income tax purposes, we would likely fail to qualify as a REIT.

If our operating partnership failed to qualify as a partnership or is not otherwise disregarded for U.S. federal income tax purposes, we would cease to qualify as a REIT.

If the IRS were to successfully challenge the status of our operating partnership as a partnership or disregarded entity for such purposes, it would be taxable as a corporation. In such event, this would reduce the amount of distributions that the operating partnership could make to us. This also would result in our failing to qualify as a REIT, and becoming subject to a corporate level tax on our income. This substantially would reduce our cash available to pay distributions and the yield on our stockholders' investment. In addition, if any of the partnerships or limited liability companies through which our operating partnership owns its properties, in whole or in part, loses its characterization as a partnership and is otherwise not disregarded for U.S. federal income tax purposes, it would be subject to taxation as a corporation, thereby reducing distributions to the operating partnership. Such a recharacterization of an underlying property owner could also threaten our ability to maintain our REIT qualification.

If our “qualified lodging facilities” are not properly leased to a taxable REIT subsidiary or the managers of such “qualified lodging facilities” do not qualify as “eligible independent contractors,” we could fail to qualify as a REIT.

In general, we cannot operate any lodging facilities and can only indirectly participate in the operation of “qualified lodging facilities” on an after-tax basis through leases of such properties to our taxable REIT subsidiaries. A “qualified lodging facility” is a hotel, motel, or other establishment in which more than one-half of the dwelling units are used on a transient basis at which or in connection with which wagering activities are not conducted. Rent paid by a lessee that is a “related party tenant” of ours will not be qualifying income for purposes of the two gross income tests applicable to REITs. A taxable REIT subsidiary that leases lodging facilities from us will not be treated as a “related party tenant” with respect to our lodging facilities that are managed by an independent management company, so long as the independent management company qualifies as an “eligible independent contractor.”

Each of the management companies that enters into a management contract with our taxable REIT subsidiaries must qualify as an “eligible independent contractor” under the REIT rules in order for the rent paid to us by our taxable REIT subsidiaries to be qualifying income for purposes of the REIT gross income tests. An “eligible independent contractor” is an independent contractor that, at the time such contractor enters into a management or other agreement with a taxable REIT subsidiary to operate a “qualified lodging facility,” is actively engaged in the trade or business of operating “qualified lodging facilities” for any person not related, as defined in the Code, to us or the taxable REIT subsidiary. Among other requirements, in order to qualify as an independent contractor a manager must not own, directly or applying attribution provisions of the Code, more than 35% of our outstanding shares of stock (by value), and no person or group of persons can own more than 35% of our outstanding shares and 35% of the ownership interests of the manager (taking into account only owners of more than 5% of our shares and, with respect to ownership interest in such managers that are publicly traded, only holders of more than 5% of such ownership interests). The ownership attribution rules that apply for purposes of the 35% thresholds are complex. There can be no assurance that the levels of ownership of our stock by our managers and their owners will not be exceeded.

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Our investments in certain debt instruments may cause us to recognize “phantom income” for U.S. federal income tax purposes even though no cash payments have been received on the debt instruments, and certain modifications of such debt by us could cause the modified debt to not qualify as a good REIT asset, thereby jeopardizing our REIT qualification.

Our taxable income may substantially exceed our net income as determined based on GAAP, or differences in timing between the recognition of taxable income and the actual receipt of cash may occur. For example, we may acquire assets, including debt securities requiring us to accrue original issue discount, or recognize market discount income, that generate taxable income in excess of economic income or in advance of the corresponding cash flow from the assets referred to as “phantom income.” In addition, if a borrower with respect to a particular debt instrument encounters financial difficulty rendering it unable to pay stated interest as due, we may nonetheless be required to continue to recognize the unpaid interest as taxable income with the effect that we will recognize income but will not have a corresponding amount of cash available for distribution to our stockholders.

As a result of the foregoing, we may generate less cash flow than taxable income in a particular year and find it difficult or impossible to meet the REIT distribution requirements in certain circumstances. In such circumstances, we may be required to (a) sell assets in adverse market conditions, (b) borrow on unfavorable terms, (c) distribute amounts that would otherwise be used for future acquisitions or used to repay debt, or (d) make a taxable distribution of our shares of common stock as part of a distribution in which stockholders may elect to receive shares of common stock or (subject to a limit measured as a percentage of the total distribution) cash, in order to comply with the REIT distribution requirements.

Moreover, we may acquire distressed debt investments that require subsequent modification by agreement with the borrower. If the amendments to the outstanding debt are “significant modifications” under the applicable Treasury Regulations, the modified debt may be considered to have been reissued to us in a debt-for-debt taxable exchange with the borrower. This deemed reissuance may prevent the modified debt from qualifying as a good REIT asset if the underlying security has declined in value and would cause us to recognize income to the extent the principal amount of the modified debt exceeds our adjusted tax basis in the unmodified debt.

The failure of a mezzanine loan to qualify as a real estate asset would adversely affect our ability to qualify as a REIT.

In general, in order for a loan to be treated as a qualifying real estate asset producing qualifying income for purposes of the REIT asset and income tests, the loan must be secured by real property. We may acquire mezzanine loans that are not directly secured by real property but instead secured by equity interests in a partnership or limited liability company that directly or indirectly owns real property. In Revenue Procedure 2003-65, the IRS provided a safe harbor pursuant to which a mezzanine loan that is not secured by real estate would, if it meets each of the requirements contained in the Revenue Procedure, be treated by the IRS as a qualifying real estate asset. Although the Revenue Procedure provides a safe harbor on which taxpayers may rely, it does not prescribe rules of substantive tax law and in many cases it may not be possible for us to meet all the requirements of the safe harbor. We cannot provide assurance that any mezzanine loan in which we invest would be treated as a qualifying asset producing qualifying income for REIT qualification purposes. If any such loan fails either the REIT income or asset tests, we may be disqualified as a REIT.

We may choose to make distributions in our own stock, in which case our stockholders may be required to pay U.S. federal income taxes in excess of the cash dividends they receive.

In connection with our qualification as a REIT, we are required to distribute annually to our stockholders at least 90% of our REIT taxable income (which does not equal net income as calculated in accordance with GAAP), determined without regard to the deduction for dividends paid and excluding net capital gain. In order to satisfy this requirement, we may make distributions that are payable in cash and/or shares of our common stock (which could account for up to 80% of the aggregate amount of such distributions) at the election of each stockholder. Taxable stockholders receiving such distributions will be required to include the full amount of such distributions as ordinary dividend income to the extent of our current or accumulated earnings and profits, as determined for U.S. federal income tax purposes. As a result, U.S. stockholders may be required to pay U.S. federal income taxes with respect to such distributions in excess of the cash portion of the distribution received. Accordingly, U.S. stockholders receiving a distribution of our shares may be required to sell shares received in such distribution or may be required to sell other stock or assets owned by them, at a time that may be disadvantageous, in order to satisfy any tax imposed on such distribution. If a U.S. stockholder sells the stock that it receives as part of the distribution in order to pay this tax, the sales proceeds may be less than the amount included in income with respect to the distribution, depending on the market price of our stock at the time of the sale. Furthermore, with respect to certain non-U.S. stockholders, we may be required to withhold U.S. tax with respect to such distribution, including in respect of all or a portion of such distribution that is payable in stock, by withholding or disposing of part of the shares included in such distribution and using the proceeds of such disposition to satisfy the withholding tax imposed. In addition, if a significant number of our stockholders determine to sell shares of our common stock in order to pay taxes owed on dividend income, such sale may put downward pressure on the market price of our common stock.

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Various tax aspects of such a taxable cash/stock distribution are uncertain and have not yet been addressed by the IRS. No assurance can be given that the IRS will not impose requirements in the future with respect to taxable cash/stock distributions, including on a retroactive basis, or assert that the requirements for such taxable cash/stock distributions have not been met.

The taxation of distributions to our stockholders can be complex; however, distributions that we make to our stockholders generally will be taxable as ordinary income, which may reduce our stockholders' anticipated return from an investment in us.

Distributions that we make to our taxable stockholders out of current and accumulated earnings and profits (and not designated as capital gain dividends or qualified dividend income) generally will be taxable as ordinary income. However, a portion of our distributions may (1) be designated by us as capital gain dividends generally taxable as long-term capital gain to the extent that they are attributable to net capital gain recognized by us, (2) be designated by us as qualified dividend income generally to the extent they are attributable to dividends we receive from our taxable REIT subsidiaries, or (3) constitute a return of capital generally to the extent that they exceed our accumulated earnings and profits as determined for U.S. federal income tax purposes. A return of capital is not taxable, but has the effect of reducing the basis of a stockholder’s investment in our common stock.

Our stockholders may have tax liability on distributions that they elect to reinvest in common stock, but they would not receive the cash from such distributions to pay such tax liability.

If our stockholders participate in our DRIP, they will be deemed to have received, and for U.S. federal income tax purposes will be taxed on, the amount reinvested in shares of our common stock to the extent the amount reinvested was not a tax-free return of capital. In addition, our stockholders will be treated for tax purposes as having received an additional distribution to the extent the shares are purchased at a discount to fair market value. As a result, unless a stockholder is a tax-exempt entity, it may have to use funds from other sources to pay its tax liability on the value of the shares of common stock received.

Dividends payable by REITs generally do not qualify for the reduced tax rates available for some dividends.

Currently, the maximum tax rate applicable to qualified dividend income payable to U.S. stockholders that are individuals, trusts and estates is 20%. Dividends payable by REITs, however, generally are not eligible for this reduced rate. Although this does not adversely affect the taxation of REITs or dividends payable by REITs, the more favorable rates applicable to regular corporate qualified dividends could cause investors who are individuals, trusts and estates to perceive investments in REITs to be relatively less attractive than investments in the stocks of non-REIT corporations that pay dividends, which could adversely affect the value of the shares of REITs, including our common stock. Tax rates could be changed in future legislation.

If we were considered to actually or constructively pay a “preferential dividend” to certain of our stockholders, our status as a REIT could be adversely affected.

In order to qualify as a REIT, we must distribute annually to our stockholders at least 90% of our REIT taxable income (which does not equal net income as calculated in accordance with GAAP), determined without regard to the deduction for dividends paid and excluding net capital gain. In order for distributions to be counted as satisfying the annual distribution requirements for REITs, and to provide us with a REIT-level tax deduction, the distributions must not be “preferential dividends.” A dividend is not a preferential dividend if the distribution is pro rata among all outstanding shares of stock within a particular class, and in accordance with the preferences among different classes of stock as set forth in our organizational documents. Currently, there is uncertainty as to the IRS’s position regarding whether certain arrangements that REITs have with their stockholders could give rise to the inadvertent payment of a preferential dividend (e.g., the pricing methodology for stock purchased under a distribution reinvestment plan inadvertently causing a greater than 5% discount on the price of such stock purchased).

Initially, the per share price for our common stock pursuant to our DRIP will be $23.75, which is 95.0% of the primary offering price of $25.00 (which includes the maximum selling commissions and dealer manager fee). After the NAV pricing date, the per share price for our common stock pursuant to our DRIP will be equal to the per share NAV on the date that the distribution is payable, which, for U.S. federal income tax purposes, is intended to reflect the fair market value per share and does not include selling commissions or the dealer manager fee. If the IRS were to take a position contrary to our position that the per share NAV reflect the fair market value per share, it is possible that we may be treated as offering our stock under our DRIP at a discount greater than 5% of its fair market value resulting in the payment of a preferential dividend.

There is no de minimis exception with respect to preferential dividends. Therefore, if the IRS were to take the position that we inadvertently paid a preferential dividend, we may be deemed either to (a) have distributed less than 100% of our REIT taxable income and be subject to tax on the undistributed portion, or (b) have distributed less than 90% of our REIT taxable income and our status as a REIT could be terminated for the year in which such determination is made if we were unable to cure such failure.

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Complying with REIT requirements may limit our ability to hedge our liabilities effectively and may cause us to incur tax liabilities.

The REIT provisions of the Code may limit our ability to hedge our liabilities. Any income from a hedging transaction we enter into to manage risk of interest rate changes, price changes or currency fluctuations with respect to borrowings made or to be made to acquire or carry real estate assets, if properly identified under applicable Treasury Regulations, does not constitute “gross income” for purposes of the 75% or 95% gross income tests. To the extent that we enter into other types of hedging transactions, the income from those transactions will likely be treated as non-qualifying income for purposes of both of the gross income tests. As a result of these rules, we may need to limit our use of advantageous hedging techniques or implement those hedges through a taxable REIT subsidiary. This could increase the cost of our hedging activities because our taxable REIT subsidiaries would be subject to tax on gains or expose us to greater risks associated with changes in interest rates than we would otherwise want to bear. In addition, losses in a taxable REIT subsidiary generally will not provide any tax benefit, except for being carried forward against future taxable income of such taxable REIT subsidiary.

Complying with REIT requirements may force us to forgo and/or liquidate otherwise attractive investment opportunities.

To qualify as a REIT, we must ensure that we meet the REIT gross income tests annually and that at the end of each calendar quarter, at least 75% of the value of our assets consists of cash, cash items, government securities and qualified REIT real estate assets, including certain mortgage loans and certain kinds of mortgage-related securities. The remainder of our investment in securities (other than government securities and qualified real estate assets) generally cannot include more than 10% of the outstanding voting securities of any one issuer or more than 10% of the total value of the outstanding securities of any one issuer. In addition, in general, no more than 5% of the value of our assets (other than government securities and qualified real estate assets) can consist of the securities of any one issuer, and no more than 25% of the value of our total assets can be represented by securities of one or more taxable REIT subsidiaries. If we fail to comply with these requirements at the end of any calendar quarter, we must correct the failure within 30 days after the end of the calendar quarter or qualify for certain statutory relief provisions to avoid losing our REIT qualification and suffering adverse tax consequences. As a result, we may be required to liquidate assets from our portfolio or not make otherwise attractive investments in order to maintain our qualification as a REIT. These actions could have the effect of reducing our income and amounts available for distribution to our stockholders.

The ability of our board of directors to revoke our REIT qualification without stockholder approval may subject us to U.S. federal income tax and reduce distributions to our stockholders.

Our charter provides that our board of directors may revoke or otherwise terminate our REIT election, without the approval of our stockholders, if it determines that it is no longer in our best interest to continue to qualify as a REIT. While we intend to elect and qualify to be taxed as a REIT, we may not elect to be treated as a REIT or may terminate our REIT election if we determine that qualifying as a REIT is no longer in our best interests. If we cease to be a REIT, we would become subject to U.S. federal income tax on our taxable income and would no longer be required to distribute most of our taxable income to our stockholders, which may have adverse consequences on our total return to our stockholders and on the market price of our common stock.

We may be subject to adverse legislative or regulatory tax changes that could increase our tax liability, reduce our operating flexibility and reduce the market price of our common stock.

In recent years, numerous legislative, judicial and administrative changes have been made in the provisions of U.S. federal income tax laws applicable to investments similar to an investment in shares of our common stock. Additional changes to the tax laws are likely to continue to occur, and we cannot assure you that any such changes will not adversely affect the taxation of a stockholder. Any such changes could have an adverse effect on an investment in our shares or on the market value or the resale potential of our assets. Our stockholders are urged to consult with their tax advisors with respect to the impact of recent legislation on their investment in our shares and the status of legislative, regulatory or administrative developments and proposals and their potential effect on an investment in our shares. Our stockholders also should note that our counsel’s tax opinion is based upon existing law, applicable as of the date of its opinion, all of which will be subject to change, either prospectively or retroactively.

Although REITs generally receive better tax treatment than entities taxed as regular corporations, it is possible that future legislation would result in a REIT having fewer tax advantages, and it could become more advantageous for a company that invests in real estate to elect to be treated for U.S. federal income tax purposes as a corporation. As a result, our charter provides our board of directors with the power, under certain circumstances, to revoke or otherwise terminate our REIT election and cause us to be taxed as a regular corporation, without the vote of our stockholders. Our board of directors has fiduciary duties to us and our stockholders and could only cause such changes in our tax treatment if it determines in good faith that such changes are in the best interest of our stockholders.

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The share ownership restrictions of the Code for REITs and the 9.8% share ownership limit in our charter may inhibit market activity in our shares of stock and restrict our business combination opportunities.

In order to qualify as a REIT, five or fewer individuals, as defined in the Code, may not own, actually or constructively, more than 50% in value of our issued and outstanding shares of stock at any time during the last half of each taxable year, other than the first year for which a REIT election is made. Attribution rules in the Code determine if any individual or entity actually or constructively owns our shares of stock under this requirement. Additionally, at least 100 persons must beneficially own our shares of stock during at least 335 days of a taxable year for each taxable year, other than the first year for which a REIT election is made. To help insure that we meet these tests, among other purposes, our charter restricts the acquisition and ownership of our shares of stock.

Our charter, with certain exceptions, authorizes our directors to take such actions as are necessary and desirable to preserve our qualification as a REIT while we so qualify. Unless exempted (prospectively or retroactively) by our board of directors, for so long as we qualify as a REIT, our charter prohibits, among other limitations on ownership and transfer of shares of our stock, any person from beneficially or constructively owning (applying certain attribution rules under the Code) more than 9.8% in value of the aggregate of our outstanding shares of stock and more than 9.8% (in value or in number of shares, whichever is more restrictive) of any class or series of our shares of stock. Our board of directors may not grant an exemption from these restrictions to any proposed transferee whose ownership in excess of the 9.8% ownership limit would result in the termination of our qualification as a REIT. These restrictions on transferability and ownership will not apply, however, if our board of directors determines that it is no longer in our best interest to continue to qualify as a REIT or that compliance with the restrictions is no longer required in order for us to continue to so qualify as a REIT.

These ownership limits could delay or prevent a transaction or a change in control that might involve a premium price for our common stock or otherwise be in the best interest of the stockholders.

Non-U.S. stockholders will be subject to U.S. federal withholding tax and may be subject to U.S. federal income tax on distributions received from us and upon the disposition of our shares.

Subject to certain exceptions, distributions received from us will be treated as dividends of ordinary income to the extent of our current or accumulated earnings and profits. Such dividends ordinarily will be subject to U.S. withholding tax at a 30% rate, or such lower rate as may be specified by an applicable income tax treaty, unless the distributions are treated as “effectively connected” with the conduct by the non-U.S. stockholder of a U.S. trade or business. Pursuant to the Foreign Investment in Real Property Tax Act of 1980 ("FIRPTA") capital gain distributions attributable to sales or exchanges of “U.S. real property interests” ("USRPIs") generally will be taxed to a non-U.S. stockholder as if such gain were effectively connected with a U.S. trade or business. However, a capital gain dividend will not be treated as effectively connected income if (a) the distribution is received with respect to a class of stock that is regularly traded on an established securities market located in the United States and (b) the non-U.S. stockholder does not own more than 5% of the class of our stock at any time during the one-year period ending on the date the distribution is received. We do not anticipate that our shares will be “regularly traded, as defined by applicable Treasury regulations” on an established securities market for the foreseeable future, and therefore, this exception is not expected to apply.

Gain recognized by a non-U.S. stockholder upon the sale or exchange of our common stock generally will not be subject to U.S. federal income taxation unless such stock constitutes a USRPI under FIRPTA. Our common stock will not constitute a USRPI so long as we are a “domestically-controlled qualified investment entity.” A domestically-controlled qualified investment entity includes a REIT if at all times during a specified testing period, less than 50% in value of such REIT’s stock is held directly or indirectly by non-U.S. stockholders. We believe, but cannot assure you, that we will be a domestically-controlled qualified investment entity.

Even if we do not qualify as a domestically-controlled qualified investment entity at the time a non-U.S. stockholder sells or exchanges our common stock, gain arising from such a sale or exchange would not be subject to U.S. taxation under FIRPTA as a sale of a USRPI if: (a) our common stock is “regularly traded” on an established securities market, and (b) such non-U.S. stockholder owned, actually and constructively, 5% or less of our common stock at any time during the five-year period ending on the date of the sale. However, it is not anticipated that our common stock will be “regularly traded” on an established market. We encourage our stockholders to consult their tax advisors to determine the tax consequences applicable to them if they are non-U.S. stockholders.

Potential characterization of distributions or gain on sale may be treated as UBTI to tax-exempt investors.

If (a) we are a “pension-held REIT,” (b) a tax-exempt stockholder has incurred (or is deemed to have incurred) debt to purchase or hold our common stock, or (c) a holder of common stock is a certain type of tax-exempt stockholder, dividends on, and gains recognized on the sale of, common stock by such tax-exempt stockholder may be subject to U.S. federal income tax as UBTI under the Code.

43

Retirement Plan Risks

If the fiduciary of an employee pension benefit plan subject to the Employee Retirement Income Security Act ("ERISA") (such as a profit-sharing, Section 401(k) or pension plan) or any other retirement plan or account fails to meet the fiduciary and other standards under ERISA or the Code as a result of an investment in our stock, the fiduciary could be subject to criminal and civil penalties.

There are special considerations that apply to employee benefit plans subject to ERISA (such as profit-sharing, Section 401(k) or pension plans) and other retirement plans or accounts subject to Section 4975 of the Code (such as an IRA) that are investing in our shares. Fiduciaries investing the assets of such a plan or account in our common stock should satisfy themselves that:

• the investment is consistent with their fiduciary obligations under ERISA and the Code;

• the investment is made in accordance with the documents and instruments governing the plan or IRA, including the plan’s or account’s investment policy;

• the investment satisfies the prudence and diversification requirements of Sections 404(a)(1)(B) and 404(a)(1)(C) of ERISA and other applicable provisions of ERISA and the Code;

• the investment will not impair the liquidity of the plan or IRA;

• the investment will not produce an unacceptable amount of UBTI for the plan or IRA;

• the value of the assets of the plan can be established annually in accordance with ERISA requirements and applicable provisions of the plan or IRA; and

• the investment will not constitute a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code.

With respect to the annual valuation requirements described above, we expect to provide an estimated value for our shares annually. From the commencement of our IPO until the NAV pricing date, we expect to use the gross offering price of a share of common stock in our most recent offering as the per share estimated value. For purposes of this definition, we will not consider “public equity offerings” to include offerings on behalf of selling stockholders or offerings related to any distribution reinvestment plan, employee benefit plan or the redemption of interests in our operating partnership.

This estimated value is not likely to reflect the proceeds our stockholders would receive upon our liquidation or upon the sale of their shares. Accordingly, we can make no assurances that such estimated value will satisfy the applicable annual valuation requirements under ERISA and the Code. The Department of Labor or the IRS may determine that a plan fiduciary or an IRA custodian is required to take further steps to determine the value of our common shares. In the absence of an appropriate determination of value, a plan fiduciary or an IRA custodian may be subject to damages, penalties or other sanctions.

Failure to satisfy the fiduciary standards of conduct and other applicable requirements of ERISA and the Code may result in the imposition of civil and criminal penalties and could subject the fiduciary to equitable remedies. In addition, if an investment in our shares constitutes a non-exempt prohibited transaction under ERISA or the Code, the fiduciary or IRA owner who authorized or directed the investment may be subject to the imposition of excise taxes with respect to the amount invested. In the case of a non-exempt prohibited transaction involving an IRA owner, the IRA may be disqualified and all of the assets of the IRA may be deemed distributed and subject to tax.

Prospective investors with investment discretion over the assets of an IRA, employee benefit plan or other retirement plan or arrangement that is covered by ERISA or Section 4975 of the Code should carefully review the information in the section of our prospectus entitled “Investment by Tax Exempt Entities and ERISA Considerations.” Any such prospective investors are required to consult their own legal and tax advisors on these matters.

If our stockholders invest in our shares through an IRA or other retirement plan, they may be limited in their ability to withdraw required minimum distributions.

If our stockholders establish an IRA or other retirement plan through which they invest in our shares, federal law may require those stockholders to withdraw required minimum distributions ("RMDs") from such plan in the future. Our SRP limits the amount of repurchases (other than those repurchases as a result of a stockholder’s death or disability) that can be made in a given year. Additionally, our stockholders will not be eligible to have their shares repurchased until they have held their shares for at least one year. As a result, our stockholders may not be able to have their shares repurchased at a time in which they need liquidity to satisfy the RMD requirements under their IRA or other retirement plan. Even if our stockholders are able to have their shares repurchased, such repurchase may be at a price less than the price at which the shares were initially purchased, depending on how long those stockholders have held their shares. If a stockholder fails to withdraw RMDs from his or her IRA or other retirement plan, that stockholder may be subject to certain tax penalties.

44

Item 1B. Unresolved Staff Comments.

Not applicable.

Item 2. Properties

The following table presents certain information about the properties we owned as of December 31, 2014:

Portfolio	Acquisition Date	Number of Properties	Rentable Square Feet	Occupancy	Remaining Lease Term (1)	Base Purchase Price (2)
						(In thousands)
421 W. 54th Street - Hit Factory	Jun. 2014	1	12,327	100.0%	5.8	$	7,250
400 E. 67th Street - Laurel Condominium	Sept. 2014	1	58,750	100.0%	9.3	76,000
200 Riverside Boulevard - ICON Garage	Sept. 2014	1	61,475	100.0%	22.8	9,000
570 Seventh Avenue	Nov. 2014	1	166,639	56.0%	3.1	162,291
		4	299,191	75.5%	7.3	$	254,541

_______________________________

(1) Remaining lease term in years as of December 31, 2014, calculated on a weighted-average basis, as applicable.

(2) Contract purchase price, net of purchase price adjustments and excluding acquisition-related costs.

Future Minimum Lease Payments

The following table presents future minimum base rental cash payments due to us over the next ten years and thereafter at the properties we owned as of December 31, 2014. To the extent we have leases with contingent rent provisions, these amounts exclude contingent rent payments that would be collected 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 Base Rent Payments
2015	$	7,865
2016	7,653
2017	7,171
2018	6,723
2019	6,613
2020	6,261
2021	5,380
2022	4,275
2023	4,357
2024	3,049
Thereafter	9,248
Total	$	68,595

45

Future Lease Expirations Table

The following is a summary of lease expirations for the next ten years at the properties we owned as of December 31, 2014:

Year of Expiration	Number of Leases Expiring	Annualized Rental Income(1)		Annualized Rental Income as a Percentage of the Total Portfolio		Leased Rentable Square Feet	Percentage of Portfolio Leased Rentable Square Feet Expiring
		(In Thousands)
2015	5	$	990	10.4	%	19,939	8.8	%
2016	2	235		2.5	%	5,426	2.4	%
2017	4	437		4.6	%	10,599	4.7	%
2018	3	649		6.8	%	14,143	6.3	%
2019	—	—		—	%	—	—	%
2020	5	1,193		12.5	%	26,454	11.7	%
2021	4	1,642		17.2	%	45,576	20.2	%
2022	—	—		—	%	—	—	%
2023	—	—		—	%	—	—	%
2024	1	2,476		26.0	%	29,321	13.0	%
Total	24	$	7,622	80.0	%	151,458	67.1	%

_____________________________

(1) Annualized rental income as of December 31, 2014 for the leases in place in the property portfolio on a straight-line basis, which includes tenant concessions such as free rent, as applicable.

Tenant Concentration

The following table lists tenants whose rented square footage is greater than 10% of the total portfolio rented square footage as of December 31, 2014:

Tenant	Rented Square Feet	Rented Square Feet as a Percentage of Total Portfolio		Lease Expiration	Remaining Lease Term(1)	Renewal Options	Annualized Rental Income(2)
							(In Thousands)
200 Riverside Parking LLC	61,475	27.2	%	Sept. 2037	22.8	None	$	594
Cornell University	29,321	13.0	%	Jun. 2024	9.5	3 - 5 year options	2,476
Quik Park East 67th Street LLC	26,009	11.5	%	Nov. 2021	6.9	2 - 5 year options	854

________________________________

(1) Remaining lease term in years as of December 31, 2014.

(2) Annualized rental income as of December 31, 2014 on a straight-line basis, which includes tenant concessions such as free rent, as applicable.

46

Significant Portfolio Properties

The rentable square feet or annualized rental income of the properties located at 570 Seventh Avenue, 400 East 67th Street and 200 Riverside Boulevard represent a significant portion of our total portfolio. The tenant concentrations of the properties located at 570 Seventh Avenue, 400 East 67th Street and 200 Riverside Boulevard are summarized below:

570 Seventh Avenue

The following table lists the tenant in 570 Seventh Avenue whose annualized rental income on a straight-line basis is greater than 10% of the total annualized rental income on a straight-line basis of 570 Seventh Avenue as of December 31, 2014:

Tenant	Rented Square Feet	Rented Square Feet as a Percentage of 570 Seventh Avenue		Lease Expiration	Remaining Lease Term(1)	Renewal Options	Annualized Rental Income(2)
							(In Thousands)
NY Loves Us, Inc.	5,023	3.0	%	Jan. 2015	0.01	None	$	624

________________________________

(1) Remaining lease term in years as of December 31, 2014.

(2) Annualized rental income as of December 31, 2014 on a straight-line basis, which includes tenant concessions such as free rent, as applicable.

400 East 67th Street

The following table lists tenants in 400 East 67th Street whose rented square footage is greater than 10% of the total rentable square footage of 400 East 67th Street as of December 31, 2014:

Tenant	Rented Square Feet	Rented Square Feet as a Percentage of 400 E. 67th Street		Lease Expiration	Remaining Lease Term(1)	Renewal Options	Annualized Rental Income(2)
							(In Thousands)
Cornell University	29,321	49.9	%	Jun. 2024	9.5	3 - 5 year options	$	2,476
Quik Park East 67th Street LLC	26,009	44.3	%	Nov. 2021	6.9	2 - 5 year options	854

________________________________

(1) Remaining lease term in years as of December 31, 2014.

(2) Annualized rental income as of December 31, 2014 on a straight-line basis, which includes tenant concessions such as free rent, as applicable.

200 Riverside Boulevard

The following table lists the tenant in 200 Riverside Boulevard whose rented square footage is greater than 10% of the total rentable square footage of 200 Riverside Boulevard as of December 31, 2014:

Tenant	Rented Square Feet	Rented Square Feet as a Percentage of 200 Riverside Boulevard		Lease Expiration	Remaining Lease Term(1)	Renewal Options	Annualized Rental Income(2)
							(In Thousands)
200 Riverside Parking LLC	61,475	100.0	%	Sept. 2037	22.8	None	$	594

________________________________

(1) Remaining lease term in years as of December 31, 2014.

(2) Annualized rental income as of December 31, 2014 on a straight-line basis, which includes tenant concessions such as free rent, as applicable.

Item 3. Legal Proceedings.

We are not party to, and none of our properties are subject to, any material legal proceedings.

Item 4. Mine Safety Disclosure.

Not applicable.

47

PART II

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

No established public market currently exists for our shares of common stock, and we currently have no plans to list our shares on a national securities exchange. Until our shares are listed, if ever, our stockholders may not sell their shares unless the buyer meets the applicable suitability and minimum purchase requirements. In addition, our charter prohibits the ownership of more than 9.8% in value of the aggregate of our outstanding shares of stock or more than 9.8% (in value or in number of shares, whichever is more restrictive) of any class or series of shares of our stock by a single investor, unless exempted by our board of directors. Consequently, there is the risk that our stockholders may not be able to sell their shares at a time or price acceptable to them.  Pursuant to our IPO, we are selling shares of our common stock to the public at a price of $25.00 per share and at $23.75 per share pursuant to our DRIP.

In order for FINRA members and their associated persons to participate in the offering and sale of shares of common stock pursuant to our IPO, we are required pursuant to FINRA Rule 2310(b)(5) to disclose in each annual report distributed to stockholders a per share estimated value of the shares, the method by which it was developed and the date of the data used to develop the estimated value.  In addition, we prepare annual statements of estimated share value to assist fiduciaries of retirement plans subject to the annual reporting requirements of ERISA in the preparation of their reports relating to an investment in our shares. 

Holders

As of March 15, 2015, we had 23,988,980 shares of common stock outstanding held by a total of 10,964 stockholders of record.

Distributions

We intend to elect and qualify to be taxed as a REIT for U.S. federal income tax purposes commencing with our taxable year ended December 31, 2014. As a REIT, we are required to distribute at least 90% of our REIT taxable income to our stockholders annually. The amount of distributions payable to our stockholders is determined by our board of directors and is dependent on a number of factors, including funds available for distribution, financial condition, capital expenditure requirements, as applicable and annual distribution requirements needed to qualify and maintain our status as a REIT under the Code. From a tax perspective, 100% of distributions, or $0.84 per share, for the period from June 13, 2014 to December 31, 2014 represented a return of capital.

On May 22, 2014, our board of directors authorized, and we declared, a distribution payable to stockholders of record each day during the applicable period at a rate equal to $0.0041438356 per day, which is equivalent to $1.5125, based on a 365-day year. Our distributions are payable by the 5th day following each month end to stockholders of record at the close of business each day during the prior month. Distribution payments are dependent on the availability of funds. Our board of directors may reduce the amount of distributions paid or suspend distribution payments at any time and therefore distribution payments are not assured.

The following table reflects distributions paid in cash and through the DRIP to common stockholders, excluding distributions related to Class B units, which are expensed and included in general and administrative expenses on the consolidated statements of operations and comprehensive loss since June 13, 2014, the date on which distributions began to accrue:

(In thousands)	Distributions Paid in Cash		Distributions Reinvested Through the DRIP		Total Distributions Paid		Total Distributions Declared
2014:
1st Quarter 2014	$	—	$	—	$	—	$	—
2nd Quarter 2014	—		—		—		186
3rd Quarter 2014	735		1,283		2,018		3,347
4th Quarter 2014	2,585		3,243		5,828		6,855
Total 2014	$	3,320	$	4,526	$	7,846	$	10,388

We, our board of directors and Advisor share a similar philosophy with respect to paying our distributions. The distributions should principally be derived from cash flows generated from real estate operations. In order to improve our operating cash flows and our ability to pay distributions from operating cash flows, our related party Advisor and Property Manager agreed to waive certain fees and reimbursements including property management fees. We pay our Property Manager a property management fee of up to 4% per annum of the gross revenues of properties managed. The Property Manager elected to waive $0.1 million of property management fees for the year endedDecember 31, 2014. There were no property management fees incurred or waived for the period from December 19, 2013 (date of inception) to December 31, 2013. The Advisor and Property Manager will determine if a portion of fees and reimbursements will be waived in subsequent periods on a quarter-to-quarter basis. The fees that were waived are not deferrals and accordingly, will not be paid by us. Because the Property Manager waived certain cash fees that we owed, cash flow from operations that would have been paid to the Property Manager was available to pay distributions to our stockholders.

For the year endedDecember 31, 2014, none of our distributions were covered by cash flows from operations. To the extent we pay distributions in excess of cash flows provided by operations, your investment may be adversely impacted. Since inception, our cumulative distributions have exceeded our cumulative FFO. See "Item 1A. Risk Factors - Distributions paid from sources other than our cash flows from operations, particularly from proceeds of our IPO, will result in us having fewer funds available for the acquisition of properties and other real estate-related investments and may dilute our stockholders' interests in us, which may adversely affect our ability to fund future distributions with cash flows from operations and may adversely affect our stockholders' overall return."

Securities Authorized for Issuance Under Equity Compensation Plans

Restricted Share Plan

We have an employee and director incentive restricted share plan (the “RSP”), which provides for the automatic grant of 1,333 restricted shares of common stock to each of the independent directors, without any further approval by our board of directors or the stockholders, on the date of initial election to the board of directors and on the date of each annual stockholder’s meeting. Restricted stock issued to independent directors vests over a five-year period following the date of grant in increments of 20.0% per annum. The RSP provides us with the ability to grant awards of restricted shares to our directors, officers and employees (if we ever have employees), employees of our Advisor and its affiliates, employees of entities that provide services to us, directors of our Advisor or of entities that provide services to us, certain consultants to us and our Advisor and its affiliates or to entities that provide services to us. The total number of common shares granted under the RSP may not exceed 5.0% of our outstanding shares of common stock on a fully diluted basis at any time and in any event will not exceed 1.5 million shares (as such number may be adjusted for stock splits, stock dividends, combinations and similar events).

Restricted share awards entitle the recipient to receive shares of common stock from us under terms that provide for vesting over a specified period of time or upon attainment of pre-established performance objectives. Such awards are forfeited with respect to the unvested shares upon the termination of the recipient’s employment or other relationship with us, unless accelerated vesting is approved by the board of directors. Restricted shares may not, in general, be sold or otherwise transferred until restrictions are removed and the shares have vested. Holders of restricted shares may receive cash distributions prior to the time that the restrictions on the restricted shares have lapsed. Any distributions payable in shares of common stock will be subject to the same restrictions as the underlying restricted shares. As of December 31, 2014, there were 3,999 unvested restricted shares issued to independent directors under the RSP at $22.50 per share.

49

Recent Sales of Unregistered Securities

On January 2, 2014, we sold 8,888 shares of our common stock to the Special Limited Partner under Rule 506 of Regulation D of the Securities Act at a price of $22.50 per share for aggregate gross proceeds of $0.2 million, which was used to fund third-party offering costs. The Special Limited Partner did not pay any commissions related to the purchase of these shares. On November 25, 2014, the Advisor contributed $2,020 to the OP in exchange for 90 OP units at $22.50 per share, which represents a nominal percentage of the aggregate OP ownership. The Advisor did not pay any commissions related to the purchase of these OP units.

Use of Proceeds from Sales of Registered Securities

On April 24, 2014, we commenced our IPO on a "reasonable best efforts" basis of up to 30.0 million shares of common stock, $0.01 par value per share, at a price of $25.00 per share, subject to certain volume and other discounts, pursuant to the Registration Statement filed with the SEC under the Securities Act (File No. 333-194135), which became effective on April 24, 2014. The Registration Statement also covers 10.5 million shares of common stock issuable pursuant to the DRIP under which common stockholders may elect to have their distributions reinvested in additional shares of common stock. On May 29, 2014, we received and accepted subscriptions in excess of the minimum offering amount for the IPO of $2.0 million in shares, broke general escrow and issued shares of common stock to initial investors who were admitted as stockholders. As of December 31, 2014, we have issued 20.6 million shares of our common stock, including unvested restricted shares and shares issued pursuant to our DRIP, and received $509.9 million of offering proceeds, inclusive of proceeds from our DRIP.

The following table reflects the offering costs associated with the issuance of common stock:

	Year Ended
(In thousands)	December 31, 2014
Selling commissions and dealer manager fees	$	46,997
Other offering costs	8,628
Total offering costs	$	55,625

The Dealer Manager may reallow the selling commissions and a portion of the dealer manager fees to participating broker-dealers. The following table details the selling commissions incurred and reallowed related to the sale of shares of common stock:

	Year Ended
(In thousands)	December 31, 2014
Total commissions paid to the Dealer Manager	$	46,997
Less:
Commissions to participating brokers	(31,920		)
Reallowance to participating broker dealers	(5,685		)
Net to the Dealer Manager	$	9,392

As of December 31, 2014, we have incurred $55.6 million of cumulative offering costs in connection with the issuance and distribution of our registered securities. Cumulative offering proceeds from the sale of common stock exceeded cumulative offering costs by $454.3 million at December 31, 2014.

As of December 31, 2014, cumulative offering costs included $47.0 million of selling commissions and dealer manager fees and $6.7 million of offering costs reimbursements incurred from the Advisor and Dealer Manager. We are obligated to reimburse the Advisor or its affiliates, as applicable, for organization and offering costs paid by them on our behalf, provided that the Advisor is obligated to reimburse us to the extent organization and offering costs (excluding selling commissions and the dealer manager fee) incurred by us in our IPO exceed 2.0% of gross offering proceeds in the IPO. As a result, these costs are only our liability to the extent aggregate selling commissions, the dealer manager fee and other organization and offering costs do not exceed 12.0% of the gross proceeds determined at the end of the IPO. However, during the IPO, the Advisor elected to cap cumulative offering costs incurred by us, net of unpaid amounts, to 15% of gross common stock proceeds. Cumulative offering costs, net of unpaid amounts, were less than the 15% threshold as of December 31, 2014.

We have used and expect to continue to use substantially all of the net proceeds from our IPO to primarily acquire office and retail properties in the five boroughs of New York City, with a focus on Manhattan. We may also originate or acquire first mortgage loans secured by real estate. As of December 31, 2014, we have used the net proceeds from our IPO to purchase four properties with an aggregate purchase price of $254.5 million.

50

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

Our common stock is currently not listed on a national securities exchange and we will not seek to list our stock until such time as our independent directors believe that the listing of our stock would be in the best interest of the Company and stockholders. In order to provide stockholders with the benefit of some interim liquidity, our board of directors has adopted the SRP that enables our stockholders to sell their shares back to us after they have held them for at least one year, subject to significant conditions and limitations. Our Sponsor, Advisor, directors and affiliates are prohibited from receiving a fee on any share repurchases.  

Repurchases of shares of our common stock, when requested, are at our sole discretion and generally will be made quarterly. We will limit the number of shares repurchased during any calendar year to 5% of the number of shares of common stock outstanding on December 31st of the previous calendar year. In addition, we are only authorized to repurchase shares in a given quarter up to the amount of proceeds we receive from our DRIP in that same quarter.

Only those stockholders who purchased their shares from us or received their shares from us (directly or indirectly) through one or more non-cash transactions may be able to participate in the SRP. In other words, once our shares are transferred for value by a stockholder, the transferee, and all subsequent holders of the shares, is not eligible to participate in the SRP. We will repurchase shares prior to the last business day in the month subsequent to each quarter-end (and in all events on a date other than a dividend payment date). Prior to our calculation of NAV, the price per share that we will pay to repurchase shares of our common stock will be as follows:

• the lower of $23.13 or 92.5% of the price paid to acquire the shares from us for stockholders who have continuously held their shares for at least one year; and

• the lower of $23.75 or 95.0% of the price paid to acquire the shares from us for stockholders who have continuously held their shares for at least two years.

Prior to our calculating NAV, upon the death or disability of a stockholder, upon request, we will waive the one-year holding requirement that otherwise will apply to redemption requests made prior to such time. Once we begin calculating NAV, no holding period will be required. Shares repurchased in connection with the death or disability of a stockholder will be repurchased at a purchase price equal to the price actually paid for the shares during the IPO, or if not engaged in the IPO, the per share purchase price will be based on the greater of $25.00 and the then-current NAV (as adjusted for any stock dividends, combinations, splits, recapitalizations and the like with respect to our common stock). Our board of directors has the discretion to exempt shares purchased pursuant to our DRIP from the one-year holding requirement, if a stockholder sells back all of his or her shares. In addition, we may waive the holding period in the event of a stockholder's bankruptcy or other exigent circumstances.

We did not repurchase any of our securities nor did we receive any repurchase requests during the year ended December 31, 2014.

51

Item 6. Selected Financial Data.

The following selected financial data as of December 31, 2014 and 2013 and for the year ended December 31, 2014 and the period from December 19, 2013 (date of inception) to December 31, 2013 should be read in conjunction with the accompanying consolidated financial statements and related notes thereto and "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" below:

	December 31,
Balance sheet data(In thousands)	2014		2013
Total real estate investments, at cost	$	270,083	$	—
Total assets	458,565		35
Total liabilities	21,159		35
Total equity	437,406		—

	Year Ended			For the Period from December 19, 2013 (date of inception) to
Operating data(In thousands, except share and per share data)	December 31, 2014			December 31, 2013
Total revenues	$	2,851		$	—
Total operating expenses	9,386			—
Operating loss	(6,535		)	—
Total other income	16			—
Net loss	$	(6,519	)	$	—
Other data:
Cash flows used in operations	$	(4,965	)	$	—
Cash flows used in investing activities	(256,567		)	—
Cash flows provided by financing activities	445,873			—
Per share data:
Basic and diluted net loss per common share	$	(1.44	)	$	—
Distributions declared per common share	$	0.84		$	—
Basic and diluted weighted-average number of common shares outstanding	4,530,066			—

Item 7. 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. The following information contains forward-looking statements, which are subject to risks and uncertainties. Should one or more of these risks or uncertainties materialize, actual results may differ materially from those expressed or implied by the forward-looking statements. Please see "Forward-Looking Statements" elsewhere in this report for a description of these risks and uncertainties.

Overview

We were incorporated on December 19, 2013 as a Maryland corporation and intend to elect and qualify to be taxed as a real estate investment trust ("REIT") for U.S. federal income tax purposes beginning with our taxable year ended December 31, 2014. On April 24, 2014, we commenced our initial public offering ("IPO") on a "reasonable best efforts" basis of up to 30.0 million shares of common stock, $0.01 par value per share, at a price of $25.00 per share, subject to certain volume and other discounts, pursuant to a registration statement on Form S-11, as amended (File No. 333-194135) (the "Registration Statement") filed with the U.S. Securities and Exchange Commission (the "SEC") under the Securities Act of 1933, as amended (the "Securities Act"). The Registration Statement also covers up to 10.5 million shares available pursuant to a distribution reinvestment plan (the "DRIP") under which our common stockholders may elect to have their distributions reinvested in additional shares of our common stock equal to $23.75 per share, which is equal to 95% of the offering price in the IPO.

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On May 29, 2014, we received and accepted subscriptions in excess of the minimum offering amount for the IPO of $2.0 million in shares, broke general escrow and issued shares of common stock to our initial investors who were admitted as stockholders. As of December 31, 2014, we had 20.6 million shares of common stock outstanding, including unvested restricted shares and shares issued pursuant to our DRIP, and had received total gross proceeds from the IPO of $509.9 million. Until the NAV pricing date (as described below) the per share purchase price in the IPO will be up to $25.00 per share (including the maximum allowed to be charged for commissions and fees) and shares issued under the DRIP will be equal to $23.75 per share, which is equal to 95% of the offering price in the IPO. Beginning with the NAV pricing date, the per share purchase price for shares in the IPO and under the DRIP will vary quarterly and will be equal to our NAV, as determined by New York Recovery Advisors, LLC (our "Advisor"), plus applicable commissions and fees, in the case of the IPO, and the per share purchase price in the DRIP will be equal to the NAV per share. The NAV pricing date means the date we first publish an estimated per share NAV, which will be on or prior to October 26, 2016, which is 150 days following the second anniversary from the date we broke escrow in the IPO. We reserve the right to reallocate shares covered in the Registration Statement between the primary offering and the DRIP. On February 6, 2015, our board of directors approved the reallocation of 10.0 million shares from the DRIP to our primary offering. We expect to achieve our target offering proceeds and close our IPO by May 31, 2015.

We were formed to invest our assets in properties in the five boroughs of New York City, with a focus on Manhattan. We may also purchase certain real estate assets that accompany office properties, including retail spaces and amenities, as well as hospitality assets, residential assets and other property types exclusively in New York City. All such properties may be acquired and owned by us alone or jointly with another party. As of December 31, 2014, we owned four properties consisting of 299,191 rentable square feet, which were 75.5% leased, with a weighted average remaining lease term of 7.3 years.

Substantially all of our business is conducted through New York City Operating Partnership, L.P. (the "OP"). We are the sole general partner and hold substantially all of the units of limited partner interests in the OP (“OP units”). The Advisor contributed $2,020 to the OP in exchange for 90 units of limited partner interest in the aggregate OP ownership, which represents a nominal percentage of the aggregate OP ownership. A holder of OP units has the right to convert OP units for the cash value of a corresponding number of shares of our common stock or, at the option of the OP, a corresponding number of shares of our common stock, in accordance with the limited partnership agreement of the OP, provided, however, that such OP units must have been outstanding for at least one year. The remaining rights of the limited partners in the OP 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.

We have no direct employees. The Advisor is our affiliated external advisor, which we have retained to manage our affairs on a day-to-day basis. New York City Properties, LLC (the "Property Manager") has been retained to serve as our property manager. Realty Capital Securities, LLC (the "Dealer Manager") serves as the dealer manager of the IPO. The Advisor, the Property Manager and the Dealer Manager are under common control with AR Capital, LLC (the "Parent of our Sponsor"), as a result of which they are related parties, and each of which have received or will receive compensation, fees and expense reimbursements for services related to the IPO and the investment and management of our assets. The Advisor, New York City Special Limited Partnership, LLC (the "Special Limited Partner"), Property Manager and Dealer Manager have received or will also receive fees, distributions and other compensation during the offering, acquisition, operational and liquidation stages.

Significant Accounting Estimates and Critical Accounting Policies

Set forth below is a summary of the significant accounting estimates and critical accounting policies that management believes are important to the preparation of our financial statements. Certain of our accounting estimates are particularly important for an understanding of our financial position and results of operations and require the application of significant judgment by our management. As a result, these estimates are subject to a degree of uncertainty. These significant accounting estimates and critical accounting policies include:

Offering and Related Costs

Offering and related costs include all expenses incurred in connection with our IPO. Offering costs (other than selling commissions and the dealer manager fees) include costs that may be paid by the Advisor, the Dealer Manager or their affiliates on our behalf. These costs include but are not limited to (i) legal, accounting, printing, mailing, and filing fees; (ii) escrow service related fees; (iii) reimbursement of the Dealer Manager for amounts it may pay to reimburse itemized and detailed due diligence expenses of broker-dealers; and (iv) reimbursement to the Advisor for a portion of the costs of its employees and other costs in connection with preparing supplemental sales materials and related offering activities. We are obligated to reimburse the Advisor or its affiliates, as applicable, for organization and offering costs paid by them on our behalf, provided that the Advisor is obligated to reimburse us to the extent organization and offering costs (excluding selling commissions and the dealer manager fee) incurred by us in our IPO exceed 2.0% of gross offering proceeds in the IPO. As a result, these costs are only our liability to the extent aggregate selling commissions, the dealer manager fee and other organization and offering costs do not exceed 12.0% of the gross proceeds determined at the end of the IPO.

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Revenue Recognition

Our revenues, which are derived primarily from rental income, include rents that each tenant pays in accordance with the terms of each lease reported on a straight-line basis over the initial term of the lease. Since many of our leases provide for rental increases at specified intervals, straight-line basis accounting requires us to record a receivable, and include in revenues, unbilled rent receivables that we will only receive if the tenant makes all rent payments required through the expiration of the initial term of the lease. We defer the revenue related to lease payments received from tenants in advance of their due dates. When we acquire a property, the terms of existing leases are considered to commence as of the acquisition date for the purposes of this calculation.

We will continually review receivables related to rent and unbilled rent receivables and determine collectability by taking into consideration the tenant's payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in the area in which the property is located. In the event that the collectability of a receivable is in doubt, we will record an increase in our allowance for uncollectible accounts or record a direct write-off of the receivable in our consolidated statements of operations.

Cost recoveries from tenants are included in operating expense reimbursement in the period the related costs are incurred, as applicable.

We may own certain properties with leases that include provisions for the tenant to pay contingent rental income based on a percent of the tenant's sales upon the achievement of certain sales thresholds or other targets which may be monthly, quarterly or annual targets. As the lessor to the aforementioned leases, we defer the recognition of contingent rental income until the specified target that triggered the contingent rental income is achieved, or until such sales upon which percentage rent is based are known. If we own certain properties with leases that include provisions for the tenant to pay contingent rental income, contingent rental income will be included in rental income on the consolidated statements of operations and comprehensive loss.

Investments in Real Estate

We evaluate the inputs, processes and outputs of each asset acquired to determine if the transaction is a business combination or asset acquisition. If an acquisition qualifies as a business combination, the related transaction costs are recorded as an expense in the consolidated statement of operations. If an acquisition qualifies as an asset acquisition, the related transaction costs are generally capitalized and subsequently amortized over the useful life of the acquired assets.

In business combinations, we allocate the purchase price of acquired properties to tangible and identifiable intangible assets or liabilities based on their respective fair values. Tangible assets may include land, land improvements, buildings, and fixtures. Intangible assets or liabilities may include the value of in-place leases, above- and below-market leases and other identifiable intangible assets or liabilities based on lease or property specific characteristics.

The fair value of the tangible assets of an acquired property with an in-place operating lease is determined by valuing the property as if it were vacant, and the “as-if-vacant” value is then allocated to the tangible assets based on the fair value of the tangible assets. The fair value of in-place leases is determined by considering estimates of carrying costs during the expected lease-up periods, current market conditions, as well as costs to execute similar leases. The fair value of above-market or below-market leases is recorded based on the present value of the difference between the contractual amount to be paid pursuant to the in-place lease and our estimate of fair market lease rate for the corresponding in-place lease, measured over the remaining term of the lease. The fair value of other intangible assets, such as real estate tax abatements and signage rights, are recorded based on the present value of the expected benefit and amortized over the expected useful life including any below-market fixed rate renewal options for below-market leases.

In allocating the fair value to assumed mortgages, if applicable, amounts are recorded to debt premiums or discounts based on the present value of the estimated cash flows, which is calculated to account for either above- or below-market interest rates.

In allocating non-controlling interests, if applicable, amounts are recorded based on the fair value of units issued at the date of acquisition, as determined by the terms of the applicable agreement.

In making estimates of fair values for purposes of allocating purchase price, we utilize a number of sources, including real estate valuations prepared by independent valuation firms. We also consider information and other factors including: market conditions, the industry in which the tenant operates, characteristics of the real estate such as location, size, demographics, value and comparative rental rates, tenant credit profile and the importance of the location of the real estate to the operations of the tenant’s business.

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We are required to present the operations related to properties that have been sold or properties that are intended to be sold as discontinued operations in the consolidated statements of operations and comprehensive loss at the lesser of carrying amount or fair value less estimated selling costs for all periods presented to the extent the disposal of a component represents a strategic shift that has had or will have a major effect on our operations and financial results. Properties that are intended to be sold will be designated as "held for sale" on the consolidated balance sheets when they meet specific criteria to be presented as held for sale. Properties are no longer depreciated when they are classified as held for sale.

Depreciation and Amortization

We are required to make subjective assessments as to the useful lives of the components of our real estate investments for purposes of determining the amount of depreciation to record on an annual basis. These assessments have a direct impact on our net income because if we were to shorten the expected useful lives of our real estate investments, we would depreciate these investments over fewer years, resulting in more depreciation expense and lower net income on an annual basis.

Depreciation is computed using the straight-line method over the estimated useful lives of up to 40 years for buildings, 15 years for land improvements, five years for fixtures and improvements, and the shorter of the useful life or the remaining lease term for tenant improvements and leasehold interests.

Capitalized above-market lease values are amortized as a reduction of rental income over the remaining terms of the respective leases. Capitalized below-market lease values are amortized as an increase to rental income over the remaining terms of the respective leases and expected below-market renewal option periods.

The value of in-place leases, exclusive of the value of above-market and below-market in-place leases, is amortized to expense over the remaining periods of the respective leases.

Assumed mortgage premiums or discounts, if applicable, are amortized as an increase or reduction to interest expense over the remaining term of the respective mortgages.

Impairment of Long Lived Assets

When circumstances indicate the carrying value of a property may not be recoverable, we review the asset for impairment. This review is based on an estimate of the future undiscounted cash flows, excluding interest charges, expected to result from the property’s use and eventual disposition. These estimates consider factors such as expected future operating income, market and other applicable trends and residual value, as well as the effects of leasing demand, competition and other factors. If impairment exists due to the inability to recover the carrying value of a property, an impairment loss is recorded to the extent that the carrying value exceeds the estimated fair value of the property for properties to be held and used. For properties held for sale, the impairment loss is the adjustment to fair value less estimated cost to dispose of the asset. These assessments have a direct impact on net income because recording an impairment loss results in an immediate negative adjustment to net income.

Recently Issued Accounting Pronouncements

In April 2014, the Financial Accounting Standards Board ("FASB") amended the requirements for reporting discontinued operations. Under the revised guidance, in addition to other disclosure requirements, a disposal of a component of an entity or a group of components of an entity is required to be reported in discontinued operations if the disposal represents a strategic shift that has had (or will have) a major effect on an entity's operations and financial results when the component or group of components meets the criteria to be classified as held for sale, disposed of by sale or other than by sale. We have adopted the provisions of this guidance effective January 1, 2014, and have applied the provisions prospectively. This adoption of this guidance did not have a material impact on our consolidated financial position, results of operations or cash flows.

In May 2014, the FASB issued revised guidance relating to revenue recognition. Under the revised guidance, an entity is required to recognize revenue when it transfers 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. The revised guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is not permitted under GAAP. The revised guidance allows entities to apply the full retrospective or modified retrospective transition method upon adoption. We have not yet selected a transition method and are currently evaluating the impact of the new guidance.

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In August 2014, the FASB issued guidance relating to disclosure of uncertainties about an entity's ability to continue as a going concern. In connection with preparing financial statements for each annual and interim reporting period, management should evaluate whether there are conditions or events that raise substantial doubt about the entity's ability to continue as a going concern within one year after the date that the financial statements are issued. If conditions or events raise substantial doubt about the entity's ability to continue as a going concern, the guidance requires management to disclose information that enables users of the financial statements to understand the conditions or events that raised the substantial doubt, management's evaluation of the significance of the conditions or events that led to the doubt and management's plans that are intended to mitigate the conditions or events that raised substantial doubt about the entity's ability to continue as a going concern. The guidance is effective for the annual period ending after December 15, 2016 and for annual and interim periods thereafter. We have elected to adopt the provisions of this guidance effective December 31, 2014, as early application is permitted. The adoption of this guidance had no impact on our consolidated financial position, results of operations or cash flows.

In February 2015, the FASB amended the accounting for consolidation of certain legal entities. The amendments modify the evaluation of whether certain legal entities are variable interest entities ("VIEs") or voting interest entities, eliminate the presumption that a general partner should consolidate a limited partnership, affect the consolidation analysis of reporting entities that are involved with VIEs (particularly those that have fee arrangements and related party relationships) and provide a scope exception from consolidation guidance for reporting entities with interests in legal entities. The revised guidance is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted, including adoption in an interim period. If we decide to early adopt the revised guidance in an interim period, any adjustments will be reflected as of the beginning of the fiscal year that includes the interim period. We have not yet selected a transition method and are currently evaluating the impact of the new guidance.

