10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

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

For the quarterly period endedMarch 31, 2018

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 001-38414

___________________________________________________________

SPIRIT MTA REIT

(Exact name of registrant as specified in its charter)

_______________________________________________

Maryland	82-6712510
(State or other Jurisdiction of Incorporation)	(IRS Employer Identification No.)
2727 North Harwood Street, Suite 300                  Dallas, Texas 75201	(972) 476-1409
(Address of principal executive offices)	(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

__________________________________________________________________________

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.    

Yes  o  No   x

Indicate by check mark whether the registrant has 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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    

Yes  x       No   o

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

 Large accelerated filer o Accelerated filer o Non-accelerated filer   x

Smaller reporting company o Emerging growth company x

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

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

Yes  o No  x

As of June 19, 2018, there were 42,851,010 commons shares, par value $0.01, of Spirit MTA REIT outstanding.

EXPLANATORY NOTE

This quarterly report of Spirit MTA REIT (the “Company” or “SMTA”) includes the financial information of both the Company, as of March 31, 2018 and December 31, 2017 and for the three months endedMarch 31, 2018, and the Company’s predecessor entities (the “Predecessor Entities”), as of March 31, 2018 and December 31, 2017 and for the three months endedMarch 31, 2018 and 2017. The Predecessor Entities were owned and operated by Spirit Realty Capital, Inc. (“Spirit”), and were contributed to the Company pursuant to the Spin-Off (as defined below). The Predecessor Entities were not operated by Spirit as stand-alone businesses.

On May 31, 2018, the distribution date, Spirit completed the previously announced spin-off (the “Spin-Off”) of all of the properties leased to Shopko, the assets that collateralize Master Trust 2014 and certain other assets into an independent, publicly traded REIT, SMTA. On the distribution date, Spirit distributed on a pro rata basis one common share of SMTA for every ten shares of Spirit common stock held by each of Spirit's stockholders as of May 18, 2018, the record date.

The financial statements of the Company and Predecessor Entities covered in this report present the financial condition of the Company and Predecessor Entities prior to consummation of the Spin-Off. Therefore, the discussion of the Company and Predecessor Entities’ results of operations, cash flows and financial condition set forth in this report is not necessarily indicative of the future results of operations, cash flows or financial condition of the Company as an independent, publicly traded company.

INDEX

Glossary	3
PART I — FINANCIAL INFORMATION
Item 1. Spirit MTA REIT Financial Statements (Unaudited)	5
Predecessor Entities Financial Statements (Unaudited)	10
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3. Quantitative and Qualitative Disclosures About Market Risk	39
Item 4. Controls and Procedures	39
PART II — OTHER INFORMATION
Item 1. Legal Proceedings	40
Item 1A. Risk Factors	40
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	40
Item 3. Defaults Upon Senior Securities	40
Item 4. Mine Safety Disclosures	40
Item 5. Other Information	40
Item 6. Exhibits	41
Signatures	43

GLOSSARY

AFFO	Adjusted Funds From Operations. See definition in Management’s Discussion and Analysis of Financial Condition and Results of Operations
Annualized Contractual Rent	Contractual Rent multiplied by twelve
ASC	Accounting Standards Codification
Asset Management Agreement	Asset Management Agreement between Spirit Realty, L.P. and Spirit MTA REIT dated May 31, 2018
ASU	Accounting Standards Update
CMBS	Commercial mortgage-backed securities
Contractual Rent	Monthly contractual cash rent, excluding percentage rents, from properties owned fee-simple or ground leased, recognized during the final month of the reporting period, adjusted to exclude amounts received from properties sold during that period and adjusted to include a full month of contractual rent for properties acquired during that period
CPI	Consumer Price Index
EBITDAre	EBITDAre is a non-GAAP financial measure and is computed in accordance with standards established by NAREIT. EBITDAre is defined as net income (loss) (computed in accordance with GAAP), plus interest expense, plus income tax expense (if any), plus depreciation and amortization, plus (minus) losses and gains on the disposition of depreciated property, plus impairment write-downs of depreciated property and investments in unconsolidated real estate ventures, plus adjustments to reflect the Company's share of EBITDAre of unconsolidated real estate ventures.
FASB	Financial Accounting Standards Board
FFO	Funds From Operations. See definition in Management’s Discussion and Analysis of Financial Condition and Results of Operations
GAAP	Generally Accepted Accounting Principles in the United States
Liquidity Reserve	Cash held on deposit until there is a cashflow shortfall as defined in the Master Trust 2014 agreements or a liquidation of Master Trust 2014 occurs.
Manager	Spirit Realty, L.P., a wholly-owned subsidiary of Spirit
Master Trust 2014	The asset-backed securitization trust established in 2005, and amended and restated in 2014, which issues non-recourse net-lease mortgage notes collateralized by commercial real estate, net-leases and mortgage loans from time to time
NAREIT	National Association of Real Estate Investment Trusts
Occupancy	The number of economically yielding owned properties divided by total owned properties
Predecessor Entities	The legal entities comprised of Master Trust 2014, the Shopko Entities, the Sporting Goods Entities and two additional legal entities
Properties	Owned properties and mortgage loans receivable secured by properties
Property Management and Servicing Agreement	Second amended and restated agreement governing the management services and special services provided to Master Trust 2014 by Spirit Realty, L.P., dated as of May 20, 2014, as amended, supplemented, amended and restated or otherwise modified
Real Estate Investment Value	The gross acquisition cost, including capitalized transaction costs, plus improvements and less impairments, if any
Release Account	Proceeds from the sale of assets securing Master Trust 2014 held in a restricted account until a qualifying substitution is made
S&P	Standard & Poor’s Rating Services

3

Separation and Distribution Agreement	Separation and Distribution Agreement between Spirit Realty Capital, Inc. and Spirit MTA REIT dated May 21, 2018
SEC	Securities and Exchange Commission
Shopko	Specialty Retail Shops Holding Corp. and certain of its affiliates
Shopko Entities	Three legal entities that own properties primarily leased to Shopko
SMTA	Spirit MTA REIT
Spirit	Spirit Realty Capital, Inc.
Sporting Goods Entities	One legal entity which owns a single distribution center property leased to a sporting goods tenant and its general partner entity
U.S.	United States of America
Vacant	Owned properties that are not economically yielding

Unless otherwise indicated or unless the context requires otherwise, all references to the "Company," "Spirit MTA

REIT," “SMTA,” "we," "us" or "our" refer to Spirit MTA REIT and its Predecessor Entities.

4

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Spirit MTA REIT

Balance Sheets

(Unaudited)

	March 31, 2018			December 31, 2017
Assets
Cash	$	8,643		$	10,000
Total assets	$	8,643		$	10,000
Shareholder’s equity
Common shares, $0.01 par value, 750,000,000 shares authorized: 10,000 issued and outstanding	$	100		$	100
Capital in excess of par value	9,900			9,900
Accumulated deficit	(1,357		)	—
Total shareholder’s equity	$	8,643		$	10,000

See accompanying notes.

5

Spirit MTA REIT

Statement of Operations and Comprehensive Loss

(Unaudited)

	Three Months Ended March 31,
	2018
Expenses:
General and administrative	$	1,357
Net loss and comprehensive loss	$	(1,357	)
Net loss per share	$	(0.14	)
Weighted average shares of common stock outstanding (basic and diluted)	10,000

See accompanying notes.

6

Spirit MTA REIT

Statement of Changes in Shareholder’s Equity

(Unaudited)

	Shares	Par Value		Capital in Excess of Par		Accumulated Deficit			Total Equity
Balances, December 31, 2017	10,000	$	100	$	9,900	$	—		$	10,000
Net loss and comprehensive loss	—	—		—		(1,357		)	(1,357		)
Balances, March 31, 2018	10,000	$	100	$	9,900	$	(1,357	)	$	8,643

See accompanying notes.

7

Spirit MTA REIT

Statement of Cash Flows

(Unaudited)

	Three Months Ended March 31,
	2018
Operating activities
Net loss	$	(1,357	)
Net cash used in operating activities	(1,357		)
Net decrease in cash	(1,357		)
Cash, beginning of period	10,000
Cash, end of period	$	8,643

See accompanying notes.

8

Spirit MTA REIT

Notes to Financial Statements

(Unaudited)

Note 1. Organization

Spirit MTA REIT (“SMTA”), a Maryland real estate investment trust, was formed and capitalized on November 15, 2017 as a wholly owned subsidiary of Spirit Realty Capital, Inc. (“Spirit”). SMTA was formed for the purpose of receiving, via contribution from Spirit, (i) an asset-backed securitization trust established in 2005 and amended and restated in 2014, comprised of six legal entities, which issues non-recourse net-lease mortgage notes collateralized by commercial real estate, net-leases and mortgage loans (“Master Trust 2014”), (ii) three legal entities (“Shopko Entities”) that own properties primarily leased to Specialty Retail Shops Holding Corp. and its subsidiaries, (iii) one legal entity that owns a single distribution center property leased to a sporting goods tenant and its general partner entity (“Sporting Goods Entities”), and (iv) two legal entities that own four unencumbered properties (collectively with Master Trust 2014, the Shopko Entities, and the Sporting Goods Entities, the “Predecessor Entities”).