Results of Operations

We were incorporated on December 19, 2013. We purchased our first property and commenced our real estate operations in June 2014. We had no net income (loss) for the period from December 19, 2013 (date of inception) to December 31, 2013.

Year Ended December 31, 2014

Rental Income

Rental income for the year endedDecember 31, 2014 was $2.7 million. As of December 31, 2014, we owned four properties, which were 75.5% leased and had a weighted-average remaining lease term of 7.3 years.

Operating Expense Reimbursements

Operating expense reimbursements for the year endedDecember 31, 2014 was $0.2 million. Pursuant to many of our lease agreements, tenants are required to pay their pro rata share of certain property operating expenses, in addition to base rent, whereas under certain other lease agreements, the tenants are directly responsible for most operating costs of the respective properties.

Property Operating Expenses

Property operating expenses of $0.7 million for the year endedDecember 31, 2014 related to the costs of maintaining our four properties including real estate taxes, condominium fees, utilities, maintenance, repairs and property insurance.

Acquisition and Transaction Related Expenses

Acquisition and transaction related expenses of $6.1 million for the year endedDecember 31, 2014 related to our acquisition of four properties.

General and Administrative Expenses

General and administrative expenses of $0.5 million for the year endedDecember 31, 2014 primarily included professional fees, insurance and board member compensation expense.

Depreciation and Amortization

Depreciation and amortization expenses of $2.0 million for the year endedDecember 31, 2014 related to our acquisition of four properties. The purchase price of acquired properties is allocated to tangible and identifiable intangible assets and depreciated or amortized over the estimated useful lives.

Income from Investment Securities

Income from investment securities of approximately $14,000 for the year endedDecember 31, 2014 related to dividends earned relating to our $0.5 million investment in equity securities.

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Other Income

Other income of approximately $2,000 related to interest income on escrow deposits related to our property acquisitions.

Cash Flows for the Year EndedDecember 31, 2014

During the year ended December 31, 2014, net cash used in operating activities was $5.0 million. The level of cash flows used in or provided by operating activities is affected by the volume of acquisition activity and the receipt of scheduled rent payments. Cash flows used in operating activities during the year ended December 31, 2014 included $6.1 million of acquisition and transaction costs. Cash flows used in operating activities included a net loss adjusted for non-cash items of $4.6 million (net loss of $6.5 million adjusted for non-cash items consisting of depreciation and amortization of tangible and intangible real estate assets and share based compensation of $1.9 million) and an increase in prepaid expenses and other assets of $1.6 million related to prepaid insurance and real estate taxes as well as accounts receivable and unbilled rent receivables recorded in accordance with accounting for rental income on a straight-line basis. These cash outflows were partially offset by an increase in accounts payable and accrued expenses of $1.0 million, primarily related to accrued property operating costs and an increase in deferred rent and other liabilities of $0.2 million.

The net cash used in investing activities during the year ended December 31, 2014 of $256.6 million primarily related to the acquisition of four properties for $256.0 million, consisting of an aggregate purchase price of $254.5 million and amounts deposited in escrow of $2.1 million, net of assumed liabilities of $0.6 million. The amounts deposited in escrow will be released to us in accordance with an escrow agreement. Cash used in investing activities also included $0.5 million in purchases of investment securities and capital expenditures of $0.1 million.

Net cash provided by financing activities of $445.9 million during the year ended December 31, 2014 consisted of proceeds, net of receivables, from the issuance of common stock of $503.4 million, partially offset by payments of offering costs of $54.2 million and distributions to stockholders of $3.3 million.

Liquidity and Capital Resources

As of December 31, 2014, we had cash of $184.3 million. We expect to continue to raise capital through the sale of our common stock and to utilize the net proceeds from the sale of our common stock and proceeds from secured financings to fund future property acquisitions. As of December 31, 2014, we had 20.6 million shares of common stock outstanding, including unvested restricted shares and shares issued pursuant to the DRIP, and had received total gross proceeds from the IPO of $509.9 million. We acquired our first property and commenced real estate operations in June 2014.

Our principal demands for cash will be for acquisition costs, including the purchase price of any properties, loans and securities we acquire, improvement costs, the payment of our operating and administrative expenses, debt service obligations and distributions to our stockholders. Generally, we will fund our acquisitions from the net proceeds of our IPO. We intend to acquire our assets with cash and mortgage or other debt proceeds, but we also may acquire assets free and clear of permanent mortgage or other indebtedness by paying the entire purchase price for the asset in cash or in OP Units.

We expect to fund our future short-term operating liquidity requirements through a combination of net cash provided by our current property operations and the operations of properties to be acquired in the future, proceeds from the sale of common stock and proceeds from secured mortgage financings. Management expects that in the future, as our portfolio matures, cash flow from our properties will be sufficient to fund operating expenses and the payment of our monthly distributions. Other potential future sources of capital include proceeds from secured and unsecured financings from banks or other lenders, proceeds from public and private offerings, proceeds from the sale of properties and undistributed funds from operations.

We expect to use debt financing as a source of capital. Under our charter, the maximum amount of our total indebtedness may not exceed 300% of our total "net assets" (as defined in our charter) as of the date of any borrowing, which is equal to 75% of the cost of our investments. We may exceed that limit if approved by a majority of our independent directors and disclosed to stockholders in our next quarterly report following such borrowing along with justification for exceeding such limit. This charter limitation, however, does not apply to individual real estate assets or investments. In addition, it is currently our intention to limit our aggregate borrowings to 40% to 50% of the aggregate fair market value of our assets unless borrowing a greater amount is approved by a majority of our independent directors and disclosed to stockholders in our next quarterly report following such borrowing along with justification for borrowing such a greater amount. This limitation will be calculated after the close of our IPO and once we have invested substantially all the proceeds of our IPO and will not apply to individual real estate assets or investments. At the date of acquisition of each asset, we anticipate that the cost of investment for such asset will be substantially similar to its fair market value, which will enable us to satisfy our requirements under our charter. However, subsequent events, including changes in the fair market value of our assets, could result in our exceeding these limits. As of December 31, 2014, we had not obtained any debt financing.

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We intend to maintain the following percentage of the overall value of our portfolio in liquid assets that can be liquidated more readily than properties: 5% of our NAV in excess of $1 billion. However, our stockholders should not expect that we will maintain liquid assets at or above this level. To the extent that we maintain borrowing capacity under a line of credit, such available amount will be included in calculating our liquid assets. Our Advisor will consider various factors in determining the amount of liquid assets we should maintain, including, but not limited to, our receipt of proceeds from sales of additional shares, our cash flow from operations, available borrowing capacity under a line of credit, if any, our receipt of proceeds from any asset sale, and the use of cash to fund repurchases. The board of directors will review the amount and sources of liquid assets on a quarterly basis.

Our board of directors has adopted a SRP that enables our stockholders to sell their shares to us under limited circumstances. At the time a stockholder requests a repurchase, we may, subject to certain conditions, repurchase the shares presented for repurchase for cash to the extent we have sufficient funds available to fund such purchase. Repurchases of shares of our common stock, when requested, are at our sole discretion and generally will be made quarterly. There are limits on the number of shares we may repurchase under this program during any 12-month period. Further, we are only authorized to repurchase shares using proceeds secured from our DRIP in any given quarter. As of December 31, 2014, no shares of common stock have been repurchased or requested to be repurchased.

Acquisitions

Our Advisor evaluates potential acquisitions of real estate and real estate-related assets and engages in negotiations with sellers and borrowers on our behalf.  Investors should be aware that after a purchase contract is executed that contains specific terms, the property will not be purchased until the successful completion of due diligence and fully negotiated binding agreements. During this period, we may decide to temporarily invest any unused proceeds from common stock offerings in certain investments that could yield lower returns than the properties. These lower returns may affect our ability to make distributions.

123 William Street

On March 27, 2015, we, through a wholly owned subsidiary of our OP, completed the acquisition of the fee simple interest in an institutional quality office building (the "Property") located at 123 William Street in Downtown Manhattan.

The contract purchase price of the Property was $253.0 million, exclusive of closing costs. We funded the purchase price with proceeds from our IPO as well as a mortgage note payable.

Funds from Operations and Modified Funds from Operations

Due to certain unique operating characteristics of real estate companies, as discussed below, the National Association of Real Estate Investment Trusts ("NAREIT"), an industry trade group, has promulgated a measure known as funds from operations ("FFO"), which we believe to be an appropriate supplemental measure to reflect the operating performance of a REIT. The use of FFO is recommended by the REIT industry as a supplemental performance measure. FFO is not equivalent to net income or loss as determined under GAAP.

We define FFO, a non-GAAP measure, consistent with the standards established by the White Paper on FFO approved by the Board of Governors of NAREIT, as revised in February 2004 (the "White Paper"). The White Paper defines FFO as net income or loss computed in accordance with GAAP, excluding gains or losses from sales of property and asset impairment writedowns, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect FFO. Our FFO calculation complies with NAREIT's policy described above.

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The historical accounting convention used for real estate assets requires straight-line depreciation of buildings and improvements, which implies that the value of real estate assets diminishes predictably over time, especially if such assets are not adequately maintained or repaired and renovated as required by relevant circumstances and/or is requested or required by lessees for operational purposes in order to maintain the value disclosed. We believe that, since real estate values historically rise and fall with market conditions, including inflation, interest rates, the business cycle, unemployment and consumer spending, presentations of operating results for a REIT using historical accounting for depreciation may be less informative. Additionally, we believe it is appropriate to disregard impairment charges, as this is a fair value adjustment that is largely based on market fluctuations and assessments regarding general market conditions which can change over time. An asset will only be evaluated for impairment if certain impairment indicators exist and if the carrying or book value exceeds the total estimated undiscounted future cash flows (including net rental and lease revenues, net proceeds on the sale of the property, and any other ancillary cash flows at a property or group level under GAAP) from such asset. Determinations of whether impairment charges have been incurred are based partly on anticipated operating performance, because estimated undiscounted future cash flows from a property, including estimated future net rental and lease revenues, net proceeds on the sale of the property, and certain other ancillary cash flows, are taken into account in determining whether an impairment charge has been incurred. While impairment charges are excluded from the calculation of FFO as described above, because impairments are based on estimated undiscounted future cash flows and the relatively limited term of our operations, it could be difficult to recover any impairment charges.

Historical accounting for real estate involves the use of GAAP. Any other method of accounting for real estate such as the fair value method cannot be construed to be any more accurate or relevant than the comparable methodologies of real estate valuation found in GAAP. Nevertheless, we believe that the use of FFO, which excludes the impact of real estate related depreciation and amortization and impairments, provides a more complete understanding of our performance to investors and to management, and when compared year over year, reflects the impact on our operations from trends in occupancy rates, rental rates, operating costs, general and administrative expenses, and interest costs, which may not be immediately apparent from net income. However, FFO and modified funds from operations ("MFFO"), as described below, should not be construed to be more relevant or accurate than the current GAAP methodology in calculating net income or in its applicability in evaluating our operating performance. The method utilized to evaluate the value and performance of real estate under GAAP should be construed as a more relevant measure of operational performance and considered more prominently than the non-GAAP FFO and MFFO measures and the adjustments to GAAP in calculating FFO and MFFO.

There have been changes in the accounting and reporting promulgations under GAAP that were put into effect in 2009 subsequent to the establishment of NAREIT's definition of FFO, such as the change to expense as incurred rather than capitalize and depreciate acquisition fees and expenses incurred for business combinations. Management believes these fees and expenses do not affect our overall long-term operating performance. Publicly registered, non-listed REITs typically have a significant amount of acquisition activity and are substantially more dynamic during their initial years of investment and operation, but have a limited and defined acquisition period. Due to the above factors and other unique features of publicly registered, non-listed REITs, the Investment Program Association ("IPA"), an industry trade group, has standardized a measure known as MFFO, which the IPA has recommended as a supplemental measure for publicly registered non-listed REITs and which we believe to be another appropriate supplemental measure to reflect the operating performance of a non-listed REIT having the characteristics described above. MFFO is not equivalent to our net income or loss as determined under GAAP, and MFFO may not be a useful measure of the impact of long-term operating performance on value if we continue to purchase a significant amount of new assets. We believe that, because MFFO excludes costs that we consider more reflective of investing activities and other non-operating items included in FFO and also excludes acquisition and transaction-related fees and expenses that affect our operations only in periods in which properties are acquired, MFFO can provide, on a going forward basis, an indication of the sustainability (that is, the capacity to continue to be maintained) of our operating performance after the period in which we are acquiring properties and once our portfolio is stabilized. By providing MFFO, we believe we are presenting useful information that assists investors and analysts to better assess the sustainability of our operating performance after our IPO has been completed and our portfolio has been stabilized. We also believe that MFFO is a recognized measure of sustainable operating performance by the non-listed REIT industry.

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We define MFFO, a non-GAAP measure, consistent with the IPA's Guideline 2010-01, Supplemental Performance Measure for Publicly Registered, Non-Listed REITs: Modified Funds from Operations ("Practice Guideline") issued by the IPA in November 2010. The Practice Guideline defines MFFO as FFO further adjusted for the following items, as applicable, included in the determination of GAAP net income: acquisition and transaction-related fees and expenses; amounts relating to deferred rent receivables and amortization of above and below market leases and liabilities (which are adjusted in order to reflect such payments from a GAAP accrual basis to a cash basis of disclosing the rent and lease payments); accretion of discounts and amortization of premiums on debt investments; mark-to-market adjustments included in net income; gains or losses included in net income from the extinguishment or sale of debt, hedges, foreign exchange, derivatives or securities holdings where trading of such holdings is not a fundamental attribute of the business plan, unrealized gains or losses resulting from consolidation from, or deconsolidation to, equity accounting, and after adjustments for consolidated and unconsolidated partnerships and joint ventures, with such adjustments calculated to reflect MFFO on the same basis. The accretion of discounts and amortization of premiums on debt investments, gains and losses on hedges, foreign exchange, derivatives or securities holdings, unrealized gains and losses resulting from consolidations, as well as other listed cash flow adjustments are adjustments made to net income in calculating the cash flows provided by operating activities and, in some cases, reflect gains or losses which are unrealized and may not ultimately be realized.

Our MFFO calculation complies with the IPA's Practice Guideline described above. In calculating MFFO, we exclude acquisition and transaction-related expenses, fair value adjustments of derivative financial instruments, amortization of above and below market leases, deferred rent receivables and the adjustments of such items related to non-controlling interests. Under GAAP, acquisition and transaction-related fees and expenses are characterized as operating expenses in determining operating net income during the period in which the asset is acquired. These expenses are paid in cash by us, and therefore such funds will not be available to invest in other assets, pay operating expenses or fund distributions. MFFO that excludes such costs and expenses would only be comparable to that of non-listed REITs that have completed their acquisition and transaction-related activities and have similar operating characteristics as us. Further, under GAAP, certain contemplated non-cash fair value and other non-cash adjustments are considered operating non-cash adjustments to net income in determining cash flow from operating activities. In addition, we view fair value adjustments of derivatives as items which are unrealized. We view both gains and losses from dispositions of assets and fair value adjustments of derivatives as items which are not reflective of ongoing operations and are therefore typically adjusted for when assessing operating performance. While we are responsible for managing interest rate, hedge and foreign exchange risk, we will retain an outside consultant to review all of our hedging agreements. Inasmuch as interest rate hedges are not a fundamental part of our operations, we believe it is appropriate to exclude such gains and losses in calculating MFFO, as such gains and losses are not reflective of ongoing operations. The purchase of properties, and the corresponding expenses associated with that process, is a key operational feature of our business plan to generate operational income and cash flows in order to make distributions to our investors.

We believe that our use of MFFO and the adjustments used to calculate it allow us to present our performance in a manner that reflects certain characteristics that are unique to non-listed REITs, which have defined acquisition periods and targeted exit strategies, and allow us to evaluate our performance against other non-listed REITs. For example, acquisition costs are funded from the proceeds of our IPO and other financing sources and not from operations. By excluding expensed acquisition and transaction-related costs, the use of MFFO provides information consistent with management's analysis of the operating performance of the properties. Additionally, fair value adjustments, which are based on the impact of current market fluctuations and underlying assessments of general market conditions, but can also result from operational factors such as rental and occupancy rates, may not be directly related or attributable to our current operating performance. By excluding such changes that may reflect anticipated and unrealized gains or losses, we believe MFFO provides useful supplemental information.

Presentation of this information is intended to provide useful information to investors as they compare the operating performance of different REITs, although it should be noted that not all REITs calculate FFO and MFFO the same way. Accordingly, comparisons with other REITs may not be meaningful. Furthermore, FFO and MFFO are not necessarily indicative of cash flow available to fund cash needs and should not be considered as an alternative to net income (loss) or income (loss) from continuing operations as an indication of our performance, as an alternative to cash flows from operations as an indication of our liquidity, or indicative of funds available to fund our cash needs including our ability to make distributions to our stockholders. FFO and MFFO should be reviewed in conjunction with other GAAP measurements as an indication of our performance. MFFO has limitations as a performance measure in an ongoing offering such as our IPO where the price of a share of common stock is a stated value and there is no NAV determination during the offering phase and for a period thereafter. MFFO is useful in assisting management and investors in assessing the sustainability of operating performance in future operating periods, and in particular, after the offering and acquisition stages are complete.

Neither the SEC, NAREIT nor any other regulatory body has passed judgment on the acceptability of the adjustments that we use to calculate FFO or MFFO. In the future, the SEC, NAREIT or another regulatory body may decide to standardize the allowable adjustments across the non-listed REIT industry and we would have to adjust our calculation and characterization of FFO or MFFO.

60

The table below reflects the items deducted or added to net loss in our calculation of FFO and MFFO for the periods presented.

	Three Months Ended												Year Ended
(In thousands)	March 31, 2014			June 30, 2014			September 30, 2014			December 31, 2014			December 31, 2014
Net loss (in accordance with GAAP)	$	(16	)	$	(214	)	$	(2,235	)	$	(4,054	)	$	(6,519	)
Depreciation and amortization	—			43			467			1,505			2,015
FFO	(16		)	(171		)	(1,768		)	(2,549		)	(4,504		)
Acquisition and transaction-related fees and expenses	—			142			2,047			3,959			6,148
Amortization of above or accretion of below-market lease liabilities, net	—			(13		)	(37		)	(84		)	(134		)
Straight-line rent	—			—			(31		)	(161		)	(192		)
MFFO	$	(16	)	$	(42	)	$	211		$	1,165		$	1,318

Distributions

On May 22, 2014, our board of directors authorized, and we declared, a distribution payable to stockholders of record each day during the applicable period at a rate equal to $0.0041438356 per day, which is equivalent to $1.5125, based on a 365-day year. The distributions began to accrue to record holders on June 13, 2014, which date represents the closing of our initial property acquisition, and were first paid in July 2014. Distributions to record holders are payable by the 5th day following each month end to stockholders of record at the close of business each day during the prior month.

The amount of distributions payable to our stockholders is determined by our board of directors and is dependent on a number of factors, including funds available for distribution, our financial condition, capital expenditure requirements, as applicable, requirements of Maryland law and annual distribution requirements needed to qualify and maintain our status as a REIT under the Internal Revenue Code of 1986, as amended (the "Code"). Distribution payments are dependent on the availability of funds. Our board of directors may reduce the amount of distributions paid or suspend distribution payments at any time and therefore distribution payments are not assured.

During the year ended December 31, 2014, distributions paid to common stockholders totaled $7.8 million, inclusive of $4.5 million of distributions reinvested through the DRIP. During the year ended December 31, 2014, cash used to pay our distributions was generated from proceeds from the IPO and proceeds from the IPO which were reinvested in common stock issued under our DRIP.

61

The following table shows the sources for the payment of distributions to common stockholders for the periods presented:

	Three Months Ended																				Year Ended
	March 31, 2014					June 30, 2014					September 30, 2014					December 31, 2014					December 31, 2014
(In thousands)				Percentage of Distributions					Percentage of Distributions					Percentage of Distributions					Percentage of Distributions					Percentage of Distributions
Distributions:(1)
Distributions paid in cash	$	—				$	—				$	735				$	2,583				$	3,318
Distributions reinvested	—					—					1,283					3,243					4,526
Distributions on unvested restricted shares	—					—					—					2					2
Total distributions	$	—				$	—				$	2,018				$	5,828				$	7,846
Source of distribution coverage:
Cash flows provided by operations(2)	$	—		—	%	$	—		—	%	$	—		—	%	$	—		—	%	$	—		—	%
Common stock issued under the DRIP / offering proceeds	—			—	%	—			—	%	1,283			63.6	%	3,243			55.6	%	4,526			57.7	%
Proceeds from issuance of common stock	—			—	%	—			—	%	735			36.4	%	2,585			44.4	%	3,320			42.3	%
Proceeds from financings	—			—	%	—			—	%	—			—	%	—			—	%	—			—	%
Total sources of distributions	$	—		—	%	$	—		—	%	$	2,018		100.0	%	$	5,828		100.0	%	$	7,846		100.0	%
Cash flows provided by (used in) operations (GAAP basis)(1)	$	—				$	(445	)			$	(931	)			$	(3,589	)			$	(4,965	)
Net loss (in accordance with GAAP)	$	(16	)			$	(214	)			$	(2,235	)			$	(4,054	)			$	(6,519	)

__________________________________

(1) Excludes distributions related to Class B Units, the expense for which is included in general and administrative expenses on the consolidated statements of operations and comprehensive loss.

(2) Cash flows used in operations for the year ended December 31, 2014 includes cash-related acquisition and transaction related expenses of $6.1 million.

62

The following table compares cumulative distributions paid to cumulative net loss, cumulative cash flows used in operations and cumulative FFO (in accordance with GAAP) for the period from December 19, 2013 (date of inception) through December 31, 2014:

	For the Period
	from December 19, 2013
	(date of inception) to
(in thousands)	December 31, 2014
Distributions paid:
Common stockholders in cash	$	3,318
Common stockholders pursuant to DRIP/offering proceeds	4,526
Unvested restricted shares	2
Total distributions paid	$	7,846
Reconciliation of net loss:
Revenues	$	2,851
Acquisition and transaction-related	(6,148		)
Depreciation and amortization	(2,015		)
Other operating expenses	(1,223		)
Other non-operating income	16
Net loss (in accordance with GAAP)(1)	$	(6,519	)
Cash flows used in operations	$	(4,965	)
FFO	$	(4,504	)

_______________________

(1) Net loss as defined by GAAP includes the non-cash impact of depreciation and amortization as well as costs incurred relating to acquisitions and related transactions.

Contractual Obligations

We did not have any contractual obligations as of December 31, 2014.

Dilution

Our net tangible book value per share is a mechanical calculation using amounts from our balance sheet, and is calculated as (1) total book value of our assets less the net value of intangible assets, (2) minus total liabilities less the net value of intangible liabilities, (3) divided by the total number of shares of common and preferred stock outstanding. It assumes that the value of real estate, and real estate related assets and liabilities diminish predictably over time as shown through the depreciation and amortization of real estate investments. Real estate values have historically risen or fallen with market conditions. Net tangible book value is used generally as a conservative measure of net worth that we do not believe reflects our estimated value per share. It is not intended to reflect the value of our assets upon an orderly liquidation in accordance with our investment objectives. Our net tangible book value reflects dilution in the value of our common and preferred stock from the offer price as a result of (i) operating losses, which reflect accumulated depreciation and amortization of real estate investments, (ii) the funding of distributions from sources other than our cash flow from operations, and (iii) fees paid in connection with our IPO, including commissions, dealer manager fees and other offering costs. As of December 31, 2014, our net tangible book value per share was $18.75. The offering price of shares under the primary portion of our IPO (ignoring purchase price discounts for certain categories of purchasers) at December 31, 2014 was $25.00.

Our offering price was not established on an independent basis and was not based on the actual or projected net value of our assets. Further, even without depreciation in the value of our assets, the other factors described above with respect to the dilution in the value of our common stock are likely to cause our offering price to be higher than the amount that stockholders would receive per share if we were to liquidate at this time.

63

Election as a REIT

We intend to elect and qualify to be taxed as a REIT under Sections 856 through 860 of the Code, effective for our taxable year ended December 31, 2014. We believe that, commencing with such taxable year, we are organized and operate in such a manner as to qualify for taxation as a REIT under the Code. We intend to continue to operate in such a manner to qualify for taxation as a REIT, but no assurance can be given that we will operate in a manner so as to qualify or remain qualified as a REIT. In order to qualify and continue to qualify for taxation as a REIT, we must distribute annually at least 90% of our REIT taxable income. REITs are also subject to a number of other organizational and operational requirements. Even if we qualify for taxation as a REIT, we may be subject to certain state and local taxes on our income and property, and federal income and excise taxes on our undistributed income and taxable REIT subsidiaries.

Inflation

We may be adversely impacted by inflation on any leases that do not contain indexed escalation provisions. In addition, we may be required to pay costs for maintenance and operation of properties which may adversely impact our results of operations due to potential increases in costs and operating expenses resulting from inflation.

Related-Party Transactions and Agreements

We have entered into agreements with affiliates of our Sponsor, whereby we have paid or may in the future pay certain fees or reimbursements to our Advisor, its affiliates and entities under common control with our Advisor in connection with acquisition and financing activities, sales and maintenance of common stock under our offering, transfer agency services, asset and property management services and reimbursement of operating and offering related costs. See Note 8 — Related Party Transactions and Arrangements to our financial statements included in this report for a discussion of the various related party transactions, agreements and fees.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have 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 that are material to investors.

Item 7A. Quantitative and Qualitative Disclosures About 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 rates. As of December 31, 2014, we do not have any debt, but anticipate incurring debt in the future. Our interest rate risk management objectives with respect to our debt will be to limit the impact of interest rate changes on earnings and cash flows and to lower our overall borrowing costs. To achieve these objectives, from time to time, we may enter into interest rate hedge contracts such as swaps and collars in order to mitigate our interest rate risk with respect to various debt instruments. We will not hold or issue these derivative contracts for trading or speculative purposes. We do not anticipate having any material foreign operations and we do not expect to be exposed to material foreign currency fluctuations.

Item 8. Financial Statements and Supplementary Data.

The information required by this Item 8 is hereby incorporated by reference to our Consolidated Financial Statements beginning on page F-1 of this Annual Report on Form 10-K.

Item 9.Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

None.

Item 9A.Controls and Procedures.

Disclosure Controls and Procedures

In accordance with Rules 13a-15(b) and 15d-15(b) of the Exchange Act, management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of the end of the period covered by this annual report on Form 10-K. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded, as of the end of such period, that our disclosure controls and procedures are effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by us in our reports that we file or submit under the Exchange Act.

64

Internal Control Over Financial Reporting

Management's Annual Reporting on Internal Controls over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Exchange Act.

The rules of the SEC do not require, and this Annual Report does not include, a report of management's assessment regarding internal control over financial reporting or an attestation report of our independent registered public accounting firm regarding internal control over financial reporting due to a transition period established by rules of the SEC for newly public companies.

Changes in Internal Control Over Financial Reporting.

During the fourth quarter of our fiscal year ended December 31, 2014, there were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) of the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information.

None.

PART III

Item 10. Directors, Executive Officers and Corporate Governance.

We have adopted a Code of Ethics that applies to all of our executive officers and directors, including but not limited to, our principal executive officer and principal financial officer. A copy of our code of ethics may be obtained, free of charge, by sending a written request to our executive office – 405 Park Avenue – 14^th Floor, New York, NY 10022, attention Chief Financial Officer.

The information required by this Item is incorporated by reference to our annual proxy statement to be filed with the SEC for the fiscal year ended December 31, 2014 (the "Proxy Statement").

Item 11. Executive Compensation.

The information required by this Item is incorporated by reference to our Proxy Statement.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The information required by this Item is incorporated by reference to our Proxy Statement.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

The information required by this Item is incorporated by reference to our Proxy Statement.

Item 14. Principal Accounting Fees and Services.

The information required by this Item is incorporated by reference to our Proxy Statement.

PART IV

Item 15. Exhibits and Financial Statement Schedules.

(a)Financial Statement Schedules

See the Index to Consolidated Financial Statements at page F-1 of this report.

The following financial statement schedule is included herein at page F-25 of this report:

Schedule III – Real Estate and Accumulated Depreciation

(b)Exhibits

65

EXHIBIT INDEX

The following exhibits are included, or incorporated by reference, in this Annual Report on Form 10-K for the year ended December 31, 2014 (and are numbered in accordance with Item 601 of Regulation S-K):

Exhibit No.	Description
1.1 (2)	Exclusive Dealer Manager Agreement, dated as of April 24, 2014, among American Realty Capital New York City REIT, Inc., New York City Advisors, LLC and Realty Capital Securities, LLC
1.2 (3)	Form of Soliciting Dealer Agreement between Realty Capital Securities, LLC and the Soliciting Dealers
3.1 (1)	Articles of Amendment and Restatement for American Realty Capital New York City REIT, Inc.
3.2 (8)	Bylaws of American Realty Capital New York City REIT, Inc.
4.1 (2)	Agreement of Limited Partnership of New York City Operating Partnership, L.P., dated as of April 24, 2014
10.1 (2)	Amended and Restated Subscription Escrow Agreement, dated as of May 5, 2014, among Realty Capital Securities, LLC, American Realty Capital New York City REIT, Inc. and UMB Bank, N.A.
10.2 (2)	Advisory Agreement, dated as of April 24, 2014, by and among American Realty Capital New York City REIT, Inc., New York City Operating Partnership, L.P. and New York City Advisors, LLC
10.3 (2)	Property Management and Leasing Agreement, dated as of April 24, 2014, by and among American Realty Capital New York City REIT, Inc., New York City Operating Partnership, L.P. and New York City Properties, LLC
10.4 (4)	Employee and Director Incentive Restricted Share Plan of American Realty Capital New York City REIT, Inc.
10.5 (5)	Form of Restricted Share Award Agreement Pursuant to the Employee and Director Incentive Restricted Share Plan of American Realty Capital New York City REIT, Inc.
10.6 (2)	Purchase and Sale Agreement, dated June 4, 2014, by and among American Realty Capital New York City REIT, Inc., Sagamore 54th St. Investments LLC and Sagamore Arizona LLC
10.7 (2)	Purchase and Sale Agreement, dated August 7, 2014, by and between 200 Riverside Parking LLC and ARC NYC200RIVER01, LLC
10.8 (2)	Purchase and Sale Agreement, dated August 8, 2014, by and between USPF IV Laurel Retail Owner, L.P. and ARC NYC400E67, LLC
10.9 (6)	Agreement of Purchase and Sale, dated October 11, 2014, by and between 570 7th Avenue Property Owner, L.L.C. and ARC NYC570Seventh, LLC.
10.10 (7)	Indemnification Agreement, dated as of December 31, 2014
10.11 *	Purchase and Sale Agreement, dated January 27, 2015, by and between EEGO 123 William Owner, LLC and ARC NYC123WILLIAM, LLC
14 (2)	American Realty Capital New York City REIT, Inc. Code of Business Conduct and Ethics
16.1 (9)	Letter from Grant Thornton LLP to the Securities and Exchange Commission dated January 28, 2015
21.1*	List of Subsidiaries of American Realty Capital New York City REIT, Inc.
31.1 *	Certification of the Principal Executive Officer of the Company 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 Principal Financial Officer of the Company 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 *	Written statements of the Principal Executive Officer and Principal Financial Officer of the Company pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101 *	XBRL (eXtensible Business Reporting Language). The following materials from American Realty Capital New York City REIT, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2014, formatted in XBRL: (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations and Comprehensive Loss, (iii) the Consolidated Statement of Changes in Equity, (iv) the Consolidated Statements of Cash Flows and (v) the Notes to the Consolidated Financial Statements.

____________________

*     Filed herewith

(1) Filed as an exhibit to the Company’s Registration Statement on Form S-11/A filed with the SEC on April 21, 2014.

(2) Filed as an exhibit to the Company's Quarterly Report on Form 10-Q filed with the SEC on August 14, 2014.

(3) Filed as an exhibit to the Company’s Registration Statement on Form S-11 filed with the SEC on February 26, 2014.

(4) Filed as an exhibit to the Company's Form 8-A filed with the SEC on March 4, 2015

(5) Filed as an exhibit to the Company’s Registration Statement on Form S-11/A filed with the SEC on March 31, 2014.

(6) Filed as an exhibit to the Company's Quarterly Report on Form 10-Q filed with the SEC on November 13, 2014.

(7) Filed as an exhibit to the Company’s Pre-Effective Amendment No. 1 to Post-Effective Amendment No. 4 to Form S-11 filed with the SEC on January 6, 2015

(8) Filed as an exhibit to the Company’s Registration Statement on Form S-11 submitted confidentially to the SEC on January 15, 2014.

(9) Filed as an exhibit to the Company's Post-Effective Amendment No. 5 to Form S-11 filed with the SEC on January 29, 2015.

66

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on this 31st day of March, 2015.

AMERICAN REALTY CAPITAL NEW YORK CITY REIT, INC.
By:	/s/ MICHAEL A. HAPPEL
	MICHAEL A. HAPPEL
	CHIEF EXECUTIVE OFFICER, PRESIDENT AND SECRETARY

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Name	Capacity	Date
/s/ Michael A. Happel	Chief Executive Officer, President and Secretary (Principal Executive Officer)	March 31, 2015
Michael A. Happel
/s/ Gregory W. Sullivan	Chief Financial Officer, Chief Operating Officer and Treasurer (Principal Financial Officer and Principal Accounting Officer)	March 31, 2015
Gregory W. Sullivan
/s/ William M. Kahane	Executive Chairman of the Board of Directors	March 31, 2015
William M. Kahane
/s/ Elizabeth K. Tuppeny	Independent Director	March 31, 2015
Elizabeth K. Tuppeny
/s/ Abby M. Wenzel	Independent Director	March 31, 2015
Abby M. Wenzel

67

AMERICAN REALTY CAPITAL NEW YORK CITY REIT, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	Page
Report of Independent Registered Public Accounting Firm	F-2
Consolidated Balance Sheets as of December 31, 2014 and 2013	F-3
Consolidated Statements of Operations and Comprehensive Loss for the Year Ended December 31, 2014 and for the period from December 19, 2013 (date of inception) to December 31, 2013	F-4
Consolidated Statements of Changes in Equity for the Year Ended December 31, 2014 and for the period from December 19, 2013 (date of inception) to December 31, 2013	F-5
Consolidated Statements of Cash Flows for the Year Ended December 31, 2014 and for the period from December 19, 2013 (date of inception) to December 31, 2013	F-6
Notes to Consolidated Financial Statements	F-7
Financial Statement Schedule:
Schedule III - Real Estate and Accumulated Depreciation	F-25

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders

American Realty Capital New York City REIT, Inc.

We have audited the accompanying consolidated balance sheets of American Realty Capital New York City REIT, Inc. and subsidiaries (the Company) as of December 31, 2014 and 2013, and the related consolidated statements of operations and comprehensive loss, changes in equity, and cash flows for the year ended December 31, 2014 and the period from December 19, 2013 (date of inception) through December 31, 2013. In connection with our audits of the consolidated financial statements, we also have audited the financial statement schedule III, real estate and accumulated depreciation. These consolidated financial statements and financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of American Realty Capital New York City REIT, Inc. and subsidiaries as of December 31, 2014 and 2013, and the results of their operations and their cash flows for the year ended December 31, 2014 and the period from December 19, 2013 (date of inception) through December 31, 2013, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

/s/ KPMG LLP

New York, New York

March 31, 2015

F-2

AMERICAN REALTY CAPITAL NEW YORK CITY REIT, INC

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

	December 31,
	2014			2013
ASSETS
Real estate investments, at cost:
Land	$	83,316		$	—
Building, fixtures and improvements	139,489			—
Acquired intangible assets	47,278			—
Total real estate investments, at cost	270,083			—
Less accumulated depreciation and amortization	(1,970		)	—
Total real estate investments, net	268,113			—
Cash and cash equivalents	184,341			—
Investment securities, at fair value	490			—
Receivables for sale of common stock	2,003			—
Prepaid expenses and other assets	3,618			—
Deferred costs, net	—			35
Total assets	$	458,565		$	35
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable, accrued expenses and other liabilities (including amounts due to affiliates of $1,109 and $0 at December 31, 2014 and 2013, respectively)	$	3,025		$	35
Below-market lease liabilities, net	15,367			—
Deferred revenue	225			—
Distributions payable	2,542			—
Total liabilities	21,159			35
Preferred stock, $0.01 par value, 50,000,000 shares authorized, none issued and outstanding at December 31, 2014 and 2013	—			—
Common stock, $0.01 par value, 300,000,000 shares authorized, 20,569,012 shares issued and outstanding as of December 31, 2014 and no shares issued and outstanding as of December 31, 2013	206			—
Additional paid-in capital	454,131			—
Accumulated other comprehensive loss	(24		)	—
Accumulated deficit	(16,907		)	—
Total stockholders' equity	437,406			—
Total liabilities and stockholders' equity	$	458,565		$	35

The accompanying notes are an integral part of these consolidated financial statements.

F-3

AMERICAN REALTY CAPITAL NEW YORK CITY REIT, INC

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(In thousands, except share and per share data)

				Period from
				December 19, 2013
	Year Ended			(date of inception) to
	December 31, 2014			December 31, 2013
Revenues:
Rental income	$	2,661		$	—
Operating expense reimbursements	190			—
Total revenues	2,851			—
Operating expenses:
Property operating	688			—
Acquisition and transaction related	6,148			—
General and administrative	535			—
Depreciation and amortization	2,015			—
Total operating expenses	9,386			—
Operating loss	(6,535		)	—
Other income:
Income from investment securities	14			—
Other income	2			—
Total other income	16			—
Net loss	$	(6,519	)	$	—
Other comprehensive loss:
Unrealized loss on investment securities	(24		)	—
Comprehensive loss	$	(6,543	)	$	—
Basic and diluted weighted average shares outstanding	4,530,066			—
Basic and diluted net loss per share	$	(1.44	)	$	—

The accompanying notes are an integral part of these consolidated financial statements.

F-4

AMERICAN REALTY CAPITAL NEW YORK CITY REIT, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(In thousands, except share data)

	Common Stock
	Number of Shares	Par Value		Additional Paid-in Capital			Accumulated Other Comprehensive Loss			Accumulated Deficit			Total Stockholders' Equity
Balance, December 19, 2013 (date of inception)	—	$	—	$	—		$	—		$	—		$	—
Issuance of common stock	—	—		—			—			—			—
Net loss	—	—		—			—			—			—
Balance, December 31, 2013	—	—		—			—			—			—
Issuance of common stock	20,374,429	204		505,219			—			—			505,423
Common stock offering costs, commissions and dealer manager fees	—	—		(55,625		)	—			—			(55,625		)
Common stock issued through distribution reinvestment plan	190,584	2		4,524			—			—			4,526
Share-based compensation	3,999	—		13			—			—			13
Distributions declared	—	—		—			—			(10,388		)	(10,388		)
Unrealized loss on investment securities	—	—		—			(24		)	—			(24		)
Net loss	—	—		—			—			(6,519		)	(6,519		)
Balance, December 31, 2014	20,569,012	$	206	$	454,131		$	(24	)	$	(16,907	)	$	437,406

The accompanying notes are an integral part of these consolidated financial statements.

F-5

AMERICAN REALTY CAPITAL NEW YORK CITY REIT, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

				Period from
				December 19, 2013
	Year Ended			(date of inception) to
	December 31, 2014			December 31, 2013
Cash flows from operating activities:
Net loss	$	(6,519	)	$	—
Adjustment to reconcile net loss to net cash provided by operating activities:
Depreciation	843			—
Amortization of intangibles	1,172			—
Amortization (accretion) of market lease assets (liabilities), net	(134		)	—
Share-based compensation	13			—
Changes in assets and liabilities:
Prepaid expenses and other assets	(1,550		)	—
Accounts payable, accrued expenses and other liabilities	985			—
Deferred revenue	225			—
Net cash used in operating activities	(4,965		)	—
Cash flows from investing activities:
Investments in real estate	(255,967		)	—
Purchase of investment securities	(514		)	—
Capital expenditures	(86		)	—
Net cash used in investing activities	(256,567		)	—
Cash flows from financing activities:
Payments of offering costs and fees related to common stock issuances	(54,227		)	—
Proceeds from issuance of common stock	503,420			—
Distributions paid	(3,320		)	—
Net cash provided by financing activities	445,873			—
Net change in cash and cash equivalents	184,341			—
Cash and cash equivalents, beginning of period	—			—
Cash and cash equivalents, end of period	$	184,341		$	—
Supplemental information:
Receivables for sale of common stock	$	2,003		$	—
Accrued offering costs	1,363			—
Reclassification of deferred offering costs to equity	35			—
Liabilities assumed in real estate transactions	642			—
Common stock issued through distribution reinvestment plan	4,526			—

The accompanying notes are an integral part of these consolidated financial statements.

F-6

AMERICAN REALTY CAPITAL NEW YORK CITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2014 and 2013

Note 1 — Organization

American Realty Capital New York City REIT, Inc. (the “Company”) was incorporated on December 19, 2013 as a Maryland corporation and intends to elect and qualify to be taxed as a real estate investment trust (“REIT”) for U.S. federal income tax purposes beginning with its taxable year ended December 31, 2014. On April 24, 2014, the Company commenced its initial public offering (the "IPO") on a "reasonable best efforts" basis of up to 30.0 million shares of common stock, $0.01 par value per share, at a price of $25.00 per share, subject to certain volume and other discounts, pursuant to a registration statement on Form S-11, as amended (File No. 333-194135) (the "Registration Statement") filed with the U.S. Securities and Exchange Commission (the "SEC") under the Securities Act of 1933, as amended (the "Securities Act"). The Registration Statement also covers up to 10.5 million shares available pursuant to a distribution reinvestment plan (the "DRIP") under which the Company's common stockholders may elect to have their distributions reinvested in additional shares of the Company's common stock at a price of $23.75 per share, which is equal to 95% of the offering price in the IPO.

On May 29, 2014, the Company received and accepted subscriptions in excess of the minimum offering amount for the IPO of $2.0 million in shares, broke general escrow and issued shares of common stock to initial investors who were admitted as stockholders of the Company. As of December 31, 2014, the Company had 20.6 million shares of common stock outstanding, including unvested restricted shares and shares issued pursuant to the DRIP, and had received total gross proceeds from the IPO of $509.9 million, inclusive of $4.5 million from the DRIP. Until the net asset value ("NAV") pricing date, the per share purchase price in the IPO will be up to $25.00 per share (including the maximum allowed to be charged for commissions and fees) and shares issued under the DRIP will be equal to $23.75 per share, which is equal to 95% of the offering price in the primary offering. Beginning with the NAV pricing date, the per share price for shares in the IPO and under the DRIP will vary quarterly and will be equal to the NAV per share, as determined by New York City Advisors, LLC (the "Advisor"), plus applicable commissions and fees, in the case of the primary offering, and the per share purchase price in the DRIP will be equal to the NAV per share. The NAV pricing date means the date the Company first publishes an estimated per share NAV, which will be on or prior to October 26, 2016, which is 150 days following the second anniversary from the date the Company broke escrow in the IPO. The Company reserves the right to reallocate shares covered in the Registration Statement between the IPO and the DRIP.

The Company was formed to invest its assets in properties in the five boroughs of New York City, with a focus on Manhattan. The Company may also purchase certain real estate assets that accompany office properties, including retail spaces and amenities, as well as hospitality assets, residential assets and other property types exclusively in New York City. All such properties may be acquired and owned by the Company alone or jointly with another party. As of December 31, 2014, the Company owned four properties consisting of 299,191 rentable square feet, which were 75.5% leased, with a weighted average remaining lease term of 7.3 years.

Substantially all of the Company’s business is conducted through New York City Operating Partnership, L.P. (the “OP”), a Delaware limited partnership. The Company is the sole general partner and holds substantially all of the units of limited partner interests in the OP (“OP units”). The Advisor contributed $2,020 to the OP in exchange for 90 units of limited partner interest in the aggregate OP ownership, which represents a nominal percentage of the aggregate OP ownership. A holder of OP units has the right to convert OP units for the cash value of a corresponding number of shares of the Company's common stock or, at the option of the OP, a corresponding number of shares of the Company's common stock, in accordance with the limited partnership agreement of the OP, provided, however, that such OP units must have been outstanding for at least one year. The remaining rights of the limited partners in the OP 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.

The Company has no direct employees. The Advisor has been retained by the Company to manage the Company's affairs on a day-to-day basis. The Company has retained New York City Properties, LLC (the “Property Manager”) to serve as the Company’s property manager. Realty Capital Securities, LLC (the “Dealer Manager”) serves as the dealer manager of the IPO. The Advisor, Property Manager and Dealer Manager are under common control with the parent of American Realty Capital III, LLC ("the Sponsor"), as a result of which they are related parties, and each of which has received or will receive compensation, fees and expense reimbursements for services related to the IPO and the investment and management of the Company's assets. The Advisor, New York City Special Limited Partner, LLC (the "Special Limited Partner"), Property Manager and Dealer Manager have also received or will also receive fees, distributions and other compensation during the offering, acquisition, operational and liquidation stages.

F-7

AMERICAN REALTY CAPITAL NEW YORK CITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2014 and 2013

Note 2 — Summary of Significant Accounting Policies

Basis of Accounting

The accompanying consolidated financial statements of the Company are prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America ("GAAP").

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its subsidiaries. All inter-company accounts and transactions are eliminated in consolidation. In determining whether the Company has a controlling financial interest in a joint venture and the requirement to consolidate the accounts of that entity, management considers factors such as ownership interest, authority to make decisions and contractual and substantive participating rights of the other partners or members as well as whether the entity is a variable interest entity for which the Company is the primary beneficiary. The Company had no investments in joint ventures or variable interest entities as of December 31, 2014 or 2013.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Management makes significant estimates regarding revenue recognition, purchase price allocations to record investments in real estate, and fair value measurements, as applicable.

Organizational Costs

Organizational costs include accounting, legal and regulatory fees incurred related to the formation of the Company. Organizational costs are expensed as incurred.

Investments in Real Estate

The Company evaluates the inputs, processes and outputs of each asset acquired to determine if the transaction is a business combination or asset acquisition. If an acquisition qualifies as a business combination, the related transaction costs are recorded as an expense in the consolidated statement of operations. If an acquisition qualifies as an asset acquisition, the related transaction costs are generally capitalized and subsequently amortized over the useful life of the acquired assets.

In business combinations, the Company allocates the purchase price of acquired properties to tangible and identifiable intangible assets or liabilities based on their respective fair values. Tangible assets may include land, land improvements, buildings, and fixtures. Intangible assets or liabilities may include the value of in-place leases, above- and below-market leases and other identifiable intangible assets or liabilities based on lease or property specific characteristics.

The fair value of the tangible assets of an acquired property with an in-place operating lease is determined by valuing the property as if it were vacant, and the “as-if-vacant” value is then allocated to the tangible assets based on the fair value of the tangible assets. The fair value of in-place leases is determined by considering estimates of carrying costs during the expected lease-up periods, current market conditions, as well as costs to execute similar leases. The fair value of above-market or below-market leases is recorded based on the present value of the difference between the contractual amount to be paid pursuant to the in-place lease and the Company's estimate of the fair market lease rate for the corresponding in-place lease, measured over the remaining term of the lease, including any below-market fixed rate renewal options for below-market leases. The fair value of other intangible assets, such as real estate tax abatements and signage rights, are recorded based on the present value of the expected benefit and amortized over the expected useful life.

In allocating the fair value to assumed mortgages, if applicable, amounts are recorded to debt premiums or discounts based on the present value of the estimated cash flows, which is calculated to account for either above- or below-market interest rates.

In allocating non-controlling interests, if applicable, amounts are recorded based on the fair value of units issued at the date of acquisition, as determined by the terms of the applicable agreement.

In making estimates of fair values for purposes of allocating purchase price, the Company utilizes a number of sources, including real estate valuations prepared by independent valuation firms. The Company also considers information and other factors including: market conditions, the industry in which the tenant operates, characteristics of the real estate such as location, size, demographics, value and comparative rental rates, tenant credit profile and the importance of the location of the real estate to the operations of the tenant’s business.

F-8

AMERICAN REALTY CAPITAL NEW YORK CITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2014 and 2013

The Company is required to present the operations related to properties that have been sold or properties that are intended to be sold as discontinued operations in the consolidated statements of operations and comprehensive loss at the lesser of carrying amount or fair value less estimated selling costs for all periods presented to the extent the disposal of a component represents a strategic shift that has had or will have a major effect on the Company's operations and financial results. Properties that are intended to be sold will be designated as "held for sale" on the consolidated balance sheets when they meet specific criteria to be presented as held for sale. Properties are no longer depreciated when they are classified as held for sale. The Company did not have any properties held for sale as of December 31, 2014 or 2013.

Intangible assets and acquired lease liabilities consist of the following as of December 31, 2014. The Company had no intangible assets and liabilities as of December 31, 2013.

	December 31, 2014
	Gross Carrying		Accumulated		Net Carrying
(In thousands)	Amount		Amortization		Amount
Intangible assets:
In-place leases	$	11,920	$	721	$	11,199
Other intangibles	31,447		270		31,177
Above-market leases	3,911		136		3,775
Acquired intangible assets	$	47,278	$	1,127	$	46,151
Intangible liabilities:
Below-market lease liabilities	$	15,637	$	270	$	15,367

Depreciation and Amortization

The Company is required to make subjective assessments as to the useful lives of the components of the Company’s real estate investments for purposes of determining the amount of depreciation to record on an annual basis. These assessments have a direct impact on the Company’s net income because if the Company were to shorten the expected useful lives of the Company’s real estate investments, the Company would depreciate these investments over fewer years, resulting in more depreciation expense and lower net income on an annual basis.

Depreciation is computed using the straight-line method over the estimated useful lives of up to 40 years for buildings, 15 years for land improvements, five years for fixtures and improvements, and the shorter of the useful life or the remaining lease term for tenant improvements and leasehold interests.

Capitalized above-market lease values are amortized as a reduction of rental income over the remaining terms of the respective leases. Capitalized below-market lease values are amortized as an increase to rental income over the remaining terms of the respective leases and expected below-market renewal option periods.

The value of in-place leases, exclusive of the value of above-market and below-market in-place leases, is amortized to expense over the remaining periods of the respective leases.

Assumed mortgage premiums or discounts, if applicable, are amortized as an increase or reduction to interest expense over the remaining term of the respective mortgages.

F-9

AMERICAN REALTY CAPITAL NEW YORK CITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2014 and 2013

The following table provides the weighted-average remaining amortization and accretion periods as of December 31, 2014, for intangible assets and liabilities and the projected amortization expense and adjustments to revenues for the next five years:

(Dollar amounts in thousands)	Weighted-Average Remaining Amortization Period	2015			2016			2017			2018			2019
In-place leases	7.2	$	2,442		$	2,067		$	1,512		$	1,242		$	1,066
Other intangibles	36.5	1,165			1,165			1,165			1,165			1,165
Total to be included in depreciation and amortization		$	3,607		$	3,232		$	2,677		$	2,407		$	2,231
Above-market lease assets	9.4	$	(404	)	$	(404	)	$	(404	)	$	(402	)	$	(400	)
Below-market lease liabilities	18.0	1,275			1,267			1,176			1,098			1,037
Total to be included in rental income		$	871		$	863		$	772		$	696		$	637

For the year endedDecember 31, 2014, amortization of in-place leases and other intangibles of $1.2 million is included in depreciation and amortization on the consolidated statements of operations and comprehensive loss. No amortization was recognized for the period from December 19, 2013 (date of inception) to December 31, 2013. For the year endedDecember 31, 2014, net amortization and accretion of above- and below-market lease intangibles of $0.1 million is included in rental income on the consolidated statements of operations and comprehensive loss. No amortization or accretion was recognized for the period from December 19, 2013 (date of inception) to December 31, 2013.

Impairment of Long Lived Assets

When circumstances indicate the carrying value of a property may not be recoverable, the Company reviews the asset for impairment. This review is based on an estimate of the future undiscounted cash flows, excluding interest charges, expected to result from the property’s use and eventual disposition. These estimates consider factors such as expected future operating income, market and other applicable trends and residual value, as well as the effects of leasing demand, competition and other factors. If impairment exists due to the inability to recover the carrying value of a property, an impairment loss is recorded to the extent that the carrying value exceeds the estimated fair value of the property for properties to be held and used. For properties held for sale, the impairment loss is the adjustment to fair value less estimated cost to dispose of the asset. These assessments have a direct impact on net income because recording an impairment loss results in an immediate negative adjustment to net income. The Company did not recognize any impairment charges for the year endedDecember 31, 2014 or for the period from December 19, 2013 (date of inception) to December 31, 2013.

Cash and Cash Equivalents

Cash and cash equivalents includes cash in bank accounts as well as investments in highly liquid money market funds with original maturities of three months or less. The Company deposits cash with high quality financial institutions. These deposits are guaranteed by the Federal Deposit Insurance Company ("FDIC") up to an insurance limit. At December 31, 2014, the Company had deposits of $184.3 million, of which $184.1 million was in excess of the amount insured by the FDIC. The Company had no cash and cash equivalents as of December 31, 2013. Although the Company bears risk to amounts in excess of those insured by the FDIC, it does not anticipate any losses as a result.

Investments in Securities

The Company classifies its investments in debt or equity securities into one of three classes: held-to-maturity, available-for-sale or trading, as applicable.  Investments in debt securities that the Company has the positive intent and ability to hold until maturity are classified as held-to-maturity and are reported at amortized cost.  Debt and equity securities that are bought and held principally for the purposes of selling them in the near future are classified as trading securities.  Debt and equity securities not classified as trading securities or as held-to-maturity securities are classified as available-for-sale securities and are reported at fair value, with unrealized holding gains and losses reported as a component of equity within accumulated other comprehensive income or loss. Gains or losses on securities sold are based on the specific identification method.

F-10

AMERICAN REALTY CAPITAL NEW YORK CITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2014 and 2013

The Company evaluates its investments in securities for impairment or other-than-temporary impairment on a quarterly basis.  The Company reviews each investment individually and assesses factors that may include (i) if the carrying amount of an investment exceeds its fair value, (ii) if there has been any change in the market as a whole or in the investee’s market, (iii) if there are any plans to sell the investment in question or if the Company believes it may be forced to sell its investment, and (iv) if there have been any other factors that would indicate the possibility of the existence of an other-than-temporary impairment. The fair value of the Company’s investments in available-for-sale securities generally rise and fall based on current market conditions. If, after reviewing relevant factors surrounding an impaired security, the Company determines that it will not recover its full investment in an impaired security, the Company recognizes an other-than-temporary impairment charge in the consolidated statements of operations and comprehensive loss in the period in which the other-than-temporary impairment is discovered, regardless of whether or not the Company plans to sell or believes it will be forced to sell the security in question.  The Company did not recognize any other-than-temporary impairment charges for the year endedDecember 31, 2014 or the period from December 19, 2013 (date of inception) to December 31, 2013.

Deferred Costs

Deferred costs may consist of deferred financing costs, deferred offering costs and deferred leasing costs. Deferred financing costs represent commitment fees, legal fees, and other costs associated with obtaining commitments for financing. These costs are amortized over the terms of the respective financing agreements using the effective interest method. Unamortized deferred financing costs are expensed when the associated debt is refinanced or repaid before maturity. Costs incurred in seeking financial transactions that do not close are expensed in the period in which it is determined that the financing will not close.

Deferred offering costs represent professional fees, fees paid to various regulatory agencies, and other costs incurred in connection with registering to sell shares of the Company's common stock.

Deferred leasing costs, consisting primarily of lease commissions and professional fees incurred, are deferred and amortized over the term of the lease.

As of December 31, 2014, the Company had no deferred costs. As of December 31, 2013, the Company had approximately $35,000 in deferred costs, which were comprised entirely of offering costs and reclassified to stockholders' equity upon commencement of the IPO.

Share Repurchase Program

The Company has a Share Repurchase Program ("SRP") that enables stockholders to sell their shares to the Company. Under the SRP, stockholders may request that the Company redeem all or any portion of their shares, subject to certain minimum conditions described below, if such repurchase does not impair the Company's capital or operations.

Prior to the time that the Company's shares are listed on a national securities exchange and until the Company begins to calculate its NAV, the repurchase price per share will depend on the length of time investors have held such shares as follows: after one year from the purchase date — the lower of $23.13 or 92.5% of the amount they actually paid for each share; and, after two years from the purchase date —the lower of $23.75 or 95.0% of the amount they actually paid for each share (in each case, as adjusted for any stock distributions, combinations, splits and recapitalizations).

Once the Company begins to calculate its NAV, the price per share that the Company will pay to repurchase the Company's shares on any business day will be the Company's NAV per share of common stock for the quarter, calculated after the close of business on the first business day of each quarter. Subject to limited exceptions, stockholders who redeem their shares of the Company's common stock within the first four months from the date of purchase will be subject to a short-term trading fee of 2% of the aggregate NAV per share of the shares of common stock received. Because the Company's NAV per share will be calculated quarterly, the redemption price may fluctuate between the redemption request day and the date on which the Company pays redemption proceeds.

Until the Company begins to calculate its NAV, the Company is only authorized to repurchase shares pursuant to the SRP using the proceeds received from the DRIP and will limit the amount spent to repurchase shares in a given quarter to the amount of proceeds received from the DRIP in that same quarter. In addition, the board of directors may reject a request for redemption, at any time. Due to these limitations, the Company cannot guarantee that it will accommodate all repurchase requests. Purchases under the SRP by the Company will be limited in any calendar year to 5% of the weighted average number of shares outstanding during the prior year.

When a stockholder requests redemption and the redemption is approved, the Company will reclassify such obligation from equity to a liability based on the settlement value of the obligation. Shares purchased under the SRP will have the status of authorized but unissued shares. As of December 31, 2014, no shares had been repurchased or requested to be repurchased.