On May 31, 2018, Spirit completed the spin-off by means of a pro-rata distribution of SMTA common shares to Spirit stockholders of record as of the close of business on the record date (“Spin-Off”). As of March 31, 2018, SMTA had not conducted any business as a separate company and SMTA had no material assets or liabilities. Following the Spin-Off, SMTA expects to operate as a real estate investment trust under the applicable provisions of the Internal Revenue Code of 1986, as amended.

As of March 31, 2018, SMTA expected to own approximately 790 assets in Master Trust 2014, 95 assets in the Shopko Entities and 15 other assets, collectively with an approximate net book value of $2.8 billion. SMTA will be managed by Spirit Realty, L.P. under an Asset Management Agreement.

Note 2. Summary of Significant Accounting Policies

Basis of Accounting

The accompanying balance sheets include all of the accounts of SMTA as of March 31, 2018 and December 31, 2017, prepared in accordance with GAAP in the U.S. The Company has no assets other than cash. Bank fees on cash are presented as general and administrative expenses on the statement of operations and comprehensive loss and are recognized when fees are paid.

Cash

Cash includes cash on hand or held in banks.

Note 3. Shareholder’s Equity

SMTA has been capitalized with the issuance of 10,000 common shares of beneficial interest ($0.01 par value per share) for a total of $10,000.

Note 4. Preferred Shares

SMTA has 20,000,000 authorized preferred shares ($0.01 par value per share). As of March 31, 2018, there were no preferred shares issued and outstanding.

Note 5. Subsequent Events

On May 31, 2018, the distribution date, Spirit completed the Spin-Off of SMTA. On the distribution date, Spirit distributed on a pro rata basis one common share of SMTA for every ten shares of Spirit common stock held by each of Spirit's stockholders as of May 18, 2018, the record date. As a result, 42,851,010 common shares of SMTA were issued on May 31, 2018.

Prior to the Spin-Off, but subsequent to March 31, 2018, Spirit transferred to SMTA the legal entities that hold the Predecessor Entities' assets and liabilities, as well as newly formed legal entities that hold ten additional properties contributed to SMTA with an aggregate net book value of $44.9 million, a $35.0 million B-1 Term Loan with Shopko as borrower, and a cash contribution of $3.0 million.

In conjunction with the Spin-Off, SMTA issued to Spirit Realty, L.P. and one of its affiliates, both wholly-owned subsidiaries of Spirit, 10% Series A preferred shares with an aggregate liquidation preference of $150.0 million. A newly formed, wholly-owned subsidiary of SMTA also issued 18% Series A preferred shares with an aggregate liquidation preference of $5.0 million to a third-party entity. The $5.0 million in cash received was distributed to Spirit prior to the Spin-Off.

9

Predecessor Entities

Combined Balance Sheets

(Unaudited, In Thousands)

	March 31, 2018			December 31, 2017
Assets
Investments:
Real estate investments:
Land and improvements	$	958,585		$	973,231
Buildings and improvements	1,656,579			1,658,023
Total real estate investments	2,615,164			2,631,254
Less: accumulated depreciation	(565,118		)	(557,948		)
	2,050,046			2,073,306
Loans receivable, net	30,105			32,307
Intangible lease assets, net	97,790			102,262
Real estate assets held for sale, net	7,853			28,460
Net investments	2,185,794			2,236,335
Cash and cash equivalents	5			6
Deferred costs and other assets, net	121,996			107,770
Goodwill	13,549			13,549
Total assets	$	2,321,344		$	2,357,660
Liabilities and parent company equity
Liabilities:
Mortgages and notes payable, net	$	2,007,771		$	1,926,835
Intangible lease liabilities, net	22,538			23,847
Accounts payable, accrued expenses and other liabilities	16,273			16,060
Total liabilities	2,046,582			1,966,742
Commitments and contingencies (see Note 6)
Parent company equity:
Net parent investment	274,762			390,918
Total liabilities and parent company equity	$	2,321,344		$	2,357,660

See accompanying notes.

10

Predecessor Entities

Combined Statements of Operations and Comprehensive (Loss) Income

(Unaudited, In Thousands)

	Three Months Ended March 31,
	2018			2017
Revenues:
Rentals	$	59,031		$	56,385
Interest income on loans receivable	81			203
Tenant reimbursement income	577			778
Other income	379			482
Total revenues	60,068			57,848
Expenses:
General and administrative	5,651			5,269
Related party fees	1,730			1,354
Transaction costs	3,017			—
Property costs (including reimbursable)	1,413			2,456
Interest	28,012			18,816
Depreciation and amortization	20,993			20,610
Impairments	4,825			6,493
Total expenses	65,641			54,998
(Loss) income before other expense and income tax expense	(5,573		)	2,850
Other expense:
Loss on debt extinguishment	255			—
Total other expense	255			—
(Loss) income before income tax expense	(5,828		)	2,850
Income tax expense	57			45
(Loss) income before (loss) gain on disposition of assets	(5,885		)	2,805
(Loss) gain on disposition of assets	(1,694		)	11,189
Net (loss) income and comprehensive (loss) income	$	(7,579	)	$	13,994

See accompanying notes.

11

Predecessor Entities

Combined Statement of Changes in Parent Company Equity

(Unaudited, In Thousands)

	Total Equity
Balance, December 31, 2017	$	390,918
Net loss and comprehensive loss	(7,579		)
Contributions from parent company	49,819
Distributions to parent company	(158,396		)
Balance, March 31, 2018	$	274,762

See accompanying notes.

12

Predecessor Entities

Combined Statements of Cash Flows

(Unaudited, In Thousands)

	Three Months Ended March 31,
	2018			2017
Operating activities
Net (loss) income	$	(7,579	)	$	13,994
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization	20,993			20,610
Impairments	4,825			6,493
Amortization of deferred financing costs	875			325
Amortization of debt discounts	2,000			1,061
Stock based compensation expense	1,606			831
Loss on debt extinguishment, net	255			—
Loss (gain) on dispositions of real estate and other assets, net	1,694			(11,189		)
Non-cash revenue	(769		)	(1,117		)
Other	(58		)	1,009
Changes in operating assets and liabilities:
Deferred costs and other assets, net	430			871
Accounts payable, accrued expenses and other liabilities	1,050			269
Net cash provided by operating activities	25,322			33,157
Investing activities
Acquisitions of real estate	—			(10,059		)
Capitalized real estate expenditures	(178		)	(463		)
Collections of principal on loans receivable	2,267			841
Proceeds from dispositions of real estate and other assets	16,911			40,461
Net cash provided by investing activities	19,000			30,780
Financing activities
Borrowings under mortgages and notes payable	92,216			—
Repayments under mortgages and notes payable	(12,904		)	(3,927		)
Debt extinguishment costs	(255		)	—
Deferred financing costs	(1,251		)	—
Contribution from parent company	48,213			29,306
Distribution to parent company	(156,252		)	(78,762		)
Net cash used in financing activities	(30,233		)	(53,383		)
Net increase in cash, cash equivalents and restricted cash	14,089			10,554
Cash, cash equivalents and restricted cash, beginning of period	66,510			12,688
Cash, cash equivalents and restricted cash, end of period	$	80,599		$	23,242

	Three Months Ended March 31,
	2018		2017
Supplemental Disclosures of Non-Cash Investing and Financing Activities:
Net investment distribution to parent	$	2,144	$	—
Supplemental Cash Flow Disclosures:
Interest paid	$	26,518	$	17,430
Taxes paid	$	19	$	25

See accompanying notes.

13

Predecessor Entities

Notes to Combined Financial Statements

(Unaudited)

Note 1. Organization

On August 3, 2017, Spirit Realty Capital, Inc. (“Spirit”) announced a plan to spin-off (“Spin-Off”) its interests in (i) an asset-backed securitization trust established in 2005 and amended and restated in 2014, comprised of six legal entities, which issues non-recourse net-lease mortgage notes collateralized by commercial real estate, net-leases and mortgage loans (“Master Trust 2014”), (ii) three legal entities (“Shopko Entities”) that own properties primarily leased to Specialty Retail Shops Holding Corp. and certain of its affiliates, (iii) one legal entity that owns a single distribution center property leased to a sporting goods tenant and its general partner entity (“Sporting Goods Entities”), and (iv) two legal entities that own four unencumbered properties (collectively with Master Trust 2014, the Shopko Entities, and the Sporting Goods Entities, the “Predecessor Entities” or the “Company”) into an independent, publicly traded company, Spirit MTA REIT (“SMTA”). The legal entities that comprise the Predecessor Entities are: Spirit Master Funding, LLC, Spirit Master Funding II, LLC, Spirit Master Funding III, LLC, Spirit Master Funding VI, LLC, Spirit Master Funding VIII, LLC, Spirit SPE Property Holdings II, LLC, Spirit SPE Portfolio 2006-1, LLC, Spirit SPE Portfolio 2006-2, LLC, Spirit SPE Portfolio 2006-3, LLC, Spirit AS Katy TX, LP, Spirit IM Katy TX, LLC, Spirit SPE Portfolio 2012-5, LLC and Spirit SPE Crown 2014-1, LLC.

To accomplish the Spin-Off, Spirit created a new real estate investment trust, SMTA, which as of March 31, 2018 was a wholly-owned subsidiary of Spirit. Prior to the Spin-Off, but subsequent to March 31, 2018, Spirit transferred to SMTA the legal entities that hold the Predecessor Entities’ assets and liabilities. Spirit effected the Spin-Off by means of a pro-rata distribution of SMTA common shares to Spirit stockholders of record as of the close of business on the record date. The operations of the Predecessor Entities are presented for all historical periods described and at the carrying value of such assets and liabilities reflected in Spirit’s books and records.

Costs associated with the Spin-Off incurred in the three months ended March 31, 2018 totaled $3.0 million, and are reflected as transaction costs on the accompanying combined statements of operations and comprehensive (loss) income. There were no costs associated with the Spin-Off incurred in the three months ended March 31, 2017.

Note 2. Summary of Significant Accounting Policies

Basis of Accounting

The accompanying combined financial statements have been prepared on a stand-alone basis and are derived from Spirit’s consolidated financial statements and underlying accounting records. The combined financial statements reflect the historical results of operations, financial position and cash flows of the wholly-owned subsidiaries of Spirit that make up the Predecessor Entities and are presented as if the transferred subsidiaries formed SMTA’s business for all historical periods presented. The assets to be contributed and liabilities to be assumed, as presented in the accompanying combined financial statements, reflect Spirit’s historical carrying value of the assets and liabilities as of the financial statement date, consistent with the accounting for spin-off transactions in accordance with GAAP in the U.S. All Predecessor Entities’ intercompany transactions have been eliminated in combination.

The results for interim periods are not necessarily indicative of the results for the entire year. Certain information and note disclosures, normally included in financial statements prepared in accordance with GAAP, have been condensed or omitted from these statements pursuant to SEC rules and regulations and, accordingly, these financial statements should be read in conjunction with the Predecessor Entities’ audited combined financial statements for the year ended December 31, 2017 included in the Company's registration statement on Form 10 filed with the SEC.

As of March 31, 2018, the Predecessor Entities were wholly-owned subsidiaries of Spirit. As a result, the combined net assets of the Predecessor Entities have been reflected in the accompanying combined balance sheets as net parent investment. All transactions between Spirit and the Predecessor Entities are considered effectively settled through equity in the combined financial statements at the time the transaction is recorded, other than certain intercompany mortgages as discussed in the Related Party footnote (see Note 5). The settlement of these transactions is reflected as contributions and distributions to parent in the combined statement of changes in parent company equity and contributions and distributions to parent in the combined statements of cash flows as a financing activity.

The combined financial statements include expense allocations related to certain Spirit corporate functions, including executive oversight, asset management, property management, treasury, finance, human resources, tax, accounting, financial reporting, information technology and investor relations. These expenses have been allocated to the Predecessor Entities based on direct usage or benefit where specifically identifiable, with the remainder allocated pro rata based on property count. All the expense allocations were deemed to have been incurred and settled through net

14

Predecessor Entities

Notes to Combined Financial Statements

(Unaudited)

parent investment in the period in which the costs were incurred. At time of the Spin-Off, SMTA entered into an Asset Management Agreement with Spirit to provide corporate functions.

Management considers the expense allocation methodology and results to be reasonable. However, the allocations may not be indicative of the actual expense that would have been incurred had the Predecessor Entities operated as an independent, publicly traded company for the periods presented. Accordingly, the combined financial statements herein do not necessarily reflect what the Predecessor Entities’ financial position, results of operations or cash flows would have been if it had been a standalone company during the periods presented, nor are they necessarily indicative of its future results of operations, financial position or cash flows.

These combined financial statements include the special purpose entities that will be wholly owned by SMTA. Certain of these special purpose entities were formed to acquire and hold real estate encumbered by indebtedness (see Note 4). Each special purpose entity is a separate legal entity and is the sole owner of its assets and responsible for its liabilities. The assets of these special purpose entities are not available to pay, or otherwise satisfy obligations to, the creditors of any affiliate or owner of another entity unless the special purpose entities have expressly agreed and are permitted under their governing documents. As of March 31, 2018 and December 31, 2017, net assets totaling $1.90 billion and $1.82 billion, respectively, were held and net liabilities totaling $2.04 billion and $1.96 billion, respectively, were owed by these encumbered special purpose entities included in the accompanying combined balance sheets.

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 at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although management believes its estimates are reasonable, actual results could differ from those estimates.

Segment Reporting

The Company views its operations as one segment, which consists of net leasing operations. The Company has no other reportable segments.

Allowance for Doubtful Accounts

The Company reviews its rent and other tenant receivables for collectability on a regular basis, taking into consideration changes in factors such as 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 tenant operates. If the collectability of a receivable with respect to any tenant is in doubt, a provision for uncollectible amounts will be established or a direct write-off of the specific receivable will be made. The Company’s reserves for uncollectible amounts totaled $3.5 million as of both March 31, 2018 and December 31, 2017, against accounts receivable balances of $4.7 million and $5.0 million, respectively. Receivables are recorded within deferred costs and other assets, net in the accompanying combined balance sheets. Receivables are written off against the reserves for uncollectible amounts when all possible means of collection have been exhausted.

For deferred rental revenues related to the straight-line method of reporting rental revenue, the collectability review includes management’s estimates of amounts that will not be realized based on an assessment of the risks inherent in the portfolio, considering historical experience. The Company established a reserve for losses of $1.0 million as of both March 31, 2018 and December 31, 2017, against deferred rental revenue receivables of $25.8 million and $24.9 million, respectively. Deferred rental revenue receivables are recorded within deferred costs and other assets, net in the accompanying combined balance sheets.

15

Predecessor Entities

Notes to Combined Financial Statements

(Unaudited)

Cash, Cash Equivalents and Restricted Cash

Cash and cash equivalents include cash and highly liquid investment securities with maturities at acquisition of three months or less. The Company invests cash primarily in money market funds of major financial institutions with fund investments consisting of highly-rated money market instruments and other short-term instruments. Restricted cash is classified within deferred costs and other assets, net in the accompanying combined balance sheets. Cash, cash equivalents and restricted cash as shown in the combined statements of cash flows consisted of the following (in thousands):

	March 31, 2018		December 31, 2017		March 31, 2017
Cash and cash equivalents	$	5	$	6	$	1,446
Restricted cash:
Release Account (1)	74,982		61,001		21,796
Liquidity Reserve (2)	5,527		5,503		—
Tenant improvements, repairs, and leasing commissions (3)	81		—		—
Other (4)	4		—		—
Total cash, cash equivalents and restricted cash	$	80,599	$	66,510	$	23,242

⁽¹⁾ Release Account cash consists of proceeds from the sales of assets pledged as collateral under Master Trust 2014 and is held on deposit until a qualifying substitution is made or the funds are applied as prepayment of principal.

⁽²⁾  Liquidity Reserve cash was placed on deposit in conjunction with the issuance of additional series of notes under Master Trust 2014 and is held until there is a cashflow shortfall, as defined in the Master Trust 2014 agreements, or a liquidation of Master Trust 2014 occurs.

⁽³⁾  Deposits held as additional collateral support by lenders to fund improvements, repairs, and leasing commissions incurred to secure a new tenant.

⁽⁴⁾  Funds held in lender controlled accounts released after scheduled debt service requirements are met.

Goodwill

Goodwill arises from business combinations and represents the excess of the cost of an acquired entity over the net fair value amounts that were assigned to the identifiable assets acquired and the liabilities assumed. Spirit recorded goodwill as a result of its merger with Cole Credit Property II, Inc. (“Cole”) on July 17, 2013. Goodwill was allocated to the Predecessor Entities based on the fair value of the Cole assets attributable to the Predecessor Entities relative to the total fair value of Cole assets acquired through the merger. Goodwill is tested for impairment at the reporting unit level on an annual basis and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying value.

Income Taxes

The Company applies the provisions of FASB ASC Topic 740, Income Taxes, and computes the provision for income taxes on a separate return basis. The separate return method applies the accounting guidance for income taxes to the stand-alone combined financial statements as if the Predecessor Entities were a separate taxpayer and a stand-alone enterprise for the periods presented.