F-11

AMERICAN REALTY CAPITAL NEW YORK CITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2014 and 2013

Distribution Reinvestment Plan

Pursuant to the DRIP, stockholders may elect to reinvest distributions by purchasing shares of common stock in lieu of receiving cash. No dealer manager fees or selling commissions are paid with respect to shares purchased pursuant to the DRIP. Participants purchasing shares pursuant to the DRIP have the same rights and are treated in the same manner as if such shares were issued pursuant to the IPO. The board of directors may designate that certain cash or other distributions be excluded from the DRIP. The Company has the right to amend any aspect of the DRIP or terminate the DRIP with ten days' notice to participants. Shares issued under the DRIP are recorded to equity in the accompanying consolidated balance sheets in the period distributions are declared. As of December 31, 2014, there were 190,584 shares issued under the DRIP.

Revenue Recognition

The Company's revenues, which are derived primarily from rental income, include rents that each tenant pays in accordance with the terms of each lease reported on a straight-line basis over the term of the lease. Since many of the Company's leases provide for rental increases at specified intervals, straight-line basis accounting requires the Company to record a receivable, and include in revenues, unbilled rent receivables that the Company will only receive if the tenant makes all rent payments required through the expiration of the initial term of the lease. The Company defers the revenue related to lease payments received from tenants in advance of their due dates. When the Company acquires a property, the terms of existing leases are considered to commence as of the acquisition date for the purposes of this calculation.

The Company will continually review receivables related to rent and unbilled rent receivables and determine collectability by taking into consideration the tenant's payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in the area in which the property is located. In the event that the collectability of a receivable is in doubt, the Company will record an increase in the Company's allowance for uncollectible accounts or record a direct write-off of the receivable in the Company's consolidated statements of operations and comprehensive loss.

Cost recoveries from tenants are included in operating expense reimbursement in the period the related costs are incurred, as applicable.

The Company may own certain properties with leases that include provisions for the tenant to pay contingent rental income based on a percent of the tenant's sales upon the achievement of certain sales thresholds or other targets, which may be monthly, quarterly or annual targets. As the lessor to the aforementioned leases, the Company defers the recognition of contingent rental income until the specified target that triggered the contingent rental income is achieved, or until such sales upon which percentage rent is based are known. If the Company owns certain properties with leases that include provisions for the tenant to pay contingent rental income, contingent rental income will be included in rental income on the consolidated statements of operations and comprehensive loss.

Offering and Related Costs

Offering and related costs include all expenses incurred in connection with the Company's IPO. Offering costs (other than selling commissions and the dealer manager fee) of the Company may be paid by the Advisor, the Dealer Manager or their affiliates on behalf of the Company. Offering costs will include all expenses incurred by the Company in connection with its IPO as of such date. These costs include but are not limited to (i) legal, accounting, printing, mailing, and filing fees; (ii) escrow service related fees; (iii) reimbursement of the Dealer Manager for amounts it may pay to reimburse the bona fide due diligence expenses of broker-dealers; and (iv) reimbursement to the Advisor for a portion of the costs of its employees and other costs in connection with preparing supplemental sales materials and related offering activities. The Company is obligated to reimburse the Advisor or its affiliates, as applicable, for organization and offering costs paid by them on behalf of the Company, provided that the Advisor is obligated to reimburse the Company to the extent organization and offering costs (excluding selling commissions and the dealer manager fee) incurred by the Company in its offering exceed 2.0% of gross offering proceeds. As a result, these costs are only a liability of the Company to the extent aggregate selling commissions, dealer manager fees and other organization and offering costs do not exceed 12.0% of the gross proceeds determined at the end of the IPO (See Note 8 — Related Party Transactions and Arrangements).

Share-Based Compensation

The Company has a stock-based incentive award plan, which is accounted for under the guidance for share based payments. The expense for such awards are included in general and administrative expenses and are recognized over the vesting period or when the requirements for exercise of the award have been met (See Note 10 — Share-Based Compensation).

F-12

AMERICAN REALTY CAPITAL NEW YORK CITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2014 and 2013

Income Taxes

The Company intends to elect and qualify to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code commencing with the taxable year ended December 31, 2014. In order to qualify and continue to qualify as a REIT, the Company must meet a number of organizational and operational requirements, including a requirement that the Company distribute annually at least 90% of the Company’s REIT taxable income to the Company’s stockholders. If the Company fails to continue to qualify as a REIT in any taxable year and does not qualify for certain statutory relief provisions, the Company will be subject to U.S. federal and state income taxes at regular corporate rates (including any applicable alternative minimum tax) beginning with the year in which it fails to qualify and may be precluded from being able to elect to be treated as a REIT for the Company’s four subsequent taxable years. Even if the Company qualifies for taxation as a REIT, it may be subject to certain state and local taxes on its income and property, and federal income and excise taxes on its undistributed income. Because the election of REIT status is reasonably expected, income tax expense has been determined assuming the Company is a REIT.

Per Share Data

The Company calculates basic income (loss) per share by dividing net income (loss) for the period by weighted-average shares of its common stock outstanding for a respective period. Diluted income per share takes into account the effect of dilutive instruments, such as OP units, Class B units and unvested restricted stock, but uses the average share price for the period in determining the number of incremental shares that are to be added to the weighted-average number of shares outstanding. See Note 11 - Net Loss Per Share for a discussion of the common share equivalents which have been excluded from the calculation of diluted net loss per share as their impact would have been antidilutive.

Reportable Segments

The Company has determined that it has one reportable segment, with activities related to investing in real estate. The Company's investments in real estate generate rental revenue and other income through the leasing of properties, which will comprise 100% of total consolidated revenues. Management evaluates the operating performance of the Company's investments in real estate on an individual property level.

Recent Accounting Pronouncements

In April 2014, the Financial Accounting Standards Board ("FASB") amended the requirements for reporting discontinued operations. Under the revised guidance, in addition to other disclosure requirements, a disposal of a component of an entity or a group of components of an entity is required to be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity's operations and financial results when the component or group of components meets the criteria to be classified as held for sale, disposed of by sale or other than by sale. The Company has adopted the provisions of this guidance effective January 1, 2014, and has applied the provisions prospectively. The adoption of this guidance did not have a material impact on the Company's consolidated financial position, results of operations or cash flows.

In May 2014, the FASB issued revised guidance relating to revenue recognition. Under the revised guidance, an entity is required to recognize revenue when it transfers 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. The revised guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is not permitted under GAAP. The revised guidance allows entities to apply the full retrospective or modified retrospective transition method upon adoption. The Company has not yet selected a transition method and is currently evaluating the impact of the new guidance.

In August 2014, the FASB issued guidance relating to disclosure of uncertainties about an entity's ability to continue as a going concern. In connection with preparing financial statements for each annual and interim reporting period, management should evaluate whether there are conditions or events that raise substantial doubt about the entity's ability to continue as a going concern within one year after the date that the financial statements are issued. If conditions or events raise substantial doubt about the entity's ability to continue as a going concern, the guidance requires management to disclose information that enables users of the financial statements to understand the conditions or events that raised the substantial doubt, management's evaluation of the significance of the conditions or events that led to the doubt and management's plans that are intended to mitigate the conditions or events that raised substantial doubt about the entity's ability to continue as a going concern. The guidance is effective for the annual period ending after December 15, 2016 and for annual and interim periods thereafter. The Company has elected to adopt the provisions of this guidance effective December 31, 2014, as early application is permitted. The adoption of this guidance had no material impact on the Company's consolidated financial position, results of operations or cash flows.

F-13

AMERICAN REALTY CAPITAL NEW YORK CITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2014 and 2013

In February 2015, the FASB amended the accounting for consolidation of certain legal entities. The amendments modify the evaluation of whether certain legal entities are variable interest entities ("VIEs") or voting interest entities, eliminate the presumption that a general partner should consolidate a limited partnership, affect the consolidation analysis of reporting entities that are involved with VIEs (particularly those that have fee arrangements and related party relationships) and provide a scope exception from consolidation guidance for reporting entities with interests in legal entities. The revised guidance is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted, including adoption in an interim period. If the Company decides to early adopt the revised guidance in an interim period, any adjustments will be reflected as of the beginning of the fiscal year that includes the interim period. The Company has not yet selected a transition method and is currently evaluating the impact of the new guidance.

Note 3 — Real Estate Investments

On June 13, 2014, the Company, through a wholly owned subsidiary of the OP, completed the acquisition of a commercial condominium unit located at 421 West 54th Street in the Midtown West neighborhood of Manhattan (the "Hit Factory"). The sellers of the Hit Factory were Sagamore 54th St. Investments LLC and Sagamore Arizona LLC, as tenants in common, which had no preexisting relationship with the Company. The purchase price of the Hit Factory was $7.3 million, exclusive of closing costs and net of any purchase price adjustments, and was funded with proceeds from the Company's ongoing IPO. The Company accounted for the purchase of the Hit Factory as a business combination and incurred acquisition related costs of $0.2 million, which are reflected in the acquisition and transaction related line item of the consolidated statements of operations and comprehensive loss.

On September 5, 2014, the Company, through a wholly owned subsidiary of the OP, completed the acquisition of three commercial condominium units located at 400 East 67th Street (the "Laurel Condominium") in the Upper East Side neighborhood of Manhattan. The seller of the Laurel Condominium was USPF IV Laurel Retail Owner, L.P., which had no preexisting relationship with the Company. The purchase price for the Laurel Condominium was $76.0 million, exclusive of closing costs and net of any purchase price adjustments, and was funded with proceeds from the Company's ongoing IPO. The Company accounted for the purchase of the Laurel Condominium as a business combination and incurred acquisition related costs of $1.8 million, which are reflected in the acquisition and transaction related line item of the consolidated statements of operations and comprehensive loss.

On September 24, 2014, the Company, through a wholly owned subsidiary of the OP, completed the acquisition of the fee simple interest in a commercial garage unit located at 200 Riverside Boulevard ("200 Riverside Boulevard") in the Upper West Side neighborhood of Manhattan. The seller of 200 Riverside Boulevard was 200 Riverside Parking, LLC, which had no preexisting relationship with the Company. The purchase price of 200 Riverside Boulevard was $9.0 million, exclusive of closing costs and net of any purchase price adjustments, and was funded with proceeds from the Company's ongoing IPO. The Company accounted for the purchase of 200 Riverside Boulevard as a business combination and incurred acquisition related costs of $0.2 million, which are reflected in the acquisition and transaction related line item of the consolidated statements of operations and comprehensive loss.

On November 5, 2014, the Company, through a wholly owned subsidiary of the OP, completed its acquisition of the fee simple interest in an institutional-quality office building located at 570 Seventh Avenue ("570 Seventh Avenue") in Times Square, Manhattan. The seller of the property was 570 7th Avenue Property Owner, L.L.C., which had no preexisting relationship with the Company. The purchase price of 570 Seventh Avenue was $162.3 million, exclusive of closing costs and net of any purchase price adjustments, and was funded with proceeds from the Company's ongoing IPO. The Company accounted for the purchase of 570 Seventh Avenue as a business combination. The Company incurred acquisition related costs of $3.9 million, which are reflected in the acquisition and transaction related line item of the consolidated statements of operations and comprehensive loss.

F-14

AMERICAN REALTY CAPITAL NEW YORK CITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2014 and 2013

The following table presents the allocation of real estate assets acquired during the year ended December 31, 2014. No real estate assets were acquired during the period from December 19, 2013 (date of inception) to December 31, 2013.

	Year Ended
(Dollar amounts in thousands)	December 31, 2014
Real estate investments, at cost:
Land	$	83,316
Buildings, fixtures and improvements	139,403
Total tangible assets	222,719
Acquired intangibles:
In-place leases	12,102
Above-market lease assets	3,911
Other intangibles	31,446
Below-market lease liabilities	(15,637		)
Total assets acquired, net	254,541
Funds deposited in escrow	2,068
Other liabilities assumed	(642		)
Cash paid for acquired real estate investment	$	255,967
Number of properties purchased	4

The following table presents unaudited pro forma information as if the acquisitions during the year ended December 31, 2014 had been consummated on December 19, 2013 (date of inception). Additionally, the unaudited pro forma net loss was adjusted to reclassify acquisition and transaction related expense of $6.1 million from the year ended December 31, 2014 to the period from December 19, 2013 (date of inception) to December 31, 2013.

				Period from
				December 19, 2013
	Year Ended			(date of inception) to
(In thousands, except per share data)	December 31, 2014			December 31, 2013
Pro forma revenues (1)	$	11,203		$	399
Pro forma net loss (1)	$	(2,746	)	$	(6,227	)
Basic and diluted pro forma net loss per share (2)	$	(0.61	)	N/A

(1) For the the year ended December 31, 2014, aggregate revenues and net income derived from the Company's acquisitions (for the Company's period of ownership) were $2.9 million and $0.1 million, respectively.

(2) The Company did not have any shares outstanding as of December 31, 2013.

F-15

AMERICAN REALTY CAPITAL NEW YORK CITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2014 and 2013

On March 27, 2015, the Company completed its acquisition of the property at 123 William Street in downtown Manhattan. As of the date that these consolidated financial statements were available to be issued, the Company was still reviewing the financial information of 123 William Street and, as such, it was impractical to include in these consolidated financial statements the pro-forma effect of the acquisition. See Note 13 - Subsequent Events for more information.

The following table presents future minimum base rental cash payments due to the Company over the next five years and thereafter. These amounts exclude contingent rent payments, as applicable, that may be collected 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 Base Rent Payments
2015	$	7,865
2016	7,653
2017	7,171
2018	6,723
2019	6,613
Thereafter	32,570
	$	68,595

The following table lists the tenants whose annualized rental income on a straight-line basis represented greater than 10% of total annualized rental income for all portfolio properties on a straight-line basis as of December 31, 2014:

		December 31,
Property Portfolio	Tenant	2014
400 E. 67th Street - Laurel Condominium	Cornell University	26.0%
400 E. 67th Street - Laurel Condominium	TD Bank, N.A.	10.9%

The termination, delinquency or non-renewal of these leases by the above tenants may have a material adverse effect on revenues.

Note 4 — Investment Securities

As of December 31, 2014, the Company had investments in equity securities with a fair value of $0.5 million. The Company held no investment securities as of December 31, 2013. The equity securities consist of a mutual fund managed by an affiliate of the Sponsor (see Note 8 —Related Party Transactions and Arrangements). These investments are considered to be available-for-sale securities 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 on the consolidated balance sheets unless the securities are considered to be other-than-temporarily impaired, at which time the losses would be reclassified to expense.

The following table details the unrealized gains and losses on investment securities by security type as of December 31, 2014:

(In thousands)	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Equity securities	$	514	$	—	$	(24	)	$	490

The Company's investment in equity securities has been in a continuous unrealized loss position for less than twelve months. The Company believes that the decline in fair value is solely a factor of current market conditions and, as such, considers the unrealized losses as of December 31, 2014 to be temporary and therefore no impairment was recorded during the year endedDecember 31, 2014.

F-16

AMERICAN REALTY CAPITAL NEW YORK CITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2014 and 2013

Note 5 — Fair Value of Financial Instruments

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 instrument. This alternative approach also reflects the contractual terms of the instrument, as applicable, including the period to maturity, and may use observable market-based inputs, including interest rate curves and implied volatilities, and unobservable inputs, such as expected volatility. The 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 that reflect the entity's own 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. However, the Company expects that changes in classifications between levels will be rare.

The Company has an investment in a real estate income fund that is traded in active markets and therefore, due to the availability of quoted market prices in active markets, classified this investment as Level 1 in the fair value hierarchy.

The following table presents information about the Company's asset measured at fair value on a recurring basis as of December 31, 2014, aggregated by the level in the fair value hierarchy within which that instrument falls. The Company had no assets measured at fair value on a recurring basis as of December 31, 2013.

	Quoted Prices in Active Markets		Significant Other Observable Inputs		Significant Unobservable Inputs
(In thousands)	Level 1		Level 2		Level 3		Total
December 31, 2014
Investment Securities	$	490	$	—	$	—	$	490

There were no transfers between levels of the fair value hierarchy during the year endedDecember 31, 2014 or the period from December 19, 2013 (date of inception) to December 31, 2013.

Financial instruments not carried at fair value

The Company is required to disclose at least annually the fair value of financial instruments for which it is practicable to estimate the value. The fair value of short-term financial instruments such as cash, receivables for sale of common stock, prepaid expenses and other assets, accounts payable and distributions payable approximates their carrying value on the consolidated balance sheet due to their short-term nature. 

Note 6 — Common Stock

The Company had 20.6 million shares of common stock outstanding, including unvested restricted shares and shares issued pursuant to the DRIP, for gross proceeds of $509.9 million as of December 31, 2014. The Company had no shares of common stock outstanding and had received no proceeds as of December 31, 2013.

F-17

AMERICAN REALTY CAPITAL NEW YORK CITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2014 and 2013

On May 22, 2014, the Company's board of directors authorized, and the Company declared, a distribution payable to stockholders of record each day during the applicable period at a rate equal to $0.0041438356 per day based on a price of $25.00 per share of common stock. The distributions began to accrue on June 13, 2014, which date represents the closing of the Company’s initial property acquisition. The distributions are payable by the 5th day following each month end to stockholders of record at the close of business each day during the prior month. Distribution payments are dependent on the availability of funds. The board of directors may reduce the amount of distributions paid or suspend distributions payments at any time and therefore distribution payments are not assured.

Note 7 — Commitments and Contingencies

Litigation and Regulatory Matters

In the ordinary course of business, the Company may become subject to litigation, claims and regulatory matters. There are no material legal or regulatory proceedings pending or known to be contemplated against the Company.

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. As of December 31, 2014, 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 that it believes will have a material adverse effect on the results of operations.

Note 8 — Related Party Transactions and Arrangements

As of December 31, 2014, the Special Limited Partner owned 8,888 shares of the Company’s outstanding common stock. The Special Limited Partner did not own any shares of the Company's outstanding common stock as of December 31, 2013.

As of December 31, 2014, the Company had $0.5 million invested in a mutual fund managed by an affiliate of the Sponsor (see Note 4 - Investment Securities). There is no obligation to purchase any additional shares and the shares can be sold at any time.

Fees Paid in Connection with the IPO

The Dealer Manager is paid fees and compensation in connection with the sale of the Company's common stock in the IPO. The Dealer Manager is paid a selling commission of up to 7.0% of the per share purchase price of offering proceeds before reallowance of commissions earned by participating broker-dealers. In addition, the Dealer Manager is paid up to 3.0% of the gross proceeds from the sale of shares as a dealer manager fee. The Dealer Manager may reallow its dealer manager fee to participating broker-dealers. A participating broker-dealer may elect to receive a fee equal to 7.5% of the gross proceeds from the sale of shares (not including selling commissions and dealer manager fees) by such participating broker-dealer, with 2.5% thereof paid at the time of such sale and 1.0% thereof paid on each anniversary of the closing of such sale up to and including the fifth anniversary of the closing of such sale. If this option is elected, the dealer manager fee will be reduced to 2.5% of gross proceeds (not including selling commissions and dealer manager fees).

The following table details total selling commissions and dealer manager fees incurred from and due to the Dealer Manager as of and for the periods presented:

			Period from
			December 19, 2013
	Year Ended		(date of inception) to		Payable as of
(In thousands)	December 31, 2014		December 31, 2013		December 31, 2014		December 31, 2013
Total commissions and fees incurred from the Dealer Manager	$	46,997	$	—	$	197	$	—

F-18

AMERICAN REALTY CAPITAL NEW YORK CITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2014 and 2013

The Advisor and its affiliates are paid compensation and receive reimbursement for services relating to the IPO, including transfer agent services and other professional services provided by an affiliate of the Dealer Manager. All offering costs incurred by the Company, the Advisor and its affiliated entities on behalf of the Company are charged to additional paid-in capital on the accompanying consolidated balance sheets as of December 31, 2014. The following table details offering costs and reimbursements incurred from and due to the Advisor and affiliates of the Dealer Manager as of and for the periods presented:

			Period from
			December 19, 2013
	Year Ended		(date of inception) to		Payable as of
(In thousands)	December 31, 2014		December 31, 2013		December 31, 2014		December 31, 2013
Fees and expense reimbursements from the Advisor and affiliates of the Dealer Manager	$	6,656	$	—	$	912	$	—

The Company is responsible for paying offering and related costs from the IPO, excluding commissions and dealer manager fees, up to a maximum of 2.0% of gross proceeds received from the IPO, measured at the end of the IPO. Offering costs in excess of the 2.0% cap as of the end of the IPO are the Advisor’s responsibility. As of December 31, 2014, offering and related costs did not exceed 2.0% of gross proceeds received from the IPO.

As of December 31, 2014, cumulative offering costs, including selling commissions and dealer manager fees, were $55.6 million. Offering costs are only a liability to the Company to the extent aggregate selling commissions, dealer manager fees and other organization and offering costs do not exceed 12.0% of the gross proceeds determined at the end of the IPO. During the IPO, beginning after the general escrow break, the Advisor elected to cap cumulative offering costs, including selling commissions and dealer manager fees, incurred by the Company, net of unpaid amounts, to 15% of gross common stock proceeds. Cumulative offering costs, including selling commissions and dealer manager fees, net of unpaid amounts, were less than the 15% threshold as of December 31, 2014.

Fees Paid in Connection With the Operations of the Company

The Advisor is paid an acquisition fee of 1.5% of the contract purchase price of each acquired property and 1.5% of the amount advanced for a loan or other investment. The Advisor is also reimbursed for expenses actually incurred related to selecting, evaluating and acquiring assets on the Company's behalf, regardless of whether the Company actually acquires the related assets. Specifically, the Company pays the Advisor or its affiliates for any services provided for which they incur investment-related expenses, or insourced expenses. Such insourced expenses are fixed initially at and shall not exceed 0.50% of the purchase price of each property and 0.50% of the amount advanced for each loan or other investment, which is paid at the closing of each such investment. The Advisor is also reimbursed for legal expenses incurred in the process of acquiring properties, in an amount not to exceed 0.10% of the contract purchase price. In addition, the Company also pays third parties, or reimburses the Advisor for any investment-related expenses due to third parties. In no event will the total of all acquisition fees, acquisition expenses and any financing coordination fees (as described below) payable with respect to the Company's portfolio of investments exceed 4.5% of the contract purchase price or 4.5% of the amount advanced for all loans or other investments. Once the proceeds from the primary offering have been fully invested, the aggregate amount of acquisition fees and any financing coordination fees may not exceed 4.5% of the contract purchase price and the amount advanced for a loan or other investment, as applicable, for all the assets acquired.

If the Advisor provides services in connection with the origination or refinancing of any debt that the Company obtains and uses to acquire properties or to make other permitted investments, or that is assumed, directly or indirectly, in connection with the acquisition of properties, the Company pays the Advisor a financing coordination fee equal to 0.75% of the amount made available or outstanding under such financing, subject to certain limitations.

F-19

AMERICAN REALTY CAPITAL NEW YORK CITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2014 and 2013

For its asset management services, the Company causes the OP to issue restricted Class B units in the OP (“Class B Units”) to the Advisor on a quarterly basis in an amount equal to: (i) the cost of assets (or the lower of the cost of assets and the applicable quarterly NAV multiplied by 0.1875% once the Company begins calculating NAV) multiplied by 0.1875% divided by (ii) the value of one share of common stock as of the last day of such calendar quarter, which is equal initially to $22.50 (the primary offering price minus selling commissions and dealer manager fees) and, at such time as the Company calculates NAV, to per share NAV. The Class B Units are intended to be profits interests and will vest, and no longer be subject to forfeiture, at such time as: (a) the value of the OP's assets plus all distributions made by the Company to its stockholders equals or exceeds the total amount of capital contributed by investors plus a 6.0% cumulative, pretax, non-compounded annual return thereon, or the "economic hurdle;" (b) any one of the following events occurs concurrently with or subsequently to the achievement of the economic hurdle described above: (i) a listing of the Company's common stock on a national securities exchange; (ii) a transaction to which the Company or the OP is a party, as a result of which OP units or the Company's common stock are or will be exchanged for or converted into the right, or the holders of such securities will otherwise be entitled, to receive cash, securities or other property or any combination thereof; or (iii) the termination of the advisory agreement without cause by an affirmative vote of a majority of the Company's independent directors after the economic hurdle has been met; and (c) the Advisor pursuant to the advisory agreement is providing services to the Company immediately prior to the occurrence of an event of the type described in clause (b) above, unless the failure to provide such services is attributable to the termination without cause of the advisory agreement by an affirmative vote of the majority of the Company's independent directors after the economic hurdle has been met (the "performance condition"). The value of issued Class B Units will be determined and expensed when the Company deems the achievement of the performance condition to be probable. As of December 31, 2014, the Company cannot determine the probability of achieving the performance condition. The Advisor receives distributions on unvested Class B Units equal to the distribution rate received on the Company's common stock. Such distributions on issued Class B Units will be expensed in the consolidated statement of operations and comprehensive loss until the performance condition is considered probable to occur. As of December 31, 2014, the Company's board of directors has approved the issuance of 8,361 Class B Units in connection with the arrangement.

Unless the Company contracts with a third party, the Company pays the Property Manager a property management fee equal to: (i) for non-hotel properties, 4.0% of gross revenues from the properties managed, plus market-based leasing commissions; and (ii) for hotel properties, a market-based fee based on a percentage of gross revenues. The Company also reimburses the Property Manager for property-level expenses. The Property Manager may subcontract the performance of its property management and leasing services duties to third parties and pay all or a portion of its property management fee to the third parties with whom it contracts for these services.

The Company reimburses the Advisor’s costs of providing administrative services, subject to the limitation that the Company will not reimburse the Advisor for any amount by which the Company’s operating expenses at the end of the four preceding fiscal quarters exceeds the greater of (a) 2.0% of average invested assets and (b) 25.0% of net income other than any additions to reserves for depreciation, bad debt, impairments or other similar non-cash expenses and excluding any gain from the sale of assets for that period. Additionally, the Company reimburses the Advisor for personnel costs in connection with other services during the operational stage; however, the Company may not reimburse the Advisor for personnel costs in connection with services for which the Advisor receives acquisition fees or real estate commissions.

F-20

AMERICAN REALTY CAPITAL NEW YORK CITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2014 and 2013

The following table details amounts incurred, forgiven and payable in connection with the Company's operations-related services described above as of and for the periods presented:

					Period from
					December 19, 2013
	Year Ended				(date of inception) to				Payable as of
	December 31, 2014				December 31, 2013				December 31,		December 31,
(In thousands)	Incurred		Forgiven		Incurred		Forgiven		2014		2013
Acquisition fees and reimbursements:
Acquisition fees and related cost reimbursements	$	5,251	$	—	$	—	$	—	$	—	$	—
Ongoing fees:
Property management and leasing fees	—		101		—		—		—		—
Distributions on Class B units	2		—		—		—		—		—
Total related party operation fees and reimbursements	$	5,253	$	101	$	—	$	—	$	—	$	—

Fees Paid in Connection with the Liquidation or Listing of the Company's Real Estate Assets

The Company will pay to the Advisor an annual subordinated performance fee calculated on the basis of the Company’s return to stockholders, payable annually in arrears, such that for any year in which investors receive payment of 6.0% per annum, the Advisor will be entitled to 15.0% of the excess return, provided that the amount paid to the Advisor does not to exceed 10.0% of the aggregate return for such year, and that the amount paid to the Advisor will not be paid unless investors receive a return of capital contributions. This fee will be paid only upon the sale of assets, distributions or other event which results in the return on stockholders’ capital exceeding 6.0% per annum. No subordinated performance fees were incurred during the year endedDecember 31, 2014 or the period from December 19, 2013 (date of inception) to December 31, 2013.

The Company will pay to the Advisor a brokerage commission to the Advisor or its affiliates on the sale of property, not to exceed the lesser of 2.0% of the contract sale price of the property and 50.0% of the total brokerage commission paid if a third party broker is also involved; provided, however, that in no event may the real estate commissions paid to the Advisor, its affiliates and unaffiliated third parties exceed the lesser of 6.0% of the contract sales price and a reasonable, customary and competitive real estate commission, in each case, payable to the Advisor if the Advisor or its affiliates, as determined by a majority of the independent directors, provided a substantial amount of services are provided in connection with the sale. No such fees were incurred during the year endedDecember 31, 2014 or the period from December 19, 2013 (date of inception) to December 31, 2013.

Upon a sale of all or substantially all assets, the Special Limited Partner will receive a subordinated distribution from the OP equal to 15.0% of remaining net sale proceeds after return of capital contributions to investors plus payment to investors of an annual 6.0% cumulative, pre-tax non-compounded annual return on the capital contributed by investors. The Special Limited Partner will not be entitled to the subordinated participation in net sale proceeds unless the Company’s investors have received a return of their capital plus a 6.0% cumulative non-compounded annual return on their capital contributions. No such distributions were incurred during the year endedDecember 31, 2014 or the period from December 19, 2013 (date of inception) to December 31, 2013.

If the Company’s shares of common stock are listed on a national exchange, the Special Limited Partner will receive a subordinated incentive listing distribution from the OP equal to 15.0% of the amount by which the Company’s market value plus distributions exceeds the aggregate capital contributed by investors plus an amount equal to a 6.0% cumulative, pre-tax non-compounded annual return to investors. The Special Limited Partner will not be entitled to the subordinated incentive listing distribution unless the Company's market value plus distribution exceeds the investors' capital plus a return equal to an annual 6.0% cumulative, pre-tax non-compounded annual return on their capital contributions. No such distributions were incurred during the year endedDecember 31, 2014 or the period from December 19, 2013 (date of inception) to December 31, 2013. The Special Limited Partner cannot earn both the subordinated participation in net sales proceeds and the subordinated incentive listing distribution.

F-21

AMERICAN REALTY CAPITAL NEW YORK CITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2014 and 2013

Upon termination or non-renewal of the advisory agreement with or without cause, the Special Limited Partner will be entitled to receive distributions from the OP equal to 15.0% of the amount by which the sum of the Company’s market value plus distributions exceeds the sum of the aggregate capital contributed by investors plus an amount equal to an annual 6.0% cumulative, pre-tax, non-compounded annual return to investors. The Special Limited Partner may elect to defer its right to receive a subordinated distribution upon termination until either a listing on a national securities exchange or other liquidity event occurs.

Note 9 — Economic Dependency

Under various agreements, the Company has engaged or will engage the Advisor, its affiliates and entities under common control with the Advisor to provide certain services that are essential to the Company, including asset management services, supervision of the management and leasing of properties owned by the Company, asset acquisition and disposition decisions, the sale of shares of the Company's common stock available for issue, transfer agency services, as well as other administrative responsibilities for the Company including accounting services, transaction management services and investor relations.

As a result of these relationships, the Company is dependent upon the Advisor and its affiliates. In the event that the Advisor and its affiliates are unable to provide the Company with the respective services, the Company will be required to find alternative providers of these services.

Note 10 — Share-Based Compensation

Restricted Share Plan

The Company has an employee and director incentive restricted share plan (the “RSP”), which provides for the automatic grant of 1,333 restricted shares of common stock to each of the independent directors, without any further approval by the Company’s board of directors or the stockholders, on the date of initial election to the board of directors and on the date of each annual stockholder’s meeting. Restricted stock issued to independent directors vests over a five-year period following the date of grant in increments of 20.0% per annum. The RSP provides the Company with the ability to grant awards of restricted shares to the Company’s directors, officers and employees (if the Company ever has employees), employees of the Advisor and its affiliates, employees of entities that provide services to the Company, directors of the Advisor or of entities that provide services to the Company, certain consultants to the Company and the Advisor and its affiliates or to entities that provide services to the Company. The total number of common shares granted under the RSP shall not exceed 5.0% of the Company’s outstanding shares of common stock on a fully diluted basis at any time and in any event will not exceed 1.5 million shares (as such number may be adjusted for stock splits, stock dividends, combinations and similar events).

Restricted share awards entitle the recipient to receive shares of common stock from the Company under terms that provide for vesting over a specified period of time or upon attainment of pre-established performance objectives. Such awards would typically be forfeited with respect to the unvested shares upon the termination of the recipient’s employment or other relationship with the Company. Restricted shares may not, in general, be sold or otherwise transferred until restrictions are removed and the shares have vested. Holders of restricted shares may receive cash distributions prior to the time that the restrictions on the restricted shares have lapsed. Any distributions payable in shares of common stock shall be subject to the same restrictions as the underlying restricted shares. As of December 31, 2014, there were 3,999 unvested restricted shares issued to independent directors under the RSP at $22.50 per share. There were no such restricted shares outstanding as of December 31, 2013. The fair value of the restricted shares is expensed on a straight-line basis over the service period of five years. Compensation expense related to restricted stock was approximately $13,000 for the year endedDecember 31, 2014. As of December 31, 2014, the Company had $0.1 million of unrecognized compensation costs related to unvested restricted share awards granted under the Company's RSP, which is expected to vest over a period of 4.3 years.

F-22

AMERICAN REALTY CAPITAL NEW YORK CITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2014 and 2013

Note 11 — Net Loss Per Share

The following is a summary of the basic and diluted net loss per share computation for the periods presented:

				Period from
				December 19, 2013
	Year Ended			(date of inception) to
	December 31, 2014			December 31, 2013
Net loss (in thousands)	$	(6,519	)	$	—
Basic and diluted weighted average shares outstanding	4,530,066			—
Basic and diluted net loss per share	$	(1.44	)	$	—

The Company had the following common share equivalents as of December 31, 2014 and 2013, which were excluded from the calculation of diluted loss per share attributable to stockholders as the effect would have been antidilutive:

	December 31,
	2014	2013
Unvested restricted stock	3,999	—
OP Units	90	—
Class B units	8,361	—
Total common share equivalents	12,450	—

Note 12 — Quarterly Results (Unaudited)

Presented below is a summary of the unaudited quarterly financial information for the year ended December 31, 2014. There was no net income or loss for the period from December 19, 2013 (date of inception) to December 31, 2013.

(In thousands, except share and per share data)	March 31, 2014			June 30, 2014			September 30, 2014			December 31, 2014
Total revenues	$	—		$	43		$	540		$	2,268
Net loss attributable to stockholders	$	(16	)	$	(214	)	$	(2,235	)	$	(4,054	)
Weighted average shares outstanding	8,888			690,143			8,543,271			17,938,717
Basic and diluted net loss per share attributable to stockholders	NM			$	(0.31	)	$	(0.26	)	$	(0.23	)

________________

NM - Not meaningful

Note 13 — Subsequent Events

The Company has evaluated subsequent events through the filing of this Annual Report on Form 10-K and determined that there have not been any events that have occurred that would require adjustments to disclosures in the consolidated financial statements except for the following transactions:

Sales of Common Stock

As of March 15, 2015, the Company had 24.0 million shares of common stock outstanding, including unvested restricted shares and shares issued pursuant to the DRIP from total gross proceeds from the IPO and the DRIP of $595.0 million.

Total capital raised to date, including shares issued under the DRIP, is as follows:

Source of Capital (in thousands)	Inception to December 31, 2014		January 1, 2015 to March 15, 2015		Total
Common stock	$	509,949	$	85,100	$	595,049

F-23

AMERICAN REALTY CAPITAL NEW YORK CITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2014 and 2013

On February 6, 2015, the Company's board of directors approved the reallocation of 10.0 million shares from the DRIP to the primary offering.

Acquisitions

On March 27, 2015, the Company, through a wholly owned subsidiary of the OP, completed the acquisition of the fee simple interest in an institutional quality office building located at 123 William Street in Downtown Manhattan. The contract purchase price was $253.0 million, exclusive of closing costs. The Company funded the purchase price with proceeds from the IPO and a $95.2 million mortgage note payable.

The seller of the property is a wholly owned subsidiary of EEGO-ARC 123 William JV, LLC, a joint venture in which New York REIT, Inc. ("NYRT") held a $35.1 million preferred equity interest. The sponsor and advisor of NYRT and the Sponsor and Advisor of the Company are under common control.

F-24

AMERICAN REALTY CAPITAL NEW YORK CITY REIT, INC.

REAL ESTATE AND ACCUMULATED DEPRECIATION

SCHEDULE III

DECEMBER 31, 2014

(dollar amounts in thousands)

					Initial Costs				Costs Capitalized Subsequent to Acquisition
Portfolio	State	Acquisition Date	Encumbrances at December 31, 2014		Land		Building and Improvements		Building and Improvements		Gross Carried at December 31, 2014(1)(2)		Accumulated Depreciation(3)(4)
421 W. 54th Street	NY	6/13/2014	$	—	$	4,723	$	1,757	$	—	$	6,480	$	(26	)
400 E. 67th Street	NY	9/5/2014	—		10,653		55,682		14		66,349		(464		)
200 Riverside Blvd	NY	9/24/2014	—		13,787		5,510		—		19,297		(34		)
570 Seventh Ave	NY	11/5/2014	—		54,153		76,454		72		130,679		(319		)
					$	83,316	$	139,403	$	86	$	222,805	$	(843	)

(1) Acquired intangible assets allocated to individual properties in the amount of $47.3 million are not reflected in the table above.

(2) The tax basis of aggregate land, buildings and improvements as of December 31, 2014 is $260.6 million.

(3) The accumulated depreciation column excludes $1.2 million of amortization associated with acquired intangible assets.

(4) Each of the properties has a depreciable life of: 40 years for buildings, 15 years for land improvements and five years for fixtures.

A summary of activity for real estate and accumulated depreciation for the year ended December 31, 2014:

(In thousands)	December 31, 2014
Real estate investments, at cost:
Balance at beginning of year	$	—
Additions-acquisitions	222,719
Capital expenditures	86
Disposals	—
Balance at end of the year	$	222,805
Accumulated depreciation:
Balance at beginning of year	$	—
Depreciation expense	(843		)
Disposals	—
Balance at the end of the year	$	(843	)

F-25

EX-10.11

Exhibit 10.11

Sale and Purchase Agreement

between

EEGO 123 William Owner, LLC,

as Seller

and

ARC NYC123WILLIAM, LLC,

as Purchaser

Premises:

123 William Street

New York, NY

January 27, 2015

TABLE OF CONTENTS

Page

1.	Certain Definitions.	1
2.	Sale-Purchase.	4
3.	Purchase Price.	4
4.	Condition of Title.	5
5.	Closing.	7
6.	Violations.	7
7.	Apportionments.	7
8.	Closing Deliveries	13
9.	Conditions Precedent.	17
10.	Estoppel Certificates.	18
11.	Cancellation of Contracts.	20
12.	Right of Inspection.	20
13.	Title Insurance.	22
14.	Return of Deposit.	24
15.	Purchaser’s Default.	24
16.	Representations and Warranties.	24
17.	Broker.	32
18.	Condemnation and Destruction.	32
19.	Escrow.	33
20.	Covenants.	35
21.	Transfer Taxes.	39
22.	Non-Liability.	40
23.	Seller’s Inability to Perform; Seller’s Default.	40
24.	Condition of Premises.	41
25.	Environmental Matters.	42
26.	Tax Reduction Proceedings.	43
27.	Union Agreement; Other Employment Matters.	43
28.	Notices.	45
29.	Entire Agreement.	46
30.	Amendments.	47
31.	No Waiver.	47
32.	Successors and Assigns.	47
33.	Partial Invalidity.	47
34.	Section Headings; Incorporation of Exhibits.	47
35.	Governing Law.	47

18848190v.10

TABLE OF CONTENTS(continued)

36.	Confidentiality.	48
37.	No Recording or Notice of Pendency.	48
38.	Assignment.	48
39.	Counterparts.	49
40.	No Third Party Beneficiary.	49
41.	[Intentionally deleted]	49
42.	Business Days.	49
43.	Mortgage Loan Assignment.	49
44.	Waiver of Trial by Jury.	50

TABLE OF CONTENTS(continued)

EXHIBITS

1(A) Description of Land

1(B) Leases

1(C) Existing Contracts

1(D) Telecommunications Contracts

1(E) Brokerage Agreements

1(F) Union Agreement

4(A)(i) Permitted Exceptions

4(A)(ii) Title Objections

8(A)(i) Form of Bargain and Sale Deed

8(A)(ii) Form of Bill of Sale

8(A)(iii) Form of Assignment and Assumption of Leases

8(A)(iv) Form of Assignment and Assumption of Contracts

8(A)(viii) Form of Tenant Notice Letter

8(A)(ix) Form of Contractor Notice Letter

8(A)(xiv) Form of Assignment and Assumption of Union Agreement

8 (A)(xix) Form of Title Affidavit

10 Form of Tenant Estoppel Certificate

16(A)(i) Rent Arrearages

16(A)(ii) Union Employees

16(A)(xii) Tax Assessment Reduction Proceedings

16(A)(xiii) Security Deposits

16(A)(xxi) Landlord’s Work

20(A)(iv) Certificates of Insurance

20(D) Seller’s Work

SALE AND PURCHASE AGREEMENT (this “Agreement”), made as of the _____ day of January, 2015 between EEGO 123 William Owner, LLC, a Delaware limited liability company having an address c/o East End Capital, 600 Madison Avenue, 11^th Floor, New York, New York 10022 (“Seller”) and ARC NYC123WILLIAM, LLC, a Delaware limited liability company having an address at c/o American Realty Capital, 405 Park Avenue, New York, New York 10022 (“Purchaser”).

RECITALS:

A.    Seller is the owner of the fee interest in the Premises (as hereinafter defined), commonly known as 123 William Street, New York, New York.

B.    Purchaser wishes to purchase, and Seller wishes to sell, all of Seller’s right, title and interest in and to the Premises on the terms and conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the mutual covenants set forth in this Agreement and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Seller and Purchaser hereby agree as follows:

Certain Definitions.

Certain capitalized terms used in this Agreement shall, for the purposes of this Agreement, have the meanings ascribed to such terms in this Article 1. Other capitalized terms used in this Agreement and not defined in this Article 1 shall have the meanings ascribed to such terms elsewhere in this Agreement.

“Brokerage Agreements” shall mean the agreements between Seller and any leasing brokers which are set forth on Exhibit “1(E)”.

“Building” shall mean the building commonly identified as 123 William Street, New York, New York.

“Escrow Agent” shall mean Kensington Vanguard National Land Services.

“Existing Contracts” shall mean the management, service, telecommunications, information service and maintenance contracts, and all amendments, modifications and/or assignments thereof, affecting the Premises or the operation thereof, all of which are listed on Exhibits “1(C)”, “1(D)” and “1(F)”.

“Fixtures” shall mean all equipment, fixtures and appliances of whatever nature which are (i) affixed to the Land or Improvements and (ii) owned by Seller.

“Hazardous Materials” means (a) those substances included within the definitions of any one or more of the terms “hazardous materials,” “hazardous wastes,” “hazardous substances,” industrial wastes,” and “toxic pollutants,” as such terms are defined under the Relevant Environmental Laws, or any of them, (b) petroleum and petroleum products, including, without limitation, crude oil and any fractions thereof, (c) natural gas, synthetic gas and any mixtures thereof, (d) asbestos and or any material which contains any hydrated mineral silicate, including, without limitation, chrysotile, amosite, crocidolite, tremolite, anthophylite and/or actinolite, whether friable or non-friable (collectively, “Asbestos”), (e) polychlorinated biphenyl (“PCBs”) or PCB-containing materials or fluids, (f) radon, (g) any other hazardous or radioactive substance, material, pollutant, contaminant or waste, (h) any Pathogen (as hereinafter defined), and (i) any other substance with respect to which any Relevant Environmental Law or governmental authority requires environmental investigation, monitoring or remediation.

“Improvements” shall mean the improvements on the Land, including without limitation the Building.

“Land” shall mean the land described on Exhibit “1(A)” and situated in the Borough of Manhattan, City, County and State of New York, and designated as Block 787, Lot 72 in the Borough of Manhattan on the Tax Map of the City of New York, State of New York.

“Leases” (each individually, a “Lease”) shall mean the leases, tenancies, concessions, licenses and occupancies, and all amendments, modifications and/or assignments thereof, affecting the Premises, all of which are as listed on Exhibit “1(B)”, as the same may be

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amended, modified or extended from time to time in accordance with the terms of this Agreement, or entered into between the date hereof and the Closing Date (as hereinafter defined) in accordance with the terms and conditions of Article 20 hereof, as well as all lease guaranties, if any, delivered in connection therewith.

“New Contracts” shall mean all management, service, telecommunications, information service and maintenance contracts and collective bargaining and other union agreements affecting the Premises or the operation thereof which are entered into by Seller after the date hereof subject to the applicable provisions of this Agreement.

“Pathogen” shall mean any pathogen, toxin or other biological agent or condition, including but not limited to, any fungus, mold, mycotoxin or microbial volatile organic compound.

“Personal Property” shall mean the aggregate of the following:

(i)All site plans, architectural renderings, plans and specifications, engineering plans, as-built drawings, floor plans and other similar plans or diagrams, if any, which (a) relate to the Real Property and (b) are in Seller’s possession or control;

(i)Seller’s right, title and interest, if any, in all licenses, permits, permit applications and warranties, guaranties, indemnities and bonds which (a) relate to the Real Property and (b) are assignable by Seller to Purchaser, without penalty;

(ii)All equipment, appliances, tools, machinery, supplies, building materials and other similar personal property which is (a) owned by Seller as of the date of this Agreement and (b) attached to, appurtenant to or located in the Improvements and/or used in the day-to-day operation or maintenance of the Improvements, but expressly excluding the Fixtures and any and all personal property owned by any property manager, tenants in possession, public or private utilities licensees or contractors. Seller shall not transfer to any third party or remove any Personal Property from the Premises after the date hereof, except for repair or replacement thereof and except in the case of the termination of this Agreement. Notwithstanding the foregoing, “Personal Property” expressly excludes, and Seller shall not be required to convey, and Purchaser shall not be entitled to receive, any items containing the logo of Seller or any of Seller’s affiliates, or any computer programs, software and documentation thereof, electronic data processing systems, program specifications, source codes, logs, input data and report layouts and forms, record file layouts, diagrams, functional specifications and variable descriptions, flow charts and other related materials (collectively, “Operational Systems”);

(iii)All non-exclusive trademarks, logos and trade names (if any) used or useful in connection with the Real Property, but only to the extent that the same are not trademarks or trade names of Seller or any of Seller’s affiliated companies; and

(iv)All rights, privileges, easements and appurtenances to the Land and the Building, if any, including, without limitation, all of Seller’s right, title and interest in and to all operating agreements, reciprocal easement agreements, mineral and water rights and all easements,

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18848190v.10

rights-of-way, air rights, development rights and other appurtenances used or connected with the beneficial use or enjoyment of the Land and the Building.

“Premises” shall mean the aggregate of the Real Property and the Personal Property.

“Purchaser Representatives” shall mean Purchaser’s designees, agents, employees, consultants, appraisers, engineers, contractors and prospective lenders.

“Real Property” shall mean the fee estate of Seller in and to the aggregate of the Land, the Building, the Fixtures, Seller’s right, title and interest, if any, in the streets, roads, lands and alleys in front of and adjacent to the Land, and the hereditaments and appurtenances to the Improvements and the Land, including without limitation all easements, rights-of-way, air rights and other similar interests appertaining to the Land or the Building.

“Relevant Environmental Laws” shall mean any and all laws, rules, regulations, statutes, orders and directives, whether federal, state or local, applicable to the Premises or any part thereof now or hereinafter in effect, in each case as amended or supplemented from time to time including, without limitation all applicable judicial or administrative orders, applicable consent decrees and binding judgments relating to the regulation and protection of human health, safety, the environment and natural resources (including, without limitation, ambient air, surface, water, groundwater, wetlands, land surface or subsurface strata, wildlife, aquatic species and vegetation), including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (49 U.S.C. §6901 etseq.), the Hazardous Material Transportation Act, as amended (49 U.S.C. §§ 1801 etseq.), the Federal Insecticide, Fungicide, and Rodenticide Act, as amended (7 U.S.C. §§ 136 etseq.), the Resource Conservation and Recovery Act, as amended (42 U.S. §§ 6901 etseq.), the Toxic Substance Control Act, as amended (15 U.S.C. §§ 2601 etseq.), the Clean Air Act, as amended (42 U.S.C. §§ 7401 etseq.), the Federal Water Pollution Control Act, as amended (33 U.S.C. §§ 1251 etseq.) the Occupational Safety and Health Act, as amended (29 U.S.C. §§ 651 etseq.), the Safe Drinking Water Act, as amended (42 U.S. C. §§ 300f etseq.), Environmental Protection Agency regulations pertaining to Asbestos (including, without limitation, 40 C.F.R. Part 61, Subpart M, the United States Environmental Protection Agency Guidelines on Mold Remediation in Schools and Commercial Buildings, the United States Occupational Safety and Health Administration regulations pertaining to Asbestos including, without limitation, 29 C.F.R. Section 1910.1001 and 1926.58), and any state or local counterpart or equivalent of any of the foregoing, and any related federal, state or local transfer of ownership notification or approval statutes. The foregoing, with respect to the environmental condition of the Premises and any adjacent property, and any activities conducted on or at the Premises, including by way of example and not limitation: (i) Hazardous Materials; (ii) air emissions, water discharges, noise emissions and any other environmental, health or safety matter; (iii) the existence of any underground storage tanks that contained or contain Hazardous Materials; and (vi) the existence of pcb contained electrical equipment.

“Security Deposits” (each individually, a “Security Deposit”) shall mean all security deposits and/or letters of credit actually held by Seller under Leases as of the date hereof as listed on Exhibit “16(A)(xiii)” as same may be drawn down, applied and/or retained after the date hereof in accordance with both the applicable Lease and the terms of this Agreement.

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18848190v.10

“Surviving Contracts” shall mean Existing Contracts and New Contracts which are in effect as of the Closing.

“Telecommunications Contracts” shall mean the telecommunications and information service contracts and licenses affecting the Premises or the operation thereof which are listed on Exhibit “1(D)”.

“Tenants” (each individually, a “Tenant”) shall mean the current tenants under the Leases.

“Title Insurer” shall mean Kensington Vanguard National Land Services.

“Union Agreement” shall mean the collective bargaining agreements identified in Exhibit “1(F)”with respect to the Union Employees (hereinafter defined).

2. Sale-Purchase.

In consideration of, and upon and subject to, the mutual covenants and agreements set forth in this Agreement, and for other good and valuable consideration, the mutual receipt and legal sufficiency of which is hereby acknowledged, Seller agrees to sell and convey all of Seller’s right, title and interest in and to the Premises, the Leases and the Surviving Contracts (as hereinafter defined) to Purchaser, and Purchaser agrees to purchase the Premises, and all of Seller’s rights in and to the Leases and the Surviving Contracts from Seller. Seller and Purchaser agree that no portion of the Purchase Price (as hereinafter defined) is attributable to the Personal Property included in this sale.

3. Purchase Price.

The purchase price for the Premises (the “Purchase Price”) is Two Hundred Fifty-Three Million and 00/100 Dollars ($253,000,000.00), payable as follows: (i) Twenty-Five Million Three Hundred Thousand and 00/100 Dollars ($25,300,000.00) (the “Deposit”) within one (1) business day following the date hereof to Escrow Agent, by federal funds, wire transfer of immediately available federal funds to an account designated by Escrow Agent, to be held by Escrow Agent pursuant to and in accordance with the provisions of Article 19 of this Agreement; and (ii) subject to the apportionments and other credits provided for in this Agreement, the balance of the Purchase Price on the Closing Date by federal funds or wire transfer of immediately available federal funds to an account or accounts designated by Seller. Seller and Purchaser agree that one-half of the interest earned on the Deposit shall be credited to the Purchase Price upon the Closing and the balance of the interest on the Deposit shall, upon the Closing, be and remain the property of Seller, and shall not be credited against the Purchase Price. Failure by Purchaser to deliver the Deposit to Escrow Agent as provided above within one (1) business day following the date hereof shall render this Agreement void ab initio.

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4. Condition of Title.

A.The Premises shall be sold, and title thereto conveyed, subject only to (collectively, the “Permitted Exceptions”):

(i)The matters set forth on Exhibit “4(A)(i)”;

(ii)The Leases and the rights of Tenants;

(iii)All Violations (hereinafter defined); except that Seller shall tender payment at Closing to Title Insurer to pay to the appropriate governmental agency any and all fines, fees, penalties, and interest imposed with respect to such Violations through the Closing Date.

(iv)All present and future zoning, building, land use, environmental and other laws, ordinances, codes, restrictions, rules and regulations or other legal requirements of all governmental authorities having jurisdiction with respect to the Premises, including, without limitation, landmark designations and all zoning variances and special exceptions, if any;

(v)Liens, encumbrances, violations and defects (including, without limitation, any mechanics and/or materialmen’s lien or any judgment arising as a result thereof), removal of which is an obligation of a Tenant;

(vi)All presently existing and future liens for unpaid real estate taxes and water and sewer charges not due and payable as of the date of the Closing, subject to adjustment as hereinbelow provided;

(vii)All covenants, restrictions and rights and all easements and agreements for the erection and/or maintenance of water, gas, steam, electric, telephone, sewer or other utility pipelines, poles, wires, conduits or other like facilities, and appurtenances thereto, over, across and under the Premises which are either (a) presently existing or (b) granted to a public utility in the ordinary course, provided that the same shall not have a material adverse effect on the use of the Premises for its current use;

(viii)Statement of facts shown on the survey, dated August 16, 1957, prepared by Charles J. Dearing, as updated on June 6, 2013 by visual examination by Earl A. Lovell – S.P. Belcher, Inc. and any additional facts which would be shown on or by an accurate current survey of the Premises, provided that such additional facts shall not have a material adverse effect on the use of the Premises for its current use;

(ix)The Surviving Contracts;

(x)Consents by any former owner of the Land for the erection of any structure or structures on, under or above any street or streets on which the Land may abut;

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(xi)Possible encroachments and/or projections of stoop areas, roof cornices, window trims, vent pipes, cellar doors, steps, columns and column bases, flue pipes, signs, piers, lintels, window sills, fire escapes, satellite dishes, protective netting, sidewalk sheds, ledges, fences, coping walls (including retaining walls and yard walls), air conditioners and the like, if any, on, under or above any street or highway, the Building, or any adjoining property, provided that the same shall not have a material adverse effect on the use of the Property for its current use;

(xii)Variations between tax lot lines and lines of record title;

(xiii)Standard exclusions from coverage contained in the form of title policy or “marked-up” title commitment employed by the Title Insurer;

(xiv)Any financing statements, chattel mortgages, encumbrances or mechanics’ or other liens entered into by, or arising from, any financing statements filed on a day more than five (5) years prior to the Closing and any financing statements, chattel mortgages, encumbrances or mechanics’ or other liens filed against property no longer contained in the Premises, provided that the Title Insurer shall remove them as exceptions from the title insurance policy to be issued to Purchaser at Closing or shall affirmatively insure over them at regular rates;

(xv)Any lien or encumbrance arising out of the acts or omissions of Purchaser;

(xvi)Subject to the terms of this Agreement, any other matter which the Title Insurer may raise as an exception to title, provided the Title Insurer will either omit or affirmatively insure against collection or enforcement of same out of the Premises and/or that no prohibition of present use or maintenance of the Premises will result therefrom, as may be applicable;

(xvii)Any encumbrance that will be extinguished upon conveyance of the Property to Purchaser, provided that the Title Insurer shall remove them as exceptions from the title insurance policy to be issued to Purchaser at Closing or shall affirmatively insure over them; and

(xviii)any other matter which, pursuant to the terms of this Agreement, is a permitted condition of the transaction contemplated by this Agreement.

B.Title to the Premises shall be such title as the Title Insurer shall be prepared to insure, subject to the Permitted Exceptions and the provisions of Article 13 hereof.

5. Closing.

The “Closing” shall mean the consummation of each of the actions set forth in Article 8 of this Agreement, or the waiver in writing of such action by the party in whose favor such action is intended, and the satisfaction of each condition precedent to the Closing set forth in Article 9 and elsewhere in this Agreement, or the waiver in writing of such condition precedent by the party intended to be benefited thereby. The Closing shall be consummated on March 27, 2015 (TIME BEING OF THE ESSENCE) at 10:00 a.m., with the Purchase Price to be received by 4:00 p.m., to be deemed paid as of such date (Eastern Standard Time) in escrow through Escrow Agent, at its

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office located at 39 West 37^th Street, 7^th Floor, New York, New York 10018. Neither party hereto shall be required to be present at the Closing, unless otherwise agreed to by the parties hereto. Purchaser and Seller agree to cause all documents and deliverables required to be delivered by the parties hereunder, and by any necessary third parties, to be delivered to Escrow Agent at its New York City office address on or prior to 1:00 p.m. (Eastern Standard Time) on March 27, 2015 (“Initial Closing Date”; the Initial Closing Date, as same may be extended or adjourned in accordance with this Agreement, is hereinafter referred to as the “Closing Date”). Purchaser shall have the right to accelerate the Initial Closing Date upon ten (10) business days prior written notice to Seller; provided that such accelerated Closing Date shall not be earlier than February 27, 2015 and all conditions precedent to both Purchaser’s and Seller’s respective obligations to close under this Agreement shall have been satisfied (or waived in writing) (but failure to close on such accelerated Closing Date shall not constitute a default by Seller under this Agreement). TIME IS OF THE ESSENCE with respect to Purchaser’s and Seller’s obligation to close on or before the Initial Closing Date, subject to Seller’s right to adjourn the Closing as permitted under this Agreement which adjourned date shall be TIME OF THE ESSENCE with respect to Purchaser’s and Seller’s obligation to close on such date.

6. Violations.

The Premises are sold, and Purchaser shall accept same, subject to any and all violations of law, rules, regulations, ordinances, orders or requirements noted in or issued by any Federal, state, county, municipal or other department or governmental agency having jurisdiction against or affecting the Premises whenever noted or issued (collectively, “Violations”) and any conditions which could give rise to any Violations. Other than tendering payment to the Title Insurer at Closing in order to pay the appropriate governmental agency all fines, fees, penalties, and interest imposed with respect to the Violations through the Closing Date, Seller shall have no obligation to cure or remove any Violations.