The Predecessor Entities are directly and indirectly wholly-owned by Spirit Realty, L.P. and are disregarded entities for Federal income tax purposes. Spirit Realty, L.P. is wholly-owned by Spirit through certain direct and indirect ownership interests and is taxed as a partnership for Federal income tax purposes. Spirit has elected to be taxed as a REIT under the applicable provisions of the Internal Revenue Code of 1986, as amended, and as a result will not be subject to Federal income tax as long as it distributes 100% of its taxable income and satisfies certain other requirements. Therefore, no provision for Federal income tax has been made in the accompanying combined financial statements. The Predecessor Entities are subject to certain other taxes, including state taxes, which are reflected as income tax (expense) benefit in the combined statements of operations and comprehensive (loss) income. Franchise taxes are included in general and administrative expenses in the accompanying combined statements of operations and comprehensive (loss) income.

Earnings Per Share

The Company does not present earnings per share as common shares were not part of the Company’s capital structure for the periods presented.

16

Predecessor Entities

Notes to Combined Financial Statements

(Unaudited)

New Accounting Pronouncements

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers: Topic 606. This new guidance establishes a principles-based approach for accounting for revenue from contracts with customers and is effective for annual reporting periods beginning after December 15, 2017, with early application permitted for annual reporting periods beginning after December 15, 2016. The Company adopted the new revenue recognition standard effective January 1, 2018 under the modified retrospective method, and elected to apply the standard only to contracts that were not completed as of the date of adoption (i.e., January 1, 2018). In evaluating the impact of this new standard, the Company identified that lease contracts covered by Leases (Topic 840) are excluded from the scope of this new guidance, as such, this ASU had no material impact on the Company's reported revenues, results of operations, financial position, cash flows and disclosures.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which supersedes the existing guidance for lease accounting Leases (Topic 840). ASU 2016-02 requires lessees to recognize leases on their balance sheets, and leaves lessor accounting largely unchanged. Leases pursuant to which the Company is the lessee primarily consists of ground leases. The amendments in this ASU are effective for the fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Early application is permitted for all entities. ASU 2016-02 requires a modified retrospective approach for all leases existing at, or entered into after, the date of initial application, with an option to elect to use certain transition relief. Under the guidance as currently contemplated, the Company will record certain expenses paid directly by tenants that protect the Company's interests in its properties, such as insurance and real estate taxes; however, the FASB has announced it will re-evaluate this requirement. The Company has begun implementation of the ASU and is currently evaluating the overall impact of this ASU on its combined financial statements.

In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments, which requires more timely recognition of credit losses associated with financial assets. ASU 2016-13 requires financial assets (or a group of financial assets) measured at an amortized cost basis to be presented at the net amount expected to be collected. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently evaluating the impact of this ASU on its combined financial statements.

Note 3. Investments

Real Estate Investments

As of March 31, 2018, the Company’s gross investment in real estate properties and loans totaled approximately $2.8 billion, representing investments in 884 owned properties and 6 properties securing mortgage loans. The gross investment is comprised of land, buildings, lease intangible assets and lease intangible liabilities, as adjusted for any impairment, and the carrying amount of loans receivable and real estate assets held for sale. The portfolio is geographically dispersed throughout 45 states with only one state, Texas, with a real estate investment of 12.2%, accounting for more than 10.0% of the total dollar amount of the Company’s real estate investment portfolio.

17

Predecessor Entities

Notes to Combined Financial Statements

(Unaudited)

During the three months ended March 31, 2018, the Company had the following real estate and loan activity, net of accumulated depreciation and amortization:

	Number of Properties						Dollar Amount of Investments
	Owned		Financed		Total		Owned			Financed			Total
							(In Thousands)
Gross balance, December 31, 2017	907		11		918		$	2,838,285		$	32,307		$	2,870,592
Acquisitions/improvements (1)	—		—		—		178			—			178
Dispositions of real estate (2)(3)	(23	)	—		(23	)	(29,451		)	—			(29,451		)
Principal payments and payoffs	—		(5	)	(5	)	—			(2,557		)	(2,557		)
Impairments	—		—		—		(4,825		)	—			(4,825		)
Write-off of gross lease intangibles	—		—		—		(16,054		)	—			(16,054		)
Loan premium amortization and other	—		—		—		(139		)	355			216
Gross balance, March 31, 2018	884		6		890		$	2,787,994		$	30,105		$	2,818,099
Accumulated depreciation and amortization							(654,968		)	—			(654,968		)
Other non-real estate assets held for sale							125			—			125
Net balance, March 31, 2018							$	2,133,151		$	30,105		$	2,163,256

⁽¹⁾ Includes investments of $162 thousand in revenue producing capitalized expenditures, as well as $16 thousand of non-revenue producing capitalized expenditures as of March 31, 2018.

⁽²⁾ The total accumulated depreciation and amortization associated with dispositions of real estate was $6.8 million as of March 31, 2018.

⁽³⁾ For the period ended March 31, 2018, the total loss on disposal of assets for properties held and used was $1.7 million.

Scheduled minimum future contractual rent to be received under the remaining non-cancelable term of the operating leases (including contractual fixed rent increases occurring on or after April 1, 2018) are as follows (in thousands):

	March 31, 2018
2018 Remainder	$	173,321
2019	226,667
2020	218,569
2021	211,415
2022	198,474
Thereafter	1,467,603
Total future minimum rentals	$	2,496,049

Because lease renewal periods are exercisable at the option of the lessee, the preceding table presents future minimum lease payments due during the initial lease term only. In addition, the future minimum rentals do not include any contingent rentals based on a percentage of the lessees’ gross sales or lease escalations based on future changes in the CPI or other stipulated reference rate.

Loans Receivable

The following table details loans receivable, net of premium and allowance for loan losses (in thousands):

	March 31, 2018		December 31, 2017
Mortgage loans-principal	$	30,105	$	32,665
Mortgage loans-premium, net of amortization	—		31
Allowance for loan losses	—		(389		)
Total loans receivable, net	$	30,105	$	32,307

The mortgage loans are secured by single-tenant commercial properties and generally have fixed interest rates over the term of the loans.

18

Predecessor Entities

Notes to Combined Financial Statements

(Unaudited)

Lease Intangibles, Net

The following table details lease intangible assets and liabilities, net of accumulated amortization (in thousands):

	March 31, 2018			December 31, 2017
In-place leases	$	176,765		$	191,557
Above-market leases	21,773			24,691
Less: accumulated amortization	(100,748		)	(113,986		)
Intangible lease assets, net	$	97,790		$	102,262
Below-market leases	$	36,740		$	39,274
Less: accumulated amortization	(14,202		)	(15,427		)
Intangible lease liabilities, net	$	22,538		$	23,847

The amounts amortized as a net increase to rental revenue for capitalized above and below-market leases were $154 thousand and $130 thousand for the three months ended March 31, 2018 and 2017, respectively. The value of in place leases amortized and included in depreciation and amortization expense was $2.7 million for both the three months ended March 31, 2018 and 2017. 

Real Estate Assets Held for Sale

The following table shows the activity in real estate assets held for sale for the three months ended March 31, 2018 (dollars in thousands): 

	Number of Properties		Carrying Value
			(In Thousands)
Balances, December 31, 2017	7		$	28,460
Transfers from real estate investments	2		2,207
Sales	—		—
Transfers to real estate investments held and used	(4	)	(22,814		)
Impairments	—		—
Balances, March 31, 2018	5		$	7,853

Impairments

The following table summarizes total impairment losses recognized on the accompanying combined statements of operations and comprehensive (loss) income (in thousands):

	Three Months Ended March 31,
	2018			2017
Real estate and intangible asset impairment	$	4,818		$	6,962
Write-off of lease intangibles, net	23			(469		)
Recovery of loans receivable, previously reserved	(16		)	—
Total impairment loss	$	4,825		$	6,493

Impairments for the three months ended March 31, 2018 were comprised of $4.8 million on properties classified as held and used. Impairments for the three months ended March 31, 2017 were comprised of $4.1 million on properties classified as held and used and $2.4 million on properties classified as held for sale.

19

Predecessor Entities

Notes to Combined Financial Statements

(Unaudited)

Note 4. Debt

Master Trust 2014

The Company has access to an asset-backed securitization platform, Master Trust 2014, to raise capital through the issuance of non-recourse net-lease mortgage notes collateralized by commercial real estate, net-leases and mortgage loans. Master Trust 2014 has five bankruptcy-remote, special purpose entities as issuers or co-issuers of the notes.

On January 23, 2018, the Company re-priced a private offering of the Master Trust 2014 Series 2017-1 notes with $674.4 million aggregate principal amount. As a result, the interest rate on the Class B Notes was reduced from 6.35% to 5.49%, while the other terms of the Class B Notes remained unchanged. The terms of the Class A Notes were unaffected by the repricing. In connection with the repricing, the Company received $8.2 million in additional proceeds that reduced the debt discount. The additional proceeds were distributed to Spirit.

During the three months ended March 31, 2018, the Company extinguished $4.6 million of Master Trust 2014 debt as a result of pre-payments, resulting in approximately $0.3 million in losses on debt extinguishment attributable to pre-payment premiums paid.

The Master Trust 2014 notes are summarized below:

	Stated Rates (1)	Maturity		March 31, 2018				December 31, 2017
		(in Years)	(in Thousands)
Series 2014-1 Class A2	5.4%	2.3		$	249,203			$	252,437
Series 2014-2	5.8%	3.0		232,768				234,329
Series 2014-3	5.7%	4.0		310,439				311,336
Series 2014-4 Class A1	3.5%	1.8		149,629				150,000
Series 2014-4 Class A2	4.6%	11.8		353,746				358,664
Series 2017-1 Class A	4.4%	4.7		540,599				542,400
Series 2017-1 Class B	5.5%	4.7		132,000				132,000
Total Master Trust 2014 notes	4.9%	5.1		1,968,384				1,981,166
Debt discount, net			(26,125			)	(36,342			)
Deferred financing costs, net			(17,263			)	(17,989			)
Total Master Trust 2014, net				$	1,924,996			$	1,926,835

⁽¹⁾ Represents the individual series stated interest rates as of March 31, 2018 and the weighted average stated rate of the total Master Trust 2014 notes, based on the collective series outstanding principal balances as of March 31, 2018.

As of March 31, 2018, the Master Trust 2014 notes were secured by 790 owned and financed properties. The notes issued under Master Trust 2014 are cross-collateralized by the assets of all issuers within this trust.

CMBS

On January 22, 2018, one of the Predecessor Entities entered into a new non-recourse loan agreement with Société Générale and Barclays Bank PLC as lenders, which is collateralized by a single distribution center property located in Katy, Texas. The loan has a term of 10 years to maturity with a stated interest rate of 5.14%. As a result of the issuance, the Company received approximately $84 million in proceeds. The Company distributed all of the proceeds to Spirit. As of March 31, 2018, the loan had an outstanding principal balance of $83.9 million and unamortized deferred financing costs of $1.1 million.

20

Predecessor Entities

Notes to Combined Financial Statements

(Unaudited)

Debt Maturities

As of March 31, 2018, scheduled debt maturities of Master Trust 2014 and CMBS debt are as follows (in thousands):

	Scheduled Principal		Balloon Payment		Total
2018	$	26,185	$	—	$	26,185
2019	36,437		—		36,437
2020	40,781		364,997		405,778
2021	23,642		220,176		243,818
2022	23,248		972,263		995,511
Thereafter	182,781		161,752		344,533
Total	$	333,074	$	1,719,188	$	2,052,262

Interest Expense

The following table is a summary of the components of interest expense related to the Company’s borrowings (in thousands):

	Three Months Ended March 31,
	2018		2017
Interest expense	$	25,137	$	17,430
Non-cash interest expense:
Amortization of deferred financing costs	875		325
Amortization of debt discount, net	2,000		1,061
Total interest expense	$	28,012	$	18,816

Note 5. Related Party Transactions

Related Party Transfers

The combined financial statements of the Predecessor Entities include transfers of properties from the Predecessor Entities to Spirit and its wholly-owned subsidiaries. These transactions are reflected in the combined statements of cash flows as distribution to parent. For the three months ended March 31, 2018, the Predecessor Entities transferred three properties to Spirit with a net book value of $2.1 million. There were no related party transfers during the three months ended March 31, 2017. For these transactions, due to all entities being under common control, no gain or loss was recognized by the Predecessor Entities.

Related Party Loans Receivable

The Predecessor Entities have four mortgage loans receivable where wholly-owned subsidiaries of Spirit are the borrower, and the loans are secured by six single-tenant commercial properties. In total, these mortgage notes had outstanding principal of $30.1 million and $30.8 million at March 31, 2018 and December 31, 2017, respectively, which is included in loans receivable, net on the combined balance sheet, and generated $0.1 million of income in both the three months ended March 31, 2018 and 2017, which is included in interest income on loans receivable in the combined statements of operations and comprehensive (loss) income. These mortgage notes have a weighted average stated interest rate of 1.0% and a weighted average maturity of 9.8 years at March 31, 2018.

Related Party Note Payable

Spirit Realty, L.P., a wholly-owned subsidiary of Spirit, owned notes issued under Master Trust 2014 Series 2014-2. The principal amounts due under the notes was $11.6 million at December 31, 2017, and is included in mortgages and notes payable, net on the combined balance sheet. On February 2, 2018, Spirit Realty, L.P. sold its holding of Master Trust 2014 Series 2014-2 notes to a third-party. This transaction had no impact on the Company’s mortgages and notes payable, net balance as shown in the combined balance sheet.

21

Predecessor Entities

Notes to Combined Financial Statements

(Unaudited)

Also, in conjunction with the Series 2017-1 notes issuance completed in December 2017, Spirit Realty, L.P., as sponsor of the issuance, retained a 5% economic interest in the Master Trust 2014 Series 2017-1 notes as required by the risk retention rules issued under 17 CFR Part 246. As such, the principal amounts due under the notes was $33.6 million and $33.7 million at March 31, 2018 and December 31, 2017, respectively, and is included in the mortgages and notes payable, net on the combined balance sheets. The notes have a weighted average stated interest rate of 4.6% with a term of 4.7 years to maturity as of March 31, 2018.

Related Party Service Agreement

Spirit Realty, L.P., a wholly-owned subsidiary of Spirit, provides property management services and special services for Master Trust 2014. The property management fees accrue daily at 0.25% per annum of the collateral value of the Master Trust 2014 collateral pool less any specially serviced assets and the special servicing fees accrue daily at 0.75% per annum of the collateral value of any assets deemed to be specially serviced per the terms of the Property Management and Servicing Agreement dated May 20, 2014. During the three months ended March 31, 2018 and 2017, property management fees of $1.5 million and $1.2 million, respectively, were incurred. Special servicing fees of $0.2 million were incurred in both the three months ended March 31, 2018 and 2017. The property management fees and special servicing fees are included in related party fees in the combined statements of operations and comprehensive (loss) income. There were no accrued payables at March 31, 2018 or December 31, 2017.

Expense Allocations

As described in Note 2, the accompanying combined financial statements present the operations of the Predecessor Entities as carved out from the financial statements of Spirit. General and administrative expenses of $0.1 million and $1.0 million during the three months ended March 31, 2018 and 2017, respectively, and transaction costs of $2.5 million during the three months ended March 31, 2018 were specifically identified based on direct usage or benefit. The remaining general and administrative expenses, restructuring charges and transaction costs have been allocated to the Predecessor Entities based on relative property count, which the Company believes to be a reasonable methodology. These allocated expenses are centralized corporate costs borne by Spirit for management and other services, including, but not limited to, executive oversight, asset management, property management, treasury, finance, human resources, tax, accounting, financial reporting, information technology and investor relations, as well as transaction costs incurred in connection with the Spin-Off. A summary of the amounts allocated by property count is provided below:

	Three Months Ended March 31,
	2018		2017
Corporate expenses:
Cash compensation and benefits	$	2,663	$	1,928
Stock compensation	1,606		831
Professional fees	602		906
Other corporate expenses	650		566
Total corporate expenses	$	5,521	$	4,231
Transaction costs	$	532	$	—

Corporate expenses have been included within general and administrative expenses in the combined statements of operations and comprehensive (loss) income.

There were no accruals for related party amounts at either March 31, 2018 or December 31, 2017.

Note 6. Commitments and Contingencies

The Company is periodically subject to claims or litigation in the ordinary course of business, including claims generated from business conducted by tenants on real estate owned by the Company. In these instances, the Company is typically indemnified by the tenant against any losses that might be suffered, and the Company and/or the tenant are insured against such claims.

As of March 31, 2018, there were no outstanding claims against the Company that are expected to have a material adverse effect on the Company’s financial position, results of operations or cash flows.

22

Predecessor Entities

Notes to Combined Financial Statements

(Unaudited)

As of March 31, 2018, the Company had commitments totaling $9.0 million, of which $6.5 million relates to future acquisitions and the remainder to fund improvements on properties the Company currently owns. Commitments related to acquisitions contain standard cancellation clauses contingent on the results of due diligence. Of the total commitments of $9.0 million, $8.5 million is expected to be funded during fiscal year 2018, with the remaining $0.5 million expected to be funded in 2019.

The Company estimates future costs for known environmental remediation requirements when it is probable that the Company has incurred a liability and the related costs can be reasonably estimated. The Company considers various factors when estimating its environmental liabilities, and adjustments are made when additional information becomes available that affects the estimated costs to study or remediate any environmental issues. When only a wide range of estimated amounts can be reasonably established and no other amount within the range is better than another, the low end of the range is recorded in the combined financial statements. As of March 31, 2018, no accruals have been made.