7. Apportionments.

A.The following shall be apportioned between Seller and Purchaser at the Closing with respect to the Premises as of 11:59 p.m. of the day immediately preceding the Closing Date, and the net amount thereof either shall be paid by Purchaser to Seller or credited to Purchaser, as the case may be, at the Closing:

(i)Real property taxes and assessments (or installments thereof), payments required to be made to any business improvement district (“BID taxes”) and vault charges, except those required pursuant to Leases to be paid directly to the entity imposing same;

(ii)Water rates and charges, except those required pursuant to Leases to be paid directly to the entity imposing same;

(iii)Sewer taxes and rents, except those required pursuant to Leases to be paid directly to the entity imposing same;

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(iv)All other operating expenses with respect to the Property, including, but not limited to, salaries, vacation pay, sick pay, health, welfare, employer contributions, and pension and other benefits of the Union Employee(s) (as hereinafter defined), provided Seller shall provide appropriate backup for such items; Seller shall not be charged with termination pay arising by reason of Purchaser's termination of the Union Employee(s) or failure to hire any Union Employee, at or subsequent to the Closing, and Purchaser shall be fully liable for any such termination pay. If personnel engaged at the Property are in the employ of an agent or contractor (including any cleaning company engaged at the Property), then such adjustment or proration shall be made as appropriate with the agent to reach the same economic result as if in the direct employ of Seller but Purchaser shall not be required to hire such non-union employees;

(v)Permit, license and inspection fees, if any, on the basis of the fiscal year for which levied, if the rights with respect thereto are transferred to Purchaser;

(vi)Fuel, if any, at the cost per gallon most recently charged to Seller, based on the supplier’s measurements thereof, plus sales taxes thereon, which measurements shall be given by Seller to Purchaser as close to the Closing Date as is reasonably practicable, and which, absent manifest error, shall be conclusive and binding on the Seller and Purchaser;

(vii)Deposits on account with any utility company servicing the Premises to the extent transferred to (and assumed by) Purchaser shall not be apportioned, but Seller shall receive a credit in the full amount thereof (including accrued interest thereon, if any);

(viii)Rents (as hereinafter defined), if, as and when collected, in accordance with Section 7(F) hereof;

(ix)Leasing Costs, if any, in accordance with Section 20(B) hereof;

(x)Payments due under any Surviving Contracts;

(xi)Purchaser shall receive a credit against the Purchase Price in an amount equal to the prepaid rents received by Seller in connection with the Leases covering any period after the Closing Date

(xii)[Reserved];

(xiii)All other items customarily apportioned in connection with the sale of similar properties similarly located. Notwithstanding the foregoing, Purchaser shall not receive any offset or credit for free rent noted in any lease.

B.Apportionment of real property taxes, BID taxes, water rates and charges, sewer taxes and rents and vault charges shall be made on the basis of the fiscal year for which assessed. If the Closing Date shall occur before the real property tax rate, BID taxes, water rates or charges, sewer taxes or rents or vault charges are fixed, apportionment for any item not yet fixed shall be made on the basis of the real property tax rate, BID taxes, water rates and charges, sewer taxes and rents or vault charges, as applicable, for the preceding year applied to the latest assessed valuation.

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After the real property taxes, BID taxes, water rates and charges, sewer taxes and rents and vault charges are finally fixed, Seller and Purchaser shall make a recalculation of the apportionment of same after the Closing, and Seller or Purchaser, as the case may be, shall make an appropriate payment to the other based upon such recalculation.

C.The amount of any of the unpaid taxes, assessments, water charges, sewer rents and vault charges which Seller is obligated to pay and discharge, with interest and penalties thereon (if any) to the Closing Date may, at Seller’s option, be allowed to Purchaser out of the balance of the Purchase Price, provided that official bills therefor with interest and penalties thereon (if any) are furnished by Seller at the Closing and provided that Title Insurer will omit same as exceptions from, or insure against collection from the Premises in, Purchaser’s title insurance policy, at no additional cost or expense to Purchaser.

D.If any refund of real property taxes, BID taxes, water rates or charges, sewer taxes or rents or vault charges is made after the Closing Date covering a period prior to the Closing Date, the same shall be applied first to the reasonable out-of-pocket costs incurred in obtaining same (including reasonable attorneys’ fees, accounting fees, consultant fees and filing fees) and the balance, if any, of such refund shall, to the extent received by Purchaser, be paid to Seller (for the period prior to the Closing Date) and to the extent received by Seller, be paid to Purchaser (for the period commencing with the Closing Date). Any payment to Seller or Purchaser pursuant to the immediately preceding sentence shall be net of any amount payable to a Tenant in accordance with its Lease (which payment to such Tenant shall be made promptly by the Purchaser or Seller, as applicable, after such refund is made). Each of Purchaser and Seller hereby agrees to indemnify and hold harmless the other as to any refund payment paid by it to the other for a Tenant.

E.If there are meters measuring water consumption or sewer usage at the Premises, Seller shall obtain readings to a date not more than thirty (30) days prior to the Closing Date. If such readings are not obtained, water rates and charges and sewer taxes and rents, if any, shall be apportioned based upon the last actual meter readings, subject to reapportionment when readings for the relevant period are obtained after the Closing Date. If any of the Tenants pay electric based on a submeter for their electric consumption, then the Seller shall cause any such submeter to be read as close as possible to the Closing Date and upon completion of such reading, the Seller shall bill each such Tenant electric charges, based on such reading. At the Closing, the Seller shall provide the Purchaser with documentation as to any such readings and billings for submetered electric charges.

F.To the extent that Seller or Purchaser receives Rents after the Closing Date, the same shall be held in trust by Seller or Purchaser, as the case may be, and shall be applied in the order of priority set forth in this Section 7(F).

(i)The following terms shall be as defined herein: “Base Rents”: fixed rent, and other amounts of a fixed nature (which may include, without limitation, electric inclusion and supplemental water, HVAC and condenser water charges paid or payable by Tenants; “Overage Rents”: a percentage of the Tenant’s business during a specified annual or other period (sometimes referred to as “percentage rent”), so-called “escalation rent”, and additional rent based upon increases in or otherwise attributable to real estate and BID taxes, operating expenses, utility costs,

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a cost of living index or porter’s wages or otherwise, but which shall in no event include Reimbursable Payments (as hereinafter defined); “Reimbursable Payments”: overtime heat, air conditioning or other utilities or services; freight elevator; electric inclusion and adjustments related to electric usage (such as rate and/or fuel adjustments and survey); submetered electric; supplemental water, HVAC, and condenser water charges; services or repairs, and labor costs associated therewith, to which a Tenant is obligated to reimburse the landlord under its Lease or for which a Tenant has separately contracted with Seller or its agent; true-ups on account of escalation and/or additional rent for years prior to the year in which the Closing occurs; above standard cleaning; and all other items which are payable to Seller as reimbursement or payment for above standard or overtime services (but which amounts shall not be treated as Reimbursable Payments if already included in a Tenant’s Base Rents); and “Rents”: all amounts due and owing from Tenants, however characterized, including, without limitation, Base Rents, Overage Rents and Reimbursable Payments.

(ii)Base Rents and Overage Rents under the Leases shall be adjusted and prorated on an as, if and when collected basis. Base Rents and Overage Rents collected by Purchaser or Seller after the Closing from any Tenant who owes any such amounts for periods prior to the Closing shall be applied in the following order, but shall be treated separately for such allocation purposes: (a) first, in payment of such amounts owed by such Tenant for the month in which the Closing occurs, (b) second, in payment of such amounts owed by such Tenant for all periods immediately following the month in which the Closing occurs, (c) third, in payment of such amounts owed by such Tenant (if any) for any other period prior to the Closing. Each such amount, less any third party costs of collection (including reasonable attorneys’ fees and expenses) reasonably allocable thereto, shall be paid over as provided above, and the party who receives any such amount shall promptly pay over to the other party any portion thereof to which it is so entitled.

(iii)Reimbursable Payments shall not be apportioned or adjusted; to the extent incurred prior to the Closing Date, Reimbursable Payments incurred prior to Closing shall belong in their entirety to Seller, and shall be retained by Seller, and/or paid over to Seller by Purchaser, as applicable, on an as, if and when collected basis. To the extent a payment is made by a Tenant which is specifically designated as being on account of one or more Reimbursable Payments due to Seller, by reference to a charge, invoice number or otherwise, or is of an amount which is equal to one or more Reimbursable Payments due to Seller, then same shall be treated as a Reimbursable Payment, and shall be paid over to Seller promptly upon receipt thereof.

(iv)Purchaser shall bill Tenants who owe Rents for periods prior to the Closing on a monthly basis for a period of nine (9) consecutive months following the Closing and shall use commercially reasonable efforts to collect such past due Rents (which efforts shall include, but not be limited to, including such amounts in Purchaser’s invoices and notices for rents due for the period after Closing, but excluding litigation or otherwise seeking to terminate the Leases) but Purchaser shall have no liability for the failure to collect any such amounts. Purchaser shall have no obligation to commence any action or proceeding to collect any such past due Rents, provided, however, if Purchaser in fact commences any such action or proceeding, the amount sought shall include all Rents unpaid for the period prior to the Closing. Notwithstanding the foregoing, if Purchaser shall fail to collect such past due Rents after such nine (9) month period, Seller shall have

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the right to pursue Tenants to collect such delinquencies (including, without limitation, the prosecution of one or more lawsuits, but Seller shall not be entitled to pursue an action for eviction); provided, however, that in no event shall Seller have the right to terminate, or cause the termination of, the Lease of any such Tenants.

(v)Purchaser shall (a) promptly render bills to the applicable Tenants for any Overage Rent in respect of a period that shall have expired prior to the Closing but which is payable after the Closing, (b) bill Tenants for any such Overage Rent on a monthly basis for a period of nine (9) consecutive months thereafter and (c) use commercially reasonable efforts to collect such Overage Rent (which efforts shall include but not be limited to, including such amounts in Buyer’s invoices and notices for rents due for the period after the Closing) but Purchaser shall have no liability for the failure to collect any such amounts. Notwithstanding the foregoing, if Purchaser shall be unable to collect such Overage Rent after such nine (9) month period, Seller shall have the right to pursue Tenants to collect such delinquencies (including, without limitation, the prosecution of one or more lawsuits but Seller shall not be entitled to pursue and action for eviction); provided, however, that in no event shall Seller have the right to terminate, or cause the termination of, the Lease of any such Tenants. From and after the Closing, Seller shall furnish to Purchaser calculations of the amounts due from Tenants on account of Overage Rent for periods prior to the Closing, and such other information relating to the period prior to the Closing as is reasonably necessary for the billing of any such Overage Rent. Purchaser shall bill Tenants for Overage Rent for periods prior to the Closing in accordance with and on the basis of such information furnished by Seller. Purchaser shall deliver to Seller, concurrently with the delivery to Tenants, copies of all statements relating to Overage Rent for periods prior to the Closing Date.

(vi)Overage Rent for the calendar year in which the Closing occurs shall be apportioned between Seller and Purchaser using a percentage derived by dividing the total operating expenses incurred for those operating expenses which are used by Seller in determining the operating expense pool for the calendar year in question over each parties’ actual expenses incurred for such operating expenses. Seller shall be entitled to receive the proportion of such Overage Rent (less a like portion of any out-of-pocket costs and expenses (including reasonable attorneys’ fees and expenses) incurred in the collection of such Overage Rent) that the portion of such period occurring prior to the Closing bears to the entire such period, and Purchaser shall be entitled to receive the proportion of such Overage Rent (less a like portion of any out-of-pocket costs and expenses (including reasonable attorneys’ fees and expenses) incurred in the collection of such Overage Rent) that the portion of such period from and after the Closing bears to the entire such period. If, prior to the Closing, Seller shall receive any installment of Overage Rent attributable to Overage Rent for periods from and after the Closing, such sum shall be apportioned at the Closing. If, after the Closing, Purchaser shall receive any installment of Overage Rent attributable to Overage Rent for periods prior to the Closing, such sum (less any out-of-pocket costs and expenses (including reasonable counsel fees) incurred by Purchaser in the collection of such Overage Rent) shall be paid by Purchaser to Seller promptly after Purchaser receives payment thereof.

(vii)To the extent that any payment on account of Overage Rent is required to be paid periodically by Tenants for any calendar year (or, if applicable, any lease year or any other applicable accounting period), and at the end of such calendar year (or lease year or other

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applicable accounting period, as the case may be) such estimated amounts are to be recalculated based upon the actual expenses, taxes or other relevant factors for that calendar year (or lease year or other applicable accounting period, as the case may be), then Purchaser agrees to so recalculate same, subject to Seller’s review and reasonable approval of such recalculation, and to bill such Tenants for all amounts due from such Tenants on account therefor, within nine (9) months after the end of such calendar year (or lease year or other applicable accounting period, as the case may be). At the time(s) of final calculation and collection from (or refund to) each Tenant of the amounts in reconciliation of actual Overage Rent, there shall be a re-proration between Seller and Purchaser in accordance with this Agreement and Seller and Purchaser shall each be entitled to (or responsible for, as the case may be) the amounts attributable to such party’s period of ownership of the Premises, provided that Seller shall have no liability for amounts due to Tenants if Purchaser shall have failed to obtain Seller’s prior approval of any such recalculation. Purchaser shall indemnify and hold Seller harmless from any and all losses, costs, damages, liens, claims, counterclaims, liabilities and expenses (including, but not limited to, reasonable attorneys’ fees, court costs and disbursements) incurred by Seller as the result of Purchaser failing to pay over to any Tenant any amount paid by Seller to Purchaser on account of Overage Rent. The Seller, on or prior to the Closing, shall complete the reconciliations with the Tenants for Overage Rent for calendar year 2014 and all prior years and to the extent any such Tenant overpaid such Overage Rent, the Seller shall, on or prior to the Closing, refund any such overpayment of Overage Rent to each such applicable Tenant. At the Closing, the Seller shall provide documentation to Purchaser as to the completion of such reconciliations. Seller hereby agrees to indemnify and hold Purchaser harmless from any and all losses, costs, damages, liens, claims, counterclaims, liabilities and expenses (including, but not limited to, reasonable attorneys’ fees, court costs and disbursements) incurred by Purchaser as a result of the Seller’s failure to refund any overpayment of Overage Rent due by the Seller to any Tenant for any time period prior to the Closing.

(viii)Until such time as all amounts required to be paid to Seller by Purchaser pursuant to this Section 7(F) shall have been paid in full to the extent the Purchaser collects any arrears in Base Rents and/or Overage Rent owed to the Seller, Purchaser shall furnish to Seller a reasonably detailed monthly accounting of cash receipts from Tenants (accompanied by aged receivable reports) with a reasonably detailed accounting of amounts allocable to Seller pursuant to this Agreement, which accounting shall be delivered to Seller for each such applicable month, within twenty (20) days after the end thereof. Seller and Purchaser and their representatives shall each have the right from time to time for a period of one (1) year following the Closing, on prior notice to the other party, during ordinary business hours on business days, to review each other’s rental records with respect to the Premises to ascertain the accuracy of any such accountings during the Seller’s and Purchaser’s respective periods of ownership for the Premises.

G.If any adjustment or apportionment is miscalculated at the Closing, or the complete and final information necessary for any adjustment is unavailable at the Closing, the affected adjustment shall be calculated after the Closing. The provisions of this Article 7 shall survive the Closing Date for a period of one (1) year.

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8. Closing Deliveries.

A.At the Closing, Seller shall deliver to Purchaser, executed and acknowledged, as applicable:

(i)A bargain and sale deed without covenants against grantor’s acts, sufficient to convey fee title to the Land and Improvements subject to and in accordance with the provisions of this Agreement, in the form attached hereto as Exhibit“8(A)(i)”, and made a part hereof (the “Deed”);

(ii)A general bill of sale for the Personal Property, in the form of Exhibit“8(A)(ii)”, conveying, lien free (other than Permitted Exceptions) and as more particularly set forth therein, to Purchaser all of Seller’s right, title and interest in and to the Personal Property;

(iii)An assignment and assumption, in the form of Exhibit“8(A)(iii)”, which provides for, as more particularly set forth therein, the assignment by Seller of all of Seller’s right, title and interest as landlord in and to the Leases, all guaranties delivered in connection therewith and all security deposits thereunder, and the assumption by Purchaser of all of Seller’s obligations as landlord under the Leases arising from and after the Closing Date (the “Assignment of Leases”);

(iv)An assignment and assumption, in the form of Exhibit“8(A)(iv)”, which provides for, as more particularly set forth therein, the assignment by Seller of all of Seller’s right, title and interest in and to all of the Surviving Contracts and Brokerage Agreements and the assumption by Purchaser of all of Seller’s obligations under such Surviving Contracts and Brokerage Agreements arising from and after the Closing Date (the “Assignment of Contracts”);

(v)(vi) The cash Security Deposits under Leases then in effect and then actually held by Seller (together with accrued interest thereon, if any, less Seller’s proportionate share of administrative fees, if any) by payment of the aggregate amount thereof to Purchaser or a credit to Purchaser against the Purchase Price, at Seller’s option.

(a)If one or more Security Deposit is wholly or partially comprised of a letter of credit (collectively, the “Letters of Credit”), Seller shall use commercially reasonable efforts to transfer the Letters of Credit to Purchaser as of the Closing Date, the cost and expense of which Purchaser shall pay, and on the Closing Date Seller shall deliver to Purchaser all original Letters of Credit, with all amendments thereto, actually held by Seller. As to those Letters of Credits which are not transferred to Purchaser at Closing (collectively, the “Non-Transferable Letters of Credit”), Seller shall execute at Closing the documentation necessary to cause the transfer or re-issuance of the Non-Transferable Letters of Credit and Seller and Purchaser shall reasonably cooperate with each other on the Closing Date and following the Closing so as to effectuate the transfer of same to Purchaser and cause Purchaser to be the beneficiary thereunder or to obtain a replacement letter of credit showing Purchaser as the beneficiary thereunder. Until the Non-Transferable Letters of Credit shall be transferred to Purchaser or replaced, as aforesaid, Purchaser shall hold the same, but upon request may deliver the same to Seller (if necessary), who shall then draw upon the same and deliver the proceeds to Purchaser or return the same to the applicable Tenant, in each case upon Purchaser’s written instruction. Seller shall also deliver to

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Purchaser at Closing such documentation, including, without limitation, sight drafts executed in blank, as Purchaser shall reasonably require in connection with drawing under the Non-Transferable Letters of Credit in Seller’s name. Purchaser shall indemnify and hold Seller harmless from any and all losses, costs, damages, liens, claims, counterclaims, liabilities and expenses (including, but not limited to, reasonable attorneys’ fees, court costs and disbursements) incurred by Seller as the result of Seller taking any steps pursuant to a request of Purchaser, including drawing, or seeking to draw, on any Tenant’s Security Deposit. The provisions of this Section 8(A)(v)(b) shall survive the Closing;

(vii)Executed original counterparts of all Leases, guaranties of Leases and Surviving Contracts, or copies thereof to the extent executed original counterparts are not in Seller’s possession or control, all of which shall be certified by Seller as true and correct to Seller’s Actual Knowledge, subject to the limitations set forth in Section 16(C) of this Agreement;

(viii)A certification of non-foreign status, in form required by Internal Revenue Code Section 1445 and the regulations issued thereunder;

(ix)Notice letters to the Tenants, in the form of Exhibit“8(A)(viii)” (the “Notice Letters”), to be prepared by Purchaser;

(x)Notice letters to contractors under Surviving Contracts, in the form of Exhibit“8(A)(ix)” (the “Contractor Letters”), to be prepared by Purchaser;

(xi)The Tenant Estoppels (as hereinafter defined), including any applicable Seller Estoppel (as hereinafter defined) required to be delivered under Article 10 hereof;

(xii)A Real Property Transfer Tax Return with respect to the New York City Real Property Transfer Tax (the “RPT Form”);

(xiii)A New York State Real Estate Transfer Tax Return and Credit Line Mortgage Certificate with respect to the New York State Real Estate Transfer Tax (the “Form TP-584”);

(xiv)A New York State Real Property Transfer Report Form RP-5217 NYC (the “RP-5217”);

(xv)A Department of Housing Preservation and Development Affidavit in Lieu of Registration Statement (the “Non-Multiple Dwelling Affidavit”);

(xvi)Evidence of authority, good standing (if applicable) and due authorization of Seller to enter into the within transaction and to perform all of its obligations hereunder, including, without limitation, the execution and delivery of all of the closing documents required by this Agreement, and setting forth such additional facts, if any, as may be needed to show that the transaction is duly authorized and is in conformity with Seller’s organizational documents and applicable laws and to enable Title Insurer to omit all exceptions regarding Seller’s standing, authority and authorization;

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(xvii)An assignment and assumption agreement with respect to the Union Agreement and Union Employees in the form of Exhibit“8(A)(xvi)” (the “Assumption of Union Agreement”), which shall be assumed by Purchaser or as Purchaser shall direct as provided in Section 27; provided, however, so long as Purchaser assumes the two Master Services Agreements with Core Industries and Pritchard Industries identified on Exhibit“1(C)” as part of the Assignment of Contracts, then the obligation to execute the Assumption of Union Agreement shall be waived by both Purchaser and Seller;

(xviii)To the extent not available as a matter of public record and in Seller’s possession or control (a) those transferable licenses and permits, authorizations and approvals pertaining to the Premises which are not posted at the Premises and (b) all transferable guarantees and warranties which Seller has received in connection with any work or services performed or equipment installed during Seller’s period of ownership at the Premises;

(xix)Documentation as reasonably required by the Purchaser to calculate the Overage Rent due and owing after the Closing;

(xx)A title affidavit in substantially the form attached hereto as Exhibit“8(A)(xix)” (the “Title Affidavit”);

(xxi)A closing statement (the “Closing Statement”);

(xxii)Evidence of Seller’s termination of any existing management and/or leasing agency agreements pertaining to the Premises;

(xxiii)An updated rent roll, arrears report and schedule of security deposits and letters of credit, certified to Seller’s Actual Knowledge to be true and correct in all material respects, subject to the limitations set forth in Section 16(C) of this Agreement;

(xxiv)A certificate from Seller, certifying to Purchaser that all of Seller’s representations and warranties provided for inSection 16 of this Agreement are true and correct in all material respects as of the Closing Date, but subject to the limitations set forth in Sections 9(B) and (C) and 16(C), (D) and (E)of this Agreement;

(xxv)A Form 1099-S Statement for Recipient of Proceeds from Real Estate Transaction;

(xxvi)All tenant files, to the extent in Seller’s possession or control;

(xxvii)All keys, security codes, pass cards and like for the Premises, to the extent in Seller’s possession or control; and

(xxviii)Such other instruments or documents which by the terms of this Agreement are to be delivered by Seller at the Closing.

B.At the Closing, Purchaser shall deliver to Seller, executed and acknowledged, as applicable:

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(i)The balance of the Purchase Price and all other amounts payable by Purchaser to Seller at the Closing pursuant to this Agreement;

(ii)The Assignment of Leases;

(iii)The Assignment of Contracts;

(iv)The Tenant Notice Letters;

(v)The Contractor Notice Letters;

(vi)The RPT Form;

(vii)The RP-5217;

(viii)The Form TP-584;

(ix)The Assumption of Union Agreement (subject to Section 27(B));

(x)[Reserved];

(xi)Evidence of authority, good standing (if applicable) and due authorization of Purchaser to enter into the within transaction and to perform all of its obligations hereunder, including, without limitation, the execution and delivery of all of the closing documents required by this Agreement, and setting forth such additional facts, if any, as may be needed to show that the transaction is duly authorized and is in conformity with Purchaser’s organizational documents and applicable laws;

(xii)An acknowledgement or receipt for each of the Security Deposits paid over or credited to Purchaser at the Closing;

(xiii)A certificate from Purchaser, certifying to Seller that all of Purchaser’s representations and warranties provided for in Section 16(B) of this Agreement are true and correct in all material respects as of the Closing Date;

(xiv)The Closing Statement; and

(xv)Such other instruments or documents which by the terms of this Agreement are to be delivered by Purchaser at Closing.

C.The acceptance of the Deed by Purchaser shall be deemed to be full performance and discharge of any and all obligations on the part of Seller to be performed pursuant to the provisions of this Agreement, except where such agreements and obligations are specifically stated to survive.

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9. Conditions Precedent.

A.Seller’s obligations under this Agreement are subject to satisfaction of the following conditions precedent, which may be waived in whole or in part by Seller, provided such waiver is in writing and signed by Seller on or before the Closing Date:

(xvi)Purchaser shall have paid or tendered payment of the Purchase Price and paid all other amounts payable by Purchaser pursuant to the terms hereof;

(xvii)Purchaser shall have delivered to or for the benefit of Seller, on or before the Closing Date, all of the documents and items required to be delivered by Purchaser pursuant to Article 8 hereof and Purchaser shall have performed in all material respects all of its other obligations hereunder to be performed on or before the Closing Date; and

(xviii)All of Purchaser’s representations and warranties made in this Agreement shall be true and correct in all material respects as of the date hereof and as of the Closing Date as if then made.

B.Purchaser’s obligations under this Agreement are subject to the satisfaction of the following conditions precedent which may be waived in whole or in part by Purchaser, provided such waiver is in writing and signed by Purchaser on or before the Closing Date:

(i)Seller shall have delivered to or for the benefit of Purchaser, on or before the Closing Date, all of the documents and items required to be delivered by Seller pursuant to Article 8 hereof and Seller shall have performed in all material respects all of its obligations hereunder to be performed on or before the Closing Date; and

(ii)Subject to the other provisions of this Agreement, all of Seller’s representations and warranties made in this Agreement shall be true and correct in all material respects as of the date hereof and as of the Closing Date as if then made, and shall survive for a period of one-hundred eighty (180) days following the Closing Date, other than those representations or warranties made as of a specific date, or with reference to previously dated materials, in which event such representations and warranties shall be true and correct as of the date thereof or as of the date of such materials, as applicable. For purposes hereof, a representation or warranty shall not be deemed to have been breached if the representation or warranty is not true and correct in all material respects as of the Closing Date by reason of changed facts or circumstances arising after the date hereof which did not arise by reason of a breach of any covenant made by Seller under this Agreement.

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C.Notwithstanding anything to the contrary contained in this Agreement, (i) Seller does not represent or warrant that any Lease will be in force or effect at Closing, that any Tenant will have performed its obligations under its Lease or that any Tenant will not be the subject of bankruptcy proceedings and (ii) the existence of any default by a Tenant, the failure by a Tenant to perform its obligations under its Lease, the termination of any Lease prior to Closing by reason of the Tenant’s default (if in accordance with the other provisions of this Agreement) or the existence of bankruptcy proceedings pertaining to any Tenant shall not affect Purchaser’s obligations hereunder in any manner or entitle Purchaser to an abatement of or credit against the Purchase Price or give rise to any other claim on the part of Purchaser.

D.Seller shall be entitled to one or more adjournments, not to exceed sixty (60) days in the aggregate (along with all of Seller’s other adjournments under this Agreement), of the Closing Date to attempt to satisfy any of the conditions described in Section 9B above.

10. Estoppel Certificates.

A.As soon as reasonably practicable after the date hereof, Seller shall send to all of the Tenants a request to deliver estoppel certificates (individually, an “Estoppel” and, collectively, the “Estoppels”). Thereafter, Seller shall use reasonably diligent efforts to obtain and to deliver to Purchaser Estoppels from all of the Tenants. Seller shall obtain Estoppels from the following Tenants: McAloon & Friedman, P.C., General Services Administration, Securities Training Corporation, Open Kitchen 123 and International Center for the Disabled (collectively, the “Required Estoppel Tenants”). Each Estoppel shall either (i) be substantially in the form attached hereto as Exhibit 10 and made a part hereof, it being agreed that (a) the inclusion of qualifications as to knowledge or word of similar import, (b) references to a general condition statement such as “we reserve all rights” or “subject to our audit of ____ years operating expenses or taxes,” (c) non-material modifications, (d) modifications thereof to conform the same to Leases or other information delivered or available to Purchaser prior to the date of the execution of this Agreement shall not cause in each instance the Estoppel to be non-compliant or (ii) be on such other form as may be provided by any Tenant, provided that it certifies the matters contained in Exhibit 10; or (iii) in the event that any Lease provides for the form or content of an Estoppel that such Tenant shall be required to deliver, then such Tenant’s estoppel may be in such form or contain only those matters as an estoppel is required to address pursuant to the related Lease, without giving effect to any requirement regarding “additional information reasonably requested by the lessor” or words of similar import. Purchaser acknowledges that the following NYS tenants use their own estoppel form which Purchaser agrees may be used in lieu of the form annexed hereto: NYS Department of State, NYS Emergency Financial Control Board for New York City, NYS Office of Court Administration and NYS Comptroller’s Office. Each Estoppel, in any of the foregoing forms, shall be executed and delivered by the Tenant, confirming in all material respects only such matters as an estoppel is required to address pursuant to the related Lease, it being understood and agreed that, for the purposes of this Section 10(A), an estoppel shall fail to confirm the applicable matters in all material respects if and only if the aggregate adverse economic impact as a result of all such failures is equal to or exceeds the Floor, as defined in Section 16(C) herein (Estoppels that do confirm such applicable matters are referred to herein as the “Confirming Estoppels”). Notwithstanding the foregoing, Seller shall have no obligation to deliver an Estoppel from any Tenant which is in default

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in the payment of fixed rent or other fixed charges under its Lease or subject to bankruptcy proceedings as of the Closing (or on account of a rejected lease in bankruptcy), and the Required Percentage shall be reduced in the same proportion as the square footage of the Tenant then in default or bankruptcy and/or the rejected lease bears to the rentable square footage leased as of the date hereof (the “Adjustment Factor”). In the event that Seller is unable to obtain Confirming Estoppels from Tenants occupying seventy-five percent (75%) of the leased rentable square footage of the Premises (the “Required Percentage”), Seller may, at its option, deliver one or more certificates in lieu thereof in substantially the same form as the form of Estoppel attached hereto as Exhibit 10 (each, a “Seller Certificate”) with respect to the Leases; provided, however, that such Seller Certificate is subject to the limitations set forth in Sections 16(C) and thisSection 10(A). In all events, Purchaser shall not be obligated to accept Seller Certificates in excess of ten percent (10%) of the leased rentable square footage of the Building or in place of an Estoppel from the Required Estoppel Tenants. For the sake of clarity, Seller’s obligation at Closing is to deliver Confirming Estoppels covering at least seventy-five percent (75%) of the leased rentable square footage of the Premises (of which ten percent (10%) may be in the form of a Seller Certificate and which must also include Confirming Estoppels from the Required Estoppel Tenants). Seller’s liability under each Seller’s Certificate shall expire on the earlier to occur of (a) the date of delivery to Purchaser of a Confirming Estoppel covering the amount of square footage covered by the Seller’s Certificate which has been given, or (b) the date which is one-hundred eighty (180) days after the Closing. Subject to Section 10(B) below, Seller’s failure to deliver Confirming Estoppels (or Seller’s Certificates, as applicable) under this Article 10 shall constitute a failure of a condition to Purchaser’s obligations hereunder and not a default by Seller, and Purchaser shall not be entitled to specific performance of such obligation of Seller to deliver such Confirming Estoppels. Claims of any Tenant set forth in any Estoppel shall not be deemed (alone or in combination with other matters), to cause such Estoppel not to be a Confirming Estoppel in the event such claims are based on the (i) facts disclosed in writing or available to Purchaser prior to Purchaser’s execution of this Agreement, (ii) an assertion by any Tenant that there are amounts due from Seller to such Tenant allocable to periods prior to the Closing and which, under the terms of this Agreement, Seller has agreed to pay (Seller, at its sole option, shall either pay such amounts to Tenant on or prior to the Closing Date or credit Purchaser at Closing against the Purchase Price in such amounts, or Seller shall deposit with Escrow Agent, as escrow agent, such amounts to be held in escrow pursuant to an escrow agreement reasonably acceptable to Escrow Agent, Seller and Purchaser. Such escrow agreement shall provide that amounts in escrow shall be released to Seller in the event a Confirming Estoppel is received within ninety (90) days after Closing, otherwise it shall be released to Purchaser (provided that if a credit is given, Seller shall have no liability to such tenant or to Purchaser with respect to such claim); or (iii) failure of the landlord to keep the Premises, the building systems or other improvements or equipment in good order and repair or to make required repairs or improvements thereto (it being agreed that Seller shall not be obligated to make any such repairs or improvements, and Purchaser hereby expressly agrees that for all purposes of this Agreement the obligation to make any such repairs or improvements shall be conclusively deemed to have arisen or accrued after the Closing).

B.Following the receipt by Seller of an original Confirming Estoppel from a Tenant, upon the request of Purchaser, Seller agrees to send such Tenants a form of SNDA (upon receipt thereof from Purchaser’s lender), which SNDA shall be among Purchaser, Purchaser’s Lender and

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such Tenant, in connection with Purchaser’s financing. Notwithstanding the immediately preceding sentence, it is expressly understood and acknowledged by Purchaser that this Contract and Purchaser’s obligations hereunder are not contingent or conditioned upon the execution and return by Tenant of such SNDA nor entitle Purchaser to a reduction in the Purchase Price.

C.Seller shall not be required to expend any money, provide financial accommodations or commence any litigation in connection with obtaining such Estoppels.

D.Seller shall be entitled to one or more adjournments, not to exceed sixty (60) days in the aggregate (along with all of Seller’s other adjournments under this Agreement), of the Closing Date to obtain Tenant Estoppels.

11. Cancellation of Contracts.

If Purchaser desires that Seller cancel any Existing Contract, and such Existing Contract is cancelable without cause upon no more than thirty (30) days’ notice by Seller or without payment of a cancellation fee or any other consideration (the “Desired Cancelled Contracts”), Purchaser shall provide Seller with a list thereof within four (4) business days prior to Closing. Seller shall, on or before the Closing Date, notify all parties under the Desired Cancelled Contracts of such cancellation. Purchaser understands and agrees that certain Desired Cancelled Contracts may remain in effect after the Closing through the expiration of the contractual termination period thereunder and that Purchaser shall be responsible for all payments and other obligations under such Desired Cancelled Contracts accruing after the Closing. Notwithstanding anything to the contrary contained herein, the existing property management and leasing agency agreement with East End Realty shall be terminated by Seller as of the Closing and Seller shall be responsible for all costs and expenses associated therewith. The “Surviving Contracts” shall mean the New Contracts and the Existing Contracts, excluding those Desired Cancelled Contracts which have actually been cancelled with an effective cancellation date on or before the Closing.

12. Right of Inspection.

A.Purchaser and Purchaser’s Representatives, prior to the Closing and during regular business hours, upon at least two (2) business days’ prior written notice to Seller, may inspect the Premises, provided that (i) Purchaser and Purchaser’s Representatives shall not communicate with any Tenants or occupants of the Premises without, in each instance, the prior written consent of Seller, which consent may be withheld in Seller’s sole discretion; provided, however, that Purchaser and Purchaser’s Representatives may, through Seller, schedule meetings during regular business hours with any Tenant on the following conditions: (a) no such meeting shall be scheduled until the applicable Tenant has delivered an Estoppel; (b) no such meeting shall occur unless Seller and/or Seller’s leasing agent is in attendance (for such purposes, Seller agrees to make its leasing agent available at reasonable times during regular business hours upon at least two (2) business days prior written notice); and (c) Seller makes no guaranty or assurance that any Tenant will consent to such a meeting, (ii) Purchaser and Purchaser’s Representatives shall not perform any invasive tests with respect to the Premises without the prior written consent of Seller in each instance, which consent may be withheld in Seller’s sole but reasonable discretion, (iii) Purchaser shall have no additional rights or remedies under this Agreement as a result of such inspection(s) or any findings in connection

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therewith and (iv) Purchaser may exercise such right of access no more than five (5) times, plus a final inspection prior to the Closing, plus such additional times as to which Seller may consent in Sellers sole discretion. Any entry upon the Premises shall be performed in a manner which is not unreasonably disruptive to Tenants or occupants of the Premises or the normal operation of the Premises and shall be subject to the rights of any Tenants or occupants of the Premises. Purchaser and Purchaser’s Representatives shall (i) exercise reasonable care at all times that Purchaser shall be present upon the Premises, (ii) at Purchaser’s expense, Purchaser and Purchaser shall cause Purchasers Representatives to observe and comply with all applicable laws and any conditions imposed by any insurance policy then in effect with respect to the Premises and (iii) not engage in any activities which would violate the provisions of any permit or license pertaining to the Premises. Seller shall have the right to have a representative of Seller accompany Purchaser and Purchaser’s Representatives during any such communication or entry upon the Premises.

B.Additionally, in conducting any inspection of the Premises or otherwise accessing the Premises, neither Purchaser nor any of Purchaser’s Representatives shall (i) contact or have any discussions with any of Seller’s employees, agents or representatives, or contractors providing services to, the Premises, unless in each case Purchaser obtains the prior consent of Seller, which may be withheld in Seller’s sole discretion, it being agreed that all such contacts or discussions shall, pending any such approval, be directed to Adam Pagoda, or (ii) damage the Premises. Purchaser agrees to be responsible for the cost of repairing and restoring any damage or disturbance which Purchaser or Purchaser’s Representatives shall cause to the Premises incurred by Seller in connection therewith. All inspection fees, appraisal fees, engineering fees and other costs and expenses of any kind incurred by Purchaser or Purchaser’s Representatives relating to such inspection or its other access shall be at the sole expense of Purchaser. If Closing hereunder shall not occur for any reason whatsoever, Purchaser shall: (A) at the request of Seller, promptly deliver to Seller, at no cost to Seller, and without representation or warranty, the originals of all tests, reports and inspections of the Premises, made and conducted by a third party for Purchaser or Purchaser’s Representatives or for Purchaser’s benefit which are in the possession or control of Purchaser, without any representation or warranty with respect thereto, and (B) promptly return to Seller copies of all due diligence materials delivered by Seller to Purchaser and shall destroy all copies of abstracts thereto. Purchaser and Purchaser’s Representatives shall not be permitted to conduct borings of the Premises or drilling in or on the Premises, or any other minimally invasive testing in connection with the preparation of an environmental audit or in connection with any other inspection of the Premises without the prior written consent of Seller, which shall not be unreasonably withheld (and, if such consent is given, Purchaser shall be responsible for the cost of repairing and restoring any damage as aforesaid and shall reimburse Seller upon demand for any costs incurred by Seller in connection therewith).

C.Purchaser hereby agrees to indemnify, defend and hold Seller, its officers, shareholders, partners, members, directors, employees, attorneys and agents harmless from and against any and all liability, loss, cost, judgment, claim, damage or expense (including, without limitation, attorneys’ fees and expenses), resulting from or arising out of the entry upon the Premises by Purchaser and its employees, agents, consultants, contractors and advisors. The foregoing indemnification shall survive the Closing or the termination of this Agreement.

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D.As a condition precedent to entering the Premises in connection with any inspection, Purchaser shall maintain or cause to be maintained, at Purchaser’s sole cost and expense, a policy of comprehensive general public liability and property damage insurance by an insurer or syndicate of insurers reasonably acceptable to Seller: (a) with a combined single limit of not less than Three Million Dollars ($3,000,000.00) general liability and Five Million Dollars ($5,000,000.00) excess umbrella liability, or any combination thereof, with a limit of not less than Eight Million Dollars ($8,000,000.00), (b) insuring Purchaser, Seller, their respective affiliates, Seller’s lender and any other person or entity related to Seller or involved with the transaction contemplated by this Agreement (such additional persons or entities to be designated in writing by Seller), as additional insureds, against any injuries or damages to persons or property that may result from or are related to (x) Purchaser’s or Purchaser’s Representatives entry upon the Premises and (y) any inspection or other activity conducted thereon by Purchaser or Purchaser’s Representatives and (c) containing a provision to the effect that insurance provided by Purchaser hereunder shall be primary and noncontributing with any other insurance available to Seller. Purchaser shall deliver evidence of such insurance coverage to Seller prior to the commencement of the first inspection and proof of continued coverage prior to any subsequent inspection.

E.Notwithstanding any provision in this Agreement to the contrary, neither Purchaser nor any of Purchaser’s Representatives shall contact any Federal, state, county, municipal or other department or governmental agency regarding the Premises (other than accessing publicly available documents) without Seller’s prior written consent thereto which consent may be withheld in Seller’s sole discretion, provided that Title Insurer may order customary searches. In addition, if Seller’s consent is obtained by Purchaser, Seller shall be entitled to receive at least five (5) business days prior written notice of the intended contact and shall be entitled to have a representative present when Purchaser has any such contact with any governmental official or representative.

13. Title Insurance.

A.Title Insurer has issued and delivered to Purchaser and Seller a title insurance report and commitment dated December 10, 2014 for a fee owner’s title insurance policy (Title No. 820212(0–NY-CR-KV)B (“Seller’s Title Commitment”). Purchaser may order a new report (the “Commitment”) from Title Insurer and any update of the Commitment from Title Insurer. At Closing, Purchaser shall cause title to the Premises to be insured by the Title Insurer at Purchaser’s sole cost and expense. Except as otherwise expressly provided in this Agreement, Seller shall have no obligation to remove any exception to title. Except for the items identified in Exhibit“4(a)(ii)” (the “Known Title Objections”), Purchaser unconditionally waives any right to object to any matters set forth in Seller’s Title Commitment. At Closing, Seller shall deliver and Purchaser shall accept the Premises subject only to the Permitted Exceptions. If exceptions to title appear on the Commitment or any update or continuation of the Commitment (each a “Continuation”) which are not Permitted Exceptions or Required Removal Items, Purchaser shall notify Seller thereof within the earlier of five (5) business days after Purchaser receives such Continuation and the last business day prior to the Closing Date, time being of the essence, and if Seller is unable, or elects not to attempt, to eliminate such exceptions to title, or if Seller elects to attempt to eliminate any such exceptions to title but is unable to do so or thereafter decides not to eliminate the same, and accordingly, is unable to convey title to the Premises in accordance with the provisions of this

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Agreement, Seller shall so notify Purchaser and, within five (5) business days after receipt of such notice from Seller, Purchaser shall elect either (i) to terminate this Agreement by notice given to Seller (time being of the essence with respect to Purchaser’s notice), in which event the provisions of Article 14 of this Agreement shall apply, or (ii) to accept title to the Premises subject to such exceptions, without any abatement of the Purchase Price. If Purchaser shall not notify Seller of such election within such five (5) business day period, time being of the essence, Purchaser shall be deemed to have elected clause (ii) above with the same force and effect as if Purchaser had elected clause (ii) within such five (5) business day period.

B.If the Commitment discloses judgments, bankruptcies or similar returns against persons or entities having names the same as or similar to that of Seller but which returns are not against Seller, Seller, on request, shall deliver to Purchaser or Title Insurer affidavits reasonably acceptable to Seller to the effect that such judgments, bankruptcies or returns are not against Seller.

C.If the Commitment discloses exceptions (other than the Permitted Exceptions) which (i) may be removed solely by reference to Seller’s existing title policy, or (ii) may be removed or satisfied by the payment of a liquidated sum of money (the “Title Cure Amount”) not in excess of One Million Dollars and 00/100 ($1,000,000.00) in the aggregate with any sums expended or incurred by Seller pursuant to Section 16(D), or (iii) were created, consented to or affirmatively permitted by Seller in writing after the date hereof, or is any mortgage encumbering the Premises (except that Seller shall not be required to satisfy the current mortgage covering the Premises if it is assigned pursuant to Section 43 below), then in any such case, Seller shall remove such exceptions and the failure on the part of Seller to have such exceptions removed shall be a Seller’s Willful Default (the exceptions meeting the criteria set forth in clauses (i), (ii) or (iii) are referred to herein as “Required Removal Items”). In addition, Seller shall cause the Known Title Objections and the Required Removal Items to be satisfied, bonded over or otherwise secured to enable the Title Insurer to insure over the Known Title Objections and the Required Removal Items, or to remove the Known Title Objections and the Required Removal Items from Purchaser’s title insurance policy (except that Seller shall not be required to satisfy the current mortgage covering the Premises if it is assigned pursuant to Section 43 below). The cost of removing or satisfying the Known Title Objections of the Required Removal Items described in clauses (i) and (iii) of this Section 13(C) shall not be counted against the Title Cure Amount. Notwithstanding the foregoing, Seller, at its option in lieu of satisfying such exceptions, may deposit with Title Insurer such amount of money and provide such documentation, affidavits and indemnities as may be reasonably determined by Title Insurer as being sufficient to induce it to insure Purchaser against collection of such liens and/or encumbrances, including interest and penalties, out of or against the Premises, in which event such exceptions shall not be objections to title.

D.Seller shall be entitled to one or more adjournments of the Closing Date, not to exceed sixty (60) days in the aggregate (in addition to all of Seller’s other adjournments under this Agreement), to remove any exceptions to title which Seller is obligated to remove under this Agreement or elects to attempt, but is not obligated, to remove.

E.Notwithstanding the foregoing provisions of this Article 13, in the event that Title Insurer shall raise an exception to title which is not a Permitted Exception, Seller shall have no

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obligation to eliminate such exception and Purchaser shall have no right to terminate the Agreement by reason of such exception if Title Insurer shall be prepared to insure title to the Premises at regular rates without such exception.

F.Purchaser shall pay the costs of examination of title and any owner’s or mortgagee’s policy of title insurance to be issued insuring Purchaser’s title to the Property, as well as all other title charges, survey fees, recording charges and any and all other costs or expenses incident to the Closing.

G.Notwithstanding anything in Article 13 hereof to the contrary, Purchaser may at any time accept such title as Seller can convey, without reduction of the Purchase Price or any credit or allowance on account thereof or any claim against Seller. The acceptance of the Deed by Purchaser shall be deemed to be full performance of, and discharge of, every agreement and obligation on Seller’s part to be performed under this Agreement, except for the documents executed at Closing and such matters which are expressly stated in this Agreement to survive the Closing, to the limit of such survival.

14. Return of Deposit.

Subject to Section 13, if Seller is unable to convey title in accordance with the express terms of this Agreement or if, in accordance with the terms of this Agreement, Purchaser is entitled to and elects to terminate this Agreement, subject to Article 23 of this Agreement, then this Agreement shall terminate and neither party to this Agreement shall have any further rights or obligations hereunder, except that Escrow Agent shall refund to Purchaser the Deposit (together with all interest thereon, if any), and neither party to this Agreement shall thereafter have any further right or obligation hereunder, except for the rights and obligations hereunder that expressly survive the termination of this Agreement.

15. Purchaser’s Default.

If Purchaser shall default hereunder or shall fail or refuse to perform its obligations in accordance with this Agreement, the parties hereto agree that Seller’s sole remedy shall be to terminate this Agreement and retain the Deposit (together with all interest thereon, if any) as liquidated damages, it being expressly understood and agreed that in the event of Purchaser’s default, Seller’s damages would be impossible to ascertain and that the Deposit (together with all interest thereon, if any) constitutes a fair and reasonable amount of compensation in such event. Upon such termination, neither party to this Agreement shall have any further rights or obligations hereunder except that: (a) Purchaser shall return to Seller all written material relating to the Premises or the transaction contemplated herein delivered by or on behalf of Seller in the manner provided in Section 12(B) hereof; (b) Escrow Agent shall deliver to Seller and Seller shall retain the Deposit (together with all interest thereon, if any) as liquidated damages, except with respect to any breaches of Surviving Obligations (as hereinafter defined); and (c) any provisions of this Agreement which expressly survive the termination of this Agreement (collectively, the “Surviving Obligations”) shall survive and continue to bind Purchaser and Seller.

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16. Representations and Warranties.

A.Seller hereby represents and warrants to Purchaser as follows:

(i)To the Seller’s Actual Knowledge, the Leases listed on Exhibit“1(B)” are the only leases, licenses, tenancies, possession agreements and occupancy agreements affecting the Premises on the date of this Agreement in which Seller holds the lessor’s, licensor’s or grantor’s interest and there are no other leases, licenses, tenancies, possession agreements or occupancy agreements affecting the Premises (other than subleases, licenses, tenancies or other possession or occupancy agreements which may have been entered into by the Tenants, or their predecessors in interest, under such Leases); to the extent in the possession or control of Seller, Seller has made copies of all such Leases available to Purchaser, which such Leases are true, complete and correct in all material respects; as of the date hereof, except as may be set forth in Exhibit“1(B)”, Seller, as lessor under such Leases, has not received any written notice of any material default of any of its material obligations under such Leases which has not been cured; and no Tenant is in arrears in the payment of Base Rent for any period in excess of thirty (30) days, except as set forth on Exhibit“16(A)(i)”. Except as set forth in the Leases, (a) no Tenant is entitled to rental concessions or abatements for any period subsequent to the scheduled date of Closing, (b) no other or additional renewal or extension options have been granted to the Tenants and (c) no person, firm, or entity, and none of the tenants, has any rights in, or rights to purchase or acquire all, or any part of the Real Property, including, without limitation, a right of first refusal, right of first offer or option to purchase or lease with respect thereto other than Purchaser hereunder. As of the date hereof, none of the Tenants has made any request for any assignment, transfer, or subletting in connection with all or a portion of the Premises which is presently pending or under consideration. All of the Leases are in full force and effect in accordance with their respective terms, and none of the Leases has been modified, amended, renewed or extended except as set forth in Exhibit“1(B)”; subject to Section “20(E)”, all specified work required to be performed by the landlord under the Leases (as distinguished from compliance with general maintenance and repair obligations of Landlord) up to the date of Closing has been substantially completed or will be substantially completed prior to the Closing; all specified construction allowances or other sums to be paid to any of the Tenants (as distinguished from costs or reimbursements related to compliance with general maintenance and repair obligations of Landlord) up to the date of Closing have been or will be paid in full prior to the Closing; Seller has not received written notice from any Tenant claiming that any so-called “landlord’s Work” (such as, for example, work which was a condition to the initial commencement of the term thereof) remains incomplete. No action, proceeding or arbitration is pending on the date hereof with any Tenant in respect of its tenancy or its Lease; Seller represents and warrants to Purchaser that, to Seller’s Actual Knowledge, Seller has heretofore billed all Tenants for all Base Rents, Overage Rents and Reimbursable Payments due under the Leases;

(ii)To Seller’s Actual Knowledge, the Union Employee(s) listed on Exhibit “16(A)(ii)” are all of the Union Employees who work at the Premises as of the date hereof;

(iii)To Seller’s Actual Knowledge, the Existing Contracts listed on Exhibit “1(C)” are the only Existing Contracts; Seller has made copies of all such Existing Contracts available to Purchaser, which such Existing Contracts are true, complete and correct in all material respects;

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(iv)To Seller’s Actual Knowledge, the Telecommunications Contracts listed on Exhibit“1 (D)” are the only Telecommunications Contracts; to the extent in the possession or control of Seller, Seller has made copies of all such Telecommunications Contracts available to Purchaser, which such Telecommunications Contracts are true, complete and correct in all material respects;

(v)To Seller’s Actual Knowledge, there are no judgments of any kind against Seller unpaid or unsatisfied of record, except as shown on Seller’s Title Commitment;

(vi)Seller is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware; Seller has taken all action required to execute, deliver and, subject to obtaining any consents or waivers required to be obtained prior to the Closing, perform this Agreement and to make all of the provisions of this Agreement the valid and enforceable obligations they purport to be and has caused this Agreement to be executed by a duly authorized person;

(vii)This Agreement and all documents which are to be delivered to Purchaser by Seller at the Closing are, or at the time of Closing will be, duly authorized, executed and delivered by Seller; are, or at the time of Closing will be, legal, valid and binding obligations of Seller enforceable in accordance with their terms, subject to general principles of equity and to bankruptcy, insolvency, reorganization, moratorium or other similar laws presently or hereafter in effect affecting the rights of creditors or debtors generally; and do not conflict with any provision of any law or regulation to which Seller is subject, violate any provision of any judicial order to which Seller is a party or to which Seller or the Premises is subject. The execution, delivery and performance of this Agreement does not require the consent or approval of any court, administrative or governmental authority and do not result in the creation or imposition of any lien or equity of any kind whatsoever upon, or give to any other person any interest or right (including any right of termination or cancellation) in or with respect to, any material agreement to which Seller is a party or the business or operations of Seller or any of its properties or assets;

(viii)Seller is not a “foreign person” within the meaning of Section 1445(f)(3) of the Internal Revenue Code;

(ix)Seller has not received written notice of any pending or threatened condemnation with respect to the Premises or any part thereof;

(x)There are no actions, suits or proceedings against Seller in any court of law or in equity or before any governmental instrumentality that would materially adversely affect the ability of Seller to perform its obligations, or materially adversely affect Purchaser’s right, under this Agreement or the use or operation of the Premises;

(xi)To Seller’s Actual Knowledge, the Brokerage Agreements listed on Exhibit“1(E)” are the only brokerage agreements entered into by Seller with respect to leasing of portions of the Premises that remain outstanding and in effect. Seller has made copies of all such Brokerage Agreements available to Purchaser, which such Brokerage Agreements are true, complete and correct in all material respects;

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(xii)Other than as set forth on Exhibit“16(A)(xii)”, Seller has not commenced any tax assessment reduction proceedings with respect to the Premises;

(xiii)Exhibit“16(A)(xiii)” sets forth all Security Deposits, together with all interest earned thereon (including those in the form of Letters of Credit), presently held by or on behalf of Seller with respect to the Leases. Seller shall not apply any portion of the Security Deposits against any Tenant default subsequent to the date of this Agreement unless and until Tenant has vacated the Premises or unless Purchaser is in default under this Agreement after the Initial Closing Date or adjourned Closing Date, as applicable;

(xiv)Seller currently maintains casualty insurance that, to Seller’s Actual Knowledge, would be sufficient to restore the Building to its current condition as of the date hereof in the event of a casualty, subject to customary conditions, qualifications and exclusions of insurance policies for similarly situated properties;

(xv)OFAC. To Seller’s Actual Knowledge, neither Seller nor Seller’s officers or directors are (i) currently identified on the Specially Designated Nationals and Blocked Persons List maintained by the Office of Foreign Assets Control, Department of the Treasury (“OFAC”) and/or on any other similar list maintained by OFAC pursuant to any authorizing statute, executive order or regulation (collectively, the “List”), and (ii) a person or entity with whom a citizen of the United States is prohibited to engage in transactions by any trade embargo, economic sanction, or other prohibition of United States law, regulation, or Executive Order of the President of the United States, and (iii) an Embargoed Person (as hereinafter defined). The term “Embargoed Person” means any person, entity or government subject to trade restrictions under U.S. law, including but not limited to, the International Emergency Economic Powers Act, 50 U.S.C. §1701 et seq., The Trading with the Enemy Act, 50 U.S.C. App. 1 et seq., and any Executive Orders or regulations promulgated thereunder;

(xvi)ERISA. Seller is not and is not acting on behalf of an “employee benefit plan” within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended, a “plan” within the meaning of Section 4975 of the Internal Revenue Code of 1986, as amended or an entity deemed to hold “plan assets” within the meaning of 29 C.F.R. § 2510.3-101 of any such employee benefit plan or plans;

(xvii)Except as set forth on Exhibit“1(B)”, Seller has not received notice from any of the tenants or from the holder of any mortgage, requesting the performance of any repairs, alterations or other work, or for the correction of any defaults under any agreements, ordinances, rules or otherwise with respect to the Premises, which shall remain uncured on the Closing Date.

(xviii)Except as set forth on Exhibit “16(A)(xviii)”, there are no prepaid rents by Tenants.

(xix)Seller has made copies of all Union Agreements available to Purchaser, which Union Agreement are, to Seller’s Actual Knowledge, true, complete and correct in all material respects.

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(xx)Seller’s Work set forth on Exhibit 20(D) is a true, correct and complete list, and the contracted cost to complete (or the original estimated cost to complete if no such contract has been entered into as of the date hereof), of all base building work (excluding routine repair and maintenance) currently underway in, on or about the Premises.

(xxi) The work set forth on Exhibit “16(A)(xxi)” (collectively, “Landlord’s Work”) identifies any and all work required to be performed by the landlord and yet to be completed under any Lease (i) as a condition to the initial commencement of the term thereof, (ii) that landlord agreed to perform thereunder after the commencement of the term thereof, but in connection with tenants’ initial occupancy (such as, for example, base building bathroom renovations, or other work the landlord agreed to perform during the performance of the applicable tenant’s initial alterations), or (iii) with respect to any tenant already in occupancy of its premises under its Lease but who has claimed in writing to Seller that work which was a condition to the initial commencement of the term thereof remains incomplete (it being understood that the work set forth on Exhibit“16(A)(xxi)” is not intended to identify typical ongoing maintenance and repair work required to be performed by the landlord thereunder). Exhibit“16(A)(xxi)” shall also set forth the original estimated cost to complete, Landlord’s Work.

(xxii)To Seller’s Actual Knowledge, neither Seller nor Seller’s Service Providers are delinquent in any obligations under the Union Agreement, including but not limited to wages and benefit fund contributions pursuant to such Union Agreement. Neither Seller nor, to Seller’s Actual Knowledge, Seller’s Service Provider have received written notice of any grievances having been filed under such Union Agreement nor, to Seller’s Actual Knowledge, are there any valid bases for such grievances. Neither Seller nor Seller’s Service Provider have received written notice of any unfair labor practice charges or proceedings before the National Labor Relations Board in connection with the operation of the Premises, nor to Seller’s Actual Knowledge, are there any valid bases for such charges.

B.Purchaser represents and warrants to Seller that, as of the date hereof:

(i)Purchaser is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware and, is and in good standing and qualified to do business under the laws of the State of New York; Purchaser has taken all action required to execute, deliver and perform this Agreement and to make all of the provisions of this Agreement the valid and enforceable obligations they purport to be and has caused this Agreement to be executed by a duly authorized person;

(ii)This Agreement and all documents which are to be delivered to Seller by Purchaser at the Closing: are, or at the time of Closing will be, duly authorized, executed and delivered by Purchaser; are, or at the time of Closing will be, legal, valid and binding obligations of Purchaser enforceable in accordance with their terms, subject to general principles of equity and to bankruptcy, insolvency, reorganization, moratorium or other similar laws presently or hereafter in effect affecting the rights of creditors or debtors generally; and do not conflict with any provision of any law or regulation to which Purchaser is subject, violate any provision of any judicial order to which Purchaser is a party or to which Purchaser is subject;

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(iii)There are no judgments, orders or decrees of any kind against Purchaser unpaid or unsatisfied of record and no legal action, suit or other legal or administrative proceeding pending, threatened or reasonably anticipated which could be filed before any court or administrative agency which has, or is likely to have, any material adverse effect on (a) the business or assets or the condition, financial or otherwise, of Purchaser or (b) the ability of Purchaser to perform its obligations under this Agreement;

(iv)Purchaser has not filed any petition seeking or acquiescing in any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any law relating to bankruptcy or insolvency, nor has any such petition been filed against Purchaser; No general assignment of Purchaser’s property has been made for the benefit of creditors, and no receiver, master, liquidator or trustee has been appointed for Purchaser or any of its property; Purchaser is not insolvent and the consummation of the transactions contemplated by this Agreement shall not render Purchaser insolvent; Purchaser has now and will have as of the Closing Date sufficient capital or net worth to meet its current obligations; and Purchaser certifies that any financial statements and any financial statements of Purchaser and/or any affiliate of Purchaser submitted to Seller are true, correct and complete; and

(v)Purchaser, to Purchaser’s knowledge, is (a) not a person and/or entity with whom Seller is restricted from doing business under the International Emergency Economic Powers Act, 50 U.S.C. § 1701 et seq.; the Trading With the Enemy Act, 50 U.S.C. App. § 5; the USA Patriot Act of 2001; any executive orders promulgated thereunder, any implementing regulations promulgated thereunder by OFAC (including those persons and/or entities named on OFAC’s List of Specially Designated Nationals and locked Persons); or any other applicable law of the United States; (b) (i) not a person or entity with whom a citizen of the United States is prohibited to engage in transactions by any trade embargo, economic sanction, or other prohibition of United States law, regulation, or Executive Order of the President of the United States, and (ii) an Embargoed Person (as hereinafter defined). The term “Embargoed Person” means any person, entity or government subject to trade restrictions under U.S. law, including but not limited to, the International Emergency Economic Powers Act, 50 U.S.C. §1701 et seq., The Trading with the Enemy Act, 50 U.S.C. App. 1 et seq., and any Executive Orders or regulations promulgated thereunder.

C.The representations of Seller set forth in Section 16 of this Agreement, the statements of Seller in any Seller Estoppel and the Seller’s indemnity obligations to Purchaser under this Agreement and any document delivered by Seller at Closing which contains an indemnity (collectively, the “Surviving Seller Representation(s)”) shall survive the Closing under this Agreement for a period of one-hundred eighty (180) days after the Closing Date (the “Survival Period”); provided, however, that the representations of Seller set forth in this Agreement with respect to Leases shall not survive the Closing to the extent a Tenant Estoppel covering substantially the same matter is delivered. Each Surviving Seller Representation shall automatically be null and void and of no further force and effect after the Survival Period unless, prior to the end of the Survival Period, Purchaser shall have asserted in writing a specific claim with respect to the particular Surviving Seller Representation and commenced a legal proceeding within sixty (60) days thereafter against Seller alleging that Seller is in breach of such Surviving Seller Representation and that

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Purchaser has suffered actual damages as a result thereof (a “Proceeding”); provided, however, and in every case Purchaser’s recovery for any claims referenced above shall be net of insurance proceeds and any indemnity contribution or similar payment recoverable by Purchaser from any insurance company, tenant or third party. In no event shall Purchaser be entitled to assert any incidental, indirect, special, exemplary, consequential or punitive damages, nor shall it be entitled to any lost profits, unrealized expectations, similar claims or to any award or payment based on such damages. If Purchaser timely commences a Proceeding, and a court of competent jurisdiction, pursuant to a final, non-appealable order in connection with such Proceeding, determines that (1) the applicable Surviving Seller Representation was breached as of the date of this Agreement or the Closing Date and (2) Purchaser suffered actual damages (the “Damages”) by reason of such breach and (3) Purchaser did not have knowledge of such breach prior to the Closing and is not deemed to have knowledge as described in clause (D) below and (4) the breach was “material” (as defined in Section 16(D)(ii)), then Purchaser shall be entitled to receive an amount equal to the Damages, but in no event in an amount greater than the Ceiling (as hereinafter defined); provided, however, Purchaser shall not be entitled to pursue any claims against Seller for damage to Purchaser to the extent the aggregate of such claims is less than the Floor (as hereinafter defined). If Purchaser has a single claim against Seller that is more than the Floor or multiple claims that, in the aggregate, is more than the Floor, then Purchaser shall be entitled to pursue the actual loss suffered by Purchaser in connection with such claim against Seller, but in no event shall Seller’s liability for any and all claims exceed the Ceiling. For purposes of this Section 16(C), Purchaser shall be deemed to have actual knowledge if Purchaser and/or its affiliates and their respective officers, employees, agents, representatives or consultants had knowledge of the fact in issue prior to Closing. As used herein, “Floor” shall mean with respect to any claim or claims against Seller for breach of any Surviving Seller Representation, Two Hundred Thousand Dollars and 00/100 ($200,000.00), and “Ceiling” shall mean Two Million Five Hundred Thirty Thousand Dollars and 00/100 ($2,530,000.00). During the Survival Period, Seller agrees to maintain a net worth in an amount equal to the Ceiling, which Purchaser acknowledges and agrees may be satisfied by Seller maintaining cash and/or securities (which shall be reasonably evidenced by Seller to Purchaser). If at the expiration of the Survival Period, Purchaser’s claim for Damages is less than the Ceiling, Seller’s agreement to maintain a net worth as set forth above shall be reduced to the amount of the Purchaser’s claim for Damages, if any.

D.(i) Until Closing, Seller shall update any representation or warranty in this Agreement to correct any material mistake and/or to reflect any material matter which arises subsequent to the date of this Agreement. If Purchaser has knowledge of any matter which would constitute a material breach of Seller’s representations and warranties, Purchaser shall notify Seller of such material breach within the earlier of five (5) business days of learning of same and the Closing Date, failing which Purchaser shall be deemed to waive any such material breach of Seller’s representations and warranties. Seller shall have the right to contest Purchaser’s determination as to a material breach of Seller’s representations and warranties, and shall have the right to attempt to cure such breach without being obligated to complete such cure. In addition, Seller shall have until the date that is the later of the originally scheduled Closing Date or sixty (60) days from the date of Purchaser’s notice to cure any such material breach of Seller’s representations and warranties and, at Seller’s sole option, the Closing Date shall be extended to such sixtieth (60th) day (or any earlier business day) after Purchaser’s notice to permit such cure by Seller. If the Seller fails to cure any such

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material breach of Seller’s representations and warranties, then Purchaser, as its sole and exclusive remedy, shall have the right to terminate this Agreement by written notice to Seller, in which case Escrow Agent shall return the Deposit (together with all interest thereon, if any) to Purchaser and neither party to this Agreement shall thereafter have any further right or obligation hereunder, other than the Surviving Obligations. For the purposes of Section 16, “material” shall mean any state of facts, taken alone or together with all other material untruths or inaccuracies and all such covenants with which Seller has not materially complied, the restoration of which to the condition represented or warranted by Seller under this Agreement, or the cost of compliance with which, would cost in excess of Two Hundred Thousand Dollars and 00/100 ($200,000.00).

(ii)The representations and warranties of Seller set forth in this Agreement are subject to the following limitations: (i) subject to the express provisions of Section 24, Seller does not represent or warrant that any particular Lease or contract will be in force or effect as of the Closing or that the tenants or contractors thereunder, as applicable, will not be in default thereunder, (ii) to the extent that Seller has delivered or made available to Purchaser (or to any Diligence Party (as hereinafter defined)) any Leases, contracts or other information with respect to the Premises at any time prior to the execution of this Agreement, and such Leases, contracts or other information contain provisions inconsistent with any of such representations and warranties, then such representations and warranties shall be deemed modified to conform to such provisions and Purchaser shall be deemed to have knowledge thereof and, (iii) in the event that, prior to the Closing, Purchaser or any Diligence Party shall obtain knowledge of any information that is contradictory to, and would constitute the basis of a breach of, any representation or warranty or failure to satisfy any condition on the part of Seller, then promptly thereafter (and, in all events, prior to Closing), Purchaser shall deliver to Seller notice of such information as provided in Section D(i) specifying the representation, warranty or condition to which such information relates, and Purchaser further acknowledges that such representation, warranty or condition will not be deemed breached in the event Purchaser shall have, prior to Closing, obtained knowledge of any information that is contradictory to such representation or warranty and shall have failed to disclose to Seller as required hereby and Purchaser shall not be entitled to bring any action after the Closing Date based on such representation, warranty or condition. Without limiting the generality of the foregoing, Purchaser shall be deemed to know that any representation or warranty contained herein is untrue, inaccurate or breached to the extent that (1) Purchaser or any Diligence Party has knowledge of any fact or information which is inconsistent with such representation or warranty or (2) it is contained in the Diligence Reports or (3) this Agreement or any Lease, contract or other information with respect to the Premises delivered or made available to Purchaser or any Diligence Party contain provisions inconsistent with any such representations and warranties. “Diligence Party” shall mean any of the following: (i) Purchaser and (ii) any direct or indirect officers, directors, employees, agents, consultants, affiliates, attorneys and representatives of Purchaser who were involved in the negotiation of this Agreement, reviewed any Lease, contracts or other information relating to the Premises, were involved in the performance of the due diligence conducted in order to prepare the same, or who otherwise approved the transactions contemplated hereunder. “Diligence Reports” mean the results of any examinations, inspections, investigations, test, studies, analyses, appraisals, evaluations and/or investigations prepared by or for or otherwise obtained by or on behalf of Purchaser in connection with the Premises.

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E.Any and all uses of the phrase, “to Seller’s Actual Knowledge” or other references to Seller’s knowledge in this Agreement (or in any Seller estoppel certificate or other document delivered by Seller pursuant to the terms of this Agreement), shall mean the actual, present, conscious knowledge of Jonathon Yormak, Adam Pagoda, David Peretz, and Mark Van Zandt (collectively, the “Seller Knowledge Individuals”) as to a fact at the time given without any investigation or inquiry. Without limiting the foregoing, Purchaser acknowledges that the Seller Knowledge Individuals have not performed and are not obligated to perform any investigation or review of any files or other information in the possession or control of Seller, or make any inquiry of any persons, or to take any other actions in connection with the representations and warranties of Seller set forth in this Agreement. Neither the actual, present, conscious knowledge of any other individual or entity, nor the constructive knowledge of the Seller Knowledge Individuals or of any other individual or entity, shall be imputed to the Seller Knowledge Individuals. Such individuals shall have no personal liability under this Agreement or otherwise with respect to the Real Property.

17. Broker.

A.Seller represents to Purchaser that it has not dealt with any broker, finder or like agent in connection with this transaction other than CBRE (“Broker”). Seller shall pay the amounts due Broker at Closing as set forth in a separate agreement by and between Seller and Broker. Seller hereby indemnifies and holds Purchaser harmless from and against any and all claims for any commission, fee or other compensation by any person or entity, including Broker, who shall claim to have dealt with Seller in connection with this transaction and for any and all costs actually incurred by Purchaser in connection with any such claims including, without limitation, reasonable attorneys’ fees and disbursements.

B.Purchaser represents to Seller that it has not dealt with any broker, finder or like agent in connection with this transaction other than Broker. Purchaser hereby indemnifies and holds Seller harmless from and against any and all claims for any commission, fee or other compensation by any person or entity (other than Broker), who shall claim to have dealt with Purchaser in connection with this transaction and for any and all costs actually incurred by Seller in connection with any such claims including, without limitation, reasonable attorneys’ fees and disbursements.

C.The provisions of this Article 17 shall survive the Closing or any early termination of this Agreement.

18. Condemnation and Destruction.

A.If, prior to the Closing Date, all or any “Significant Portion” (as hereinafter defined) of the Premises is taken, or rendered unusable for its current purpose or reasonably inaccessible by eminent domain (or is the subject of a pending or contemplated taking which has not been consummated), Seller shall notify Purchaser of such fact and Purchaser shall have the option to terminate this Agreement upon notice to Seller given not later than five (5) days after receipt of Seller’s notice. For purposes of this Section 18(A) and Section 18(B) hereof, a “Significant Portion” shall mean that the reasonable estimated cost to repair or restore such damage, or the amount of the condemnation award with respect to such taking shall exceed Ten Million Four Hundred Thousand and 00/100 Dollars ($10,400,000), or if the ingress or egress to the Premises is

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materially and permanently adversely affected or disturbed or more than five percent (5%) of the Improvements are taken. If this Agreement is terminated as aforesaid, neither party shall have any further right or obligation hereunder except that Escrow Agent shall refund to Purchaser the Deposit (together with interest thereon, if any). If Purchaser does not elect to terminate this Agreement (provided that Purchaser’s failure to elect to terminate shall be deemed an election to close pursuant to the terms of this Agreement) or if the portion of the Premises which is taken or rendered unusable or reasonably inaccessible by eminent domain (or is the subject of a pending or contemplated taking which has not been consummated) is not a Significant Portion of the Premises, Purchaser shall accept so much of the Premises as remains after such taking with no abatement of the Purchase Price, and at the Closing, Seller shall assign and turn over to Purchaser, and Purchaser shall be entitled to receive and keep, all of Seller’s interest in and to all awards for such taking by eminent domain.

B.If, prior to the Closing Date, a Significant Portion of the Building is destroyed by fire or other casualty. Seller shall notify Purchaser in writing of such fact and Purchaser shall have the option to terminate this Agreement upon ten (10) days’ notice to Seller given not later than ten (10) days after receipt of Seller’s notice, which notice from Seller shall include an estimate from the adjuster for Seller’s insurance carrier as to the cost to restore the Premises, provided, however, that within such ten (10) day period Seller may, at its option, notify Purchaser that it intends to repair such damage at its sole cost and expense, and Seller may, upon such notice, postpone the Closing for a period of time reasonably necessary, but not to exceed One Hundred twenty (120) days in the aggregate, to make such repairs. If Purchaser shall elect to terminate this Agreement as aforesaid (provided that Purchaser’s failure to elect to terminate shall be deemed an election to close pursuant to the terms of this Agreement), and Seller shall not notify Purchaser within such ten (10) day period of its intention to make such repairs, this Agreement shall terminate and neither party shall have any further rights or obligations hereunder except that Escrow Agent shall refund to Purchaser the Deposit (together with all interest thereon, if any). If Purchaser does not elect to terminate this Agreement as provided above, or if the portion of the Premises so damaged or destroyed is not a Significant Portion of the Premises, (i) Purchaser shall accept the Premises in its then “AS IS” condition with no abatement of the Purchase Price, (ii) Purchaser shall have the right to participate in any settlement negotiations with Seller’s insurance carriers and adjusters, (iii) at Closing Seller shall assign and turn over to Purchaser, and Purchaser shall be entitled to receive and keep, all of Seller’s interest in and to all casualty and business interruption and rental value insurance proceeds payable in connection with such casualty (except that the proceeds of any business interruption or rental value insurance payable to Seller shall be apportioned as of the Closing Date) and (iv) Purchaser shall receive a credit against the Purchase Price at the Closing in the amount of any deductible payable by Seller in connection with casualty coverage. This Article 18 is an express agreement to the contrary of Section 5-1311 of the New York General Obligation Law.

C.The provisions of this Paragraph 18 shall survive the Closing to the extent that any portion of insurance proceeds or condemnation awards is not fully paid or disbursed prior to Closing.

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19. Escrow.

A.The Deposit shall be held in escrow by Escrow Agent, upon the following terms and conditions:

(iii)Escrow Agent shall deposit the Deposit in an interest-bearing account or invest the Deposit in a money market or monetary fund;

(iv)Escrow Agent shall deliver to Seller the Deposit (together with all interest thereon, if any) at and upon the Closing; and

(v)If this Agreement is terminated in accordance with the terms hereof, or if the Closing does not take place under this Agreement by reason of the failure of either party to comply with such party’s obligations hereunder, Escrow Agent shall pay the Deposit (together with all interest thereon, if any) to Seller and/or Purchaser, as the case may be, in accordance with the provisions of this Agreement.

B.It is agreed that:

(i)The duties of Escrow Agent are only as herein specifically provided, and, except for the provisions of Section 19(C) hereof, are purely ministerial in nature, and Escrow Agent shall incur no liability whatever except for its own willful misconduct or gross negligence;

(ii)Escrow Agent shall not be liable or responsible for the collection of the proceeds of any checks used to pay the Deposit;

(iii)In the performance of its duties hereunder, Escrow Agent shall be entitled to rely upon any document, instrument or signature believed by it to be genuine and signed by either of the other parties hereto or their successors;

(iv)Escrow Agent may assume that any person purporting to give any notice of instructions in accordance with the provisions hereof has been duly authorized to do so;

(v)Escrow Agent shall not be bound by any modification, cancellation or rescission of this Agreement unless in writing and signed by Escrow Agent, Seller and Purchaser;

(vi)Except as otherwise provided in Section 19(C) hereof, Seller and Purchaser shall jointly and severally reimburse and indemnify Escrow Agent for, and hold it harmless against, any and all loss, liability, costs or expenses in connection herewith, including attorneys’ fees and disbursements, incurred without willful misconduct or gross negligence on the part of Escrow Agent arising out of or in connection with its acceptance of, or the performance of its duties and obligations under, this Agreement, as well as the costs and expenses of defending against any claim or liability arising out of or relating to this Agreement;

(vii)Each of Seller and Purchaser hereby releases Escrow Agent from any act done or omitted to be done by Escrow Agent in good faith in the performance of its duties hereunder; and

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(viii)Escrow Agent may resign upon ten (10) days written notice to Seller and Purchaser. If a successor Escrow Agent is not appointed by Seller and Purchaser within such ten (10) day period, Escrow Agent may petition a court of competent jurisdiction to name a successor.

C.Escrow Agent is acting as a stakeholder only with respect to the Deposit. Escrow Agent, except in the event of the Closing, shall not deliver the Deposit except on seven (7) days’ prior written notice to the parties and only if neither party shall object within such seven (7) day period. If there is any dispute as to whether Escrow Agent is obligated to deliver all or any portion of the Deposit or as to whom the Deposit is to be delivered, Escrow Agent shall not be required to make any delivery, but in such event Escrow Agent may hold the same until receipt by Escrow Agent of an authorization in writing, signed by all of the parties having any interest in such dispute, directing the disposition of the Deposit (together with all interest thereon, if any), or in the absence of such authorization Escrow Agent may hold the Deposit (together with all interest thereon, if any), until the final determination of the rights of the parties in an appropriate proceeding. If such written authorization is not given or proceedings for such determination are not begun within thirty (30) days after the date Escrow Agent shall have received written notice of such dispute, and thereafter diligently continued, Escrow Agent may, but is not required to, bring an appropriate action or proceeding for leave to deposit the Deposit (together with all interest thereon, if any), in court pending such determination. Escrow Agent shall be reimbursed for all costs and expenses of such action or proceeding including, without limitation, reasonable attorneys’ fees and disbursements, by the party determined not to be entitled to the Deposit, or if the Deposit is split between the parties hereto, such costs of Escrow Agent shall be split, pro rata, between Seller and Purchaser, in inverse proportion to the amount of the Deposit received by each. Upon making delivery of the Deposit (together with interest thereon, if any), in the manner provided in this Agreement, Escrow Agent shall have no further obligation or liability hereunder.

D.Escrow Agent has executed this Agreement solely to confirm that Escrow Agent has received the Deposit (if the Deposit is made by check, subject to collection) and will hold the Deposit, in escrow, pursuant to the provisions of this Agreement.

20. Covenants.

A.Seller agrees that, prior to the Closing, it shall:

(ix)Not enter into any new lease of space or other occupancy arrangement or any New Contract, or materially amend or modify the same or approve any assignment or sublease (to the extent Seller’s approval is required under a Lease), in each case, other than as contemplated in any such lease without the consent of Purchaser, which consent Purchaser may withhold in its sole discretion, except that Purchaser shall not unreasonably withhold, condition or delay its consent to (a) amendments and modifications of Leases which do not amend or modify the economic terms of Leases or otherwise have a material and adverse effect on the enforceability of the Lease or (b) a request for an assignment or sublease by a Tenant, provided such assignee or sublessee is creditworthy and otherwise satisfies Purchaser’s then current underwriting guidelines for other buildings substantially similar to the Premises, unless otherwise set forth in the applicable Lease, or (c) New Contracts which expire or are cancelable prior to the Closing Date or are cancelable at any time without cause and without penalty on not more than thirty (30) days’ notice, or (d) renewals,

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extensions, expansions or consents under Leases which, under the terms of the applicable Lease, (1) do not require the consent of the lessor thereunder or (2) to which the consent or approval of the lessor shall not be unreasonably withheld and as to which Seller has no reasonable basis for objecting. If Purchaser fails to respond to a request from Seller for consent to any action for which Purchaser’s consent is required under this Section 20(A)(i) within three (3) business days after Purchaser’s receipt of Seller’s written request, Seller shall send a second (2nd) notice within two (2) additional business days. Purchaser’s consent to such action shall be deemed granted. Notwithstanding anything contained in this Section 20(A)(i) to the contrary, in the event of the good faith issuance by Seller of a termination notice with respect to this Agreement as a result of Purchaser’s default, or alleged default (provided that such default is alleged in good faith), hereunder and this Agreement terminates by notice from either party or otherwise as a result thereof, then this Section 20(A)(i)shall be deemed terminated and of no further force or effect. Upon the termination of this Agreement, Seller may take such action referenced herein without the consent or approval of Purchaser.

(x)Subject to subsection (v) of this Section 20(A), keep and perform in all material respects all of the obligations to be performed by it under the Leases (“Landlord’s Lease Obligations”; provided that anything in this Agreement to the contrary notwithstanding, nothing contained in this Agreement shall prohibit Seller bringing any proceeding by reason of a default under a Lease or applying a Security Deposit under a Lease (but only after the Tenant shall have vacated its demised premises): (a) in accordance with the terms of a Lease or (b) by reason of default of a Tenant under its Lease. Notwithstanding anything to the contrary contained herein, Seller shall have no right to terminate any Lease without the prior written consent of Purchaser, which may be granted or withheld in Purchaser’s sole discretion. Notwithstanding anything to the contrary contained in this Section 20(A)(ii), in the event of the good faith issuance by Seller of a termination notice with respect to this Agreement as a result of Purchaser’s default, or alleged default (provided that such default is alleged in good faith), hereunder and this Agreement terminates by notice from either party or otherwise as a result thereof, then this Section 20(A)(ii)shall be deemed terminated and of no further force or effect. Upon the termination of this Agreement, Seller may take such action referenced herein without the consent or approval of Purchaser;

(xi)Not create, incur or suffer to exist any mortgage, deed of trust, lien, pledge or other encumbrance in any way affecting any portion of the Premises other than a Permitted Encumbrance or the liens encumbering the Premises on the date of this Agreement. Notwithstanding anything to the contrary contained in this Section 20(A)(iii), in the event of the good faith issuance by Seller of a termination notice with respect to this Agreement as a result of Purchaser’s default, or alleged default (provided that such default is alleged in good faith), hereunder and this Agreement terminates by notice from either party or otherwise as a result thereof, then this Section 20(A)(iii)shall be deemed terminated and of no further force or effect. Upon the termination of this Agreement, Seller may take such action referenced herein without the consent or approval of Purchaser.

(xii)Maintain the current insurance coverages on the Premises substantially as reflected on the certificates attached as Exhibit“20(A)(iv)”;

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(xiii)Seller may replace a current Union Employee with another Union Employee only in the event the Union Employee voluntarily quits or is terminated for just cause, and only so long as the wages and benefits for any replacement Union Employee are not different in any material respect from the wages and benefits for the replaced Union Employee and Seller shall pay any severance or transfer fee in connection therewith. Seller shall not increase or decrease the number of Union Employees without notice to and consent from Purchaser, which consent shall not be unreasonably withheld; and

(xiv)Operate the Premises substantially in accordance with past practice; provided, however, that notwithstanding the foregoing, except for Landlord’s Lease Obligations, Seller may, but shall not be obligated to, make any capital or other repairs, replacements or improvements to the Improvements. To the extent Seller elects to, or is required to, make any repairs, replacements or improvements to the Improvements (other than Landlord’s Lease Obligations) and the Purchaser approves same (which approval may be withheld or granted in its sole discretion), Purchaser shall, on or before the Closing, reimburse Seller for all sums actually expended by Seller between the date of this Agreement and the Closing Date on account of such repairs, replacements or improvements made to the Improvements.

(xv)Cooperate with Purchaser, at Purchaser’s cost and expense, both prior to and after the Closing, in connection with any and all reasonable information requests made by or on behalf of Purchaser (including contacting the previous owner of the Premises), which are required to complete a so-called “Section 314 audit”, including, but not limited to providing the following, to the extent applicable and in Seller’s possession or reasonable control or which can be obtained without unreasonable burden on Seller: (a) monthly historical income statements for the Premises for 2014; (b) monthly historical income statements for the Premises for 2015, year to date; (c) five (5) years of annual historical occupancy and rent for the Premises; (d) back-up and supporting documents relating to the items set forth herein (such as bills, checks, etc.); and (e) the most current financial statement for each of the Tenants to the extent such current financial statements are in the possession of Seller or its managing agent. In addition, Seller shall reasonably cooperate with Purchaser (including contacting the previous owner of the Premises), at Purchaser’s cost and expense, both prior to and after the Closing, in connection with any and all reasonable information requests made by or on behalf of Purchaser (provided that such information is in Seller’s possession or reasonable control or which Seller can obtain without unreasonable burden on Seller), relating to the Premises, including the books and records of the Premises. For the avoidance of doubt, (I) Purchaser acknowledges that Seller acquired the Premises on October 2, 2013, and to the extent such information or documentation referred to above does not exist or is not in Seller’s possession or control, Seller shall not be required to recreate or obtain such documentation or information for Purchaser, and (II) Seller acknowledges and agrees that any and all requests for information or documentation requested from the Purchaser or its affiliates by the Securities and Exchange Commission (“SEC”) shall be deemed “reasonable” for purposes of this Section 20(A)(vii). The provisions of this Section 20(A)(vii)shall survive until the third (3rd) year anniversary of the Closing to the extent requests are made of Purchaser by the SEC.

B.As used in this Agreement, “Leasing Costs” shall mean brokerage commissions in connection with any Lease (including commissions and overrides payable to affiliates of Seller of

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one-full commission, computed at Seller’s affiliates standard rates, if Seller’s affiliate is the sole broker, and one-half of such a full commission if Seller’s affiliate is a co-broker (collectively, “Affiliate Leasing Costs”)), out-of-pocket legal fees and expenses incurred in connection with any Lease and all costs and expenses required under a Lease to be paid by the landlord thereunder, to or for, the benefit of the tenant thereunder (but excluding Landlord’s Work).

C..

(1)    Seller’s Responsibility for Leasing Costs and Landlord’s Work. Subject to Section 20(E) hereof, Seller shall be responsible for performing and completing, and paying the costs and expenses in connection with, Landlord’s Work. Seller shall pay all Leasing Costs, other than those Leasing Costs for which Purchaser is responsible pursuant to Section 20(C)(2)hereof, at or prior to Closing, or credit any outstanding amounts to Purchaser at Closing. At the Closing, the Seller shall provide the Purchaser with evidence and documentation reasonably acceptable to Purchaser substantiating the payment of such Leasing Costs or the credited amounts. Except as provided below and with respect to any Leasing Costs which are credited against the Purchase Price, the Seller hereby agrees to indemnify and hold the Purchaser harmless from and against any and all liability, court costs, judgment, claim, damage or expense (including, without limitation, reasonable attorneys’ fees and expenses) in connection with any unpaid Leasing Costs required to be paid by Seller pursuant to this Section 20(C)(1). Seller shall, at Seller’s sole cost and expense, cause the completion of Landlord’s Work required pursuant to this Section 20(C)(1) as soon as is reasonably practicable. If Landlord’s Work has not been completed by Closing, then Seller shall, at Seller’s sole cost and expense, cause the completion of Landlord’s Work following the Closing. After Closing, Purchaser shall reasonably cooperate with Seller to allow Seller to complete Landlord’s Work.

(2)    Purchaser’s Responsibility for Leasing Costs. Purchaser shall be responsible for the payment and performance of all of landlord’s obligations under the Leases and New Leases (defined below), other than Landlord’s Work, and for paying all Leasing Costs payable in connection with: (i) the Leases entered into on or after the date hereof, including, but not limited to, those Leases approved in writing by Purchaser (or deemed approved by Purchaser under this Agreement) and leases which are pending as of the Closing (and executed by Purchaser after the Closing) which, as of the date hereof include SingleStop USA, Coalition for Behavioral Services and AHRC, (ii) all renewals, amendments, modifications, terminations, extensions and expansions entered into after the date hereof with the written approval of Purchaser (or deemed approval of Purchaser under this Agreement) or, without Purchaser’s approval, if the lessor’s consent to such action is not required or is not to be unreasonably withheld under the terms of the applicable Lease (Leases satisfying the criteria described in the foregoing clauses (i) and (ii), collectively “New Leases”) and the applicable Leasing Costs are payable in accordance with the express terms of such existing Lease as to any renewals, exercised by a Tenant for a renewal period commencing after the date hereof and (iii) all renewals, amendments, modifications, extensions and expansions which have an effective date on or after the date hereof. If on or prior to the Closing Date, Seller shall have performed any Landlord’s Work or paid any Leasing Costs for which Purchaser is responsible pursuant to this subsection, Purchaser shall reimburse Seller therefor at the Closing provided that Seller shall supply invoices,

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statements or commission agreements for all such Landlord’s Work completed and paid for and Leasing Costs paid for.

(3)    Review bySeller and Purchaser. Prior to Closing, Seller and Purchaser shall review all Leases and related commission agreements and determine the amount of all Leasing Costs which are payable after the Closing for which Seller is responsible pursuant to this Section 20(C) and the aggregate amount thereof (if any) shall be credited against the Purchase Price at the Closing. If Seller gives Purchaser a credit against the Purchase Price pursuant to the immediately preceding sentence, then Seller shall be relieved of all liability for Leasing Costs, and Purchaser shall pay such amounts as they become due, subject to the provisions of Section 7(G). Purchaser hereby agrees to indemnify, defend and hold Seller harmless from and against any and all liability, loss, cost, judgment, claim, damage or expense (including, without limitation, reasonable attorneys’ fees and expenses), in connection with Leasing Costs for New Leases and with respect to the non-payment of any Leasing Costs for which Purchaser has received a credit at the Closing. Purchaser shall not be responsible for any Affiliate Leasing Costs. The provisions of this Section 20(C) shall survive the Closing.

D.Seller’s Base Building Capital Work.

Seller shall be responsible for completing, and paying the costs and expenses required to complete, all of the base building work set forth on Exhibit 20(D) (“Seller’s Work”). Upon completion of Seller’s Work, Seller shall provide documentation to Purchaser to (i) evidence substantial completion of Seller’s Work and (2) substantive payment for Seller’s Work. If Seller’s Work has not been completed by Closing, then Seller shall, at Seller’s sole cost and expense, cause the completion of Seller’s Work following the Closing. After Closing, Purchaser shall reasonably cooperate with Seller to allow Seller to complete the Construction Work.

E.Purchaser has indicated that it intends to retain East End Realty (an affiliate of Seller) as property and construction manager at the Property following the Closing. Seller’s willingness to remain responsible for the completion of Landlord’s Work set forth on Exhibit “16(A)(xxi)” and Seller’s Work set forth on Exhibit 20(D) is expressly conditioned upon East End Realty in fact being retained as property and construction manager at the Property following the Closing. If East End Realty is not retained at Closing as the property manager at the Property, then in lieu of Seller remaining responsible for the performance and completion of Landlord’s Work set forth on Exhibit “16(A)(xxi)”and Seller’s Work set forth on Exhibit 20(D)after the Closing, Seller shall instead be permitted to credit Purchaser any amounts required to complete such Landlord’s Work and such Seller’s Work. Seller shall provide evidence and documentation reasonably acceptable to Purchaser to substantiate the amounts to be credited to Purchaser as aforementioned.

21. Transfer Taxes.

A.Seller and Purchaser shall join on the Closing Date in completing, executing, delivering and verifying the returns, affidavits and other documents required in connection with the taxes imposed under Article 31 of the Tax Law of the State of New York and Title II of Chapter 46 of the Administrative Code of the City of New York and any other tax payable by reason of delivery

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and/or recording of the documents to be delivered at the Closing (collectively, “Conveyance Taxes”). The Conveyance Taxes shall be paid by Seller.

B.Seller, shall deliver to the Title Insurer at the Closing certified check(s), payable to the order of the appropriate tax collecting agency or official, in the amount of all Conveyance Taxes. Instead of paying any of such Conveyance Taxes directly, Seller may elect to offset the amount thereof against the Purchase Price, in which event Purchaser shall pay same for the account of Seller.

C.The provisions of this Article 21 shall survive the Closing.

22. Non-Liability.

Except for the obligations of Seller to retain the Ceiling as set forth in Section 16(C), Purchaser agrees that it shall look solely to the Premises, and not to any other assets of Seller, or to the members, managers, directors, officers, employees, shareholders, partners or agents of Seller or any other person, partnership, corporation or trust, as principal of Seller or otherwise, and whether disclosed or undisclosed for the performance of any of the covenants or other Agreements contained hereto, to enforce its rights hereunder or in connection with this Agreement or the transactions contemplated hereby, and that none of the members, managers, directors, officers, employees, shareholders, partners or agents of Seller or any other person, partnership, corporation or trust, as principal of Seller or otherwise, and whether disclosed or undisclosed, shall have any personal obligation or liability hereunder, and Purchaser shall not sue nor otherwise seek to assert any claim or enforce any of its rights hereunder against such party. Without limiting the generality of the foregoing provisions of this Section 22, Purchaser hereby unconditionally and irrevocably waives any and all claims and causes of action of any nature whatsoever it may now or hereafter have against such parties, and hereby unconditionally and irrevocably releases and discharges such parties from any and all liability whatsoever which may now or hereafter accrue in favor of Purchaser against such party, in connection with or arising out of this Agreement or the transactions contemplated hereby. The provisions of this Article 22 shall survive the Closing.

23. Seller’s Inability to Perform; Seller’s Default.

If Seller shall be unable to perform its obligation to convey the Premises to Purchaser in accordance with the terms of this Agreement (other than by reason of Seller’s Willful Default (as hereinafter defined)), then Purchaser, at Purchaser’s option shall either elect to (i) waive such inability to perform and proceed to the Closing in accordance with the terms hereof, or (ii) terminate this Agreement, which election shall be made no later than the Closing Date. If Seller shall be unable to perform its obligation to convey the Premises to Purchaser in accordance with the terms of this Agreement (other than by reason of Seller’s Willful Default) and Purchaser does not close the transaction contemplated hereby or make a timely election to waive such inability, then Purchaser shall be deemed to elect to proceed under clause (ii) above, in which case Escrow Agent shall refund to Purchaser the Deposit (and all interest earned thereon, if any), and neither party shall thereafter have any further right or obligation hereunder. “Seller’s Willful Default” shall mean Seller’s willful refusal to perform its obligation to convey the Premises to Purchaser in accordance with terms of this Agreement, provided: (1) the reasons for such refusal do not include conditions beyond Seller’s control or the unmarketability of title (subject to Seller’s compliance with its express

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obligations under Section 10); and (2) Purchaser has satisfied, or is able to satisfy by the Closing Date all conditions required to be satisfied by it under this Agreement, is not otherwise in default under this Agreement and is ready, willing and able to perform all of its obligations under this Agreement and to deliver the Purchase Price due Seller under this Agreement. In the event of Seller’s Willful Default, then Purchaser, at its sole option and as its sole and exclusive remedy may either (a) terminate this Agreement, in which event Escrow Agent shall refund to Purchaser the Deposit (and all interest thereon, if any) and Seller shall pay to Purchaser an amount up to Two Hundred Fifty Thousand Dollars and 00/100 ($250,000.00) for Purchasers actual, out-of-pocket, third party costs, and neither party shall thereafter have any further right or obligation hereunder, other than the Surviving Obligations or (b) within forty-five (45) days after any rights of Purchaser arise due to a Seller’s Willful Default, bring an action in equity against Seller for specific performance. In no event may Purchaser bring an action against Seller for damages or seek any remedy (whether or not in an action at law or in equity) against Seller that could require Seller to pay any monies to Purchaser whether characterized as damages or otherwise (except for an action to compel Escrow Agent to return the Deposit to Purchaser if Purchaser is, in fact, entitled to the return thereof in accordance with this Agreement). The untruth or inaccuracy of any representation or warranty of Seller or Seller’s noncompliance with any of its covenants shall not be deemed Seller’s Willful Default, provided Seller has complied with its obligations under Section 16D(i)with respect thereto.

1. Condition of Premises.

EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN, PURCHASER SHALL ACCEPT THE PREMISES AT THE CLOSING IN ITS “AS IS” CONDITION AS OF THE DATE HEREOF, REASONABLE WEAR AND TEAR EXCEPTED, AND SUBJECT TO THE PROVISIONS OF ARTICLE 18 HEREOF IN THE EVENT OF A CASUALTY OR CONDEMNATION. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN, SELLER SHALL NOT BE LIABLE FOR ANY LATENT OR PATENT DEFECTS IN THE PREMISES OR BOUND IN ANY MANNER WHATSOEVER BY ANY GUARANTEES, PROMISES, PROJECTIONS, OPERATING EXPENSES, SET-UPS OR OTHER INFORMATION PERTAINING TO THE PREMISES MADE, FURNISHED OR CLAIMED TO HAVE BEEN MADE OR FURNISHED, WHETHER ORALLY OR IN WRITING, BY SELLER OR ANY OTHER PERSON OR ENTITY, OR ANY PARTNER, EMPLOYEE, AGENT, ATTORNEY OR OTHER PERSON REPRESENTING OR PURPORTING TO REPRESENT SELLER. PURCHASER ACKNOWLEDGES THAT NEITHER SELLER NOR ANY OF THE EMPLOYEES, AGENTS OR ATTORNEYS OF SELLER HAVE MADE AND DO NOT MAKE ANY ORAL OR WRITTEN REPRESENTATIONS OR WARRANTIES WHATSOEVER TO PURCHASER, WHETHER EXPRESS OR IMPLIED, EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, AND, IN PARTICULAR, THAT, OTHER THAN AS SET FORTH HEREIN, NO SUCH REPRESENTATIONS AND WARRANTIES HAVE BEEN MADE WITH RESPECT TO THE STATUS AND EXTENT OF ANY RIGHTS OF WAY, LEASE, RIGHT OF RETENTION, POSSESSION, LIEN ENCUMBRANCE, LICENSE, RESERVATION, COVENANT, CONDITION, RESTRICTION OR ANY OTHER MATTER AFFECTING TITLE, THE PHYSICAL, ENVIRONMENTAL CONDITION OR

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OPERATION OF THE PREMISES (INCLUDING, BUT NOT LIMITED TO, (I) STRUCTURAL ELEMENTS, FOUNDATION, ROOF, APPURTENANCES, ACCESS, LANDSCAPING, PARKING FACILITIES AND THE ELECTRICAL, HVAC, PLUMBING, SEWAGE AND UTILITY SYSTEMS, FACILITIES AND APPLIANCES; (II) THE QUALITY, NATURE, ADEQUACY AND PHYSICAL CONDITION OF SOILS, GROUND WATER AND GEOLOGY, THE PRESENCE, INTRODUCTION, HANDLING, GENERATING, STORING, DISPOSING OF HAZARDOUS MATERIALS OR EFFECT OF HAZARDOUS MATERIALS AT OR AFFECTING THE PREMISES, THE ACTUAL OR PROJECTED REVENUE AND EXPENSES OF THE PREMISES, THE ZONING AND OTHER LAWS, REGULATIONS AND RULES OR RELEVANT ENVIRONMENTAL LAWS APPLICABLE TO THE PREMISES OR THE COMPLIANCE OF THE PREMISES THEREWITH, THE CURRENT OR FUTURE REAL ESTATE TAX LIABILITY, ASSESSMENT OR VALUATION OF THE PREMISES, THE AVAILABILITY OF ANY FINANCING FOR THE ACQUISITION, ALTERATION, REHABILITATION OR OPERATION OF THE PREMISES FROM ANY SOURCE, INCLUDING, WITHOUT LIMITATION, ANY STATE, CITY OR FEDERAL GOVERNMENT OR LENDER OR ANY INSTITUTIONAL LENDER, THE CURRENT OR FUTURE USE OF THE PREMISES, INCLUDING, WITHOUT LIMITATION, THE PREMISES USE FOR RESIDENTIAL (INCLUDING HOTEL, COOPERATIVE OR CONDOMINIUM USE) OR COMMERCIAL PURPOSES, THE PRESENT AND FUTURE CONDITION AND OPERATING STATE OF ANY AND ALL MACHINERY OR EQUIPMENT ON THE PREMISES AND THE PRESENT OR FUTURE STRUCTURAL AND PHYSICAL CONDITION OF ANY BUILDING OR ITS SUITABILITY FOR REHABILITATION OR RENOVATION, THE ZONING OR LEGAL STATUS OF THE PREMISES, THE OWNERSHIP OR STATE OF TITLE OF ANY PERSONAL PROPERTY ON THE PREMISES, QUANTITY, QUALITY OR CONDITION OF THE PERSONAL PROPERTY OR FIXTURES OR OF THE LABOR AND MATERIAL FURNISHED AT OR TO THE PREMISES, THE USE OR OCCUPANCY OF THE PREMISES OR ANY PART THEREOF, OR ANY OTHER MATTER OR THING AFFECTING OR RELATING TO THE PREMISES OR THE TRANSACTIONS CONTEMPLATED HEREBY, EXCEPT AS SPECIFICALLY SET FORTH IN THIS AGREEMENT. PURCHASER HAS NOT RELIED AND IS NOT RELYING UPON ANY REPRESENTATIONS OR WARRANTIES, OR UPON ANY STATEMENTS MADE IN ANY INFORMATIONAL MATERIALS WITH RESPECT TO THE PREMISES PROVIDED BY SELLER OR ANY OTHER PERSON OR ENTITY, OR ANY SHAREHOLDER, EMPLOYEE, AGENT, ATTORNEY OR OTHER PERSON REPRESENTING OR PURPORTING TO REPRESENT SELLER, OTHER THAN THE REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN THIS AGREEMENT. THE PARTIES HERETO AGREE THAT THE PERSONAL PROPERTY INCLUDED IN THIS SALE, WHICH IS OR MAY BE ATTACHED TO OR USED IN CONNECTION WITH THE PREMISES, HAS NO SIGNIFICANT SEPARATE VALUE EXCEPT IN CONJUNCTION WITH THE REAL PROPERTY. NO PART OF THE PURCHASE PRICE IS ATTRIBUTABLE TO THE PERSONAL PROPERTY. THE PROVISIONS OF THIS ARTICLE 24 SHALL SURVIVE THE CLOSING.

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2. Environmental Matters.

Without limiting the generality of Article 24, Purchaser acknowledges that it has had an opportunity to conduct its own investigation of the Premises with regard to Hazardous Materials and compliance of the Premises with Relevant Environmental Laws. Purchaser is aware (or has had sufficient opportunity to become aware) of the environmental, biological and pathogenic conditions of, affecting or related to the Premises and Purchaser agrees to take the Premises subject to such conditions. Purchaser agrees to assume all costs and liabilities arising out of or in any way connected to the Premises, including, but not limited to those arising out of Hazardous Materials and Relevant Environmental Laws. Purchaser hereby releases Seller, its principals and affiliates, and their respective officers, directors, members, managers, partners, agents, employees, successors and assigns, from and against any and all claims, counterclaims and causes of action which Purchaser may now or in the future have against any of the foregoing parties arising out of the existence of Hazardous Materials affecting the Premises. The provisions of this Article 25 shall survive the Closing.

3. Tax Reduction Proceedings.

A.    If any tax reduction proceedings in respect of the Real Property relating to any fiscal year ending prior to the fiscal year in which the Closing occurs are pending at the time of the Closing, Seller reserves and shall have the right to continue to prosecute and/or settle the same. If any tax reduction proceedings in respect of the Real Property relating to the fiscal year in which the Closing occurs are pending at the time of the Closing, then Seller reserves and shall have the right to continue to prosecute and/or settle the same, provided, however, that Seller shall not settle any such proceeding without Purchaser’s prior written consent, which consent shall not be unreasonably withheld or delayed. Purchaser shall reasonably cooperate with Seller in connection with the prosecution of any such tax reduction proceedings.

B.    Any refunds or savings in the payment of taxes resulting from such tax reduction proceedings applicable to the period prior to the Closing shall belong to and be the property of Seller, and any refunds or savings in the payment of taxes applicable to the period from and after the Closing shall belong to and be the property of Purchaser; provided, however, that if any such refund creates an obligation to reimburse any Tenants for any Overage Rent paid or to be paid, that portion of such refund equal to the amount of such required reimbursement (after deduction of allocable expenses as may be provided in the Lease to such Tenant) shall, at Seller’s election, either (i) be paid to Purchaser and Purchaser shall disburse the same to such Tenants or (ii) be paid by Seller directly to the Tenants entitled thereto. All reasonable attorneys’ fees and other expenses incurred in obtaining such refunds or savings shall be apportioned between Seller and Purchaser in proportion to the gross amount of such refunds or savings payable to Seller and Purchaser, respectively (without regard to any amounts reimbursable to Tenants).

C.    The provisions of this Article 26 shall survive the Closing.

4. Union Agreement; Other Employment Matters.

A.    Employees. Purchaser acknowledges that the Union Employees at the Premises are

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employees of Pritchard Industries, Inc., and/or its affiliate Core Facilities Services LLC (collectively, the "Service Provider") and are covered by the Union Agreement with Local 94 and Local 2013 UFCW. Effective as of the Closing Date, all Union Employees listed on Exhibit 16(A)(ii) (and any replacements thereof) shall be offered the same employment at the Building on substantially the same terms and conditions as such Union Employees were employed immediately prior to the Closing. The parties agree that from and after the Closing the Union Employees shall be employed by Service Provider or another third-party service provider pursuant to a contract with Purchaser or its designee, as Purchaser elects in its sole discretion, in substantially the same manner as employment arrangements are currently addressed for the Property. Purchaser shall be solely responsible for, and hereby assumes, or will cause its designee to assume, all liabilities whatsoever with respect to, any and all (i) salaries (for the period from and after the Closing Date), (ii) benefits attributable to the period from and after the Closing Date payable to the Union Employees and all relevant benefit plan contributions, (iii) benefit continuation and/or severance payments relating to any Union Employee that may be payable upon any termination of employment of any such Union Employee from and after the Closing Date, and (iv) notices, payments, fines or assessments due pursuant to any laws, rules or regulations arising under federal, state or local jurisdiction or otherwise, with respect to the employment, discharge or layoff of Employees from and after the Closing Date, including, but not limited to, such liability as arises under the Worker Adjustment and Retraining Notification Act, Section 4980B of the Internal Revenue Code (COBRA) and any rules or regulations as have been issued in connection with any of the foregoing. Seller shall pay (through its third-party Service Provider) all wages, payroll taxes and fringe benefits (including vacation pay and sick pay to the extent actually earned), as well as social security, unemployment compensation, health, life and disability insurance as well as welfare and pension fund contributions, if any) through the date immediately preceding the Closing, subject to adjustment to the extent such payments relate to a period of time from and after the Closing Date. Purchaser, with respect to the period from and after the Closing Date, hereby agrees to indemnify and defend Seller and the other Seller Related Parties, and Seller, with respect to the period of Seller’s ownership of the Property prior to the Closing, hereby agrees to indemnify and defend Purchaser and its affiliates, shareholders, officers, directors, partners, principals, members, managers, employees, agents and contractors against, and agrees to hold them harmless from, any and all claims, complaints, charges, grievances, losses, damages and expenses (including, without limitation, reasonable attorneys' fees and expenses) and other liabilities or obligations incurred or suffered as a result of any claim by any Employee (or other representative thereof, including, without limitation, the union or any fund trustee) that arises under federal, state or local statute (including, without limitation, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Age Discrimination in Employment Act of 1967, the National Labor Relations Act, the Equal Pay Act, the Americans with Disabilities Act of 1990, ERISA (as hereinafter defined), the Multi Employer Pension Plan Act of 1980 (including, without limitation, any claim for pension plan withdrawal liability arising out of the transaction contemplated by this Agreement), the Displaced Building Service Workers Protection Act of the City of New York, and all other statutes or rules regulating the terms and conditions of employment), under any regulation or ordinance, under the common law or in equity (including any claims for wrongful discharge or otherwise), or under any policy, agreement, understanding or promise, written or oral, formal or informal, arising out of actions, events or omissions that occurred (or, in the case of omissions, failed to occur) during the period of their respective ownership of the Property.

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B.    Collective Bargaining Agreements. Effective as of the Closing Date, Purchaser shall assume (or cause the assumption by its designee, Service Provider or another third party service provider), observe, pay and perform all obligations and liabilities under, arising from or otherwise relating to the Union Agreement. Purchaser shall have sole responsibility for all such obligations and liabilities arising under or relating to the Union Agreement on or at any time after the Closing Date and hereby agrees to indemnify, defend and hold Seller harmless from and against all loss, cost and expense incurred by Seller as a result of the failure of Purchaser to so assume (or cause the assumption by its designee, Service Provider or another third party service provider), observe, pay and perform the same. The parties acknowledge the enactment of the Building Service Workers Protection Act, §22-505 of the Administrative Code of the City of New York (“BSWPA”). Purchaser and Seller shall comply with the terms of the BSWPA to the extent applicable.

C.    The provisions of this Section 27 shall survive the Closing.

5. Notices.

All notices, demands or requests made pursuant to, under or by virtue of this Agreement (in each case, a “Notice”) must be in writing and sent to the party to which the Notice is being made by nationally recognized overnight courier or delivered by hand with receipt acknowledged in writing as follows:

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To Seller:
	c/o East End Capital Partners, LLC 600 Madison Avenue, 11th Floor New York, New York 10022 Attention: Jonathon K. Yormak David Peretz
with a copy to:
	GreenOak Real Estate Advisors 399 Park Avenue, 22nd Floor New York, New York 10022 Attention: Mark Van Zandt Kevin Robinson, Esq.
with a copy to:
	Stephen G. Epstein, Esq. c/o Seyfarth Shaw LLP 620 Eighth Avenue New York, New York 10018
To Purchaser:
	ARC NYC123WILLIAM, LLC c/o American Realty Capital 405 Park Avenue New York, New York 10022 Attention: Michael A. Happel
with a copy to:
	ARC NYC123WILLIAM, LLC c/o American Realty Capital 405 Park Avenue New York, New York 10022 Attention: Legal Department
To Escrow Agent:	Kensington Vanguard National Land Services 39 West 37th Street, 7th Floor New York, New York 10018Attention: Lawrence Boes

All Notices (i) shall be deemed given upon the date of delivery if delivery is made before 4:00 PM (New York time) and, if delivered later, on the next business day after delivery of such Notice or the date of refusal to accept delivery of such Notice and (ii) may be given either by a party hereto or by such party’s attorney set forth above. The address for Notices to any party may be changed by such party by a written Notice by not less than five (5) days’ notice served in accordance with this Section. Notices or other communications (including agreements) signed by the attorneys for the respective parties shall be deemed binding upon the parties so long as the intention for such communications (including email agreements) between the attorneys to be binding is clearly set forth therein.

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6. Entire Agreement.

This Agreement contains all of the terms agreed upon between the parties with respect to the subject matter hereof, and all agreements heretofore had or made between the parties hereto are merged in this Agreement which alone fully and completely expresses the agreement of said parties.

7. Amendments.

This Agreement may not be changed, modified or terminated, nor may any provision hereunder be waived, except by an instrument executed by the parties hereto.

8. No Waiver.

No waiver by either party of any failure or refusal to comply with its obligations under this Agreement shall be deemed a waiver of any other or subsequent failure or refusal to so comply.

9. Successors and Assigns.

This Agreement shall inure to the benefit of, and shall bind the parties hereto and the heirs, executors, administrators, successors and permitted assigns of the respective parties.

10. Partial Invalidity.

If any term or provision of this Agreement or the application thereof to any person or circumstances shall, to any extent, be invalid or unenforceable, the remainder of this Agreement, or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each term and provision of this Agreement shall be valid and be enforced to the fullest extent permitted by law.

11. Section Headings; Incorporation of Exhibits.

The headings of the various articles and sections of this Agreement have been inserted only for convenience, and are not part of this Agreement and shall not be deemed in any manner to modify, explain or restrict any of the provisions of this Agreement. Unless otherwise provided in this Agreement, any reference in this Agreement to an Exhibit is understood to be a reference to the Exhibits annexed to this Agreement. All Exhibits annexed to this Agreement shall be incorporated into this Agreement as if fully set forth herein.

12. Governing Law.

This Agreement shall be governed by, interpreted under and construed and enforced in accordance with, the laws of the State of New York, without reference to conflicts of laws principles. EACH OF THE PARTIES HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF RELATING TO THIS AGREEMENT. Any action brought hereunder shall be brought in a court of law located in the Borough of Manhattan, City, County and State of New York. The prevailing party in any such litigation shall be entitled to recovery of all of its fees and expenses

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(including legal fees) incurred in such action. The parties hereby agree and consent that without limiting other methods of obtaining jurisdiction, personal jurisdiction over the parties in any such action or proceeding may be obtained within or without the jurisdiction of any court located in the Borough of Manhattan, City, County and State of New York and that any process or notice of motion or other application to any such court in connection with any such action or proceeding may be served upon the parties by registered or certified mail to or by personal service at the last known address of the parties, whether such address be within or without the jurisdiction of any such court. Purchaser hereby irrevocably designates Donovan LLP, as its agent for service of process in connection with any matter relating to this Agreement. Seller hereby irrevocably designates Seyfarth Shaw LLP, as its agent for service of process in connection with any matter relating to this Agreement.

13. Confidentiality.

H.Except as may be required by law or in connection with any court or administrative proceeding or required financial disclosures or other filings with the SEC or other governmental agencies by Purchaser, Purchaser’s affiliates and/or Purchaser’s Representatives, neither Purchaser nor Purchaser’s Representatives shall issue or cause the publication of any press release or other public announcement, or cause, permit or suffer any other disclosure which sets forth the terms of the transactions contemplated hereby (other than to Purchaser’s consultants, advisors, attorneys, accountants, lenders and potential lenders and investors or potential investors, who, in turn, shall be bound by this Article 36), without first obtaining the written consent of Seller which shall not be unreasonably withheld. Nothing contained herein shall preclude the parties from issuing customary press releases following the Closing.

I.Purchaser and Purchaser’s Representatives will treat the information disclosed by Seller or otherwise gained through Purchaser’s access to the Premises and Seller’s books and records as confidential giving it the same care as Purchaser’s own confidential information.

14. No Recording or Notice of Pendency.

The parties hereto agree that neither this Agreement nor any memorandum hereof shall be recorded. Supplementing the other liabilities and indemnities of Purchaser to Seller under this Agreement, and notwithstanding any other provision of this Agreement (including, without limitation, any provision purporting to create a sole and exclusive remedy for the benefit of Seller), Purchaser agrees to indemnify and hold Seller harmless from and against any and all losses, costs, damages, liens, claims, counterclaims, liabilities or expenses (including, but not limited to, attorneys’ fees, court costs and disbursements) incurred by Seller arising from or by reason of the recording of this Agreement, any memorandum hereof, or any notice of pendency (unless Purchaser prevails in a final unappealable order against Seller in the action underlying such notice of pendency) or any other instrument against the Premises. The provisions of this Article 37 shall survive the Closing or any early termination of this Agreement.

15. Assignment.

Purchaser may not assign its rights or obligations under this Agreement or transfer any direct or indirect ownership or other interest in Purchaser without the prior written consent of Seller, and

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any such assignment made without Seller’s consent shall be void ab initio. Notwithstanding anything to the contrary contained in this Article 38, Purchaser shall have a right to assign Purchaser’s rights under this Contract, in whole, but not in part, to one (i) or more entities which is an affiliate or subsidiary of New York Recovery Operating Partnership, L.P. (the entity to which the rights are assignable may be a trust, limited liability company, limited liability partnership, limited partnership or a corporation) (including the right to assign the Agreement at Closing to multiple entities provided that all of the Units shall close simultaneously), provided that (i) Purchaser designates such assignee at least three (3) business days prior to the Closing Date; (ii) the Closing is not delayed as a result of such assignment, (iii) the assignee of this Contract assumes in writing, the obligations of Purchaser under this Contract, and (iv) the assignment is made without consideration.

16. Counterparts.

This Agreement may be executed in any number of counterparts each of which when so executed and delivered shall be deemed to be an original, but all such counterparts shall constitute one and the same agreement.

17. No Third Party Beneficiary.

The provisions of this Agreement are not intended to benefit any third parties.

18. [Intentionally deleted]

19. Business Days.

In the event that any of the dates specified in this Agreement shall fall on a Saturday, a Sunday, or a Federal or New York holiday, then the date of such action shall be deemed to be extended to the next business day.