Note 7. Fair Value Measurements

Nonrecurring Fair Value Measurements

Fair value measurement of an asset on a nonrecurring basis occurs when events or changes in circumstances related to an asset indicate that the carrying amount of the asset is no longer recoverable. The following table sets forth the Company’s assets that were accounted for at fair value on a nonrecurring basis as of March 31, 2018 and December 31, 2017 (in thousands):

			Fair Value Hierarchy Level
Description	Fair Value		Level 1		Level 2		Level 3
March 31, 2018
Long-lived assets held and used	$	9,533	$	—	$	—	$	9,533
Long-lived assets held for sale	$	—	$	—	$	—	$	—
December 31, 2017
Long-lived assets held and used	$	11,077	$	—	$	—	$	11,077
Long-lived assets held for sale	$	30,956	$	—	$	—	$	30,956

Real estate and the related intangible assets are evaluated for impairment based on certain indicators including, but not limited to: the asset being held for sale, vacant, non-operating or the lease on the asset expiring in 60 days or less. The fair values of impaired real estate and intangible assets were determined by using the following information, depending on availability, in order of preference: signed purchase and sale agreements or letters of intent; recently quoted bid or ask prices, or market prices for comparable properties; estimates of cashflow, which consider, among other things, contractual and forecasted rental revenues, leasing assumptions, and expenses based upon market conditions; and expectations for the use of the real estate. Based on these inputs, the Company determined that its valuation of the impaired real estate and intangible assets falls within Level 3 of the fair value hierarchy.

During the three months ended March 31, 2018 and for the year ended December 31, 2017, we determined that 14 and five long-lived assets held and used, respectively, were impaired.

23

Predecessor Entities

Notes to Combined Financial Statements

(Unaudited)

For none of the held and used properties impaired during the three months ended March 31, 2018 and four of the held and used properties during the year ended December 31, 2017, the Company estimated property fair value using price per square foot of comparable properties. The following table provides information about the price per square foot of comparable properties used as inputs (price per square foot in dollars):

	March 31, 2018			December 31, 2017
	Range	Weighted Average	Square Footage	Range	Weighted Average	Square Footage
Long-lived assets held and used by asset type
Retail	$—	$—	—	$18.40 - $285.98	$72.04	68,871
Office	$—	$—	—	$81.61 - $244.86	$149.49	19,821

For the 14 held and used properties impaired during the three months ended March 31, 2018 and one held and used property impaired during the year ended December 31, 2017, the Company estimated property fair value using price per square foot based on a listing price or a broker opinion of value. The following table provides information about the price per square foot of listing price and broker opinion of value used as inputs (price per square foot in dollars):

	March 31, 2018			December 31, 2017
	Range	Weighted Average	Square Footage	Range	Weighted Average	Square Footage
Long-lived assets held and used by asset type
Retail	$7.00 - $109.79	$75.93	134,478	$88.89	$88.89	22,500

For the three months ended March 31, 2018 and year ended December 31, 2017, we determined that none and six long-lived assets held for sale, respectively, were impaired. The Company estimated fair value of held for sale properties using price per square foot from the signed purchase and sale agreements as follows (price per square foot in dollars):

	March 31, 2018			December 31, 2017
	Range	Weighted Average	Square Footage	Range	Weighted Average	Square Footage
Long-lived assets held for sale by asset type
Retail	$—	$—	—	$55.30 - $346.23	$299.89	87,248
Industrial	$—	$—	—	$54.21	$54.21	96,845

Estimated Fair Value of Financial Instruments

Financial assets and liabilities for which the carrying values approximate their fair values include cash and cash equivalents, restricted cash and escrow deposits, and accounts receivable and payable. Generally, these assets and liabilities are short-term in duration and are recorded at cost, which approximates fair value, on the accompanying consolidated balance sheets.

In addition to the disclosures for assets and liabilities required to be measured at fair value at the balance sheet date, companies are required to disclose the estimated fair values of all financial instruments, even if they are not carried at their fair values. The fair values of financial instruments are estimates based upon market conditions and perceived risks at March 31, 2018 and December 31, 2017. These estimates require management’s judgment and may not be indicative of the future fair values of the assets and liabilities.

24

Predecessor Entities

Notes to Combined Financial Statements

(Unaudited)

The estimated fair values of the following financial instruments have been derived based on market quotes for comparable instruments or discounted cash flow analyses using estimates of the amount and timing of future cash flows, market rates and credit spreads. These measurements are classified as Level 2 of the fair value hierarchy. The following table discloses fair value information for these financial instruments (in thousands):

	March 31, 2018				December 31, 2017
	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Loans receivable, net	$	30,105	$	26,035	$	32,307	$	29,076
Mortgages and notes payable, net (1)	$	2,007,771	$	2,089,603	$	1,926,835	$	2,030,191

⁽¹⁾ The carrying value of the debt instruments are net of unamortized deferred financing costs and certain debt discounts/premiums.

Note 8. Significant Credit and Revenue Concentration

As of March 31, 2018 and December 31, 2017, the Predecessor Entities’ real estate investments were operated by 200 and 201 tenants, respectively, that operate within retail, office and industrial property types across various industries throughout the U.S. Shopko operates in the general merchandise industry and is the Predecessor Entities’ largest tenant as a percentage of rental revenue. Total rental revenues from properties leased to Shopko for the three months ended March 31, 2018 and 2017 contributed 20.2% and 23.6% of the rental revenue presented in the accompanying combined statements of operations and comprehensive (loss) income. No other tenant contributed 5% or more of the rental revenue during any of the periods presented. As of both March 31, 2018 and December 31, 2017, the Predecessor Entities’ net investment in Shopko properties represents approximately 17.3% and 15.8%, respectively, of the Predecessor Entities’ total assets presented in the accompanying combined balance sheets.

Note 9. Subsequent Events

Spin-Off of SMTA

On May 31, 2018, the distribution date, Spirit completed the Spin-Off of SMTA. On the distribution date, Spirit distributed on a pro rata basis one common share of SMTA for every ten shares of Spirit common stock held by each of Spirit's stockholders as of May 18, 2018, the record date. As a result, 42,851,010 common shares of SMTA were issued on May 31, 2018.

Prior to the Spin-Off, but subsequent to March 31, 2018, Spirit transferred to SMTA the legal entities that hold the Predecessor Entities' assets and liabilities, as well as newly formed legal entities that hold ten additional properties contributed to SMTA with an aggregate net book value of $44.9 million, a $35.0 million B-1 Term Loan with Shopko as borrower, and a cash contribution of $3.0 million.

In conjunction with the Spin-Off, SMTA issued to Spirit Realty, L.P. and one of its affiliates, both wholly-owned subsidiaries of Spirit, 10% Series A preferred shares with an aggregate liquidation preference of $150.0 million. A newly formed, wholly-owned subsidiary of SMTA also issued 18% Series A preferred shares with an aggregate liquidation preference of $5.0 million to a third-party entity. The $5.0 million in cash received was distributed to Spirit prior to the Spin-Off.

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

FORWARD-LOOKING STATEMENTS

This quarterly report contains forward-looking statements within the meaning of the federal securities laws. When used in this quarterly report, the words “estimate,” “anticipate,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “seek,” “approximately” or “plan,” or the negative of these words or similar words or phrases that are predictions of or indicate future events or trends and which do not relate solely to historical matters are intended to identify forward-looking statements. You can also identify forward-looking statements by discussions of strategy, plans or intentions of management.

Forward-looking statements involve numerous risks and uncertainties and you should not rely on them as predictions of future events. Forward-looking statements depend on assumptions, data or methods which may be incorrect or imprecise and we may not be able to realize them. We do not guarantee that the transactions and events described will happen as described (or that they will happen at all).

The following risks and uncertainties, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements:

◦ industry and economic conditions;

◦ volatility and uncertainty in the financial markets, including potential fluctuations in the CPI;

◦ our success in implementing our business strategy and our ability to identify, underwrite, finance, consummate, integrate and manage diversifying acquisitions or investments;

◦ the financial performance of our retail tenants and the demand for retail space, particularly with respect to challenges being experienced by general merchandise retailers;

◦ our ability to diversify our tenant base and reduce the concentration of our significant tenant;

◦ the nature and extent of future competition;

◦ increases in our costs of borrowing as a result of changes in interest rates and other factors;

◦ our ability to access debt and equity capital markets;

◦ our ability to pay down, refinance, restructure and/or extend our indebtedness as it becomes due;

◦ our ability and willingness to renew our leases upon expiration and to reposition our properties on the same or better terms upon expiration in the event such properties are not renewed by tenants or we exercise our rights to replace existing tenants upon default;

◦ the impact of any financial, accounting, legal or regulatory issues or litigation that may affect us or our major tenants;

◦ our ability to manage our expanded operations;

◦ our ability and willingness to maintain our qualification as a REIT;

◦ our relationship with our Manager and its ability to retain qualified personnel;

◦ potential conflicts of interest with our Manager or Spirit;

◦ our ability to achieve the intended benefits from our Spin-Off from Spirit; and

◦ other risks inherent in the real estate business, including tenant defaults, potential liability relating to environmental matters, illiquidity of real estate investments and potential damages from natural disasters.