20. Mortgage Loan Assignment.

If Purchaser so requests in writing, Seller will reasonably cooperate with Purchaser and request from its mortgagee that the mortgage presently affecting the Premises which Seller is required to discharge in accordance with the provisions of this Agreement be assigned to Purchaser's lender, and all original notes, mortgages and prior assignments in connection therewith and in the possession of Seller's mortgagee be delivered to Purchaser's lender at or prior to the Closing. This cooperation will be at no cost or expense to Seller, and Purchaser shall pay all costs and expenses associated therewith to Seller's mortgagee; in addition to which Purchaser shall pay to Seller an amount equal to fifty (50%) percent of the mortgage recording tax savings achieved by the assignment of the mortgage at Closing, net of the costs payable by Purchaser to Seller's lender and Seller's lender's attorney in connection therewith. The assignment of mortgage by the mortgagee shall be without warranty or recourse and any such assignment of the mortgage shall be on mortgagee's standard form of assignment of mortgage. Notwithstanding the foregoing, it is expressly understood and acknowledged by Purchaser that this Agreement and Purchaser's obligations hereunder are not contingent or conditioned upon the completion of such assignment of mortgage to Purchaser's lender nor entitle Purchaser to a reduction in the Purchase Price.

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21. Waiver of Trial by Jury.

SELLER AND PURCHASER EACH HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT OR COUNTERCLAIM ARISING IN CONNECTION WITH OR OTHERWISE RELATING TO THIS AGREEMENT. THE PROVISIONS OF THIS ARTICLE 44 SHALL SURVIVE THE CLOSING OR THE TERMINATION OF THIS AGREEMENT.

[Remainder of this page intentionally left blank]

IN WITNESS WHEREOF, this Agreement has been duly executed by the parties hereto as of the day and year first above written.

SELLER:

EEGO 123 William Owner, LLC,

a Delaware limited liability company

By: /s/ Jonathon K. Yormak    Name:    Jonathon K. Yormak
Title:    Authorized Signatory

PURCHASER:

ARC NYC23WILLIAM, LLC,

a Delaware limited liability company

By: /s/ Michael Happel    Name:    Michael Happel
Title:    Authorized Signatory

The undersigned has executed this Agreement solely to confirm its acceptance of the duties of Escrow Agent as set forth in Article 19 hereof and receipt of the Deposit:

KENSINGTON VANGUARD NATIONAL LAND SERVICES

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By: /s/ Lawrence Boes    Name:    Lawrence Boes
Title:    Authorized Signatory

and EVP

-1-

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Exhibit “1(A)”

Description of Land

Old Republic National Title Insurance Company

Title Number: 820212(0-NY-CR-KV)B

SCHEDULE A
DESCRIPTION

The land referred to in this Certificate of Title is described as follows:

ALL that certain plot, piece or parcel of land, situate, lying and being in the Borough of Manhattan, County, City and State of New York, bounded and described as follows:

BEGINNING at a point on the easterly side of Dutch Street, distant 86 feet 10-1/2 inches northerly from the corner formed by the intersection of said easterly side of Dutch Street with the northerly side of John Street;

RUNNING THENCE easterly along a line forming an angle of 93 degrees 34 minutes 10 seconds on its northerly side with the easterly side of Dutch Street, 80 feet 2-1/4 inches;

THENCE northerly along a line forming an angle of 86 degrees 31 minutes 10 seconds on its westerly side with last mentioned line, 23 feet 3/8 inches, more or less, to a line drawn westerly in continuation of a line drawn along the northerly face of the northerly wall of the 1 story brick building on premises adjoining on the South;

THENCE easterly along a line which forms an angle of 88 degrees 52 minutes 20 seconds on its northerly side with the westerly side of William Street to and along the northerly face of the northerly wall of said 1 story building and part of the way through an old party wall, 89 feet 5-3/4 inches to the said westerly side of William Street;

THENCE northerly along said westerly side of William Street, 130 feet 6-1/8 inches;

THENCE westerly along a line which forms an angle of 87 degrees 12 minutes 30 seconds on its southerly side with the said westerly side of William Street and through an old party wall, 45 feet 5-1/4 inches;

THENCE northerly along a line which forms an angle of 87 degrees 12 minutes 30 seconds on its easterly side with the last course, 8-1/2 inches;

THENCE westerly along a line which forms an angle of 87 degrees 49 minutes 30 seconds on its southerly side with the last course, 49 feet 11-3/4 inches;

THENCE southerly along a line which forms an angle of 91 degrees 54 minutes 30 seconds on its easterly side with the last course, 10 feet 4-1/4 inches;

THENCE easterly along a line which forms an angle of 90 degrees 18 minutes 20 seconds on its northerly side with the last course, 7-1/2 inches;

THENCE southerly along a line which forms an angle of 89 degrees 43 minutes 00 seconds on its westerly side with the last course, 12 feet 7-3/4 inches;

THENCE westerly along a line which forms an angle of 90 degrees 53 minutes 40 seconds on its northerly side with the last course, 3 feet 1/2 inches;

THENCE westerly in a straight line parallel or nearly so with the southerly side of Fulton Street, 71 feet 10-1/2 inches to a point on the easterly side of Dutch Street, distant 103 feet southerly from the southeasterly corner of Fulton and Dutch Street, as measured along said easterly side of Dutch Street;

EXH 1(A)-1

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THENCE southerly along said easterly side of Dutch Street, 115 feet 9-3/8 inches to the point or place of beginning.

EXH 1(A)-2

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Exhibit “1(B)”

Leases

1. Breakthrough New York

a. Lease Dated July 14, 2014

b. Commencement Date Agreement, Dated August 7, 2014

2. Casa Benton

a. S&K International Food Corporation, Standard Form of Office Lease Dated August 4, 2003

b. Good Guy Guaranty, Dated August 28, 2013

c. Consent to Assignment and Assumption of Lease and Lease Modification Agreement, Dated October 3, 2013

3. The City of New York, Department of Citywide Administrative Services to be used by the Human Resources Administration

a. Agreement of Lease, Dated February 25, 2014

4. The City of New York, Department of Citywide Administrative Services to be used the New York City Department of Youth and Community Development

a. License Agreement, Dated August 19, 2014

5. Cooper Robertson & Partners Architects, LLP a. Lease, Dated June 10, 2014

6. Daksha Patel

a. Lease, Dated November 1, 1988

b. First Modification of Lease, Dated December 1991

c. Second Modification of Lease, Dated December 11, 1999

d. Lease, Dated October 29, 2009

7. Digital Evolution, Inc.

a. Lease, Dated October 15, 2014

b. Guaranty, Dated October 15, 2014

8. Gotham Medical Associates, PLLC

a. Lease, Dated May 20, 2014

b. Guaranty, Dated May 14, 2014

c. Amendment to Lease, Dated August 22, 2014

d. Commencement Date Agreement, Dated August 25, 2014

9. GSA (United States of America)

a. Lease for Real Property, Dated September 14, 2010

b. Supplemental Lease Agreement, Dated December 16, 2010

c. Supplement Lease Agreement, Dated August 23, 2012

10. 1CD - International Center for the Disabled a. Lease, Dated October 8, 2013

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11. Kaplan & Schultz LLC

a.Lease, Dated July 30, 2007

b.Guaranty of Lease, Dated July 30, 2007

c.Amendment to Lease, Dated March 19, 2014

d.Second Amendment to Lease, Dated June 13, 2014

12. Library Journals, LLC

a.Lease, Dated March 5, 2014

b.Corporate Guaranty, Dated February 2014

c.Commencement Date Agreement, Dated June 20, 2014

13. Local Projects, LLC

a.Lease, Dated July I 1 , 2014

b.Guaranty, Dated July 11, 2014

c.Commencement Date Agreement, Dated September 19, 2014

14. McAloon & Friedman, P.C.

a.Standard Form of Office Lease, Dated February 1, 2003

b.Amendment to Lease, Dated August 26, 2014

c.Letter, Dated July 1, 2014

15. Open Kitchen 123, LLC

a.Agreement of Lease, Dated October 28, 2014

b.Guaranty, Dated October 9, 2014

c.Commencement Date Agreement, Dated January 7, 2015

16. People of the State of New York (Emergency Financial Control Board) a. Agreement of Lease, Dated April 15 2008

17. People of the State of New York (NYS Department of State) a. Lease, Dated March 19, 2009

18. People of the State of New York (Office of NY State Comptroller)

a.Agreement of Lease, Dated December 7, 1999

b.Lease Extension, Dated December 30, 2009

19. People of the State of New York (NYS Office of the Court Administration)

a.Agreement of Lease, Dated May 21, 1999

b.Extension Letter, Dated December 15, 2009

20. Pro Counsel Inc.

a.Lease, Dated February 3,2010

b.Amendment to Lease, Dated June 10, 2014

21. Rent Stabilization Association of N.Y.C., Inc.

a.Standard Form of Office Lease, Dated September 12, 1994

b.Extension and Modification of Lease, Dated August 31, 2004

c.Second Extension and Modification Agreement, Dated June 20, 2007

22. Shareablee, Inc.

a.Lease, Dated December 10, 2014

b.Guaranty, Dated December 5, 2014

23. Securities Training Corporation a. Lease, Dated March 31, 2014

24. SumAll, Inc.

a.Lease, Dated April 25, 2014

b.Commencement Date Agreement, December 3, 2014

25. Urban Justice Center

a. Lease, Dated October 25, 2006

Exhibit “1(C)”

Schedule of Service Contracts

Avellino & Watson Fire Controls, Inc. - Fire Alarm Testing, Dated June 1, 2013 Cascade - Water Services, Dated October 30, 2013

Core Industries - Master Services Agreement (Engineering and Security), Dated September 1, 2013

Croker Fire Drill Corporation - Fire and Life Safety, Dated November 12, 2013

Five Star Carting, Inc. - Trash Removal, Dated November 1, 2013

Mateo Service Corporation - Chiller Maintenance, Dated November 5, 2013 (Not Signed)

Nouveau - Elevator Maintenance, Dated May 29, 2014

Pest Elimination Systems Technology, Inc. - Pest Control, Dated November 18, 2013

Pritchard Industries, Inc. - Master Services Agreement (Janitorial Services), Dated January 1, 2014

Siemens Industry, Inc. - HVAC Control Services, Dated October 20, 2013

Talpiot Management, LLC d/b/a East End Realty - Property Management Agreement, Dated October 2, 2013

TransCanada - Electrical Supply, Assignment and Assumption Agreement, Dated December 20, 2013; Power Purchase Agreement, Dated February 22, 2012

Light Tower Fiber Networks I, LLC - License Agreement, Dated November 5, 2014

RCN Telecom Services of New York, L.P. - License Agreement, Dated December 29, 2014

Realty Advisory Board on Labor Relations, Incorporated - 2015 Engineer Agreement with Local 94-94A-94B International Union of Operating Engineers, AFL-CIO, Dated January 7, 2015

Realty Advisory Board on Labor Relations, Incorporated - 2011 Engineer Agreement with Local 94-94A-94B International Union of Operating Engineers, AFL-CIO, Dated January, 2011

Union Agreement between Local 2013 U.F.C.W and Pritchard Industries, Dated October 3, 2013

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Exhibit “1(D)”

Telecommunications Contracts

1. Light Tower Fiber Networks 1, LLC

a. License Agreement, Dated November 5, 2014

2. RCN Telecom Services of New York, L.P. a. License Agreement, Dated December 29, 2014

Other Telecommunications Vendors:

AT&T

Time Warner

Verizon

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Exhibit “1(E)”

Brokerage Agreements

Leasing Agent Agreements:

• Exclusive Leasing Agreement between EEGO 123 William Owner, LLC and CBRE, Inc.("CBRE") dated December 16, 2013 employing CBRE as the sole and exclusive renting agent for office space

• Exclusive Leasing Agreement between EEGO 123 William Owner, LLC and CBRE, Inc.("CBRE") dated April 17, 2014 employing CBRE as the sole and exclusive renting agent for retail space

Brokerage Commission Agreements:

• Letter Agreement between EEGO 123 William Owner, LLC and Savills Studley, Inc. dated December 9, 2014 in connection with the tenant Shareablee

• Letter Agreement between EEGO 123 William Owner, LLC and Robert K. Futterman & Associates, LLC dated October 14, 2014 in connection with the tenant Open Kitchen

• Letter Agreement between EEGO 123 William Owner, LLC and Prime Manhattan Realty dated September 4, 2014 in connection with the tenant Digital Evolution

• Letter Agreement between EEGO 123 William Owner, LLC and Colliers International NY LLC dated September 3, 2014 in connection with the tenant McAloon & Friedman

• Letter Agreement between EEGO 123 William Owner, LLC and Cushman & Wakefield, Inc. dated August 21, 2014 in connection with the tenant NYC DYCD

• Letter Agreement between EEGO 123 William Owner, LLC and CRESA Partners New York LLC dated July 29, 2014 in connection with the tenant Breakthrough NY

• Letter Agreement between EEGO 123 William Owner, LLC and Newmark Grubb Knight Frank dated July 3, 2014 in connection with the tenant Cooper Robertson

• Letter Agreement between EEGO 123 William Owner, LLC and CBRE, Inc. dated June 30, 2014 in connection with the tenant Local Projects

• Letter Agreement between EEGO 123 William Owner, LLC and CBRE, Inc. dated June 30, 2014 in connection with the tenant SumAll

• Letter Agreement between EEGO 123 William Owner, LLC and ARG Realty Consultants, LTD. dated June 18, 2014 in connection with the tenant Gotham Medical

• Letter Agreement between EEGO 123 William Owner, LLC and CBRE, Inc. dated April 30, 2014 in connection with the tenant SumAll

• Letter Agreement between EEGO 123 William Owner, LLC and CBRE, Inc. dated March 28, 2014 in connection with the tenant Securities Training Corporation

• Letter Agreement between EEGO 123 William Owner, LLC and Studley, Inc. dated March 10, 2014 in connection with the tenant Library Journals

• Letter Agreement between EEGO 123 William Owner, LLC and Cushman & Wakefield, Inc. dated February 28, 2014 in connection with the tenant NYC-HRA

• Letter Agreement between EEGO 123 William Owner, LLC and Jones Lang LaSalle Brokerage, Inc. dated December 4, 2013 in connection with the tenant ICD

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Exhibit “1(F)”

Union Agreement

1. Realty Advisory Board on Labor Relations, Incorporated - 2015 Engineer Agreement with Local 94-94A-94B International Union of Operating Engineers, AFL-CIO, Dated January 7, 2015

2. Realty Advisory Board on Labor Relations, Incorporated - 2011 Engineer Agreement with Local 94-94A-94B International Union of Operating Engineers, AFL-CIO, Dated January, 2011

3. Union Agreement between Local 2013 U.F.C.W and Pritchard Industries, Dated October 3, 2013

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Exhibit “4(A)(i)”

Permitted Exceptions

1. Sewer Agreement – Recorded in Liber 5017 Page 306.

2. Declaration, as recorded in:

Liber 4988 (page 206)

Liber 4998 (page 561)

Liber 5022 (page 200)

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Exhibit “4(A)(ii)”

Title Objections

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Exhibit “8(A)(i)”

Form of Bargain and Sale Deed

WITHOUT COVENANT AGAINST GRANTOR’S ACTS

EEGO 123 WILLIAM OWNER, LLC
a Delaware limited liability company

TO

ARC [__________________], LLC
a Delaware limited liability company

Address: 123 William Street
New York, New York

Block:         78

Lot:        4

County:    New York

RETURN BY MAIL TO:

Donovan LLP

152 Madison Avenue, 14th Floor

New York, New York 10016

Attention: Nicholas T. Donovan, Esq.

BARGAIN AND SALE DEED

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[BARGAIN AND SALE DEED WITHOUT COVENANT AGAINST GRANTOR’S ACTS THIS INDENTURE, made as of this _____ day of ____________, 2015

BETWEEN EEGO 123 WILLIAM OWNER, LLC, a Delaware limited liability company, with offices c/o East End Capital, 600 Madison Avenue, 11^th Floor, New York, New York 10022, party of the first part, and [_________________________], a [_________________________], with offices at [________________________], party of the second part.

WITNESSETH, that the party of the first part, in consideration of ten dollars and other valuable consideration paid by the party of the second part, does hereby grant and release unto the party of the second part, the heirs or successors and assigns of the party of the second party forever,

ALL that certain plot, piece or parcel of land, with the building and improvements thereon erected, situate, lying and being in the City, County and State of New York, more commonly known as 123 William Street, New York, New York, and more particularly described on Exhibit “A” attached hereto and hereby made part hereof.

TOGETHER with all right, title and interest, if any, of the party of the first part in and to any streets and roads abutting the above described premises to the center lines thereof; TOGETHER with the appurtenances and all the estate and rights of the party of the first part in and to said premises;

TO HAVE AND TO HOLD the premises herein granted unto the party of the second part, the heirs or successors and assigns of the party of the second part forever.

AND the party of the first part, in compliance with Section 13 of the Lien Law, covenants that the party of the first part will receive the consideration of this conveyance and will hold the right to receive such consideration as a trust fund to be applied first for the purpose of paying the cost of the improvement and will apply the same first to the payment of the cost of the improvement before using any part of the total of the same for any other purpose. The word “party” shall be construed as if it read “parties” whenever the sense of this indenture so requires.

IN WITNESS WHEREOF, the party of the first part has duly executed this deed the day and year first above written.

IN PRESENCE OF: EEGO 123 WILLIAM OWNER, LLC,
A Delaware limited liability company

By: ____________________________
Name: Jonathon K. Yormak
Title:    Authorized Signatory

STATE OF NEW YORK
COUNTY OF NEW YORK

On the ______ day of ________ in the year 2015 before me, the undersigned, a Notary Public in and for said State, personally appeared _______________, personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument.

___________________________________
Signature and Office of individual taking acknowledgement

BARGAIN AND SALE DEED

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Exhibit A

Legal Description

Old Republic National Title Insurance Company

Title Number: 820212(0-NY-CR-KV)B

SCHEDULE A
DESCRIPTION

The land referred to in this Certificate of Title is described as follows:

ALL that certain plot, piece or parcel of land, situate, lying and being in the Borough of Manhattan, County, City and State of New York, bounded and described as follows:

BEGINNING at a point on the easterly side of Dutch Street, distant 86 feet 10-1/2 inches northerly from the corner formed by the intersection of said easterly side of Dutch Street with the northerly side of John Street;

RUNNING THENCE easterly along a line forming an angle of 93 degrees 34 minutes 10 seconds on its northerly side with the easterly side of Dutch Street, 80 feet 2-1/4 inches;

THENCE northerly along a line forming an angle of 86 degrees 31 minutes 10 seconds on its westerly side with last mentioned line, 23 feet 3/8 inches, more or less, to a line drawn westerly in continuation of a line drawn along the northerly face of the northerly wall of the 1 story brick building on premises adjoining on the South;

THENCE easterly along a line which forms an angle of 88 degrees 52 minutes 20 seconds on its northerly side with the westerly side of William Street to and along the northerly face of the northerly wall of said 1 story building and part of the way through an old party wall, 89 feet 5-3/4 inches to the said westerly side of William Street;

THENCE northerly along said westerly side of William Street, 130 feet 6-1/8 inches;

THENCE westerly along a line which forms an angle of 87 degrees 12 minutes 30 seconds on its southerly side with the said westerly side of William Street and through an old party wall, 45 feet 5-1/4 inches;

THENCE northerly along a line which forms an angle of 87 degrees 12 minutes 30 seconds on its easterly side with the last course, 8-1/2 inches;

THENCE westerly along a line which forms an angle of 87 degrees 49 minutes 30 seconds on its southerly side with the last course, 49 feet 11-3/4 inches;

THENCE southerly along a line which forms an angle of 91 degrees 54 minutes 30 seconds on its easterly side with the last course, 10 feet 4-1/4 inches;

THENCE easterly along a line which forms an angle of 90 degrees 18 minutes 20 seconds on its northerly side with the last course, 7-1/2 inches;

THENCE southerly along a line which forms an angle of 89 degrees 43 minutes 00 seconds on its westerly side with the last course, 12 feet 7-3/4 inches;

THENCE westerly along a line which forms an angle of 90 degrees 53 minutes 40 seconds on its northerly side with the last course, 3 feet 1/2 inches;

THENCE westerly in a straight line parallel or nearly so with the southerly side of Fulton Street, 71 feet 10-1/2 inches to a point on the easterly side of Dutch Street, distant 103 feet southerly from the southeasterly corner of Fulton and Dutch Street, as measured along said easterly side of Dutch Street;

THENCE southerly along said easterly side of Dutch Street, 115 feet 9-3/8 inches to the point or place of beginning.

BARGAIN AND SALE DEED

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Exhibit “8(A)(ii)”

Form of Bill of Sale

KNOW ALL MEN BY THESE PRESENTS,

That, subject to the terms and conditions thereinafter set forth, EEGO 123 William Owner, LLC, a Delaware limited liability company having an address c/o East End Capital, 600 Madison Avenue, 11^th Floor, New York, New York 10022 (“Seller”) for and in consideration of the sum of Ten Dollars ($10.00), lawful money of the United States, to it in hand paid at or before delivery of these presents by [_____________________], a [_______________________] having an address at [_______________________] (“Purchaser”), the receipt of which is hereby acknowledged, has bargained and sold, and by these presents does grant and convey unto Purchaser its successors and assigns all right, title and interest of Seller in and to all of the fixtures, equipment and other items of personal property (collectively, the “Personal Property”) attached to or contained in, and utilized in the operation of, the Building commonly known as 123 William Street, New York, New York.

Seller grants and conveys the Personal Property unto Purchaser without recourse and without representation or warranty of any kind, express or implied (except to the extent and only for so long as any representation and warranty, if any, regarding the Personal Property is set forth in the Sale and Purchase Agreement dated as of January ___, 2015 (as same may have been modified and amended) between Seller and Purchaser (the “Agreement”) shall survive the closing of title thereafter, and subject to the limitations contained herein).

TO HAVE AND TO HOLD the same unto Purchaser, its successors and assigns forever.

SELLER HAS MADE NO WARRANTY THAT THE PERSONAL PROPERTY COVERED BY THIS BILL OF SALE IS MERCHANTABLE OR FIT FOR ANY PARTICULAR PURPOSE AND THE SAME IS OLD IN AN “AS IS” “WHERE IS” CONDITION. BY ACCEPTANCE HEREOF, PURCHASE AFFIRMS THAT IT HAS NOT RELIED ON ANY WARRANTY OF SELLER WITH RESPECT OT THE PERSONAL PROPERTY AND THAT THERE ARE NO REPRESENTATIONS OR WARRANTEES, EXPRESSED, IMPLIED OF STATUTORY (EXCEPT TO THE EXTENT AND ONLY FOR SO LONG AS ANY REPRESENTATION AND WARRANTY, IF ANY, REGARDING THE PERSONAL PROPERTY AS SET FORTH IN THE AGREEMENT SHALL SURVIVE THE CLOSING OF TITLE THEREUNDER, AND SUBJECT TO THE LIMITATIONS CONTAINED THEREIN).

This Bill of Sale shall be governed by and construed in accordance with the laws of the State of New York,

This Bill of Sale shall be binding upon, enforceable by and shall inure to the benefit of the parties hereto and their respective successors and assigns.

[Signature page follows immediately]

IN WITNESS WHEREOF, Seller has caused this instrument to be duly executed this _____ day of ________________, 2015.

ASSIGNOR:

EEGO 123 WILLIAM OWNER, LLC
a Delaware limited liability company

By: Name:    Jonathon K. Yormak
Title:    Authorized Signatory

ASSIGNEE:

[__________________________________]

By: Name:    
Title:

BILL OF SALE

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EXHIBIT “8(A)(iii)”

Form of Assignment and Assumption of Leases

THIS ASSIGNMENT AND ASSUMPTION OF LEASES (this “Assignment”), made as of the ____ day of __________, 2015, between EEGO 123 William Owner, LLC, a Delaware limited liability company having an address c/o East End Capital, 600 Madison Avenue, 11^th Floor, New York, New York 10022 (“Assignor”) and [________________________________________], a [_________________________________], with offices at [_______________________] (“Assignee”):

RECITALS

WHEREAS, pursuant to that certain Sale and Purchase Agreement dated January, 2015, between Assignor, as seller, and Assignee, as purchaser (the “Agreement”), Assignor is selling the Premises (as such term is more particularly described in the Agreement) to Assignee.

NOW THEREFORE, in consideration of the foregoing promises, covenants and undertakings contained in this Assignment, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

ASSIGNMENT AND ASSUMPTION

1.Assignor hereby assigns, transfers, set-over, delivers and conveys unto Assignee, it successors and assigns, all of the rights, title, interests, benefits and privileges of Assignor, as landlord, under the leases (the “Leases”) described in Schedule A annexed hereto and incorporated herein by this reference, including without limitation all rents, issues and profits arising therefrom, and all security deposits thereunder (including all interest earned thereon) actually held by Seller (subject to adjustment as set forth in the Agreement), TO HAVE AND TO HOLD all and singular subject as aforesaid, unto Assignee, its successors and assigns. This conveyance is made without any recourse and without representation or warranty of any kind, express or implied (except to the extent and only for so long as any representation and warranty, if any, regarding the Leases as is set forth in the Agreement shall survive the closing of title thereunder, and subject to the limitations contained therein).

2.Assignee assumes all obligations imposed upon landlord under all of the assigned leases and the liabilities arising from events occurring on or after the date hereof, to be performed by Assignor, as landlord, under the Leases, for the duration of the respective terms thereof. Without limiting the generality of the foregoing, the obligations and liabilities assumed by Assignee hereunder shall include, but shall not be limited to, the obligation to properly apply any advance rental, security deposit or other deposit under any of the Leases, to the extent such advance rental, security deposit or other deposit has been delivered by Assignor to Assignee or credited to Assignee concurrently herewith.

3.Assignor agrees to indemnify and hold Assignee harmless from and against any and all loss, cost, damage, claim, liability or expense accruing under the Leases relating to the time period prior to the date hereof. Such indemnification by Assignor is limited as set forth in Section 16(C) of the Agreement and shall not include any loss, cost, damage, claim, liability or expense due to the failure of Seller to have kept the Premises (as defined in the Agreement), the building systems or other improvements or equipment in good order and repair or to make required repairs or improvements thereto (it being agreed that Seller shall not be obligated to make any such repairs or improvements, and Purchaser hereby expressly agrees that for all purposes of the Agreement the obligation to make any such repairs or improvements shall be conclusively deemed to have arisen or accrued after the date hereof.

4.Assignee agrees to indemnify and hold Assignor harmless from and against any and all loss, cost, damage, claim, liability or expense accruing under the Leases relating to the time period from and after the date hereof.

5.This Assignment shall be binding upon, enforceable by and shall inure to the benefit of the parties hereto and their respective successors and assigns.

6.This Assignment may be signed in multiple counterpart which, when taken together and signed by all parties and delivery to any other party there, shall constitute a binding Assignment between the parties.

7.This Assignment shall be governed by and construed in accordance with the laws of the State of New York.

IN WITNESS WHEREOF, Assignor and Assignee have duly executed this instrument as of the date first set forth above.

ASSIGNOR:

EEGO 123 WILLIAM, LLC,
a Delaware limited liability company

By: Name:    Jonathon K. Yormak
Title:    Authorized Signatory

ASSIGNEE:

By: Name:    
Title:

ASSIGNMENT AND ASSUMPTION OF LEASE

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STATE OF NEW YORK
COUNTY OF NEW YORK

On the _____ day of ____________ in the year of 2015 before me, the undersigned, a Notary Public in and for said State, personally appeared ____________, personally known to me or proved to me on the basis of satisfactory evidence to be the individual whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his capacity, and that by his signature on the instrument, the individual, or the person upon behalf of which the individual acted, executed the instrument.

___________________________________
Signature and Office of individual taking acknowledgement

STATE OF NEW YORK
COUNTY OF NEW YORK

On the _____ day of ____________ in the year of 2015 before me, the undersigned, a Notary Public in and for said State, personally appeared ____________, personally known to me or proved to me on the basis of satisfactory evidence to be the individual whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his capacity, and that by his signature on the instrument, the individual, or the person upon behalf of which the individual acted, executed the instrument.

___________________________________
Signature and Office of individual taking acknowledgement

ASSIGNMENT AND ASSUMPTION OF LEASE

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Schedule A

ASSIGNMENT AND ASSUMPTION OF LEASE

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EXHIBIT “8(A)(iv)”

Form of Assignment and Assumption of Contracts

THIS ASSIGNMENT AND ASSUMPTION OF CONTRACTS (this “Assignment”), made as of the ____ day of _____________, 2015 between EEGO 123 William Owner, LLC, a Delaware limited liability company having an address c/o East End Capital, 600 Madison Avenue, 11^th Floor, New York, New York 10022 (“Assignor”) and [_______________________________________], a [___________________], with offices at [________________________] (“Assignee”):

RECITALS

WHEREAS, pursuant to that certain Sale and Purchase Agreement dated ___________, ______, between Assignor, as seller, and Assignee, as purchaser (the “Agreement”), Assignor is selling the Premises (as such term is more particularly described in the Agreement) to Assignee.

NOW THEREFORE, in consideration of the foregoing promises, covenants and undertakings contained in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

ASSIGNMENT AND ASSUMPTION

3. Assignor hereby assigns, transfers, sets-over, delivers and conveys unto Assignee, its successors and assigns, all of the rights, title, interest, benefits and privileges of Assignor, as owner, under all of the service, maintenance, supply and other agreements (collectively, the “Assumed Contracts”) in effect relating to the operation of the Premises and listed on Schedule A annexed hereto and incorporated herein by this reference, (subject to adjustment as set forth in the Agreement), TO HAVE AND TO HOLD all and singular subject as aforesaid, unto Assignee. This conveyance is made without recourse and without representation or warranty of any kind, express or implied (except to the extent and only for so long as any representation and warranty, if any, regarding the Assumed Contracts as is set forth in the Agreement shall survive the closing of title thereunder, and subject to the limitations contained therein).

4. Assignee hereby expressly assumes all of the obligations imposed upon the owner of the Premises under the Assumed Contracts which accrue from and after the date hereof.

5. This Assignment shall be binding upon, enforceable by and shall inure to the benefit of the parties hereto and their respective successors and assigns.

6. This Assignment may be signed in multiple counterparts which, when taken together and signed by all parties and delivered to any other party hereto, shall constitute a binding Assignment between the parties.

7. This Assignment shall be governed by and construed in accordance with the laws of the State of New York.

IN WITNESS WHEREOF, Assignor and Assignee have duly executed this instrument as the date of the first set forth above.

ASSIGNOR:

EEGO 123 WILLIAM OWNER, LLC,
a Delaware limited liability company

By: Name:    Jonathon K. Yormak
Title:    Authorized Signatory

ASSIGNEE:

By: Name:    
Title:

STATE OF NEW YORK
COUNTY OF NEW YORK

On the _____ day of ____________ in the year of 2015 before me, the undersigned, a Notary Public in and for said State, personally appeared ____________, personally known to me or proved to me on the basis of satisfactory evidence to be the individual whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his capacity, and that by his signature on the instrument, the individual, or the person upon behalf of which the individual acted, executed the instrument.

___________________________________

Signature and Office of individual taking acknowledgement

STATE OF NEW YORK
COUNTY OF NEW YORK

On the _____ day of ____________ in the year of 2015 before me, the undersigned, a Notary Public in and for said State, personally appeared ____________, personally known to me or proved to me on the basis of satisfactory evidence to be the individual whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his capacity, and that by his signature on the instrument, the individual, or the person upon behalf of which the individual acted, executed the instrument.

___________________________________
Signature and Office of individual taking acknowledgement

ASSIGNMENT AND ASSUMPTION OF CONTRACT

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Schedule A

ASSIGNMENT AND ASSUMPTION OF CONTRACT

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EXHIBIT “8(A)(viii)”

Form of Tenant Notice Letter

_____________, 2015

By Certified Mail- Return Receipt Requested

(Name/Address of Tenant)

Re: Lease for ___________ at _________________, ____________________________
(the “Premises”)

Dear Sir or Madam:

Please be advised that effective as of the date of this letter:

(1)    EEGO 123 William Owner, LLC (“Seller”) has conveyed, all of its right, title and interest in and to the Premises, including its interest as landlord under your lease, to __________________________, a __________________ having an address at ________________ (“Purchaser”);

(2)    Purchaser has assumed the landlord’s obligations under your lease; and

Accordingly, you are hereby notified that all future rent and additional rent payments due under your lease affecting the above-referenced premises, and any notices, inquiries or requests regarding such lease, should be delivered to:

_______________________________________

In addition, all unapplied security deposits held by Seller, if any, together with any interest earned thereon, have been transferred to Purchaser.

[Signature page follows immediately]

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Very truly yours,

EEGO 123 WILLIAM OWNER, LLC

By: _______________________________
Name: Jonathon K. Yormak
Title:    Authorized Signatory

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EXHIBIT “8(A)(ix)”

Form of Contractor Notice Letter

_____________________, 2015

By Certified Mail – Return Receipt Requested

(Name/Address of Tenant)

Re: Contract (the “Contract”) by and between ________________ and _______________ concerning the property (the “Premises”) located at _____________________.

Dear Sir or Madam:

Please be advised that effective as of the date of this letter:

(1)    EEGO 123 William Owner, LLC (“Seller”), has conveyed all of its right, title and interest in and to the Premises, including all of its rights and obligations in connection with the Contract, to ______________ having an address _________________ (“Purchaser”); and

(2)    Purchaser has assumed Seller’s obligations under the Contract arising from and after the date hereof.

Accordingly, you are hereby notified that any notices, inquiries or requests regarding the Contract, should be delivered to:

______________________________

______________________________

______________________________

______________________________

Very truly yours,

EEGO 123 William Owner, LLC

By: __________________________
Name: Jonathon K. Yormak
Title:    Authorized Signatory

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EXHIBIT “8(A)(xiv)”

Form of Assignment and Assumption of Union Agreement

[Note: This Assumption Agreement shall be modified accordingly if Purchaser appoints a designee or service provider as the party to assume the obligations associated with the Union Employees under the Union Agreement, as per Section 27 of the Agreement.]

ASSIGNMENT AND ASSUMPTION OF OBLIGATIONS TO EMPLOYEES UNDER COLLECTIVE BARGAINING AGREEMENT

ASSIGNMENT AND ASSUMPTION OF OBLIGATIONS TO EMPLOYEES UNDER COLLECTIVE BARGAINING AGREEMENTS (this “Assignment”) made as of the ____ day of ___________, 2015, between EEGO 123 William Owner, LLC, a Delaware limited liability company having an address c/o East End Capital, 600 Madison Avenue, 11^th Floor, New York, New York 10022 (“Assignor”) and [_________________________], a [___________________], with offices at [______________________] (“Assignee”).

W I T NE S S E T H

WHEREAS, pursuant to that certain Sale and Purchase Agreement dated ____________, 2015, between Assignor, as seller, and Assignee, as purchaser (the “Agreement”), Assignor is selling the Premises (as such term is more particularly described in the Agreement) to Assignee.

NOW, THEREFORE, in consideration of the sum of Ten Dollars ($10.00) and other good and valuable consideration paid by Assignee to Assignor, the receipt and sufficiency of which are hereby acknowledged, Assignor hereby assigns, transfers and conveys, without warranty, representation or covenant, to Assignee all of Assignor’s rights (if any) with respect to the employees at the Premises who are members of Local 94 and Local 2013 UFCW.

ASSIGNEE HEREBY ACCEPTS the foregoing assignment and assumes all of the obligations of Assignor (if any) with respect to the employees at the Premises who are members of Local 94 and Local 2013 UFCW, accruing from and after the date hereof.

This Assignment shall be binding upon, enforceable by and shall inure to the benefit of the parties hereto and their respective successors and assigns.

This Assignment may be signed in multiple counterpart which, when taken together and signed by all parties and delivered to any other party hereto, shall constitute a binding Assignment between the parties.

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This Assignment shall be governed by and construed in accordance with the laws of the State of New York.

IN WITNESS WHEREOF, this Agreement has been executed as of the date and year first above written.

ASSIGNOR:

EEGO 123 WILLIAM OWNER, LLC

a Delaware limited liability company

By: _______________________________
Name: Jonathon K. Yormak
Title:    Authorized Signatory

ASSIGNEE:

__________________________________

By: _______________________________
Name:
Title:

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EXHIBIT “(8)(a)(xix)”

Form of Title Affidavit

STATE OF NEW YORK    )    TITLE NOS.: __________________

) ss:
COUNTY OF NEW YORK    )

The undersigned, being first duly sworn, deposes and says:

1.    ________________ is the ___________________ of EEGO 123 William Owner, LLC, a Delaware limited liability company (“Owner”), is the fee owner of, or has an ownership interest in, the premises commonly known as and by street address number 123 William Street, New York, New York, and designated as Block 78, Lot 4 on the Tax Map of the City of New York, State of New York (the “Premises”).

2.    To Owner’s actual knowledge, there are no tenants or other parties who are in possession of the Premises, other than tenants, as tenants only, and no tenant or other third party has an option to purchase or right of first refusal to purchase any of the Premises.

3.    To Owner’s actual knowledge, no work has been done upon the above premises by the City of New York nor has any demand been made by the City of New York for any such work that may result in charges by the New York City Department of Rent and Housing Maintenance, Emergency Services or charges by the New York City Department for Environmental Protection for water tap closings or any related work.

4.    To Owner’s actual knowledge, no inspection fees, permit fees, elevator(s), sign, boiler or other charges have been levied, charged, created or incurred that may become tax or other liens pursuant to Section 26-128 (formerly Section 643a-14.0) of the Administrative Code of the City of New York, as amended by Local Laws 10 of 1981 and 25 of 1984, and Section 27-4029.1 of the Administrative Code of the City of New York as amended by LL 43 (1988) or any other section of law.

5.    To Owner’s actual knowledge, there has been no work performed by any agency of the City of New York to cure problems under the New York City Hazardous Substances Emergency Response Law.

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This Affidavit is given to induce Kensington Vanguard National Land Servicesto insure title free and clear of the aforesaid, knowing that it will rely on the truth of the statements herein made.

EEGO 123 William Owner, LLC,
a Delaware limited liability company

By: _____________________________ Name: Jonathon K. Yormak
Title:

Sworn to before me this
_________ day of ______, 2015.

_________________________
(Notary Public)

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Exhibit “10”

Form of Estoppel Certificate

TENANT ESTOPPEL CERTIFICATE

THIS TENANT ESTOPPEL CERTIFICATE (this “Certificate”) is made this ___ day of ________________, 2015 by ________________ (“Tenant”), to and for the benefit of ____________________ (“Landlord”), any purchaser of the Building or Landlord’s interest therein, any lenders to the owners of the Building and to any of the owners’ constituent entities, to any lenders to purchaser and the successors and/or assigns of any of the foregoing.

STATEMENT OF FACTS

The Tenant is the tenant under that certain lease, dated as of ____________________, [as amended by _______________] ([as so amended,] the “Lease”, covering certain premises designated as _______________ located at _____________ (the “Building”), as more particularly defined and described in the Lease (the “Leased Premises”); and

NOW, THEREFORE, Tenant hereby certifies as follows:

1.The Lease has not been amended, modified or supplemented (except as stated above), is in full force and effect and represents the entire agreement between Landlord and Tenant as to Tenant’s interest in the Building and the Leased Premises.

2.The Lease has been guaranteed by ____________ (the “Guarantor”) and such guaranty is in full force and effect [If no guarantor, then this section to be deleted].

3.The fixed annual rent currently payable under the Lease (excluding electricity charges) is $_____________ per annum ($_____________ per month).

4.Fixed annual rent payable under the Lease has been paid through ________________. Tenant is current in the payment of additional rent due and payable under the Lease. No such rents, additional rents, or other similar sums or charges have been paid for more than one (1) month in advance of the due date thereof.

5.The commencement date for the Lease occurred on _______________, and the scheduled expiration date for the Lease is _________________.

6.The security deposit currently being held by Landlord under the Lease, whether in the form of cash or otherwise, is _______________.

7.Tenant has not asserted any claim that Landlord is in default or any material obligations under the Lease, and Tenant has no offsets, defenses, claims, or counterclaims to the payment of rent or other sums, or the performance of any of Tenant’s other obligations, under the Lease.

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8.All base building and other tenant improvement work to be performed by Landlord under the Lease has be substantially completed in accordance with the Lease, and all payments due to Tenant under the Lease as a landlord contribution towards Tenant’s work has been paid in full, except as follows: _____________. [To be deleted if there is no contractual obligation to perform work and/or make any landlord contribution].

9.Tenant has no right to purchase the Building or any part thereof or any interest therein by right of refusal, rights of first offer or option or other similar right to purchase. Tenant has no right to lease other space in the Building except as set forth in the Lease.

10.No actions, whether voluntary or otherwise, are pending against Tenant [or Guarantor] under the bankruptcy laws of the United States or any state and there are no claims or action pending against Tenant [and/or Guarantor] which if decided against Tenant [and/or Guarantor] would materially and adversely affect Tenant’s [or Guarantor’s] financial condition or ability to perform Tenant’s [and/or Guarantor’s] obligations under, or in respect of, the Lease.

11.This certificate has been duly authorized, executed and delivered by Tenant.

Tenant acknowledges and agrees that this certificate may be relied upon by, and shall inure to the benefit of, Landlord, any purchaser of the Building or Landlord’s interest therein, any lenders to the owners of the Building and to any of the owners’ constituent entities, to any lenders to purchaser and the successors and/or assigns of any of the foregoing.

IN WITNESS WHEREOF, Tenant has executed this Certificate as of the date above first written.

_____________________________

By: __________________________
Name:
Title:

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Exhibit “16(A)(i)”

Rent Arrearages

Tenants in Arrears of Base Rent in Excess of Thirty (30) Days

New York State NY Department of State

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Exhibit “16(A)(ii)”

Union Employees

Engineers

Note: Seller directly reimburses a third party service for Local 94 Engineers.

Adrien Hilaire - Chief Engineer Brian Kelly - Handyman Owen Lennon - Engineer

Porters and Matrons

Note: Cleaning workers are union but are employed directly by third-party sub-contractors and

their payroll and salary are not directly reimbursed.

Angel Siaca Amad

Evans Roberto Silva

Sandra De Lo Santos

Martha Gonzalez

Cesar Rozario

Pedro Gonzalez

Alexander Martinez

Virginia Lucre

Asencion Salvador

Jean Soares

Brian Buran

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Exhibit “16(A)(xii)”

Tax Assessment Reduction Proceedings

2014/15 Fiscal Tax Year - Podell, Schwartz, Schecter & Banfield, LLP,

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Exhibit “16(A)(xiii)”

Security Deposits

SECURITY DEPOSITS:

lCD Kaplan and Schultz Daksha Patel	Cash Amount $365,865.00 23,976.90 3,347.21	Interest Earned	Total Security Deposit 365,865.00 23,976.90 3,347.21
Total:			393,189.11

LETTERS OF CREDIT:
	LOC	Total	Issuing Bank
Breakthrough New York, Inc.	87,170.28	87,170.28	First Republic Bank
Cooper Robertson	396,617.36	396,617.36	TD Bank
Digital Evolution	455,688.00	455,688.00	Citibank
Gotham Medical Associates, PLLC	507,000.00	507,000.00	JP Morgan
Library Journals	195,856.98	195,856.98	The Bank NY Mellon
Local l'rojects, LLC	236,350.00	236,350.00	TD Bank
McAloon & Friedman	312,494.00	312,494.00	Bank of America
Open Kitchen	200,000.00	200,000.00	Signature
Securities Training Corporation	550,051.98	550,051.98	HSBC
Shareablee	410,550.00	410,550.00	Bank of America
SUMALL, Inc.	307,780.00	307,780.00	Silicon Valley Bank
Urban Justice Center	154,611.90	154,611.90	JP Morgan
Total:		3,814,170.50

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Exhibit “16(A)(xviii)”

Pre-Paid Rents

Tenant	Total
Breakthrough NY	14,528.38
Cooper Robertson	49,577.17
Digital Evolution	50,632.00
Gotham Medical Associates, PLLC	29,207.50
Local Projects, LLC	33,764.25
Open Kitchen	22,222.22
Securities Training Corporation	91,675.33
Shareablee	34,212.50
SumAll, Inc.	30,778.00
Total:	$356,597.35

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Exhibit 16(A)(xxi) - Landlord's Work

1. The City of New York, Department of Citywide Administrative Services to be used by the Human Resources Administration - $1,582,223 ($393,839 Tenant contribution)

2. Cooper Robertson & Partners Architects, LLP - $970,422 ($179,297 Tenant contribution)

3. Digital Evolution, Inc. - $734,164

4. Gotham Medical Associates, PLLC - $507,600

5. Securities Training Corporation - $2,034,872

6. Shareablee, Inc. - approximately $500,000

7. l9^th Floor Bathrooms - approximately $150,000

8. SumAll, Inc. - $822,770

9. Electrical Upgrades for Open Kitchen (800 amps), Gotham Medical Associates (150 amps) and Securities Training Corporation (400 amps) - $245,000

10. Three (3) Inch Gas Line Installation for Open Kitchen - approximately $50,000

Costs above are estimated or contractual hard costs to complete Landlord's Work and do not include leasing commissions and other soft costs.

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EXHIBIT “20(A)(iv)”

CERTIFICATES OF INSURANCE

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Exhibit "20(C)(4)"

NYSOCA Amendment

January 22, 2014

EEGO 123 William Owner, LLC 600 Madison Ave, 11th floor New York, New York 10022 Attention: Adam L. Pogoda

RE:OSC Lease No. L09842A

SFS GL BU No. USCO1 REP/BOL No. 9842A 123 William Street New York, New York Office of Court Administration

Project No. PM-5992

Dear Mr. Pogoda:

This letter will serve to confirm the understanding between you and Paula Mirabile of this office, that effective May 1, 2015 through April 30, 2016 the Office of Court Administration will continue to occupy the above premises.

During the term of this Agreement all terms and conditions of Lease No. L-9842A shall remain in full force and effect except Tenant shall have the right to cancel this Agreement on sixty (60) days advance written notice at any time after December 1, 2015.

By entering into a renewal or extension of this Lease, the Landlord certifies that it is not on the "Entities Determined To Be Non-Responsive Bidders/Offerers Pursuant to the New York State Iran Divestment Act of 2012" list ("Prohibited Entities List") posted on the Office of General Services (OGS) website at: http://www.ogs.ny.gov/about/regs/docsaistofEntities.pdf and further certifies that it will not utilize on such Lease any subcontractor that is identified on the Prohibited Entities List. The Landlord agrees that should it seek to further renew or extend this Lease, it must provide the same certification at the time the Lease is renewed or extended. The Landlord also agrees that any proposed assignee of this Lease will be required to certify that it is not on the Prohibited Entities List before the Tenant may approve a request for assignment of the Lease in compliance with Section 22 of the Lease.

During the Term of the Lease, should the Tenant or the Occupying Agency receive information that a person (as defined in State Finance Law §165-a) is in violation of the above-referenced certifications, the Tenant will review such information and offer the person an opportunity to respond. If the person fails to demonstrate that it has ceased its engagement in the investment activity which is in violation of the New York State Iran Divestment Act of 2012 within ninety (90) days after the determination of such violation, then the Tenant shall take such action as may be appropriate and provided for by law, rule, or this Lease, including, but not limited to, seeking compliance, recovering damages, or declaring the Landlord in default.

The Tenant reserves the right to reject any request for assignment made by or to not agree to an extension of the Lease with an entity that appears on the Prohibited Entities List prior to the extension or assignment of the Lease, and to pursue a responsibility review with the Landlord should it appear on the Prohibited Entities List hereafter.

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Due to the implementation of a different State Financial System, the process for new Landlord assignments has changed. Therefore, the Landlord shall not assign, sell, convey, transfer, mortgage, or pledge this Lease Agreement or any part thereof, or any rights created thereby or the letting, or any part thereof without the prior written consent of the STATE. Proper written notice, of a proposed assignment or transfer shall be given immediately by the Landlord to OGS by providing a properly completed and executed Consent to Assignment Form attached hereto as Exhibit1 and all necessary documentation.

Landlord currently complies with "green cleaning" specifications and will continue to do so. Invoices are to be submitted as heretofore.

Please indicate your approval by signing and returning to this office these enclosed three (3) copies and the three (3) Standard Legal Acknowledgments.

Very truly yours,

James P. Sproat, Executive Director Real Estate Planning & Development

JPS:cds

Enc.

cc: Ronald Younkins, OCA

Patricia Warner, OSC

bcc:Project No. PM-5992; Lease 9842A (file over lease) ; Computer

LANDLORD APPROVED

BY

*Landlord certifies that all information provided to the State of New York with respect to Lease Disclosure Sheet and State Finance Law §139-k is complete, true and accurate. The State reserves the right to terminate this Lease in the event it is found that the certification filed by the Landlord in accordance with New York State Finance Law §139-j or 139-k was intentionally false or intentionally incomplete. Upon such finding, the State may exercise its termination right by providing written notification to the Landlord in accordance with the written notification terms of the Lease.

*The Appendix "A" - Standard Clauses for NYS Leases, Form 1 - Lease Disclosure Sheet, Consent to Assignment, Substitute W-9 and E04 are being attached and made part of this Lease Extension.

ACKNOWLEDGMENT

STATE OF) ss.:

COUNTY OF

On theday ofin the year 20, before me, the undersigned, a Notary Public in and for said

State, personally appeared, personally known to me or proved to me on

the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to this instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, (Check One) the individual(s), or the person* upon behalf of which the individual(s) acted, executed the instrument. (* See Note, below.)

Notary Public

* For purposes of this acknowledgment, "Person" is defined as any corporation, joint stock company, estate, general partnership (including any registered limited liability partnership or foreign limited liability partnership), limited liability company (including a professional service limited liability company), foreign limited liability company (including a foreign professional service limited liability company), joint venture, limited partnership, natural person, attorney in fact, real estate investment trust, business trust or other trust, custodian, nominee or any other individual or entity in its own or any representative capacity.

EXECUTIVE ORDER No 4:

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ESTABLISHING A STATE GREEN PROCUREMENT AND AGENCY

SUSTAINABILITY PROGRAM

WHEREAS, the State of New York ("State") is dedicated to the simultaneous pursuit of environmental quality, sound public health, economic prosperity and social well-being; and

WHEREAS, the production, use and disposal of materials, and the generation and use of energy, can have significant impacts on environmental quality and public health; and

WHEREAS, State government is a major consumer of materials and energy; and

WHEREAS, the State's policies include conserving, improving and protecting natural resources and the environment; preventing water, air and land pollution; and enhancing the health, safety and welfare of State residents and their overall economic and social well-being; and

WHEREAS, it is the State's policy to promote cost effective methods to reduce energy and resource consumption, and reduce or eliminate the use of hazardous substances and the generation of hazardous substances, pollution and waste at the source; and

WHEREAS, the State's solid waste management priorities include reducing the generation of solid waste, reusing materials, and recycling materials that cannot be reused; and

WHEREAS, by making sound choices in the course of their daily activities, such as the commodities, services, and technology they consume, and the amount of waste they generate, State agencies and public authorities can minimize potential environmental and health impacts on workers and the public; and

WHEREAS, the State's procurement of commodities, services and technology can be enhanced through State agency and public authority choices that minimize the potential environmental and health impacts of their activities; and

WHEREAS, State government can be a leader in environmental stewardship through the use of green procurement and sustainable management practices.

NOW, THEREFORE, I, DAVID A. PATERSON, Governor of the State of New York, by virtue of the authority vested in me by the Constitution and laws of the State of New York, do hereby order as follows:

A.Definitions

. "State agency"^. or "agency" shall mean any State agency, department, office, board, commission or other instrumentality of the State, other than a public authority.

2. "Public authority" or "authority" shall mean a public authority or public benefit corporation created by or existing under any State law, a majority of whose members is appointed by the Governor (including any subsidiaries of such public authority or public benefit corporation), other than an interstate or international authority or public benefit corporation.

B.Interagency Committee on Sustainability and Green Procurement

1.There is hereby established an Interagency Committee on Sustainability and Green Procurement (the "Committee"). The Committee shall be comprised of the Director of the Budget, the Commissioner of General Services, the Commissioner of Environmental Conservation, the Commissioner of Health, the Commissioner of Economic Development, the President of the Urban Development Corporation, the Commissioner of Transportation, the President of the Environmental Facilities Corporation, the President of the New York State Energy, Research and Development Authority, the Chair of the Power Authority of the State of New York. and the Executive Director of the Dormitory Authority of the State of New York. The Commissioner of General Services and the Commissioner of Environmental Conservation shall serve as co-chairs of the Committee.

2.Members of the Committee may designate an executive Sla lImember to represent them and participate on the Committee on their behalf. A majority of the members of the Committee shall constitute a quorum, and all actions and recommendations of the Committee shall require approval of a majority of the total members of the Committee.

1.C. Green Procurement Lists and Specifications

1. The Committee, no later than September 1, 2008, and annually thereafter, shall select a minimum of three "priority categories" of commodities, services or technology, and at least twelve "priority commodities, services and technology" within each of the priority categories, for which the Committee shall develop "green procurement lists" ("procurement lists") and "green procurement specifications" ("procurement specifications") for use by State agencies and public authorities in the procurement of commodities, services and technology. The Committee shall focus on commodities, services and technology that reasonably will: (a) reduce or eliminate the health and environmental risks from the use or release of toxic substances; (b) minimize risks of the discharge of pollutants into the environment; (c) minimize the volume and toxicity of packaging; (d) maximize the use of recycled content and sustainably managed renewable resources; and (e) provide other environmental and health benefits.

2. The Committee, no later than December 1, 2008, shall develop: (a) procurement specifications to be used for the development and issuance of new contracts and new solicitations for priority commodities, services and technology; and (b) procurement lists of priority commodities, services and technology that are available under existing procurement arrangements that satisfy the requirements of this order.

3. In developing the procurement lists and procurement specifications, the Committee shall consider the following factors: (a) protection of the public health and the environment, including the health of children and other vulnerable populations; (b) avoidance of risks from the use or release of toxic substances; (c) pollution reduction and prevention; (d) sustainable resource management and use, and sustainable manufacturing and production processes; (e) reduction of greenhouse gases; (f) the use of renewable resources, remanufactured components and recycled content; (g) waste reduction, recyclability and compostability; (h) quality, durability and utility; (i) minimizing adverse impacts throughout a commodity's or

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technology's life cycle; (j) cost; (k) extended producer liability; and (1) legal and regulatory requirements applicable to the use and procurement of commodities. services and technology.

2.The Committee may review the priority categories, priority commodities, services and technology, procurement lists and procurement specifications periodically and revise or supplement them as appropriate in a manner consistent with the requirements of this section.

3.The Committee shall establish specific goals to achieve reasonable reductions in the amount of solid waste generated and paper consumed annually by State agencies and authorities. The Committee shall also develop and implement strategies to assist State agencies and authorities to achieve such reduction goals.

D. Sustainability and Environmental Stewardship Programs

I. Each State agency and authority shall develop and implement a Sustainability and Environmental Stewardship Program, which shall include:

(a)specific projects, programs and policies designed to achieve compliance with the requirements of this Order; and

(b)specific projects, programs and policies designed to reduce the public health and environmental impacts of the activities and operations of the agency or authority, including: (i) the reduction or elimination of the use and generation of toxic substances, pollution and waste; (ii) the reduction, reuse, recycling and composting of solid waste; (iii) increasing energy efficiency; (iv) increasing the use of renewable energy sources; (v) conserving water and other natural resources; and (vi) maximizing the use of environmentally preferable or "green" commodities, services and technology.

2. Commencing no later than July 1, 2008, all copy paper, janitorial paper and other paper supplies purchased by each State agency or authority shall be composed of 100% post-consumer recycled content to the maximum extent practicable. and all copy and janitorial paper shall be process chlorine-free to the extent practicable. unless such products do riot meet required form. function or utility, or the cost of the product is not competitive.

1. Commencing no later than July 1. 2008, all State agency and authority publications shall be printed on 100% post-consumer recycled content paper. Where paper with 100% post-consumer recycled content is not available, or does not meet required form, function and utility, paper procurements shall use post-consumer recycled content to the extent practicable. Non-recycled content shall be derived from a sustainably-managed renewable resource to the extent practicable, unless the cost of the product is not competitive.

2.State agencies and authorities shall rely on and use the procurement lists and specifications issued by the Committee when developing new solicitations and contracts for the procurement of commodities, services and technology, and for the procurement of commodities, services and technology under existing contracts, unless the head of the agency or authority determines: (a) that such commodities, services or technology will not meet required form, function or utility; (b) the cost of the commodities, services or technology is not competitive; or (c) there is an emergency or other compelling public health or safety reason not to purchase such commodities, services or technology. Such form, function, utility or other determination shall be presented in the procurement record, and notice of the determination shall be provided to the Committee Chairs.

3.All State agencies and authorities shall, to the extent practicable: (a) implement effective programs to source separate recyclable materials, including paper, metal, glass and plastic, that will maximize materials recovery; (b) implement effective programs to reduce waste; (c) use locally available compost, mulch and soil amendments produced from secondary materials; and (d) utilize secondary materials in construction.

E. Training and Staff

1. State agencies and authorities, no later than September 1, 2008, shall assign an employee to serve as a Sustainahility and Green Procurement Coordinator ("Coordinator"). Coordinators shall be given full management support and provided with the necessary resources to enable the agency or authority to comply with this order.

2.The Committee shall design and implement training and outreach programs for Coordinators and assist them with the training of appropriate staff, vendors and contractors.

3.The Commissioner of General Services, no later than September 1, 2008, shall select an employee to serve as Director of Green Procurement, who shall assist the Commissioner of General Services in carrying out his or her duties under this order.

4.The Office of General Services, the Department of Environmental Conservation, the Environmental Facilities Corporation, and the New York State Energy Research and Development Authority are authorized to assist State agencies and authorities in complying with this order, including through the development and implementation of Sustainability and Environmental Stewardship Programs.

F. Reporting

1. The Committee, no later than December 1, 2008. shall develop a format for a progress report to be used by State agencies and authorities to inform the Committee on (a) the progress each agency and authority has made toward achieving the goals described in or established pursuant to this order; (b) the effectiveness of the procurement lists and specifications; and (c) the specific sustainability projects that have been implemented and the effectiveness of such programs.

2.Each State agency and authority, no later than March 1, 2009, and on March first each year thereafter, shall submit a progress report to the Committee in the form and containing the information specified by the Committee. At a minimum, such report shall describe the agency or authority's efforts regarding waste reduction and recycling activities, recycled products procurement, quantities of waste generated and materials recycled, incentives and disincentives to waste reduction and recycling, and recommendations for additional measures to encourage efficient use of the State's resources.

18848190v.6

18848190v.10

3.The Committee, on or before June I. 2009.. and on June first each year thereafter, shall submit a report to the Governor, which shall compile the information submitted by State agencies and authorities pursuant to this section and report on progress made on the implementation of this order.

A.Sustainability and Green Procurement Advisory Council

There is hereby established a Sustainability and Green Procurement Advisory Council ("Council"), which shall consist of 11 members appointed by the Governor who have experience in the fields of green procurement, public health, waste prevention and recycling, energy efficiency, workplace safety, labor relations, environmental protection, environmental justice, or chemical manufacturing. The Governor shall select a Chair of the Council from among its members. The Council shall meet at the times requested by the Committee and provide such advice and assistance as the Committee may require.

B.Miscellaneous

1.Every agency and public authority of this State shall furnish such information and assistance as the Committee determines is reasonably necessary to accomplish its purposes.

2.Executive Order 142, issued on January 16, 1991, is hereby revoked and superseded by this Executive Order.

Given under my hand and the Privy Seal of the State in the City of Albany this twenty-fourth day of April in the year two thousand eight.

David A. Paterson Governor

18848190v.6

18848190v.10

Exhibit 20(D) - Seller's Work

1. Freight Elevator Modernization - $253,000

2.Passenger Elevator Cab Cosmetic Refurbishment - $278,000

18848190v.6

18848190v.10

EX-21.1

Exhibit 21.1

SUBSIDIARIES

	State or Country
Name of Subsidiary	of Formation
New York City Operating Partnership, L.P.	Delaware
ARC NYC421W54, LLC	Delaware
ARC NYC400E67, LLC	Delaware
ARC NYC200RIVER01, LLC	Delaware
ARC NYC123WILLIAM, LLC	Delaware
ARC NYC570SEVENTH, LLC	Delaware

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO RULE 13a-14(a) AND 15d-14(a) UNDER

THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, Michael A. Happel, certify that:

1. I have reviewed this Annual Report on Form 10-K of American Realty Capital New York City REIT, 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)) 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) [Omitted];

(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.

Dated this 31st day of March, 2015	/s/ Michael A. Happel
	Michael A. Happel
	Chief Executive Officer, President and Secretary
	(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO RULE 13a-14(a) AND 15d-14(a) UNDER

THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, Gregory W. Sullivan, certify that:

1. I have reviewed this Annual Report on Form 10-K of American Realty Capital New York City REIT, 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)) 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) [Omitted];

(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.

Dated this 31st day of March, 2015	/s/ Gregory W. Sullivan
	Gregory W. Sullivan
	Chief Operating Officer, Chief Financial Officer and Treasurer
	(Principal Financial Officer)

EX-32

Exhibit 32

SECTION 1350 CERTIFICATIONS

This Certificate is being delivered pursuant to the requirements of Section 1350 of Chapter 63 (Mail Fraud) of Title 18 (Crimes and Criminal Procedures) of the United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed for purposes of Section 18 of the Securities Act of 1934, as amended.

The undersigned, who are the Chief Executive Officer and Chief Financial Officer of American Realty Capital New York City REIT, Inc. (the “Company”), each hereby certify as follows:

The annual report on Form 10-K of the Company, which accompanies this Certificate, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and all information contained in this quarterly report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated this 31st day of March, 2015

/s/ Michael A. Happel

Michael A. Happel

Chief Executive Officer, President and Secretary

(Principal Executive Officer)

/s/ Gregory W. Sullivan

Gregory W. Sullivan

Chief Operating Officer, Chief Financial Officer and Treasurer

(Principal Financial Officer)

XML

Investment Securities (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Investments, Debt and Equity Securities [Abstract]
Cost	$ 514
Gross Unrealized Gains	0
Gross Unrealized Losses	(24)
Fair Value	$ 490	$ 0

XML

Subsequent Events - (Details) (Subsequent Event, USD $) In Millions, except Share data, unless otherwise specified	0 Months Ended
	Feb. 06, 2015	Mar. 27, 2015
Subsequent Event [Line Items]
Share Reallocated Under DRIP	10,000,000
123 William Street Downtown Manhattan
Subsequent Event [Line Items]
Consideration transferred		$ 253.0
Mortgages | 123 William Street Downtown Manhattan
Subsequent Event [Line Items]
Face amount of debt		95.2
NYRT | 123 William Street Downtown Manhattan
Subsequent Event [Line Items]
Equity interest		$ 35.1

XML

Related Party Transactions and Arrangements - Fees Paid in Connection with the Liquidation or Listing of the Company's Real Estate Assets (Details) (New York City Reit Advisors, LLC, Advisor)	Dec. 31, 2014
Pre-tax Non-compounded Return on Capital Contribution
Related Party Transaction [Line Items]
Cumulative capital investment return to investors as a percentage of benchmark	6.00%
Subordinated performance fee as a percentage of benchmark	15.00%
Excess of Adjusted Market Value of Real Estate Assets Plus Distributions Over Aggregate Contributed Investor Capital
Related Party Transaction [Line Items]
Subordinated participation fees as a percentage of benchmark	15.00%
Distribution upon nonrenewal of advisory agreement, percentage of benchmark	15.00%
Net Sale Proceeds, after Return of Capital Contributions and Annual Targeted Investor Return
Related Party Transaction [Line Items]
Subordinated performance fee as a percentage of benchmark	15.00%
Maximum | Pre-tax Non-compounded Return on Capital Contribution
Related Party Transaction [Line Items]
Subordinated performance fee as a percentage of benchmark	10.00%
Brokerage Commission Fees | Contract Sales Price
Related Party Transaction [Line Items]
Real estate commissions as a percentage of benchmark	2.00%
Brokerage Commission Fees | Maximum | Contract Sales Price
Related Party Transaction [Line Items]
Real estate commissions as a percentage of benchmark	50.00%
Real Estate Commissions | Maximum | Contract Sales Price
Related Party Transaction [Line Items]
Real estate commissions as a percentage of benchmark	6.00%
Annual Targeted Investor Return | Pre-tax Non-compounded Return on Capital Contribution
Related Party Transaction [Line Items]
Cumulative capital investment return to investors as a percentage of benchmark	6.00%

XML

Schedule III -Real Estate and Accumulated Depreciation (Details) (USD $)	12 Months Ended
	Dec. 31, 2014		Dec. 31, 2013
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Land	83,316,000
Building and Improvements	139,403,000
Costs Capitalized Subsequent to Acquisition	86,000
Gross Amount Carried	222,805,000	[1],[2]	0
Accumulated Depreciation	(843,000)	[3],[4]	0
Acquired intangible assets	47,278,000		0
Tax basis	260,600,000
Accumulated Amortization	1,200,000
421 W. 54th Street
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Encumbrances	0
Land	4,723,000
Building and Improvements	1,757,000
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried	6,480,000	[1],[2]
Accumulated Depreciation	(26,000)	[3],[4]
400 E. 67th Street
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Encumbrances	0
Land	10,653,000
Building and Improvements	55,682,000
Costs Capitalized Subsequent to Acquisition	14,000
Gross Amount Carried	66,349,000	[1],[2]
Accumulated Depreciation	(464,000)	[3],[4]
200 Riverside Blvd
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Encumbrances	0
Land	13,787,000
Building and Improvements	5,510,000
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried	19,297,000	[1],[2]
Accumulated Depreciation	(34,000)	[3],[4]
570 Seventh Ave
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Encumbrances	0
Land	54,153,000
Building and Improvements	76,454,000
Costs Capitalized Subsequent to Acquisition	72,000
Gross Amount Carried	130,679,000	[1],[2]
Accumulated Depreciation	(319,000)	[3],[4]
Building
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Useful life	40 years
Land Improvements
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Useful life	15 years
Furniture and Fixtures
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Useful life	5 years

[1] The tax basis of aggregate land, buildings and improvements as of December 31, 2014 is $260.6 million.

[2] Acquired intangible assets allocated to individual properties in the amount of $47.3 million are not reflected in the table above.

[3] The accumulated depreciation column excludes $1.2 million of amortization associated with acquired intangible assets.

[4] Each of the properties has a depreciable life of: 40 years for buildings, 15 years for land improvements and five years for fixture

XML

Related Party Transactions and Arrangements - Fees Paid in Connection With the Operations of the Company (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	May 22, 2014
Related Party Transaction [Line Items]
Share Price (in dollars per share)		$ 25.00
Sales Commissions and Dealer Manager Fees
Related Party Transaction [Line Items]
Share Price (in dollars per share)	22.50
New York City Reit Advisors, LLC | Contract Purchase Price | Advisor
Related Party Transaction [Line Items]
Acquisition fees as a percentage of benchmark	1.50%
Expected acquisition fees	0.50%
Financing advance fees as a percentage of benchmark, expected third party costs	0.10%
Quarterly asset management fee earned by related party	0.1875%
Unearned class B units (in shares)	8,361
New York City Reit Advisors, LLC | Advance on Loan or Other Investment | Advisor
Related Party Transaction [Line Items]
Financing advance fees as a percentage of benchmark	1.50%
New York City Reit Advisors, LLC | Amount Available or Outstanding Under Financing Arrangement | Advisor
Related Party Transaction [Line Items]
Financing coordination fees earned by related party	0.75%
New York City Reit Advisors, LLC | Pre-tax Non-compounded Return on Capital Contribution | Advisor
Related Party Transaction [Line Items]
Cumulative capital investment return to investors as a percentage of benchmark	6.00%
New York City Reit Advisors, LLC | Gross Revenue, Stand-alone Single-tenant Net Leased Properties | Advisor
Related Party Transaction [Line Items]
Property management fees earned by related party	4.00%
Maximum | New York City Reit Advisors, LLC | Contract Purchase Price | Advisor
Related Party Transaction [Line Items]
Acquisition fees as a percentage of benchmark	4.50%
Maximum | New York City Reit Advisors, LLC | Advance on Loan or Other Investment | Advisor
Related Party Transaction [Line Items]
Financing advance fees as a percentage of benchmark	4.50%
Greater Of | Maximum | New York City Reit Advisors, LLC | Average Invested Assets | Advisor
Related Party Transaction [Line Items]
Operating expenses as a percentage of benchmark	2.00%
Greater Of | Maximum | New York City Reit Advisors, LLC | Net Income, Excluding Additions to Non-cash Reserves and Gains on Sales of Assets | Advisor
Related Party Transaction [Line Items]
Operating expenses as a percentage of benchmark	25.00%
Annual Targeted Investor Return | New York City Reit Advisors, LLC | Pre-tax Non-compounded Return on Capital Contribution | Advisor
Related Party Transaction [Line Items]
Cumulative capital investment return to investors as a percentage of benchmark	6.00%

XML

Summary of Significant Accounting Policies (Leases) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014
Depreciation and Amortization
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible assets amortization expense 2015	$ 3,607
Fiinite-lived intangible assets amortization expense 2016	3,232
Finite-lived intangible assets amortization expense 2017	2,677
Finite-lived intangible assets amortization expense 2018	2,407
Finite-lived intangible assets amortization expense 2019	2,231
Depreciation and Amortization | In-place leases
Finite-Lived Intangible Assets [Line Items]
Weighted-Average Amortization Period	7 years 2 months 16 days
Finite-lived intangible assets amortization expense 2015	2,442
Fiinite-lived intangible assets amortization expense 2016	2,067
Finite-lived intangible assets amortization expense 2017	1,512
Finite-lived intangible assets amortization expense 2018	1,242
Finite-lived intangible assets amortization expense 2019	1,066
Depreciation and Amortization | Other intangibles
Finite-Lived Intangible Assets [Line Items]
Weighted-Average Amortization Period	36 years 6 months 14 days
Finite-lived intangible assets amortization expense 2015	1,165
Fiinite-lived intangible assets amortization expense 2016	1,165
Finite-lived intangible assets amortization expense 2017	1,165
Finite-lived intangible assets amortization expense 2018	1,165
Finite-lived intangible assets amortization expense 2019	1,165
Rental Income
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible assets amortization expense 2015	871
Fiinite-lived intangible assets amortization expense 2016	863
Finite-lived intangible assets amortization expense 2017	772
Finite-lived intangible assets amortization expense 2018	696
Finite-lived intangible assets amortization expense 2019	637
Below market lease, amortization income 2015	1,275
Below market lease, amortization income 2016	1,267
Below market lease, amortization income 2017	1,176
Below market lease, amortization income 2018	1,098
Below market lease, amortization income 2019	1,037
Rental Income | Above-market leases
Finite-Lived Intangible Assets [Line Items]
Weighted-Average Amortization Period	9 years 4 months 24 days
Finite-lived intangible assets amortization expense 2015	(404)
Fiinite-lived intangible assets amortization expense 2016	(404)
Finite-lived intangible assets amortization expense 2017	(404)
Finite-lived intangible assets amortization expense 2018	(402)
Finite-lived intangible assets amortization expense 2019	$ (400)
Rental Income | Below Market Lease
Finite-Lived Intangible Assets [Line Items]
Weighted-Average Amortization Period	18 years

XML

Fair Value of Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2014

Fair Value Disclosures [Abstract]

Fair Value, Liabilities Measured on Recurring Basis

The following table presents information about the Company's asset measured at fair value on a recurring basis as of December 31, 2014, aggregated by the level in the fair value hierarchy within which that instrument falls. The Company had no assets measured at fair value on a recurring basis as of December 31, 2013.

	Quoted Prices in Active Markets		Significant Other Observable Inputs		Significant Unobservable Inputs
(In thousands)	Level 1		Level 2		Level 3		Total
December 31, 2014
Investment Securities	$	490	$	—	$	—	$	490

XML

Net Loss Per Share (Details) (USD $) In Thousands, except Share data, unless otherwise specified	0 Months Ended		3 Months Ended				12 Months Ended
	Dec. 31, 2013	Dec. 31, 2013	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2014
Equity [Abstract]
Net loss attributable to stockholders	$ 0	$ 0	$ (4,054)	$ (2,235)	$ (214)	$ (16)	$ (6,519)
Basic and diluted weighted average shares outstanding (in shares)		0	17,938,717	8,543,271	690,143	8,888	4,530,066
Basic and diluted net loss per share (in dollars per share)		$ 0.00	$ (0.23)	$ (0.26)	$ (0.31)		$ (1.44)

XML

Related Party Transactions and Arrangements (Details) (USD $) In Thousands, except Share data, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Related Party Transaction [Line Items]
Common stock, shares outstanding (in shares)	20,569,012	0
Fair Value	$ 490	$ 0
Special Limited Partner
Related Party Transaction [Line Items]
Common stock, shares outstanding (in shares)	8,888	0

XML

Real Estate Investments - Minimum Rental Payments (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014
Real Estate Investments, Net [Abstract]
2015	$ 7,865
2016	7,653
2017	7,171
2018	6,723
2019	6,613
Thereafter	32,570
Total	$ 68,595

XML

Quarterly Results (Unaudited) (Details) (USD $) In Thousands, except Share data, unless otherwise specified	0 Months Ended		3 Months Ended				12 Months Ended
	Dec. 31, 2013	Dec. 31, 2013	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2014
Quarterly Financial Information Disclosure [Abstract]
Total revenues		$ 0	$ 2,268	$ 540	$ 43	$ 0	$ 2,851
Net loss attributable to stockholders	$ 0	$ 0	$ (4,054)	$ (2,235)	$ (214)	$ (16)	$ (6,519)
Basic and diluted weighted average shares outstanding (in shares)		0	17,938,717	8,543,271	690,143	8,888	4,530,066
Basic and diluted net loss per share (in dollars per share)		$ 0.00	$ (0.23)	$ (0.26)	$ (0.31)		$ (1.44)

XML

Related Party Transactions and Arrangements - Fees Paid in Connection With the Operations of the Company, Incurred Forgiven, and Payable (Details) (USD $) In Thousands, unless otherwise specified	0 Months Ended	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2014
Related Party Transaction [Line Items]
Due from affiliates	$ 0	$ 0
Incurred
Related Party Transaction [Line Items]
Total commissions and fees incurred from the Dealer Manager	0	5,253
Forgiven
Related Party Transaction [Line Items]
Total commissions and fees incurred from the Dealer Manager	0	101
Acquisition fees and reimbursements: | Acquisition fees and related cost reimbursements
Related Party Transaction [Line Items]
Due from affiliates	0	0
Acquisition fees and reimbursements: | Incurred | Acquisition fees and related cost reimbursements
Related Party Transaction [Line Items]
Total commissions and fees incurred from the Dealer Manager	0	5,251
Acquisition fees and reimbursements: | Forgiven | Acquisition fees and related cost reimbursements
Related Party Transaction [Line Items]
Total commissions and fees incurred from the Dealer Manager	0	0
Ongoing fees: | Property management and leasing fees
Related Party Transaction [Line Items]
Due from affiliates	0	0
Ongoing fees: | Distributions on Class B units
Related Party Transaction [Line Items]
Due from affiliates	0	0
Ongoing fees: | Incurred | Property management and leasing fees
Related Party Transaction [Line Items]
Total commissions and fees incurred from the Dealer Manager	0	0
Ongoing fees: | Incurred | Distributions on Class B units
Related Party Transaction [Line Items]
Total commissions and fees incurred from the Dealer Manager	0	2
Ongoing fees: | Forgiven | Property management and leasing fees
Related Party Transaction [Line Items]
Total commissions and fees incurred from the Dealer Manager	0	101
Ongoing fees: | Forgiven | Distributions on Class B units
Related Party Transaction [Line Items]
Total commissions and fees incurred from the Dealer Manager	$ 0	$ 0

XML

Real Estate Investments

12 Months Ended

Dec. 31, 2014

Real Estate Investments, Net [Abstract]

Real Estate Investments

Real Estate Investments

On June 13, 2014, the Company, through a wholly owned subsidiary of the OP, completed the acquisition of a commercial condominium unit located at 421 West 54th Street in the Midtown West neighborhood of Manhattan (the "Hit Factory"). The sellers of the Hit Factory were Sagamore 54th St. Investments LLC and Sagamore Arizona LLC, as tenants in common, which had no preexisting relationship with the Company. The purchase price of the Hit Factory was $7.3 million, exclusive of closing costs and net of any purchase price adjustments, and was funded with proceeds from the Company's ongoing IPO. The Company accounted for the purchase of the Hit Factory as a business combination and incurred acquisition related costs of $0.2 million, which are reflected in the acquisition and transaction related line item of the consolidated statements of operations and comprehensive loss.

On September 5, 2014, the Company, through a wholly owned subsidiary of the OP, completed the acquisition of three commercial condominium units located at 400 East 67th Street (the "Laurel Condominium") in the Upper East Side neighborhood of Manhattan. The seller of the Laurel Condominium was USPF IV Laurel Retail Owner, L.P., which had no preexisting relationship with the Company. The purchase price for the Laurel Condominium was $76.0 million, exclusive of closing costs and net of any purchase price adjustments, and was funded with proceeds from the Company's ongoing IPO. The Company accounted for the purchase of the Laurel Condominium as a business combination and incurred acquisition related costs of $1.8 million, which are reflected in the acquisition and transaction related line item of the consolidated statements of operations and comprehensive loss.

On September 24, 2014, the Company, through a wholly owned subsidiary of the OP, completed the acquisition of the fee simple interest in a commercial garage unit located at 200 Riverside Boulevard ("200 Riverside Boulevard") in the Upper West Side neighborhood of Manhattan. The seller of 200 Riverside Boulevard was 200 Riverside Parking, LLC, which had no preexisting relationship with the Company. The purchase price of 200 Riverside Boulevard was $9.0 million, exclusive of closing costs and net of any purchase price adjustments, and was funded with proceeds from the Company's ongoing IPO. The Company accounted for the purchase of 200 Riverside Boulevard as a business combination and incurred acquisition related costs of $0.2 million, which are reflected in the acquisition and transaction related line item of the consolidated statements of operations and comprehensive loss.

On November 5, 2014, the Company, through a wholly owned subsidiary of the OP, completed its acquisition of the fee simple interest in an institutional-quality office building located at 570 Seventh Avenue ("570 Seventh Avenue") in Times Square, Manhattan. The seller of the property was 570 7th Avenue Property Owner, L.L.C., which had no preexisting relationship with the Company. The purchase price of 570 Seventh Avenue was $162.3 million, exclusive of closing costs and net of any purchase price adjustments, and was funded with proceeds from the Company's ongoing IPO. The Company accounted for the purchase of 570 Seventh Avenue as a business combination. The Company incurred acquisition related costs of $3.9 million, which are reflected in the acquisition and transaction related line item of the consolidated statements of operations and comprehensive loss.

The following table presents the allocation of real estate assets acquired during the year ended December 31, 2014. No real estate assets were acquired during the period from December 19, 2013 (date of inception) to December 31, 2013.

	Year Ended
(Dollar amounts in thousands)	December 31, 2014
Real estate investments, at cost:
Land	$	83,316
Buildings, fixtures and improvements	139,403
Total tangible assets	222,719
Acquired intangibles:
In-place leases	12,102
Above-market lease assets	3,911
Other intangibles	31,446
Below-market lease liabilities	(15,637		)
Total assets acquired, net	254,541
Funds deposited in escrow	2,068
Other liabilities assumed	(642		)
Cash paid for acquired real estate investment	$	255,967
Number of properties purchased	4

The following table presents unaudited pro forma information as if the acquisitions during the year ended December 31, 2014 had been consummated on December 19, 2013 (date of inception). Additionally, the unaudited pro forma net loss was adjusted to reclassify acquisition and transaction related expense of $6.1 million from the year ended December 31, 2014 to the period from December 19, 2013 (date of inception) to December 31, 2013.

				Period from
				December 19, 2013
	Year Ended			(date of inception) to
(In thousands, except per share data)	December 31, 2014			December 31, 2013
Pro forma revenues (1)	$	11,203		$	399
Pro forma net loss (1)	$	(2,746	)	$	(6,227	)
Basic and diluted pro forma net loss per share (2)	$	(0.61	)	N/A

(1) For the the year ended December 31, 2014, aggregate revenues and net income derived from the Company's acquisitions (for the Company's period of ownership) were $2.9 million and $0.1 million, respectively.

(2) The Company did not have any shares outstanding as of December 31, 2013.

On March 27, 2015, the Company completed its acquisition of the property at 123 William Street in downtown Manhattan. As of the date that these consolidated financial statements were available to be issued, the Company was still reviewing the financial information of 123 William Street and, as such, it was impractical to include in these consolidated financial statements the pro-forma effect of the acquisition. See Note 13 - Subsequent Events for more information.

The following table presents future minimum base rental cash payments due to the Company over the next five years and thereafter. These amounts exclude contingent rent payments, as applicable, that may be collected 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 Base Rent Payments
2015	$	7,865
2016	7,653
2017	7,171
2018	6,723
2019	6,613
Thereafter	32,570
	$	68,595

The following table lists the tenants whose annualized rental income on a straight-line basis represented greater than 10% of total annualized rental income for all portfolio properties on a straight-line basis as of December 31, 2014:

		December 31,
Property Portfolio	Tenant	2014
400 E. 67th Street - Laurel Condominium	Cornell University	26.0%
400 E. 67th Street - Laurel Condominium	TD Bank, N.A.	10.9%

The termination, delinquency or non-renewal of these leases by the above tenants may have a material adverse effect on revenues.

XML

Related Party Transactions and Arrangements - Fees Paid in Connection with the Offering (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2014
Related Party Transaction [Line Items]
Cumulative offering costs	$ 55.6
Maximum
Related Party Transaction [Line Items]
Liability for offering and related costs from IPO	2.00%
Offering costs, as a percentage of gross common stock proceeds	15.00%
Realty Capital Securities, LLC | Gross Proceeds, Common Stock | Maximum | Dealer Manager
Related Party Transaction [Line Items]
Sales commissions as a percentage of benchmark	7.00%
Option One | Gross Proceeds, Common Stock | Maximum | Participating Broker-Dealer
Related Party Transaction [Line Items]
Brokerage fee as a percentage of benchmark	7.50%
Brokerage fees as a percentage of benchmark, initial grant	2.50%
Brokerage fees as a percentage of benchmark, periodic payment	1.00%
Option One | Realty Capital Securities, LLC | Gross Proceeds, Common Stock | Maximum | Dealer Manager
Related Party Transaction [Line Items]
Gross proceeds from the sale of common stock, before allowances, percentage of benchmark	3.00%
Option Two | Realty Capital Securities, LLC | Gross Proceeds, Common Stock | Dealer Manager
Related Party Transaction [Line Items]
Sales commissions as a percentage of benchmark	2.50%
Offering Costs | Maximum
Related Party Transaction [Line Items]
Offering costs, as a percentage of gross common stock proceeds	12.00%

XML

Subsequent Events (Tables)

12 Months Ended

Dec. 31, 2014

Subsequent Events [Abstract]

Schedule of Subsequent Events

Total capital raised to date, including shares issued under the DRIP, is as follows:

Source of Capital (in thousands)	Inception to December 31, 2014		January 1, 2015 to March 15, 2015		Total
Common stock	$	509,949	$	85,100	$	595,049

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Quarterly Results (Unaudited) (Tables)

12 Months Ended

Dec. 31, 2014

Quarterly Financial Information Disclosure [Abstract]

Schedule of Quarterly Financial Information

Presented below is a summary of the unaudited quarterly financial information for the year ended December 31, 2014. There was no net income or loss for the period from December 19, 2013 (date of inception) to December 31, 2013.

(In thousands, except share and per share data)	March 31, 2014			June 30, 2014			September 30, 2014			December 31, 2014
Total revenues	$	—		$	43		$	540		$	2,268
Net loss attributable to stockholders	$	(16	)	$	(214	)	$	(2,235	)	$	(4,054	)
Weighted average shares outstanding	8,888			690,143			8,543,271			17,938,717
Basic and diluted net loss per share attributable to stockholders	NM			$	(0.31	)	$	(0.26	)	$	(0.23	)

________________

NM - Not meaningful

XML

Schedule III -Real Estate and Accumulated Depreciation Changes in Accumulated Depreciation (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014
Real estate investments, at cost:
Balance at beginning of year	$ 0
Additions-acquisitions	222,719
Capital expenditures	86
Disposals	0
Balance at end of the year	222,805	[1],[2]
Accumulated depreciation:
Balance at beginning of year	0
Depreciation expense	(843)
Disposals	0
Balance at the end of the year	$ (843)	[3],[4]

[1] The tax basis of aggregate land, buildings and improvements as of December 31, 2014 is $260.6 million.

[2] Acquired intangible assets allocated to individual properties in the amount of $47.3 million are not reflected in the table above.

[3] The accumulated depreciation column excludes $1.2 million of amortization associated with acquired intangible assets.

[4] Each of the properties has a depreciable life of: 40 years for buildings, 15 years for land improvements and five years for fixture

XML

Related Party Transactions and Arrangements - Fees Paid in Connection with the IPO - Selling Commissions and Dealer Fees (Details) (USD $) In Thousands, unless otherwise specified	0 Months Ended	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2014
Related Party Transaction [Line Items]
Due from affiliates	$ 0	$ 0
Sales Commissions and Dealer Manager Fees | Realty Capital Securities, LLC | Dealer Manager
Related Party Transaction [Line Items]
Total commissions and fees incurred from the Dealer Manager	0	46,997
Due from affiliates	$ 0	$ 197

XML

Organization (Details) (USD $)	0 Months Ended		12 Months Ended
	May 29, 2014	Dec. 31, 2013	Dec. 31, 2014 property sqft	Dec. 31, 2014 property sqft	May 22, 2014	Apr. 24, 2014
Related Party Transaction [Line Items]
Stock available for issuance in IPO						$ 30,000,000
Common stock, par value (in dollars per share)		$ 0.01	$ 0.01	$ 0.01		$ 0.01
Share Price (in dollars per share)					$ 25.00
Shares required to break escrow	2,000,000.0
Common stock, shares outstanding (in shares)		0	20,569,012	20,569,012
Proceeds from issuance of common stock		0	503,420,000	509,900,000
Proceeds from issuance of common stock, dividend reinvestment plan				4,500,000
Number of real estate properties			4	4
Area of real estate property			299,191	299,191
Occupancy rate			75.50%	75.50%
Weighted average remaining lease term			7 years 3 months 18 days
Limited partner units (in shares)						90
Special Limited Partner
Related Party Transaction [Line Items]
Common stock, shares outstanding (in shares)		0	8,888	8,888
Common Stock
Related Party Transaction [Line Items]
Share Price (in dollars per share)						$ 25.0
Shares available for issuance under a distribution reinvestment plan (in shares)						10,500,000.0
Minimum | Common Stock
Related Party Transaction [Line Items]
DRIP share price (in dollars per share)						$ 23.75
DRIP Share Price as a percentage of estimated value of common stock						95.00%
American Realty Capital III Special Limited Partnership, LLC | Special Limited Partner
Related Party Transaction [Line Items]
Contributed capital						$ 2,020

XML

Summary of Significant Accounting Policies (Details) (USD $)	0 Months Ended	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2014 segment	Dec. 31, 2013	Dec. 19, 2013
Property, Plant and Equipment [Line Items]
Amortization of intangibles	$ 0	$ 1,172,000
Amortization (accretion) of market lease assets (liabilities), net	0	(134,000)
Cash and cash equivalents	0	184,341,000	0	0
Cash in excess of FDIC limit		184,100,000
Deferred costs, net	35,000	0	35,000
Short term trading fee		2.00%
Annual authorized amount		5.00%
Number of reportable segments		1
Maximum
Property, Plant and Equipment [Line Items]
Liability for offering and related costs from IPO		2.00%
Offering costs, as a percentage of gross common stock proceeds		15.00%
Common Stock
Property, Plant and Equipment [Line Items]
Common stock issued through distribution reinvestment plan (in shares)		190,584
In-Place Leases and Real Estate Abatement | Depreciation and Amortization
Property, Plant and Equipment [Line Items]
Amortization of intangibles		1,200,000	0
Rental Income | Above and Below Market Leases
Property, Plant and Equipment [Line Items]
Amortization (accretion) of market lease assets (liabilities), net		$ (100,000)	$ 0
One Year | Minimum
Property, Plant and Equipment [Line Items]
Share repurchase price		$ 23.125
One Year | Maximum
Property, Plant and Equipment [Line Items]
Share repurchase price as percent of value		92.50%
Two Years | Minimum
Property, Plant and Equipment [Line Items]
Share repurchase price		$ 23.75
Two Years | Maximum
Property, Plant and Equipment [Line Items]
Share repurchase price as percent of value		95.00%
Offering Costs | Maximum
Property, Plant and Equipment [Line Items]
Offering costs, as a percentage of gross common stock proceeds		12.00%
Building
Property, Plant and Equipment [Line Items]
Useful life		40 years
Land Improvements
Property, Plant and Equipment [Line Items]
Useful life		15 years
Furniture and Fixtures
Property, Plant and Equipment [Line Items]
Useful life		5 years

XML

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2014

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Basis of Accounting

The accompanying consolidated financial statements of the Company are prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America ("GAAP").

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its subsidiaries. All inter-company accounts and transactions are eliminated in consolidation. In determining whether the Company has a controlling financial interest in a joint venture and the requirement to consolidate the accounts of that entity, management considers factors such as ownership interest, authority to make decisions and contractual and substantive participating rights of the other partners or members as well as whether the entity is a variable interest entity for which the Company is the primary beneficiary. The Company had no investments in joint ventures or variable interest entities as of December 31, 2014 or 2013.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Management makes significant estimates regarding revenue recognition, purchase price allocations to record investments in real estate, and fair value measurements, as applicable.

Organizational Costs

Organizational costs include accounting, legal and regulatory fees incurred related to the formation of the Company. Organizational costs are expensed as incurred.

Investments in Real Estate

The Company evaluates the inputs, processes and outputs of each asset acquired to determine if the transaction is a business combination or asset acquisition. If an acquisition qualifies as a business combination, the related transaction costs are recorded as an expense in the consolidated statement of operations. If an acquisition qualifies as an asset acquisition, the related transaction costs are generally capitalized and subsequently amortized over the useful life of the acquired assets.

In business combinations, the Company allocates the purchase price of acquired properties to tangible and identifiable intangible assets or liabilities based on their respective fair values. Tangible assets may include land, land improvements, buildings, and fixtures. Intangible assets or liabilities may include the value of in-place leases, above- and below-market leases and other identifiable intangible assets or liabilities based on lease or property specific characteristics.

The fair value of the tangible assets of an acquired property with an in-place operating lease is determined by valuing the property as if it were vacant, and the “as-if-vacant” value is then allocated to the tangible assets based on the fair value of the tangible assets. The fair value of in-place leases is determined by considering estimates of carrying costs during the expected lease-up periods, current market conditions, as well as costs to execute similar leases. The fair value of above-market or below-market leases is recorded based on the present value of the difference between the contractual amount to be paid pursuant to the in-place lease and the Company's estimate of the fair market lease rate for the corresponding in-place lease, measured over the remaining term of the lease, including any below-market fixed rate renewal options for below-market leases. The fair value of other intangible assets, such as real estate tax abatements and signage rights, are recorded based on the present value of the expected benefit and amortized over the expected useful life.

In allocating the fair value to assumed mortgages, if applicable, amounts are recorded to debt premiums or discounts based on the present value of the estimated cash flows, which is calculated to account for either above- or below-market interest rates.

In allocating non-controlling interests, if applicable, amounts are recorded based on the fair value of units issued at the date of acquisition, as determined by the terms of the applicable agreement.

In making estimates of fair values for purposes of allocating purchase price, the Company utilizes a number of sources, including real estate valuations prepared by independent valuation firms. The Company also considers information and other factors including: market conditions, the industry in which the tenant operates, characteristics of the real estate such as location, size, demographics, value and comparative rental rates, tenant credit profile and the importance of the location of the real estate to the operations of the tenant’s business.

The Company is required to present the operations related to properties that have been sold or properties that are intended to be sold as discontinued operations in the consolidated statements of operations and comprehensive loss at the lesser of carrying amount or fair value less estimated selling costs for all periods presented to the extent the disposal of a component represents a strategic shift that has had or will have a major effect on the Company's operations and financial results. Properties that are intended to be sold will be designated as "held for sale" on the consolidated balance sheets when they meet specific criteria to be presented as held for sale. Properties are no longer depreciated when they are classified as held for sale. The Company did not have any properties held for sale as of December 31, 2014 or 2013.

Intangible assets and acquired lease liabilities consist of the following as of December 31, 2014. The Company had no intangible assets and liabilities as of December 31, 2013.

	December 31, 2014
	Gross Carrying		Accumulated		Net Carrying
(In thousands)	Amount		Amortization		Amount
Intangible assets:
In-place leases	$	11,920	$	721	$	11,199
Other intangibles	31,447		270		31,177
Above-market leases	3,911		136		3,775
Acquired intangible assets	$	47,278	$	1,127	$	46,151
Intangible liabilities:
Below-market lease liabilities	$	15,637	$	270	$	15,367

Depreciation and Amortization

The Company is required to make subjective assessments as to the useful lives of the components of the Company’s real estate investments for purposes of determining the amount of depreciation to record on an annual basis. These assessments have a direct impact on the Company’s net income because if the Company were to shorten the expected useful lives of the Company’s real estate investments, the Company would depreciate these investments over fewer years, resulting in more depreciation expense and lower net income on an annual basis.

Depreciation is computed using the straight-line method over the estimated useful lives of up to 40 years for buildings, 15 years for land improvements, five years for fixtures and improvements, and the shorter of the useful life or the remaining lease term for tenant improvements and leasehold interests.

Capitalized above-market lease values are amortized as a reduction of rental income over the remaining terms of the respective leases. Capitalized below-market lease values are amortized as an increase to rental income over the remaining terms of the respective leases and expected below-market renewal option periods.

The value of in-place leases, exclusive of the value of above-market and below-market in-place leases, is amortized to expense over the remaining periods of the respective leases.

Assumed mortgage premiums or discounts, if applicable, are amortized as an increase or reduction to interest expense over the remaining term of the respective mortgages.

The following table provides the weighted-average remaining amortization and accretion periods as of December 31, 2014, for intangible assets and liabilities and the projected amortization expense and adjustments to revenues for the next five years:

(Dollar amounts in thousands)	Weighted-Average Remaining Amortization Period	2015			2016			2017			2018			2019
In-place leases	7.2	$	2,442		$	2,067		$	1,512		$	1,242		$	1,066
Other intangibles	36.5	1,165			1,165			1,165			1,165			1,165
Total to be included in depreciation and amortization		$	3,607		$	3,232		$	2,677		$	2,407		$	2,231
Above-market lease assets	9.4	$	(404	)	$	(404	)	$	(404	)	$	(402	)	$	(400	)
Below-market lease liabilities	18.0	1,275			1,267			1,176			1,098			1,037
Total to be included in rental income		$	871		$	863		$	772		$	696		$	637

For the year endedDecember 31, 2014, amortization of in-place leases and other intangibles of $1.2 million is included in depreciation and amortization on the consolidated statements of operations and comprehensive loss. No amortization was recognized for the period from December 19, 2013 (date of inception) to December 31, 2013. For the year endedDecember 31, 2014, net amortization and accretion of above- and below-market lease intangibles of $0.1 million is included in rental income on the consolidated statements of operations and comprehensive loss. No amortization or accretion was recognized for the period from December 19, 2013 (date of inception) to December 31, 2013.

Impairment of Long Lived Assets

When circumstances indicate the carrying value of a property may not be recoverable, the Company reviews the asset for impairment. This review is based on an estimate of the future undiscounted cash flows, excluding interest charges, expected to result from the property’s use and eventual disposition. These estimates consider factors such as expected future operating income, market and other applicable trends and residual value, as well as the effects of leasing demand, competition and other factors. If impairment exists due to the inability to recover the carrying value of a property, an impairment loss is recorded to the extent that the carrying value exceeds the estimated fair value of the property for properties to be held and used. For properties held for sale, the impairment loss is the adjustment to fair value less estimated cost to dispose of the asset. These assessments have a direct impact on net income because recording an impairment loss results in an immediate negative adjustment to net income. The Company did not recognize any impairment charges for the year endedDecember 31, 2014 or for the period from December 19, 2013 (date of inception) to December 31, 2013.

Cash and Cash Equivalents

Cash and cash equivalents includes cash in bank accounts as well as investments in highly liquid money market funds with original maturities of three months or less. The Company deposits cash with high quality financial institutions. These deposits are guaranteed by the Federal Deposit Insurance Company ("FDIC") up to an insurance limit. At December 31, 2014, the Company had deposits of $184.3 million, of which $184.1 million was in excess of the amount insured by the FDIC. The Company had no cash and cash equivalents as of December 31, 2013. Although the Company bears risk to amounts in excess of those insured by the FDIC, it does not anticipate any losses as a result.

Investments in Securities

The Company classifies its investments in debt or equity securities into one of three classes: held-to-maturity, available-for-sale or trading, as applicable.  Investments in debt securities that the Company has the positive intent and ability to hold until maturity are classified as held-to-maturity and are reported at amortized cost.  Debt and equity securities that are bought and held principally for the purposes of selling them in the near future are classified as trading securities.  Debt and equity securities not classified as trading securities or as held-to-maturity securities are classified as available-for-sale securities and are reported at fair value, with unrealized holding gains and losses reported as a component of equity within accumulated other comprehensive income or loss. Gains or losses on securities sold are based on the specific identification method.

The Company evaluates its investments in securities for impairment or other-than-temporary impairment on a quarterly basis.  The Company reviews each investment individually and assesses factors that may include (i) if the carrying amount of an investment exceeds its fair value, (ii) if there has been any change in the market as a whole or in the investee’s market, (iii) if there are any plans to sell the investment in question or if the Company believes it may be forced to sell its investment, and (iv) if there have been any other factors that would indicate the possibility of the existence of an other-than-temporary impairment. The fair value of the Company’s investments in available-for-sale securities generally rise and fall based on current market conditions. If, after reviewing relevant factors surrounding an impaired security, the Company determines that it will not recover its full investment in an impaired security, the Company recognizes an other-than-temporary impairment charge in the consolidated statements of operations and comprehensive loss in the period in which the other-than-temporary impairment is discovered, regardless of whether or not the Company plans to sell or believes it will be forced to sell the security in question.  The Company did not recognize any other-than-temporary impairment charges for the year endedDecember 31, 2014 or the period from December 19, 2013 (date of inception) to December 31, 2013.

Deferred Costs

Deferred costs may consist of deferred financing costs, deferred offering costs and deferred leasing costs. Deferred financing costs represent commitment fees, legal fees, and other costs associated with obtaining commitments for financing. These costs are amortized over the terms of the respective financing agreements using the effective interest method. Unamortized deferred financing costs are expensed when the associated debt is refinanced or repaid before maturity. Costs incurred in seeking financial transactions that do not close are expensed in the period in which it is determined that the financing will not close.

Deferred offering costs represent professional fees, fees paid to various regulatory agencies, and other costs incurred in connection with registering to sell shares of the Company's common stock.

Deferred leasing costs, consisting primarily of lease commissions and professional fees incurred, are deferred and amortized over the term of the lease.

As of December 31, 2014, the Company had no deferred costs. As of December 31, 2013, the Company had approximately $35,000 in deferred costs, which were comprised entirely of offering costs and reclassified to stockholders' equity upon commencement of the IPO.

Share Repurchase Program

The Company has a Share Repurchase Program ("SRP") that enables stockholders to sell their shares to the Company. Under the SRP, stockholders may request that the Company redeem all or any portion of their shares, subject to certain minimum conditions described below, if such repurchase does not impair the Company's capital or operations.

Prior to the time that the Company's shares are listed on a national securities exchange and until the Company begins to calculate its NAV, the repurchase price per share will depend on the length of time investors have held such shares as follows: after one year from the purchase date — the lower of $23.13 or 92.5% of the amount they actually paid for each share; and, after two years from the purchase date —the lower of $23.75 or 95.0% of the amount they actually paid for each share (in each case, as adjusted for any stock distributions, combinations, splits and recapitalizations).

Once the Company begins to calculate its NAV, the price per share that the Company will pay to repurchase the Company's shares on any business day will be the Company's NAV per share of common stock for the quarter, calculated after the close of business on the first business day of each quarter. Subject to limited exceptions, stockholders who redeem their shares of the Company's common stock within the first four months from the date of purchase will be subject to a short-term trading fee of 2% of the aggregate NAV per share of the shares of common stock received. Because the Company's NAV per share will be calculated quarterly, the redemption price may fluctuate between the redemption request day and the date on which the Company pays redemption proceeds.

Until the Company begins to calculate its NAV, the Company is only authorized to repurchase shares pursuant to the SRP using the proceeds received from the DRIP and will limit the amount spent to repurchase shares in a given quarter to the amount of proceeds received from the DRIP in that same quarter. In addition, the board of directors may reject a request for redemption, at any time. Due to these limitations, the Company cannot guarantee that it will accommodate all repurchase requests. Purchases under the SRP by the Company will be limited in any calendar year to 5% of the weighted average number of shares outstanding during the prior year.

When a stockholder requests redemption and the redemption is approved, the Company will reclassify such obligation from equity to a liability based on the settlement value of the obligation. Shares purchased under the SRP will have the status of authorized but unissued shares. As of December 31, 2014, no shares had been repurchased or requested to be repurchased.

Distribution Reinvestment Plan

Pursuant to the DRIP, stockholders may elect to reinvest distributions by purchasing shares of common stock in lieu of receiving cash. No dealer manager fees or selling commissions are paid with respect to shares purchased pursuant to the DRIP. Participants purchasing shares pursuant to the DRIP have the same rights and are treated in the same manner as if such shares were issued pursuant to the IPO. The board of directors may designate that certain cash or other distributions be excluded from the DRIP. The Company has the right to amend any aspect of the DRIP or terminate the DRIP with ten days' notice to participants. Shares issued under the DRIP are recorded to equity in the accompanying consolidated balance sheets in the period distributions are declared. As of December 31, 2014, there were 190,584 shares issued under the DRIP.

Revenue Recognition

The Company's revenues, which are derived primarily from rental income, include rents that each tenant pays in accordance with the terms of each lease reported on a straight-line basis over the term of the lease. Since many of the Company's leases provide for rental increases at specified intervals, straight-line basis accounting requires the Company to record a receivable, and include in revenues, unbilled rent receivables that the Company will only receive if the tenant makes all rent payments required through the expiration of the initial term of the lease. The Company defers the revenue related to lease payments received from tenants in advance of their due dates. When the Company acquires a property, the terms of existing leases are considered to commence as of the acquisition date for the purposes of this calculation.

The Company will continually review receivables related to rent and unbilled rent receivables and determine collectability by taking into consideration the tenant's payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in the area in which the property is located. In the event that the collectability of a receivable is in doubt, the Company will record an increase in the Company's allowance for uncollectible accounts or record a direct write-off of the receivable in the Company's consolidated statements of operations and comprehensive loss.

Cost recoveries from tenants are included in operating expense reimbursement in the period the related costs are incurred, as applicable.

The Company may own certain properties with leases that include provisions for the tenant to pay contingent rental income based on a percent of the tenant's sales upon the achievement of certain sales thresholds or other targets, which may be monthly, quarterly or annual targets. As the lessor to the aforementioned leases, the Company defers the recognition of contingent rental income until the specified target that triggered the contingent rental income is achieved, or until such sales upon which percentage rent is based are known. If the Company owns certain properties with leases that include provisions for the tenant to pay contingent rental income, contingent rental income will be included in rental income on the consolidated statements of operations and comprehensive loss.

Offering and Related Costs

Offering and related costs include all expenses incurred in connection with the Company's IPO. Offering costs (other than selling commissions and the dealer manager fee) of the Company may be paid by the Advisor, the Dealer Manager or their affiliates on behalf of the Company. Offering costs will include all expenses incurred by the Company in connection with its IPO as of such date. These costs include but are not limited to (i) legal, accounting, printing, mailing, and filing fees; (ii) escrow service related fees; (iii) reimbursement of the Dealer Manager for amounts it may pay to reimburse the bona fide due diligence expenses of broker-dealers; and (iv) reimbursement to the Advisor for a portion of the costs of its employees and other costs in connection with preparing supplemental sales materials and related offering activities. The Company is obligated to reimburse the Advisor or its affiliates, as applicable, for organization and offering costs paid by them on behalf of the Company, provided that the Advisor is obligated to reimburse the Company to the extent organization and offering costs (excluding selling commissions and the dealer manager fee) incurred by the Company in its offering exceed 2.0% of gross offering proceeds. As a result, these costs are only a liability of the Company to the extent aggregate selling commissions, dealer manager fees and other organization and offering costs do not exceed 12.0% of the gross proceeds determined at the end of the IPO (See Note 8 — Related Party Transactions and Arrangements).

Share-Based Compensation

The Company has a stock-based incentive award plan, which is accounted for under the guidance for share based payments. The expense for such awards are included in general and administrative expenses and are recognized over the vesting period or when the requirements for exercise of the award have been met (See Note 10 — Share-Based Compensation).

Income Taxes

The Company intends to elect and qualify to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code commencing with the taxable year ended December 31, 2014. In order to qualify and continue to qualify as a REIT, the Company must meet a number of organizational and operational requirements, including a requirement that the Company distribute annually at least 90% of the Company’s REIT taxable income to the Company’s stockholders. If the Company fails to continue to qualify as a REIT in any taxable year and does not qualify for certain statutory relief provisions, the Company will be subject to U.S. federal and state income taxes at regular corporate rates (including any applicable alternative minimum tax) beginning with the year in which it fails to qualify and may be precluded from being able to elect to be treated as a REIT for the Company’s four subsequent taxable years. Even if the Company qualifies for taxation as a REIT, it may be subject to certain state and local taxes on its income and property, and federal income and excise taxes on its undistributed income. Because the election of REIT status is reasonably expected, income tax expense has been determined assuming the Company is a REIT.

Per Share Data

The Company calculates basic income (loss) per share by dividing net income (loss) for the period by weighted-average shares of its common stock outstanding for a respective period. Diluted income per share takes into account the effect of dilutive instruments, such as OP units, Class B units and unvested restricted stock, but uses the average share price for the period in determining the number of incremental shares that are to be added to the weighted-average number of shares outstanding. See Note 11 - Net Loss Per Share for a discussion of the common share equivalents which have been excluded from the calculation of diluted net loss per share as their impact would have been antidilutive.

Reportable Segments

The Company has determined that it has one reportable segment, with activities related to investing in real estate. The Company's investments in real estate generate rental revenue and other income through the leasing of properties, which will comprise 100% of total consolidated revenues. Management evaluates the operating performance of the Company's investments in real estate on an individual property level.

Recent Accounting Pronouncements

In April 2014, the Financial Accounting Standards Board ("FASB") amended the requirements for reporting discontinued operations. Under the revised guidance, in addition to other disclosure requirements, a disposal of a component of an entity or a group of components of an entity is required to be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity's operations and financial results when the component or group of components meets the criteria to be classified as held for sale, disposed of by sale or other than by sale. The Company has adopted the provisions of this guidance effective January 1, 2014, and has applied the provisions prospectively. The adoption of this guidance did not have a material impact on the Company's consolidated financial position, results of operations or cash flows.

In May 2014, the FASB issued revised guidance relating to revenue recognition. Under the revised guidance, an entity is required to recognize revenue when it transfers 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. The revised guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is not permitted under GAAP. The revised guidance allows entities to apply the full retrospective or modified retrospective transition method upon adoption. The Company has not yet selected a transition method and is currently evaluating the impact of the new guidance.

In August 2014, the FASB issued guidance relating to disclosure of uncertainties about an entity's ability to continue as a going concern. In connection with preparing financial statements for each annual and interim reporting period, management should evaluate whether there are conditions or events that raise substantial doubt about the entity's ability to continue as a going concern within one year after the date that the financial statements are issued. If conditions or events raise substantial doubt about the entity's ability to continue as a going concern, the guidance requires management to disclose information that enables users of the financial statements to understand the conditions or events that raised the substantial doubt, management's evaluation of the significance of the conditions or events that led to the doubt and management's plans that are intended to mitigate the conditions or events that raised substantial doubt about the entity's ability to continue as a going concern. The guidance is effective for the annual period ending after December 15, 2016 and for annual and interim periods thereafter. The Company has elected to adopt the provisions of this guidance effective December 31, 2014, as early application is permitted. The adoption of this guidance had no material impact on the Company's consolidated financial position, results of operations or cash flows.

In February 2015, the FASB amended the accounting for consolidation of certain legal entities. The amendments modify the evaluation of whether certain legal entities are variable interest entities ("VIEs") or voting interest entities, eliminate the presumption that a general partner should consolidate a limited partnership, affect the consolidation analysis of reporting entities that are involved with VIEs (particularly those that have fee arrangements and related party relationships) and provide a scope exception from consolidation guidance for reporting entities with interests in legal entities. The revised guidance is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted, including adoption in an interim period. If the Company decides to early adopt the revised guidance in an interim period, any adjustments will be reflected as of the beginning of the fiscal year that includes the interim period. The Company has not yet selected a transition method and is currently evaluating the impact of the new guidance.

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Summary of Significant Accounting Policies (Intangible Leases) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 47,278
Accumulated Amortization	1,127
Net Carrying Amount	46,151
Below-market leases, Gross Carrying Amount	15,637
Below market lease, Accumulated Amortization	270
Below market lease, Net Carrying Amount	15,367	0
In-place leases
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	11,920
Accumulated Amortization	721
Net Carrying Amount	11,199
Other intangibles
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	31,447
Accumulated Amortization	270
Net Carrying Amount	31,177
Above-market leases
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	3,911
Accumulated Amortization	136
Net Carrying Amount	$ 3,775

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Fair Value of Financial Instruments (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	$ 490	$ 0
Quoted Prices in Active Markets
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	490
Significant Other Observable Inputs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	0
Significant Unobservable Inputs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	$ 0

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Subsequent Events - Sale of Common Stock (Details) (USD $) In Thousands, except Share data, unless otherwise specified	0 Months Ended	12 Months Ended		3 Months Ended	15 Months Ended
	Dec. 31, 2013	Dec. 31, 2014	Dec. 31, 2014	Mar. 15, 2015	Mar. 13, 2015	Mar. 15, 2015
Subsequent Event [Line Items]
Common stock, shares outstanding (in shares)	0	20,569,012	20,569,012
Proceeds from issuance of common stock	$ 0	$ 503,420	$ 509,900
Issuance of common stock		505,423	509,949
Subsequent Event
Subsequent Event [Line Items]
Common stock, shares outstanding (in shares)				24,000,000		24,000,000
Proceeds from issuance of common stock					595,000
Issuance of common stock				$ 85,100		$ 595,049

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CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Real estate investments, at cost:
Land	$ 83,316	$ 0
Building, fixtures and improvements	139,489	0
Acquired intangible assets	47,278	0
Total real estate investments, at cost	270,083	0
Less accumulated depreciation and amortization	(1,970)	0
Total real estate investments, net	268,113	0
Cash and cash equivalents	184,341	0
Investment securities, at fair value	490	0
Receivables for sale of common stock	2,003	0
Prepaid expenses and other assets	3,618	0
Deferred costs, net	0	35
Total assets	458,565	35
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable, accrued expenses and other liabilities (including amounts due to affiliates of $1,109 and $0 at December 31, 2014 and 2013, respectively)	3,025	35
Below-market lease liabilities, net	15,367	0
Deferred revenue	225	0
Distributions payable	2,542	0
Total liabilities	21,159	35
Preferred stock, $0.01 par value, 50,000,000 shares authorized, none issued and outstanding at December 31, 2014 and 2013	0	0
Common stock, $0.01 par value, 300,000,000 shares authorized, 20,569,012 shares issued and outstanding as of December 31, 2014 and no shares issued and outstanding as of December 31, 2013	206	0
Additional paid-in capital	454,131	0
Accumulated other comprehensive loss	(24)	0
Accumulated deficit	(16,907)	0
Total stockholders' equity	437,406	0
Total liabilities and stockholders' equity	$ 458,565	$ 35

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Related Party Transactions and Arrangements - Fees Paid in Connection with the IPO, Offering Costs and Reimbursements (Details) (USD $) In Thousands, unless otherwise specified	0 Months Ended	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2014
Related Party Transaction [Line Items]
Due from affiliates	$ 0	$ 0
Fees and Expense Reimbursement, Stock Offering | Realty Capital Securities, LLC | Advisor and Dealer Manager
Related Party Transaction [Line Items]
Total commissions and fees incurred from the Dealer Manager	0	6,656
Due from affiliates	$ 0	$ 912

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CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	0 Months Ended	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2014
Cash flows from operating activities:
Net loss attributable to stockholders	$ 0	$ (6,519)
Adjustment to reconcile net loss to net cash provided by operating activities:
Depreciation	0	843
Amortization of intangibles	0	1,172
Amortization (accretion) of market lease assets (liabilities), net	0	(134)
Share-based compensation	0	13
Changes in assets and liabilities:
Prepaid expenses and other assets	0	(1,550)
Accounts payable, accrued expenses and other liabilities	0	985
Deferred revenue	0	225
Net cash used in operating activities	0	(4,965)
Cash flows from investing activities:
Investments in real estate	0	(255,967)
Purchase of investment securities	0	(514)
Capital expenditures	0	(86)
Net cash used in investing activities	0	(256,567)
Cash flows from financing activities:
Payments of offering costs and fees related to common stock issuances	0	(54,227)
Proceeds from issuance of common stock	0	503,420
Distributions paid	0	(3,320)
Net cash provided by financing activities	0	445,873
Net change in cash and cash equivalents	0	184,341
Cash and cash equivalents, beginning of period	0	0
Cash and cash equivalents, end of period	0	184,341
Supplemental Cash Flow Information [Abstract]
Receivables for sale of common stock	0	2,003
Accrued offering costs	0	1,363
Deferred costs, net	35	0
Reclassification of deferred offering costs to equity	0
Liabilities assumed in real estate transactions	0	642
Common stock issued through distribution reinvestment plan	$ 0	$ 4,526

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Real Estate Investments - Allocation of Assets (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014 property
Business Acquisition [Line Items]
Land	$ 83,316
Buildings, fixtures and improvements	139,403
Total tangible assets	222,719
Total assets acquired, net	254,541
Funds deposited in escrow	2,068
Other liabilities assumed	(642)
Cash paid for acquired real estate investment	255,967
Number of properties purchased	4
In-place leases
Business Acquisition [Line Items]
In-place leases	12,102
Above-market leases
Business Acquisition [Line Items]
In-place leases	3,911
Other intangibles
Business Acquisition [Line Items]
In-place leases	31,446
Below Market Lease
Business Acquisition [Line Items]
Below-market lease liabilities	$ (15,637)

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Summary of Significant Accounting Policies Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2014

Accounting Policies [Abstract]

Schedule of Intangible Assets and Goodwill

Intangible assets and acquired lease liabilities consist of the following as of December 31, 2014. The Company had no intangible assets and liabilities as of December 31, 2013.