The factors included in this quarterly report, including the documents incorporated by reference and documents we subsequently file with the SEC and incorporate by reference, are not exhaustive and additional factors could adversely affect our business and financial performance. For a discussion of additional risk factors, see the factors included under the caption “Risk Factors” in our Information Statement filed as Exhibit 99.1 to our Form 10 filed on May 4, 2018. All forward-looking statements are based on information that was available, and speak only, as of the date on which they were made. We disclaim any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, new information, data or methods, future events or other changes, except as required by law.

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OVERVIEW AND BASIS OF PRESENTATION

On August 3, 2017, Spirit announced a plan to spin-off its interests in (i) Master Trust 2014, an asset-backed securitization trust comprised of six legal entities, which has issued non-recourse net-lease mortgage notes collateralized by commercial real estate, net-leases and mortgage loans receivable, (ii) three legal entities which own properties primarily leased to Shopko, (iii) the Sporting Goods Entities, and (iv) two legal entities which own unencumbered properties. As of March 31, 2018, the Predecessor Entities consisted of 884 owned properties, with a 98.9% Occupancy. The owned properties were leased to 200 tenants across 45 states and 23 industries. In addition, Master Trust 2014 included mortgage loans receivable secured by an additional six real estate properties.

The spin-off was completed on May 31, 2018 by means of a pro rata distribution by Spirit to its common stockholders of all outstanding SMTA common shares. SMTA was formed for the purpose of receiving, via contribution from Spirit, the legal entities which comprise the Predecessor Entities, as well as newly formed legal entities that hold ten additional properties contributed to SMTA with an aggregate net book value of $44.9 million, a $35.0 million B-1 Term Loan with Shopko as borrower, and a cash contribution of $3.0 million. These newly formed legal entities are not included within the Predecessor Entities' financial statements included herein.

On May 31, 2018, the distribution date, Spirit completed the Spin-Off of SMTA. On the distribution date, Spirit distributed on a pro rata basis one common share of SMTA for every ten shares of Spirit common stock held by each of Spirit's stockholders as of May 18, 2018, the record date. As a result, 42,851,010 common shares of SMTA were issued on May 31, 2018.

In connection with the Spin-Off, SMTA entered into an Asset Management Agreement with Spirit Realty, L.P., a wholly-owned subsidiary of Spirit, under which Spirit Realty, L.P. will provide various services including, but not limited to: active portfolio management (including underwriting and risk management), financial reporting, and SEC compliance. The fees for these services will be a flat rate of $20 million annually. Additionally, subsequent to the Spin-Off, Spirit Realty, L.P. will continue as the property manager and special servicer of Master Trust 2014, under which Spirit Realty, L.P. receives property management fees which accrue daily at 0.25% per annum of the collateral value of the Master Trust 2014 collateral pool less any specially serviced assets and special servicing fees which accrue daily at 0.75% per annum of the collateral value of any assets deemed to be specially serviced per the terms of the Property Management and Servicing Agreement. SMTA and Spirit also entered into a Separation and Distribution Agreement, an Insurance-Sharing Agreement, a Tax Matters Agreement, and a Registration Rights Agreement in connection with the Spin-Off.

Subsequent to the spin-off, SMTA expects to operate in a manner intended to enable it to qualify as a REIT under the applicable provisions of the Internal Revenue Code of 1986, as amended. To maintain REIT status, SMTA must meet a number of organizational and operational requirements, including a requirement to distribute annually to shareholders at least 90% of SMTA’s REIT taxable income, determined without regard to the dividends paid deduction and excluding any net capital gains. Since the Predecessor Entities are disregarded entities for Federal income tax purposes, no provision for Federal income tax has been made in their accompanying combined financial statements. The Predecessor Entities are subject to certain other taxes, including state taxes, which have been reflected as income tax expense in their combined statements of operations and comprehensive (loss) income.

The accompanying combined financial statements of the Predecessor Entities have been prepared on a carve-out basis in accordance with GAAP. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, and revenues and expenses during the reporting periods. Actual results could differ from these estimates. The historical financial results for the carved-out Predecessor Entities reflect expenses for certain corporate costs which we believe are reasonable. These expenses were based on either actual costs incurred or a proportion of costs estimated to be allocable to SMTA based on the relative property count of the Predecessor Entities to those owned by Spirit as a whole. Such costs do not necessarily reflect what the actual costs would have been if SMTA had been operating as a separate standalone public company. These expenses are discussed further in Note 5 of the accompanying Predecessor Entities’ combined financial statements.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of financial statements in conformity with GAAP requires management to use judgment in the application of accounting policies, including making estimates and assumptions. We base estimates on the best information available to us at the time, our experience and various other assumptions deemed reasonable under the circumstances. From time to time, we re-evaluate our estimates and assumptions. In the event estimates or assumptions prove to be different from actual results, adjustments are made in subsequent periods to reflect more current estimates

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and assumptions about matters that are inherently uncertain. A summary of our critical accounting policies is included under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Information Statement filed as Exhibit 99.1 to our Registration Statement on Form 10 filed on May 4, 2018. We have not made any material changes to these policies during the periods covered by this quarterly report.

RESULTS OF OPERATIONS

Spirit MTA REIT

For the three months ended March 31, 2018, the Company incurred general and administrative expenses of $1,357 related to bank fees. The Company was capitalized on November 15, 2017, so there is no comparative period presented.

Predecessor Entities

Comparison of the Three Months Ended March 31, 2018 to the Three Months Ended March 31, 2017

	Three Months Ended March 31,
(In Thousands)	2018			2017		Change			% Change
Revenues:
Rentals	$	59,031		$	56,385	$	2,646		4.7%
Interest income on loans receivable	81			203		(122		)	(60.1)%
Tenant reimbursement income	577			778		(201		)	(25.8)%
Other income	379			482		(103		)	(21.4)%
Total revenues	60,068			57,848		2,220			3.8%
Expenses:
General and administrative	5,651			5,269		382			7.2%
Related party fees	1,730			1,354		376			27.8%
Transaction costs	3,017			—		3,017			100.0%
Property costs (including reimbursable)	1,413			2,456		(1,043		)	(42.5)%
Interest	28,012			18,816		9,196			48.9%
Depreciation and amortization	20,993			20,610		383			1.9%
Impairment	4,825			6,493		(1,668		)	(25.7)%
Total expenses	65,641			54,998		10,643			19.4%
(Loss) income before other expense and income tax expense	(5,573		)	2,850		(8,423		)	NM
Other expense:
Loss on debt extinguishment	255			—		255			100.0%
Total other expense	255			—		255			100.0%
(Loss) income before income tax expense	(5,828		)	2,850		(8,678		)	NM
Income tax expense	57			45		12			26.7%
(Loss) income before (loss) gain on disposition of assets	(5,885		)	2,805		(8,690		)	NM
(Loss) gain on disposition of assets	(1,694		)	11,189		(12,883		)	NM
Net (loss) income	$	(7,579	)	$	13,994	$	(21,573	)	NM

NM-Percentages over 100% are not displayed.

Revenues

Rentals

Rental revenue for the comparative period increased as a result of increases in contractual rents and decreases in tenant credit losses period-over-period. Base rents increased 3.3% as the Predecessor Entities were net acquirers over the trailing twelve-month period. The Predecessor Entities acquired one property and received ten properties

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from Spirit as a contribution in conjunction with the Master Trust 2014 issuance, resulting in an increase in Real Estate Investment Value of $255.1 million. During the same period, the Predecessor Entities disposed of 87 properties with a Real Estate Investment Value of $141.3 million. As of March 31, 2018 and December 31, 2017, 10 and 32 of our properties, respectively, were Vacant, representing approximately 1.1% and 3.3%, respectively, of our owned properties.

During the three months ended March 31, 2018 and 2017, non-cash rental revenues were $0.8 million and $1.1 million, respectively, representing approximately 1.3% and 2.0%, respectively, of total rental revenue.

Interest income on loans receivable

The decrease in interest income on loans receivable period-over-period primarily relates to the decrease in outstanding loans over the trailing twelve-month period, where mortgage loans receivable decreased from nine loans collateralized by eleven properties at March 31, 2017 to four loans collateralized by six properties at March 31, 2018. This decrease, primarily as a result of mortgage loan payoffs, resulted in a decrease in outstanding principal on mortgage loans receivable of $8.7 million over the comparative periods.