	December 31, 2014
	Gross Carrying		Accumulated		Net Carrying
(In thousands)	Amount		Amortization		Amount
Intangible assets:
In-place leases	$	11,920	$	721	$	11,199
Other intangibles	31,447		270		31,177
Above-market leases	3,911		136		3,775
Acquired intangible assets	$	47,278	$	1,127	$	46,151
Intangible liabilities:
Below-market lease liabilities	$	15,637	$	270	$	15,367

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense

The following table provides the weighted-average remaining amortization and accretion periods as of December 31, 2014, for intangible assets and liabilities and the projected amortization expense and adjustments to revenues for the next five years:

(Dollar amounts in thousands)	Weighted-Average Remaining Amortization Period	2015			2016			2017			2018			2019
In-place leases	7.2	$	2,442		$	2,067		$	1,512		$	1,242		$	1,066
Other intangibles	36.5	1,165			1,165			1,165			1,165			1,165
Total to be included in depreciation and amortization		$	3,607		$	3,232		$	2,677		$	2,407		$	2,231
Above-market lease assets	9.4	$	(404	)	$	(404	)	$	(404	)	$	(402	)	$	(400	)
Below-market lease liabilities	18.0	1,275			1,267			1,176			1,098			1,037
Total to be included in rental income		$	871		$	863		$	772		$	696		$	637

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Real Estate Investments - Proforma (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	0 Months Ended			3 Months Ended				12 Months Ended
	Dec. 31, 2013	Dec. 31, 2013		Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2014
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items]
Pro forma revenues		$ 399	[1]					$ 11,203	[1]
Pro forma net loss		(6,227)	[1]					(2,746)	[1]
Fully diluted pro forma net income per share attributable to stockholders (in dollars per share)								$ (0.61)	[2]
Total revenues		0		2,268	540	43	0	2,851
Net Income (Loss) Attributable to Parent	0	0		4,054	2,235	214	16	6,519
2014 Acquisitions [Member]
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items]
Total revenues								2,900
Net Income (Loss) Attributable to Parent								$ 100

[1] For the the year ended December 31, 2014, aggregate revenues and net income derived from the Company's acquisitions (for the Company's period of ownership) were $2.9 million and $0.1 million, respectively.

[2] The Company did not have any shares outstanding as of December 31, 2013.

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Investment Securities (Tables)

12 Months Ended

Dec. 31, 2014

Investments, Debt and Equity Securities [Abstract]

Unrealized Gain (Loss) on Investments

The following table details the unrealized gains and losses on investment securities by security type as of December 31, 2014:

(In thousands)	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Equity securities	$	514	$	—	$	(24	)	$	490

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Organization

12 Months Ended

Dec. 31, 2014

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization

Organization

American Realty Capital New York City REIT, Inc. (the “Company”) was incorporated on December 19, 2013 as a Maryland corporation and intends to elect and qualify to be taxed as a real estate investment trust (“REIT”) for U.S. federal income tax purposes beginning with its taxable year ended December 31, 2014. On April 24, 2014, the Company commenced its initial public offering (the "IPO") on a "reasonable best efforts" basis of up to 30.0 million shares of common stock, $0.01 par value per share, at a price of $25.00 per share, subject to certain volume and other discounts, pursuant to a registration statement on Form S-11, as amended (File No. 333-194135) (the "Registration Statement") filed with the U.S. Securities and Exchange Commission (the "SEC") under the Securities Act of 1933, as amended (the "Securities Act"). The Registration Statement also covers up to 10.5 million shares available pursuant to a distribution reinvestment plan (the "DRIP") under which the Company's common stockholders may elect to have their distributions reinvested in additional shares of the Company's common stock at a price of $23.75 per share, which is equal to 95% of the offering price in the IPO.

On May 29, 2014, the Company received and accepted subscriptions in excess of the minimum offering amount for the IPO of $2.0 million in shares, broke general escrow and issued shares of common stock to initial investors who were admitted as stockholders of the Company. As of December 31, 2014, the Company had 20.6 million shares of common stock outstanding, including unvested restricted shares and shares issued pursuant to the DRIP, and had received total gross proceeds from the IPO of $509.9 million, inclusive of $4.5 million from the DRIP. Until the net asset value ("NAV") pricing date, the per share purchase price in the IPO will be up to $25.00 per share (including the maximum allowed to be charged for commissions and fees) and shares issued under the DRIP will be equal to $23.75 per share, which is equal to 95% of the offering price in the primary offering. Beginning with the NAV pricing date, the per share price for shares in the IPO and under the DRIP will vary quarterly and will be equal to the NAV per share, as determined by New York City Advisors, LLC (the "Advisor"), plus applicable commissions and fees, in the case of the primary offering, and the per share purchase price in the DRIP will be equal to the NAV per share. The NAV pricing date means the date the Company first publishes an estimated per share NAV, which will be on or prior to October 26, 2016, which is 150 days following the second anniversary from the date the Company broke escrow in the IPO. The Company reserves the right to reallocate shares covered in the Registration Statement between the IPO and the DRIP.

The Company was formed to invest its assets in properties in the five boroughs of New York City, with a focus on Manhattan. The Company may also purchase certain real estate assets that accompany office properties, including retail spaces and amenities, as well as hospitality assets, residential assets and other property types exclusively in New York City. All such properties may be acquired and owned by the Company alone or jointly with another party. As of December 31, 2014, the Company owned four properties consisting of 299,191 rentable square feet, which were 75.5% leased, with a weighted average remaining lease term of 7.3 years.

Substantially all of the Company’s business is conducted through New York City Operating Partnership, L.P. (the “OP”), a Delaware limited partnership. The Company is the sole general partner and holds substantially all of the units of limited partner interests in the OP (“OP units”). The Advisor contributed $2,020 to the OP in exchange for 90 units of limited partner interest in the aggregate OP ownership, which represents a nominal percentage of the aggregate OP ownership. A holder of OP units has the right to convert OP units for the cash value of a corresponding number of shares of the Company's common stock or, at the option of the OP, a corresponding number of shares of the Company's common stock, in accordance with the limited partnership agreement of the OP, provided, however, that such OP units must have been outstanding for at least one year. The remaining rights of the limited partners in the OP 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.

The Company has no direct employees. The Advisor has been retained by the Company to manage the Company's affairs on a day-to-day basis. The Company has retained New York City Properties, LLC (the “Property Manager”) to serve as the Company’s property manager. Realty Capital Securities, LLC (the “Dealer Manager”) serves as the dealer manager of the IPO. The Advisor, Property Manager and Dealer Manager are under common control with the parent of American Realty Capital III, LLC ("the Sponsor"), as a result of which they are related parties, and each of which has received or will receive compensation, fees and expense reimbursements for services related to the IPO and the investment and management of the Company's assets. The Advisor, New York City Special Limited Partner, LLC (the "Special Limited Partner"), Property Manager and Dealer Manager have also received or will also receive fees, distributions and other compensation during the offering, acquisition, operational and liquidation stages.

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CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Statement of Financial Position [Abstract]
Due from affiliates	$ 1,109	$ 0
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	50,000,000	50,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	300,000,000	300,000,000
Common stock, shares issued	20,569,012	0
Common stock, shares outstanding	20,569,012	0

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Net Loss Per Share

12 Months Ended

Dec. 31, 2014

Equity [Abstract]

Net Loss Per Share

Net Loss Per Share

The following is a summary of the basic and diluted net loss per share computation for the periods presented:

				Period from
				December 19, 2013
	Year Ended			(date of inception) to
	December 31, 2014			December 31, 2013
Net loss (in thousands)	$	(6,519	)	$	—
Basic and diluted weighted average shares outstanding	4,530,066			—
Basic and diluted net loss per share	$	(1.44	)	$	—

The Company had the following common share equivalents as of December 31, 2014 and 2013, which were excluded from the calculation of diluted loss per share attributable to stockholders as the effect would have been antidilutive:

	December 31,
	2014	2013
Unvested restricted stock	3,999	—
OP Units	90	—
Class B units	8,361	—
Total common share equivalents	12,450	—

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Document and Entity Information (USD $) In Millions, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Mar. 15, 2015	Jun. 30, 2014
Document and Entity Information [Abstract]
Entity Registrant Name	AMERICAN REALTY CAPITAL NEW YORK CITY REIT, INC.
Entity Central Index Key	0001595527
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Document Type	10-K
Document Period End Date	Dec. 31, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	FY
Amendment Flag	false
Entity Common Stock, Shares Outstanding		23,988,980
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Public Float			$ 75.4

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Quarterly Results (Unaudited)

12 Months Ended

Dec. 31, 2014

Quarterly Financial Information Disclosure [Abstract]

Quarterly Results (Unaudited)

Quarterly Results (Unaudited)

Presented below is a summary of the unaudited quarterly financial information for the year ended December 31, 2014. There was no net income or loss for the period from December 19, 2013 (date of inception) to December 31, 2013.

(In thousands, except share and per share data)	March 31, 2014			June 30, 2014			September 30, 2014			December 31, 2014
Total revenues	$	—		$	43		$	540		$	2,268
Net loss attributable to stockholders	$	(16	)	$	(214	)	$	(2,235	)	$	(4,054	)
Weighted average shares outstanding	8,888			690,143			8,543,271			17,938,717
Basic and diluted net loss per share attributable to stockholders	NM			$	(0.31	)	$	(0.26	)	$	(0.23	)

________________

NM - Not meaningful

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CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (USD $) In Thousands, except Share data, unless otherwise specified	0 Months Ended	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2014
Revenues:
Rental income	$ 0	$ 2,661
Operating expense reimbursements	0	190
Total revenues	0	2,851
Operating expenses:
Property operating	0	688
Acquisition and transaction related	0	6,148
General and administrative	0	535
Depreciation and amortization	0	2,015
Total operating expenses	0	9,386
Operating loss	0	(6,535)
Other income:
Income from investment securities	0	14
Other income	0	2
Total other income	0	16
Net loss	0	(6,519)
Other comprehensive loss:
Unrealized loss on investment securities	0	(24)
Comprehensive loss	$ 0	$ (6,543)
Basic and diluted weighted average shares outstanding (in shares)	0	4,530,066
Basic and diluted net loss per share (in dollars per share)	$ 0.00	$ (1.44)

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Common Stock

12 Months Ended

Dec. 31, 2014

Equity [Abstract]

Common Stock

Common Stock

The Company had 20.6 million shares of common stock outstanding, including unvested restricted shares and shares issued pursuant to the DRIP, for gross proceeds of $509.9 million as of December 31, 2014. The Company had no shares of common stock outstanding and had received no proceeds as of December 31, 2013.

On May 22, 2014, the Company's board of directors authorized, and the Company declared, a distribution payable to stockholders of record each day during the applicable period at a rate equal to $0.0041438356 per day based on a price of $25.00 per share of common stock. The distributions began to accrue on June 13, 2014, which date represents the closing of the Company’s initial property acquisition. The distributions are payable by the 5th day following each month end to stockholders of record at the close of business each day during the prior month. Distribution payments are dependent on the availability of funds. The board of directors may reduce the amount of distributions paid or suspend distributions payments at any time and therefore distribution payments are not assured.

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Fair Value of Financial Instruments

12 Months Ended

Dec. 31, 2014

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

Fair Value of Financial Instruments

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 instrument. This alternative approach also reflects the contractual terms of the instrument, as applicable, including the period to maturity, and may use observable market-based inputs, including interest rate curves and implied volatilities, and unobservable inputs, such as expected volatility. The 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 that reflect the entity's own 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. However, the Company expects that changes in classifications between levels will be rare.

The Company has an investment in a real estate income fund that is traded in active markets and therefore, due to the availability of quoted market prices in active markets, classified this investment as Level 1 in the fair value hierarchy.

The following table presents information about the Company's asset measured at fair value on a recurring basis as of December 31, 2014, aggregated by the level in the fair value hierarchy within which that instrument falls. The Company had no assets measured at fair value on a recurring basis as of December 31, 2013.

	Quoted Prices in Active Markets		Significant Other Observable Inputs		Significant Unobservable Inputs
(In thousands)	Level 1		Level 2		Level 3		Total
December 31, 2014
Investment Securities	$	490	$	—	$	—	$	490

There were no transfers between levels of the fair value hierarchy during the year endedDecember 31, 2014 or the period from December 19, 2013 (date of inception) to December 31, 2013.

Financial instruments not carried at fair value

The Company is required to disclose at least annually the fair value of financial instruments for which it is practicable to estimate the value. The fair value of short-term financial instruments such as cash, receivables for sale of common stock, prepaid expenses and other assets, accounts payable and distributions payable approximates their carrying value on the consolidated balance sheet due to their short-term nature.

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Real Estate Investments (Tables)

12 Months Ended

Dec. 31, 2014

Real Estate Investments, Net [Abstract]

Schedule of Business Acquisitions, by Acquisition

The following table presents the allocation of real estate assets acquired during the year ended December 31, 2014. No real estate assets were acquired during the period from December 19, 2013 (date of inception) to December 31, 2013.

	Year Ended
(Dollar amounts in thousands)	December 31, 2014
Real estate investments, at cost:
Land	$	83,316
Buildings, fixtures and improvements	139,403
Total tangible assets	222,719
Acquired intangibles:
In-place leases	12,102
Above-market lease assets	3,911
Other intangibles	31,446
Below-market lease liabilities	(15,637		)
Total assets acquired, net	254,541
Funds deposited in escrow	2,068
Other liabilities assumed	(642		)
Cash paid for acquired real estate investment	$	255,967
Number of properties purchased	4

Business Acquisition, Pro Forma Information

The following table presents unaudited pro forma information as if the acquisitions during the year ended December 31, 2014 had been consummated on December 19, 2013 (date of inception). Additionally, the unaudited pro forma net loss was adjusted to reclassify acquisition and transaction related expense of $6.1 million from the year ended December 31, 2014 to the period from December 19, 2013 (date of inception) to December 31, 2013.

				Period from
				December 19, 2013
	Year Ended			(date of inception) to
(In thousands, except per share data)	December 31, 2014			December 31, 2013
Pro forma revenues (1)	$	11,203		$	399
Pro forma net loss (1)	$	(2,746	)	$	(6,227	)
Basic and diluted pro forma net loss per share (2)	$	(0.61	)	N/A

(1) For the the year ended December 31, 2014, aggregate revenues and net income derived from the Company's acquisitions (for the Company's period of ownership) were $2.9 million and $0.1 million, respectively.

(2) The Company did not have any shares outstanding as of December 31, 2013.

Schedule of Future Minimum Rental Payments for Operating Leases

The following table presents future minimum base rental cash payments due to the Company over the next five years and thereafter. These amounts exclude contingent rent payments, as applicable, that may be collected 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 Base Rent Payments
2015	$	7,865
2016	7,653
2017	7,171
2018	6,723
2019	6,613
Thereafter	32,570
	$	68,595

Schedule of Annualized Rental Income by Major Tenants

The following table lists the tenants whose annualized rental income on a straight-line basis represented greater than 10% of total annualized rental income for all portfolio properties on a straight-line basis as of December 31, 2014:

		December 31,
Property Portfolio	Tenant	2014
400 E. 67th Street - Laurel Condominium	Cornell University	26.0%
400 E. 67th Street - Laurel Condominium	TD Bank, N.A.	10.9%

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Subsequent Events

12 Months Ended

Dec. 31, 2014

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

The Company has evaluated subsequent events through the filing of this Annual Report on Form 10-K and determined that there have not been any events that have occurred that would require adjustments to disclosures in the consolidated financial statements except for the following transactions:

Sales of Common Stock

As of March 15, 2015, the Company had 24.0 million shares of common stock outstanding, including unvested restricted shares and shares issued pursuant to the DRIP from total gross proceeds from the IPO and the DRIP of $595.0 million.

Total capital raised to date, including shares issued under the DRIP, is as follows:

Source of Capital (in thousands)	Inception to December 31, 2014		January 1, 2015 to March 15, 2015		Total
Common stock	$	509,949	$	85,100	$	595,049

On February 6, 2015, the Company's board of directors approved the reallocation of 10.0 million shares from the DRIP to the primary offering.

Acquisitions

On March 27, 2015, the Company, through a wholly owned subsidiary of the OP, completed the acquisition of the fee simple interest in an institutional quality office building located at 123 William Street in Downtown Manhattan. The contract purchase price was $253.0 million, exclusive of closing costs. The Company funded the purchase price with proceeds from the IPO and a $95.2 million mortgage note payable.

The seller of the property is a wholly owned subsidiary of EEGO-ARC 123 William JV, LLC, a joint venture in which New York REIT, Inc. ("NYRT") held a $35.1 million preferred equity interest. The sponsor and advisor of NYRT and the Sponsor and Advisor of the Company are under common control.

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Economic Dependency

12 Months Ended

Dec. 31, 2014

Economic Dependency [Abstract]

Economic Dependency

Economic Dependency

Under various agreements, the Company has engaged or will engage the Advisor, its affiliates and entities under common control with the Advisor to provide certain services that are essential to the Company, including asset management services, supervision of the management and leasing of properties owned by the Company, asset acquisition and disposition decisions, the sale of shares of the Company's common stock available for issue, transfer agency services, as well as other administrative responsibilities for the Company including accounting services, transaction management services and investor relations.

As a result of these relationships, the Company is dependent upon the Advisor and its affiliates. In the event that the Advisor and its affiliates are unable to provide the Company with the respective services, the Company will be required to find alternative providers of these services.

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Commitments and Contingencies

12 Months Ended

Dec. 31, 2014

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Litigation and Regulatory Matters

In the ordinary course of business, the Company may become subject to litigation, claims and regulatory matters. There are no material legal or regulatory proceedings pending or known to be contemplated against the Company.

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. As of December 31, 2014, 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 that it believes will have a material adverse effect on the results of operations.

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Related Party Transactions and Arrangements

12 Months Ended

Dec. 31, 2014

Related Party Transactions [Abstract]

Related Party Transactions and Arrangements

Related Party Transactions and Arrangements

As of December 31, 2014, the Special Limited Partner owned 8,888 shares of the Company’s outstanding common stock. The Special Limited Partner did not own any shares of the Company's outstanding common stock as of December 31, 2013.

As of December 31, 2014, the Company had $0.5 million invested in a mutual fund managed by an affiliate of the Sponsor (see Note 4 - Investment Securities). There is no obligation to purchase any additional shares and the shares can be sold at any time.

Fees Paid in Connection with the IPO

The Dealer Manager is paid fees and compensation in connection with the sale of the Company's common stock in the IPO. The Dealer Manager is paid a selling commission of up to 7.0% of the per share purchase price of offering proceeds before reallowance of commissions earned by participating broker-dealers. In addition, the Dealer Manager is paid up to 3.0% of the gross proceeds from the sale of shares as a dealer manager fee. The Dealer Manager may reallow its dealer manager fee to participating broker-dealers. A participating broker-dealer may elect to receive a fee equal to 7.5% of the gross proceeds from the sale of shares (not including selling commissions and dealer manager fees) by such participating broker-dealer, with 2.5% thereof paid at the time of such sale and 1.0% thereof paid on each anniversary of the closing of such sale up to and including the fifth anniversary of the closing of such sale. If this option is elected, the dealer manager fee will be reduced to 2.5% of gross proceeds (not including selling commissions and dealer manager fees).

The following table details total selling commissions and dealer manager fees incurred from and due to the Dealer Manager as of and for the periods presented:

			Period from
			December 19, 2013
	Year Ended		(date of inception) to		Payable as of
(In thousands)	December 31, 2014		December 31, 2013		December 31, 2014		December 31, 2013
Total commissions and fees incurred from the Dealer Manager	$	46,997	$	—	$	197	$	—

The Advisor and its affiliates are paid compensation and receive reimbursement for services relating to the IPO, including transfer agent services and other professional services provided by an affiliate of the Dealer Manager. All offering costs incurred by the Company, the Advisor and its affiliated entities on behalf of the Company are charged to additional paid-in capital on the accompanying consolidated balance sheets as of December 31, 2014. The following table details offering costs and reimbursements incurred from and due to the Advisor and affiliates of the Dealer Manager as of and for the periods presented:

			Period from
			December 19, 2013
	Year Ended		(date of inception) to		Payable as of
(In thousands)	December 31, 2014		December 31, 2013		December 31, 2014		December 31, 2013
Fees and expense reimbursements from the Advisor and affiliates of the Dealer Manager	$	6,656	$	—	$	912	$	—

The Company is responsible for paying offering and related costs from the IPO, excluding commissions and dealer manager fees, up to a maximum of 2.0% of gross proceeds received from the IPO, measured at the end of the IPO. Offering costs in excess of the 2.0% cap as of the end of the IPO are the Advisor’s responsibility. As of December 31, 2014, offering and related costs did not exceed 2.0% of gross proceeds received from the IPO.

As of December 31, 2014, cumulative offering costs, including selling commissions and dealer manager fees, were $55.6 million. Offering costs are only a liability to the Company to the extent aggregate selling commissions, dealer manager fees and other organization and offering costs do not exceed 12.0% of the gross proceeds determined at the end of the IPO. During the IPO, beginning after the general escrow break, the Advisor elected to cap cumulative offering costs, including selling commissions and dealer manager fees, incurred by the Company, net of unpaid amounts, to 15% of gross common stock proceeds. Cumulative offering costs, including selling commissions and dealer manager fees, net of unpaid amounts, were less than the 15% threshold as of December 31, 2014.

Fees Paid in Connection With the Operations of the Company

The Advisor is paid an acquisition fee of 1.5% of the contract purchase price of each acquired property and 1.5% of the amount advanced for a loan or other investment. The Advisor is also reimbursed for expenses actually incurred related to selecting, evaluating and acquiring assets on the Company's behalf, regardless of whether the Company actually acquires the related assets. Specifically, the Company pays the Advisor or its affiliates for any services provided for which they incur investment-related expenses, or insourced expenses. Such insourced expenses are fixed initially at and shall not exceed 0.50% of the purchase price of each property and 0.50% of the amount advanced for each loan or other investment, which is paid at the closing of each such investment. The Advisor is also reimbursed for legal expenses incurred in the process of acquiring properties, in an amount not to exceed 0.10% of the contract purchase price. In addition, the Company also pays third parties, or reimburses the Advisor for any investment-related expenses due to third parties. In no event will the total of all acquisition fees, acquisition expenses and any financing coordination fees (as described below) payable with respect to the Company's portfolio of investments exceed 4.5% of the contract purchase price or 4.5% of the amount advanced for all loans or other investments. Once the proceeds from the primary offering have been fully invested, the aggregate amount of acquisition fees and any financing coordination fees may not exceed 4.5% of the contract purchase price and the amount advanced for a loan or other investment, as applicable, for all the assets acquired.

If the Advisor provides services in connection with the origination or refinancing of any debt that the Company obtains and uses to acquire properties or to make other permitted investments, or that is assumed, directly or indirectly, in connection with the acquisition of properties, the Company pays the Advisor a financing coordination fee equal to 0.75% of the amount made available or outstanding under such financing, subject to certain limitations.

For its asset management services, the Company causes the OP to issue restricted Class B units in the OP (“Class B Units”) to the Advisor on a quarterly basis in an amount equal to: (i) the cost of assets (or the lower of the cost of assets and the applicable quarterly NAV multiplied by 0.1875% once the Company begins calculating NAV) multiplied by 0.1875% divided by (ii) the value of one share of common stock as of the last day of such calendar quarter, which is equal initially to $22.50 (the primary offering price minus selling commissions and dealer manager fees) and, at such time as the Company calculates NAV, to per share NAV. The Class B Units are intended to be profits interests and will vest, and no longer be subject to forfeiture, at such time as: (a) the value of the OP's assets plus all distributions made by the Company to its stockholders equals or exceeds the total amount of capital contributed by investors plus a 6.0% cumulative, pretax, non-compounded annual return thereon, or the "economic hurdle;" (b) any one of the following events occurs concurrently with or subsequently to the achievement of the economic hurdle described above: (i) a listing of the Company's common stock on a national securities exchange; (ii) a transaction to which the Company or the OP is a party, as a result of which OP units or the Company's common stock are or will be exchanged for or converted into the right, or the holders of such securities will otherwise be entitled, to receive cash, securities or other property or any combination thereof; or (iii) the termination of the advisory agreement without cause by an affirmative vote of a majority of the Company's independent directors after the economic hurdle has been met; and (c) the Advisor pursuant to the advisory agreement is providing services to the Company immediately prior to the occurrence of an event of the type described in clause (b) above, unless the failure to provide such services is attributable to the termination without cause of the advisory agreement by an affirmative vote of the majority of the Company's independent directors after the economic hurdle has been met (the "performance condition"). The value of issued Class B Units will be determined and expensed when the Company deems the achievement of the performance condition to be probable. As of December 31, 2014, the Company cannot determine the probability of achieving the performance condition. The Advisor receives distributions on unvested Class B Units equal to the distribution rate received on the Company's common stock. Such distributions on issued Class B Units will be expensed in the consolidated statement of operations and comprehensive loss until the performance condition is considered probable to occur. As of December 31, 2014, the Company's board of directors has approved the issuance of 8,361 Class B Units in connection with the arrangement.

Unless the Company contracts with a third party, the Company pays the Property Manager a property management fee equal to: (i) for non-hotel properties, 4.0% of gross revenues from the properties managed, plus market-based leasing commissions; and (ii) for hotel properties, a market-based fee based on a percentage of gross revenues. The Company also reimburses the Property Manager for property-level expenses. The Property Manager may subcontract the performance of its property management and leasing services duties to third parties and pay all or a portion of its property management fee to the third parties with whom it contracts for these services.

The Company reimburses the Advisor’s costs of providing administrative services, subject to the limitation that the Company will not reimburse the Advisor for any amount by which the Company’s operating expenses at the end of the four preceding fiscal quarters exceeds the greater of (a) 2.0% of average invested assets and (b) 25.0% of net income other than any additions to reserves for depreciation, bad debt, impairments or other similar non-cash expenses and excluding any gain from the sale of assets for that period. Additionally, the Company reimburses the Advisor for personnel costs in connection with other services during the operational stage; however, the Company may not reimburse the Advisor for personnel costs in connection with services for which the Advisor receives acquisition fees or real estate commissions.

The following table details amounts incurred, forgiven and payable in connection with the Company's operations-related services described above as of and for the periods presented:

					Period from
					December 19, 2013
	Year Ended				(date of inception) to				Payable as of
	December 31, 2014				December 31, 2013				December 31,		December 31,
(In thousands)	Incurred		Forgiven		Incurred		Forgiven		2014		2013
Acquisition fees and reimbursements:
Acquisition fees and related cost reimbursements	$	5,251	$	—	$	—	$	—	$	—	$	—
Ongoing fees:
Property management and leasing fees	—		101		—		—		—		—
Distributions on Class B units	2		—		—		—		—		—
Total related party operation fees and reimbursements	$	5,253	$	101	$	—	$	—	$	—	$	—

Fees Paid in Connection with the Liquidation or Listing of the Company's Real Estate Assets

The Company will pay to the Advisor an annual subordinated performance fee calculated on the basis of the Company’s return to stockholders, payable annually in arrears, such that for any year in which investors receive payment of 6.0% per annum, the Advisor will be entitled to 15.0% of the excess return, provided that the amount paid to the Advisor does not to exceed 10.0% of the aggregate return for such year, and that the amount paid to the Advisor will not be paid unless investors receive a return of capital contributions. This fee will be paid only upon the sale of assets, distributions or other event which results in the return on stockholders’ capital exceeding 6.0% per annum. No subordinated performance fees were incurred during the year endedDecember 31, 2014 or the period from December 19, 2013 (date of inception) to December 31, 2013.

The Company will pay to the Advisor a brokerage commission to the Advisor or its affiliates on the sale of property, not to exceed the lesser of 2.0% of the contract sale price of the property and 50.0% of the total brokerage commission paid if a third party broker is also involved; provided, however, that in no event may the real estate commissions paid to the Advisor, its affiliates and unaffiliated third parties exceed the lesser of 6.0% of the contract sales price and a reasonable, customary and competitive real estate commission, in each case, payable to the Advisor if the Advisor or its affiliates, as determined by a majority of the independent directors, provided a substantial amount of services are provided in connection with the sale. No such fees were incurred during the year endedDecember 31, 2014 or the period from December 19, 2013 (date of inception) to December 31, 2013.

Upon a sale of all or substantially all assets, the Special Limited Partner will receive a subordinated distribution from the OP equal to 15.0% of remaining net sale proceeds after return of capital contributions to investors plus payment to investors of an annual 6.0% cumulative, pre-tax non-compounded annual return on the capital contributed by investors. The Special Limited Partner will not be entitled to the subordinated participation in net sale proceeds unless the Company’s investors have received a return of their capital plus a 6.0% cumulative non-compounded annual return on their capital contributions. No such distributions were incurred during the year endedDecember 31, 2014 or the period from December 19, 2013 (date of inception) to December 31, 2013.

If the Company’s shares of common stock are listed on a national exchange, the Special Limited Partner will receive a subordinated incentive listing distribution from the OP equal to 15.0% of the amount by which the Company’s market value plus distributions exceeds the aggregate capital contributed by investors plus an amount equal to a 6.0% cumulative, pre-tax non-compounded annual return to investors. The Special Limited Partner will not be entitled to the subordinated incentive listing distribution unless the Company's market value plus distribution exceeds the investors' capital plus a return equal to an annual 6.0% cumulative, pre-tax non-compounded annual return on their capital contributions. No such distributions were incurred during the year endedDecember 31, 2014 or the period from December 19, 2013 (date of inception) to December 31, 2013. The Special Limited Partner cannot earn both the subordinated participation in net sales proceeds and the subordinated incentive listing distribution.

Upon termination or non-renewal of the advisory agreement with or without cause, the Special Limited Partner will be entitled to receive distributions from the OP equal to 15.0% of the amount by which the sum of the Company’s market value plus distributions exceeds the sum of the aggregate capital contributed by investors plus an amount equal to an annual 6.0% cumulative, pre-tax, non-compounded annual return to investors. The Special Limited Partner may elect to defer its right to receive a subordinated distribution upon termination until either a listing on a national securities exchange or other liquidity event occurs.

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Share-Based Compensation

12 Months Ended

Dec. 31, 2014

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

Share-Based Compensation

Share-Based Compensation

Restricted Share Plan

The Company has an employee and director incentive restricted share plan (the “RSP”), which provides for the automatic grant of 1,333 restricted shares of common stock to each of the independent directors, without any further approval by the Company’s board of directors or the stockholders, on the date of initial election to the board of directors and on the date of each annual stockholder’s meeting. Restricted stock issued to independent directors vests over a five-year period following the date of grant in increments of 20.0% per annum. The RSP provides the Company with the ability to grant awards of restricted shares to the Company’s directors, officers and employees (if the Company ever has employees), employees of the Advisor and its affiliates, employees of entities that provide services to the Company, directors of the Advisor or of entities that provide services to the Company, certain consultants to the Company and the Advisor and its affiliates or to entities that provide services to the Company. The total number of common shares granted under the RSP shall not exceed 5.0% of the Company’s outstanding shares of common stock on a fully diluted basis at any time and in any event will not exceed 1.5 million shares (as such number may be adjusted for stock splits, stock dividends, combinations and similar events).

Restricted share awards entitle the recipient to receive shares of common stock from the Company under terms that provide for vesting over a specified period of time or upon attainment of pre-established performance objectives. Such awards would typically be forfeited with respect to the unvested shares upon the termination of the recipient’s employment or other relationship with the Company. Restricted shares may not, in general, be sold or otherwise transferred until restrictions are removed and the shares have vested. Holders of restricted shares may receive cash distributions prior to the time that the restrictions on the restricted shares have lapsed. Any distributions payable in shares of common stock shall be subject to the same restrictions as the underlying restricted shares. As of December 31, 2014, there were 3,999 unvested restricted shares issued to independent directors under the RSP at $22.50 per share. There were no such restricted shares outstanding as of December 31, 2013. The fair value of the restricted shares is expensed on a straight-line basis over the service period of five years. Compensation expense related to restricted stock was approximately $13,000 for the year endedDecember 31, 2014. As of December 31, 2014, the Company had $0.1 million of unrecognized compensation costs related to unvested restricted share awards granted under the Company's RSP, which is expected to vest over a period of 4.3 years.

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Real Estate Investments - Narrative (Details) (USD $) In Thousands, unless otherwise specified	0 Months Ended	12 Months Ended	0 Months Ended
	Dec. 31, 2013	Dec. 31, 2014	Jun. 13, 2014	Sep. 05, 2014	Sep. 24, 2014	Nov. 10, 2014
Business Acquisition [Line Items]
Acquisition and transaction related	$ 0	$ 6,148
Total assets acquired, net		254,541
421 W. 54th Street
Business Acquisition [Line Items]
Acquisition and transaction related			200
Total assets acquired, net			7,300
400 E. 67th Street
Business Acquisition [Line Items]
Acquisition and transaction related				1,800
Total assets acquired, net				76,000
200 Riverside Boulevard
Business Acquisition [Line Items]
Acquisition and transaction related					200
Total assets acquired, net					9,000
570 Seventh Ave
Business Acquisition [Line Items]
Acquisition and transaction related						3,900
Total assets acquired, net						$ 162,300

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Net Loss Per Share - Shares Excluded From Calculation (Details)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities (in shares)	12,450	0
Restricted Stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities (in shares)	3,999	0
OP Units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities (in shares)	90	0
Class B units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities (in shares)	8,361	0

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Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2014

Accounting Policies [Abstract]

Basis of Accounting

Basis of Accounting

The accompanying consolidated financial statements of the Company are prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America ("GAAP").

Principles of Consolidation

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its subsidiaries. All inter-company accounts and transactions are eliminated in consolidation. In determining whether the Company has a controlling financial interest in a joint venture and the requirement to consolidate the accounts of that entity, management considers factors such as ownership interest, authority to make decisions and contractual and substantive participating rights of the other partners or members as well as whether the entity is a variable interest entity for which the Company is the primary beneficiary. The Company had no investments in joint ventures or variable interest entities as of December 31, 2014 or 2013.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Management makes significant estimates regarding revenue recognition, purchase price allocations to record investments in real estate, and fair value measurements, as applicable.

Organization Costs

Organizational Costs

Organizational costs include accounting, legal and regulatory fees incurred related to the formation of the Company. Organizational costs are expensed as incurred.

Investments in Real Estate

Investments in Real Estate

The Company evaluates the inputs, processes and outputs of each asset acquired to determine if the transaction is a business combination or asset acquisition. If an acquisition qualifies as a business combination, the related transaction costs are recorded as an expense in the consolidated statement of operations. If an acquisition qualifies as an asset acquisition, the related transaction costs are generally capitalized and subsequently amortized over the useful life of the acquired assets.

In business combinations, the Company allocates the purchase price of acquired properties to tangible and identifiable intangible assets or liabilities based on their respective fair values. Tangible assets may include land, land improvements, buildings, and fixtures. Intangible assets or liabilities may include the value of in-place leases, above- and below-market leases and other identifiable intangible assets or liabilities based on lease or property specific characteristics.

The fair value of the tangible assets of an acquired property with an in-place operating lease is determined by valuing the property as if it were vacant, and the “as-if-vacant” value is then allocated to the tangible assets based on the fair value of the tangible assets. The fair value of in-place leases is determined by considering estimates of carrying costs during the expected lease-up periods, current market conditions, as well as costs to execute similar leases. The fair value of above-market or below-market leases is recorded based on the present value of the difference between the contractual amount to be paid pursuant to the in-place lease and the Company's estimate of the fair market lease rate for the corresponding in-place lease, measured over the remaining term of the lease, including any below-market fixed rate renewal options for below-market leases. The fair value of other intangible assets, such as real estate tax abatements and signage rights, are recorded based on the present value of the expected benefit and amortized over the expected useful life.

In allocating the fair value to assumed mortgages, if applicable, amounts are recorded to debt premiums or discounts based on the present value of the estimated cash flows, which is calculated to account for either above- or below-market interest rates.

In allocating non-controlling interests, if applicable, amounts are recorded based on the fair value of units issued at the date of acquisition, as determined by the terms of the applicable agreement.

In making estimates of fair values for purposes of allocating purchase price, the Company utilizes a number of sources, including real estate valuations prepared by independent valuation firms. The Company also considers information and other factors including: market conditions, the industry in which the tenant operates, characteristics of the real estate such as location, size, demographics, value and comparative rental rates, tenant credit profile and the importance of the location of the real estate to the operations of the tenant’s business.

Depreciation and Amortization

Depreciation and Amortization

The Company is required to make subjective assessments as to the useful lives of the components of the Company’s real estate investments for purposes of determining the amount of depreciation to record on an annual basis. These assessments have a direct impact on the Company’s net income because if the Company were to shorten the expected useful lives of the Company’s real estate investments, the Company would depreciate these investments over fewer years, resulting in more depreciation expense and lower net income on an annual basis.

Depreciation is computed using the straight-line method over the estimated useful lives of up to 40 years for buildings, 15 years for land improvements, five years for fixtures and improvements, and the shorter of the useful life or the remaining lease term for tenant improvements and leasehold interests.

Capitalized above-market lease values are amortized as a reduction of rental income over the remaining terms of the respective leases. Capitalized below-market lease values are amortized as an increase to rental income over the remaining terms of the respective leases and expected below-market renewal option periods.

The value of in-place leases, exclusive of the value of above-market and below-market in-place leases, is amortized to expense over the remaining periods of the respective leases.

Assumed mortgage premiums or discounts, if applicable, are amortized as an increase or reduction to interest expense over the remaining term of the respective mortgages.

Impairment of Long Lived Assets

Impairment of Long Lived Assets

When circumstances indicate the carrying value of a property may not be recoverable, the Company reviews the asset for impairment. This review is based on an estimate of the future undiscounted cash flows, excluding interest charges, expected to result from the property’s use and eventual disposition. These estimates consider factors such as expected future operating income, market and other applicable trends and residual value, as well as the effects of leasing demand, competition and other factors. If impairment exists due to the inability to recover the carrying value of a property, an impairment loss is recorded to the extent that the carrying value exceeds the estimated fair value of the property for properties to be held and used. For properties held for sale, the impairment loss is the adjustment to fair value less estimated cost to dispose of the asset. These assessments have a direct impact on net income because recording an impairment loss results in an immediate negative adjustment to net income.

Cash and Cash Equivalents

Cash and Cash Equivalents

Cash and cash equivalents includes cash in bank accounts as well as investments in highly liquid money market funds with original maturities of three months or less. The Company deposits cash with high quality financial institutions. These deposits are guaranteed by the Federal Deposit Insurance Company ("FDIC") up to an insurance limit.

Investments in Securities

Investments in Securities

The Company classifies its investments in debt or equity securities into one of three classes: held-to-maturity, available-for-sale or trading, as applicable.  Investments in debt securities that the Company has the positive intent and ability to hold until maturity are classified as held-to-maturity and are reported at amortized cost.  Debt and equity securities that are bought and held principally for the purposes of selling them in the near future are classified as trading securities.  Debt and equity securities not classified as trading securities or as held-to-maturity securities are classified as available-for-sale securities and are reported at fair value, with unrealized holding gains and losses reported as a component of equity within accumulated other comprehensive income or loss. Gains or losses on securities sold are based on the specific identification method.

The Company evaluates its investments in securities for impairment or other-than-temporary impairment on a quarterly basis.  The Company reviews each investment individually and assesses factors that may include (i) if the carrying amount of an investment exceeds its fair value, (ii) if there has been any change in the market as a whole or in the investee’s market, (iii) if there are any plans to sell the investment in question or if the Company believes it may be forced to sell its investment, and (iv) if there have been any other factors that would indicate the possibility of the existence of an other-than-temporary impairment. The fair value of the Company’s investments in available-for-sale securities generally rise and fall based on current market conditions. If, after reviewing relevant factors surrounding an impaired security, the Company determines that it will not recover its full investment in an impaired security, the Company recognizes an other-than-temporary impairment charge in the consolidated statements of operations and comprehensive loss in the period in which the other-than-temporary impairment is discovered, regardless of whether or not the Company plans to sell or believes it will be forced to sell the security in question. 

Deferred Costs

Deferred Costs

Deferred costs may consist of deferred financing costs, deferred offering costs and deferred leasing costs. Deferred financing costs represent commitment fees, legal fees, and other costs associated with obtaining commitments for financing. These costs are amortized over the terms of the respective financing agreements using the effective interest method. Unamortized deferred financing costs are expensed when the associated debt is refinanced or repaid before maturity. Costs incurred in seeking financial transactions that do not close are expensed in the period in which it is determined that the financing will not close.

Deferred offering costs represent professional fees, fees paid to various regulatory agencies, and other costs incurred in connection with registering to sell shares of the Company's common stock.

Deferred leasing costs, consisting primarily of lease commissions and professional fees incurred, are deferred and amortized over the term of the lease.

Share Repurchase Program

Share Repurchase Program

The Company has a Share Repurchase Program ("SRP") that enables stockholders to sell their shares to the Company. Under the SRP, stockholders may request that the Company redeem all or any portion of their shares, subject to certain minimum conditions described below, if such repurchase does not impair the Company's capital or operations.

Prior to the time that the Company's shares are listed on a national securities exchange and until the Company begins to calculate its NAV, the repurchase price per share will depend on the length of time investors have held such shares as follows: after one year from the purchase date — the lower of $23.13 or 92.5% of the amount they actually paid for each share; and, after two years from the purchase date —the lower of $23.75 or 95.0% of the amount they actually paid for each share (in each case, as adjusted for any stock distributions, combinations, splits and recapitalizations).

Once the Company begins to calculate its NAV, the price per share that the Company will pay to repurchase the Company's shares on any business day will be the Company's NAV per share of common stock for the quarter, calculated after the close of business on the first business day of each quarter. Subject to limited exceptions, stockholders who redeem their shares of the Company's common stock within the first four months from the date of purchase will be subject to a short-term trading fee of 2% of the aggregate NAV per share of the shares of common stock received. Because the Company's NAV per share will be calculated quarterly, the redemption price may fluctuate between the redemption request day and the date on which the Company pays redemption proceeds.

Until the Company begins to calculate its NAV, the Company is only authorized to repurchase shares pursuant to the SRP using the proceeds received from the DRIP and will limit the amount spent to repurchase shares in a given quarter to the amount of proceeds received from the DRIP in that same quarter. In addition, the board of directors may reject a request for redemption, at any time. Due to these limitations, the Company cannot guarantee that it will accommodate all repurchase requests. Purchases under the SRP by the Company will be limited in any calendar year to 5% of the weighted average number of shares outstanding during the prior year.

When a stockholder requests redemption and the redemption is approved, the Company will reclassify such obligation from equity to a liability based on the settlement value of the obligation. Shares purchased under the SRP will have the status of authorized but unissued shares

Distribution Reinvestment Plan

Distribution Reinvestment Plan

Pursuant to the DRIP, stockholders may elect to reinvest distributions by purchasing shares of common stock in lieu of receiving cash. No dealer manager fees or selling commissions are paid with respect to shares purchased pursuant to the DRIP. Participants purchasing shares pursuant to the DRIP have the same rights and are treated in the same manner as if such shares were issued pursuant to the IPO. The board of directors may designate that certain cash or other distributions be excluded from the DRIP. The Company has the right to amend any aspect of the DRIP or terminate the DRIP with ten days' notice to participants. Shares issued under the DRIP are recorded to equity in the accompanying consolidated balance sheets in the period distributions are declared.

Revenue Recognition

Revenue Recognition

The Company's revenues, which are derived primarily from rental income, include rents that each tenant pays in accordance with the terms of each lease reported on a straight-line basis over the term of the lease. Since many of the Company's leases provide for rental increases at specified intervals, straight-line basis accounting requires the Company to record a receivable, and include in revenues, unbilled rent receivables that the Company will only receive if the tenant makes all rent payments required through the expiration of the initial term of the lease. The Company defers the revenue related to lease payments received from tenants in advance of their due dates. When the Company acquires a property, the terms of existing leases are considered to commence as of the acquisition date for the purposes of this calculation.

The Company will continually review receivables related to rent and unbilled rent receivables and determine collectability by taking into consideration the tenant's payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in the area in which the property is located. In the event that the collectability of a receivable is in doubt, the Company will record an increase in the Company's allowance for uncollectible accounts or record a direct write-off of the receivable in the Company's consolidated statements of operations and comprehensive loss.

Cost recoveries from tenants are included in operating expense reimbursement in the period the related costs are incurred, as applicable.

The Company may own certain properties with leases that include provisions for the tenant to pay contingent rental income based on a percent of the tenant's sales upon the achievement of certain sales thresholds or other targets, which may be monthly, quarterly or annual targets. As the lessor to the aforementioned leases, the Company defers the recognition of contingent rental income until the specified target that triggered the contingent rental income is achieved, or until such sales upon which percentage rent is based are known. If the Company owns certain properties with leases that include provisions for the tenant to pay contingent rental income, contingent rental income will be included in rental income on the consolidated statements of operations and comprehensive loss.

Offering and Related Costs

Offering and Related Costs

Offering and related costs include all expenses incurred in connection with the Company's IPO. Offering costs (other than selling commissions and the dealer manager fee) of the Company may be paid by the Advisor, the Dealer Manager or their affiliates on behalf of the Company. Offering costs will include all expenses incurred by the Company in connection with its IPO as of such date. These costs include but are not limited to (i) legal, accounting, printing, mailing, and filing fees; (ii) escrow service related fees; (iii) reimbursement of the Dealer Manager for amounts it may pay to reimburse the bona fide due diligence expenses of broker-dealers; and (iv) reimbursement to the Advisor for a portion of the costs of its employees and other costs in connection with preparing supplemental sales materials and related offering activities. The Company is obligated to reimburse the Advisor or its affiliates, as applicable, for organization and offering costs paid by them on behalf of the Company, provided that the Advisor is obligated to reimburse the Company to the extent organization and offering costs (excluding selling commissions and the dealer manager fee) incurred by the Company in its offering exceed 2.0% of gross offering proceeds. As a result, these costs are only a liability of the Company to the extent aggregate selling commissions, dealer manager fees and other organization and offering costs do not exceed 12.0% of the gross proceeds determined at the end of the IPO (See Note 8 — Related Party Transactions and Arrangements).

Share-based Compensation

Share-Based Compensation

The Company has a stock-based incentive award plan, which is accounted for under the guidance for share based payments. The expense for such awards are included in general and administrative expenses and are recognized over the vesting period or when the requirements for exercise of the award have been met (See Note 10 — Share-Based Compensation).

Income Taxes

Income Taxes

The Company intends to elect and qualify to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code commencing with the taxable year ended December 31, 2014. In order to qualify and continue to qualify as a REIT, the Company must meet a number of organizational and operational requirements, including a requirement that the Company distribute annually at least 90% of the Company’s REIT taxable income to the Company’s stockholders. If the Company fails to continue to qualify as a REIT in any taxable year and does not qualify for certain statutory relief provisions, the Company will be subject to U.S. federal and state income taxes at regular corporate rates (including any applicable alternative minimum tax) beginning with the year in which it fails to qualify and may be precluded from being able to elect to be treated as a REIT for the Company’s four subsequent taxable years. Even if the Company qualifies for taxation as a REIT, it may be subject to certain state and local taxes on its income and property, and federal income and excise taxes on its undistributed income.

Per Share Data

Per Share Data

The Company calculates basic income (loss) per share by dividing net income (loss) for the period by weighted-average shares of its common stock outstanding for a respective period. Diluted income per share takes into account the effect of dilutive instruments, such as OP units, Class B units and unvested restricted stock, but uses the average share price for the period in determining the number of incremental shares that are to be added to the weighted-average number of shares outstanding.

Reportable Segments

Reportable Segments

The Company has determined that it has one reportable segment, with activities related to investing in real estate. The Company's investments in real estate generate rental revenue and other income through the leasing of properties, which will comprise 100% of total consolidated revenues. Management evaluates the operating performance of the Company's investments in real estate on an individual property level.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In April 2014, the Financial Accounting Standards Board ("FASB") amended the requirements for reporting discontinued operations. Under the revised guidance, in addition to other disclosure requirements, a disposal of a component of an entity or a group of components of an entity is required to be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity's operations and financial results when the component or group of components meets the criteria to be classified as held for sale, disposed of by sale or other than by sale. The Company has adopted the provisions of this guidance effective January 1, 2014, and has applied the provisions prospectively. The adoption of this guidance did not have a material impact on the Company's consolidated financial position, results of operations or cash flows.

In May 2014, the FASB issued revised guidance relating to revenue recognition. Under the revised guidance, an entity is required to recognize revenue when it transfers 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. The revised guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is not permitted under GAAP. The revised guidance allows entities to apply the full retrospective or modified retrospective transition method upon adoption. The Company has not yet selected a transition method and is currently evaluating the impact of the new guidance.

In August 2014, the FASB issued guidance relating to disclosure of uncertainties about an entity's ability to continue as a going concern. In connection with preparing financial statements for each annual and interim reporting period, management should evaluate whether there are conditions or events that raise substantial doubt about the entity's ability to continue as a going concern within one year after the date that the financial statements are issued. If conditions or events raise substantial doubt about the entity's ability to continue as a going concern, the guidance requires management to disclose information that enables users of the financial statements to understand the conditions or events that raised the substantial doubt, management's evaluation of the significance of the conditions or events that led to the doubt and management's plans that are intended to mitigate the conditions or events that raised substantial doubt about the entity's ability to continue as a going concern. The guidance is effective for the annual period ending after December 15, 2016 and for annual and interim periods thereafter. The Company has elected to adopt the provisions of this guidance effective December 31, 2014, as early application is permitted. The adoption of this guidance had no material impact on the Company's consolidated financial position, results of operations or cash flows.

In February 2015, the FASB amended the accounting for consolidation of certain legal entities. The amendments modify the evaluation of whether certain legal entities are variable interest entities ("VIEs") or voting interest entities, eliminate the presumption that a general partner should consolidate a limited partnership, affect the consolidation analysis of reporting entities that are involved with VIEs (particularly those that have fee arrangements and related party relationships) and provide a scope exception from consolidation guidance for reporting entities with interests in legal entities. The revised guidance is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted, including adoption in an interim period. If the Company decides to early adopt the revised guidance in an interim period, any adjustments will be reflected as of the beginning of the fiscal year that includes the interim period. The Company has not yet selected a transition method and is currently evaluating the impact of the new guidance.

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Related Party Transactions and Arrangements (Tables)

12 Months Ended

Dec. 31, 2014

Related Party Transactions [Abstract]

Schedule of Selling Commissions and Dealer Manager Fees Payable to Affiliate

The following table details total selling commissions and dealer manager fees incurred from and due to the Dealer Manager as of and for the periods presented:

			Period from
			December 19, 2013
	Year Ended		(date of inception) to		Payable as of
(In thousands)	December 31, 2014		December 31, 2013		December 31, 2014		December 31, 2013
Total commissions and fees incurred from the Dealer Manager	$	46,997	$	—	$	197	$	—

Schedule Of Offering Costs Reimbursements to Related Party

The following table details offering costs and reimbursements incurred from and due to the Advisor and affiliates of the Dealer Manager as of and for the periods presented:

			Period from
			December 19, 2013
	Year Ended		(date of inception) to		Payable as of
(In thousands)	December 31, 2014		December 31, 2013		December 31, 2014		December 31, 2013
Fees and expense reimbursements from the Advisor and affiliates of the Dealer Manager	$	6,656	$	—	$	912	$	—

Schedule of Amount Contractually Due and Forgiven in Connection With Operation Related Services

The following table details amounts incurred, forgiven and payable in connection with the Company's operations-related services described above as of and for the periods presented:

					Period from
					December 19, 2013
	Year Ended				(date of inception) to				Payable as of
	December 31, 2014				December 31, 2013				December 31,		December 31,
(In thousands)	Incurred		Forgiven		Incurred		Forgiven		2014		2013
Acquisition fees and reimbursements:
Acquisition fees and related cost reimbursements	$	5,251	$	—	$	—	$	—	$	—	$	—
Ongoing fees:
Property management and leasing fees	—		101		—		—		—		—
Distributions on Class B units	2		—		—		—		—		—
Total related party operation fees and reimbursements	$	5,253	$	101	$	—	$	—	$	—	$	—

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Share-Based Compensation (Details) (USD $)	0 Months Ended	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation	$ 0	$ 13,000
Restricted Share Plan | Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted automatically upon election to board of directors (in shares)		1,333
Periodic vesting percentage		20.00%
Maximum authorized amount as a percentage of shares authorized		5.00%
Number of shares authorized (in shares)		1,500,000.0
Shares issued (in shares)	0	3,999
Unvested restricted shares (in dollars per share)		$ 22.50
Restricted share vesting period		5 years
Share-based compensation		13,000
Unrecognized costs		$ 100,000
Vesting period for costs not yet recognized		4 years 3 months 18 days

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Common Stock (Details) (USD $) In Thousands, except Share data, unless otherwise specified	0 Months Ended		12 Months Ended
	May 22, 2014	Dec. 31, 2013	Dec. 31, 2014	Dec. 31, 2014	May 22, 2014
Equity [Abstract]
Common stock, shares outstanding (in shares)		0	20,569,012	20,569,012
Proceeds from issuance of common stock		$ 0	$ 503,420	$ 509,900
Dividends declared per day (in dollars per share)	$ 0.0041438356
Share Price (in dollars per share)					$ 25.00

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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (USD $) In Thousands, except Share data, unless otherwise specified	Total	Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Loss	Accumulated Deficit
Beginning Balance at Dec. 19, 2013	$ 0	$ 0	$ 0	$ 0	$ 0
Beginning Balance (in shares) at Dec. 19, 2013		0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss attributable to stockholders	0			0
Ending Balance at Dec. 31, 2013	0	0	0	0	0
Beginning Balance (in shares) at Dec. 31, 2013		0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock (in shares)		20,374,429
Issuance of common stock	505,423	204	505,219
Common stock offering costs, commissions and dealer manager fees	(55,625)		(55,625)
Common stock issued through distribution reinvestment plan (in shares)		190,584
Common stock issued through distribution reinvestment plan	4,526	2	4,524
Share-based compensation (in shares)		3,999
Share-based compensation	13		13
Distributions declared	(10,388)				(10,388)
Unrealized loss on investment securities	(24)			(24)
Net loss attributable to stockholders	(6,519)				(6,519)
Ending Balance at Dec. 31, 2014	$ 437,406	$ 206	$ 454,131	$ (24)	$ (16,907)
Ending Balance (in shares) at Dec. 31, 2014		20,569,012

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Investment Securities

12 Months Ended

Dec. 31, 2014

Investments, Debt and Equity Securities [Abstract]

Investments Securities

Investment Securities

As of December 31, 2014, the Company had investments in equity securities with a fair value of $0.5 million. The Company held no investment securities as of December 31, 2013. The equity securities consist of a mutual fund managed by an affiliate of the Sponsor (see Note 8 —Related Party Transactions and Arrangements). These investments are considered to be available-for-sale securities 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 on the consolidated balance sheets unless the securities are considered to be other-than-temporarily impaired, at which time the losses would be reclassified to expense.

The following table details the unrealized gains and losses on investment securities by security type as of December 31, 2014:

(In thousands)	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Equity securities	$	514	$	—	$	(24	)	$	490

The Company's investment in equity securities has been in a continuous unrealized loss position for less than twelve months. The Company believes that the decline in fair value is solely a factor of current market conditions and, as such, considers the unrealized losses as of December 31, 2014 to be temporary and therefore no impairment was recorded during the year endedDecember 31, 2014.

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Net Loss Per Share (Tables)

12 Months Ended

Dec. 31, 2014

Equity [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

The following is a summary of the basic and diluted net loss per share computation for the periods presented:

				Period from
				December 19, 2013
	Year Ended			(date of inception) to
	December 31, 2014			December 31, 2013
Net loss (in thousands)	$	(6,519	)	$	—
Basic and diluted weighted average shares outstanding	4,530,066			—
Basic and diluted net loss per share	$	(1.44	)	$	—

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share

The Company had the following common share equivalents as of December 31, 2014 and 2013, which were excluded from the calculation of diluted loss per share attributable to stockholders as the effect would have been antidilutive:

	December 31,
	2014	2013
Unvested restricted stock	3,999	—
OP Units	90	—
Class B units	8,361	—
Total common share equivalents	12,450	—

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Real Estate Investments - Concentration (Details)	12 Months Ended
	Dec. 31, 2014
Cornell University
Real estate investments
Concentration risk, percentage	26.00%
TD Bank, N.A.
Real estate investments
Concentration risk, percentage	10.90%

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Schedule III -Real Estate and Accumulated Depreciation

12 Months Ended

Dec. 31, 2014

SEC Schedule III, Real Estate and Accumulated Depreciation Disclosure [Abstract]

Schedule III -Real Estate and Accumulated Depreciation

					Initial Costs				Costs Capitalized Subsequent to Acquisition
Portfolio	State	Acquisition Date	Encumbrances at December 31, 2014		Land		Building and Improvements		Building and Improvements		Gross Carried at December 31, 2014(1)(2)		Accumulated Depreciation(3)(4)
421 W. 54th Street	NY	6/13/2014	$	—	$	4,723	$	1,757	$	—	$	6,480	$	(26	)
400 E. 67th Street	NY	9/5/2014	—		10,653		55,682		14		66,349		(464		)
200 Riverside Blvd	NY	9/24/2014	—		13,787		5,510		—		19,297		(34		)
570 Seventh Ave	NY	11/5/2014	—		54,153		76,454		72		130,679		(319		)
					$	83,316	$	139,403	$	86	$	222,805	$	(843	)

(1) Acquired intangible assets allocated to individual properties in the amount of $47.3 million are not reflected in the table above.

(2) The tax basis of aggregate land, buildings and improvements as of December 31, 2014 is $260.6 million.

(3) The accumulated depreciation column excludes $1.2 million of amortization associated with acquired intangible assets.

(4) Each of the properties has a depreciable life of: 40 years for buildings, 15 years for land improvements and five years for fixtures.

A summary of activity for real estate and accumulated depreciation for the year ended December 31, 2014:

(In thousands)	December 31, 2014
Real estate investments, at cost:
Balance at beginning of year	$	—
Additions-acquisitions	222,719
Capital expenditures	86
Disposals	—
Balance at end of the year	$	222,805
Accumulated depreciation:
Balance at beginning of year	$	—
Depreciation expense	(843		)
Disposals	—
Balance at the end of the year	$	(843	)