Tenant reimbursement income

We have a number of leases that require our tenants to reimburse us for certain property costs we incur, which we record on a gross basis. As such, tenant reimbursement income is driven by the tenant reimbursable property costs described below, less an allowance for reimbursable expenses determined to be uncollectible from our tenants.

Other income

Period-over-period other income decreased primarily due to a decrease in lease termination fees received. For the three months ended March 31, 2018, the Predecessor Entities received $0.1 million in lease termination fees received from nine properties with tenants in the restaurant - casual dining industry, compared to $0.3 million in lease termination fees received from five properties with tenants in the restaurant - casual dining industry during the three months ended March 31, 2017.

Expenses

General and administrative and Transaction costs

General and administrative expenses of $0.1 million and $1.0 million during the three months ended March 31, 2018 and 2017, respectively, were specifically identified based on direct usage or benefit. The change in specifically identified expenses is a result of a decrease in bad debt expense as a result of certain tenants in the sporting goods and restaurant - casual dining industries for which the straight-line rent was determined to be uncollectible for the three months ended March 31, 2017, whereas there was no bad debt expense recorded for the three months ended March 31, 2018. Transaction costs are the expenses associated with the spin-off, and there were no transaction costs incurred for the three months ended March 31, 2017. For the transaction costs incurred during the three months ended March 31, 2018, $2.5 million were specifically identified based on direct usage or benefit.

The remaining general and administrative expenses and transaction costs have been allocated from Spirit’s financial statements, based on the Predecessor Entities’ property count relative to Spirit’s property count. The Predecessor Entities’ property count decreased from 971 properties at March 31, 2017 to 890 properties at March 31, 2018. Spirit’s property count also decreased from 2,602 properties to 2,446 for the same period. As such, the allocation percentage year over year remained relatively flat. Therefore, the increase in allocated general and administrative expenses and transaction costs is a direct result of Spirit’s increased expenses year-over-year.

Related party fees

Spirit Realty, L.P., a wholly-owned subsidiary of Spirit, is the property manager and special servicer of Master Trust 2014, under which Spirit Realty, L.P. receives property management fees which accrue daily at 0.25% per annum of the collateral value of the Master Trust 2014 collateral pool less any specially serviced assets and special servicing fees which accrue daily at 0.75% per annum of the collateral value of any assets deemed to be specially serviced per the terms of the Property Management and Servicing Agreement. Collateral value was $2.0 billion at March 31, 2017 and, as a result of the issuance completed in December 2017, collateral value increased to $2.5 billion at March 31, 2018. The increase in collateral value resulted in the increase in related party fees period-over-period.

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Property costs (including reimbursable)

For the three months ended March 31, 2018, property costs were $1.4 million (including $0.5 million of tenant reimbursable expenses) compared to $2.5 million (including $0.8 million of tenant reimbursable expenses) for the same period in 2017. The decrease was driven primarily by a decrease in non-reimbursable property taxes on vacant properties of $0.9 million, a result primarily due to the dispositions of vacant properties during the trailing twelve-month period. As of March 31, 2018 and December 31, 2017, 10 and 32 of our properties, respectively, were Vacant, representing approximately 1.1% and 3.3%, respectively, of our owned properties.

Interest

The increase in interest expense is primarily related to the new issuance of Master Trust 2014 notes in December 2017 and a new CMBS loan entered into in January 2018. See Note 4 to the Predecessor Entities’ financial statements herein.

The following table summarizes our interest expense on related borrowings from continuing operations:  

	Three Months Ended March 31,
(In Thousands)	2018		2017
Interest expense-Master Trust 2014	$	24,310	$	17,430
Interest expense-CMBS	827		—
Non-cash interest expense:
Amortization of deferred financing costs	875		325
Amortization of debt discount, net	2,000		1,061
Total interest expense	$	28,012	$	18,816

Depreciation and amortization

During the twelve months ended March 31, 2018, we acquired 11 properties, representing a Real Estate Investment Value of $255.1 million, and we disposed of 87 properties with a Real Estate Investment Value of $141.3 million. While we were a net acquirer during the period (based on Real Estate Investment Value), the impact to depreciation was relatively flat due to the timing of acquisition and disposition activity.

The following table summarizes our depreciation and amortization expense from continuing operations:  

	Three Months Ended March 31,
(In Thousands)	2018		2017
Depreciation of real estate assets	$	18,305	$	17,911
Amortization of lease intangibles	2,688		2,699
Total depreciation and amortization	$	20,993	$	20,610

Impairment

During the three months ended March 31, 2018, we recorded impairment losses of $4.8 million. All of the impairment was recorded on properties classified as held and used, comprised of $1.9 million of impairment on four vacant properties and $2.9 million of impairment on 11 underperforming properties with tenants in the restaurants-casual dining and restaurants-quick service industries.

During the three months ended March 31, 2017, we recorded impairment losses of $6.5 million. $4.1 million of the impairment was recorded on properties classified as held and used, primarily recorded on 11 vacant properties. The remaining $2.4 million of impairment was recorded on properties classified as held for sale, primarily recorded on five vacant properties.

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Loss on debt extinguishment

During the three months ended March 31, 2018, we extinguished $4.6 million of Master Trust 2014 debt as a result of pre-payment premiums paid, resulting in approximately $0.3 million in losses on debt extinguishment. During the same period in 2017, there were no debt extinguishments.

(Loss) gain on disposition of assets

During the three months ended March 31, 2018, we disposed of 23 properties and recorded losses totaling $1.7 million. These losses were driven by a $1.6 million loss on the sale of 20 properties operated by a tenant in the restaurant-casual dining industry.

For the same period in 2017, we disposed of 12 properties and recorded gains totaling $11.2 million. These gains were primarily driven by $7.0 million in gains on the sale of three properties operated by a tenant in the general merchandise industry, a $2.4 million gain on the sale of a property operated by a tenant in the manufacturing industry, and a $1.3 million gain on the sale of a property operated by a tenant in the education industry.

PROPERTY PORTFOLIO INFORMATION

884	$230.8M	45	200	23
Properties	Annualized Contractual Rent	States	Tenants	Industries

Our diverse real estate portfolio at March 31, 2018 had:

◦ an Occupancy of 98.9%;

◦ 58.9% of Contractual Rent from master leases;

◦ 96.0% of leases containing contractual rent escalators (based on Contractual Rent); and

◦ a weighted average remaining lease term of 10.5 years.

Diversification By Tenant

Tenant concentration represents the tenant’s contribution to Contractual Rent of our owned real estate properties at March 31, 2018 (total square feet in thousands):

Tenant (1)	Number of Properties	Total Square Feet	Percent of Contractual Rent
Shopko	98	6,669	20.3	%
AMC Entertainment, Inc.	14	690	4.7
Academy, LTD.	2	1,564	4.3
Universal Pool Co., Inc.	14	543	3.1
Crème De La Crème (Lessee), Inc.	9	190	2.4
Goodrich Quality Theaters	4	245	2.3
Casual Male Retail Group Inc.	1	756	2.3
Buehler Food Markets Inc.	5	503	2.2
Carmax, Inc.	4	201	2.1
Heartland Dental Holdings, Inc.	59	234	1.9
Other	664	7,990	54.4
Vacant	10	164	—
Total	884	19,749	100	%

⁽¹⁾  Tenants represent legal entities ultimately responsible for obligations under the lease agreements or affiliated entities. Other tenants may operate the same or similar business concepts or brands as those set forth above.

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Diversification By Asset Type

Asset type concentration represents the type of asset's contribution to Contractual Rent within our owned real estate properties as of March 31, 2018 (total square feet in thousands):

Asset Type	Number of Properties	Total Square Feet	Percent of Contractual Rent
Retail	763	15,357	83.7%
Industrial	41	3,713	9.4%
Office	80	679	6.9%
Total	884	19,749	100.0%

Diversification By Industry

Industry concentration represents the type of asset's contribution to Contractual Rent within our owned real estate properties as of March 31, 2018 (total square feet in thousands):

Industry	Number of Properties	Total Square Feet	Percent of Contractual Rent
General Merchandise	98	6,669	20.3%
Restaurants-Casual Dining	173	944	11.5%
Movie Theaters	30	1,545	10.6%
Restaurants-Quick Service	242	616	9.1%
Specialty Retail	25	1,034	5.4%
Medical / Other Office	73	495	5.4%
Sporting Goods	3	1,614	4.4%
Education	18	431	4.4%
Home Furnishings	18	1,048	4.2%
Grocery	19	1,027	3.7%
Automotive Service	74	329	3.5%
Automotive Dealers	12	323	3.5%
Health and Fitness	13	533	3.2%
Entertainment	5	338	3.2%
Apparel	2	930	2.4%
Distribution	3	138	1.1%
Manufacturing	8	860	1.1%
Car Washes	6	48	1.0%
Building Materials	28	459	*
Drug Stores / Pharmacies	8	83	*
Professional Services	5	26	*
Dollar Stores	6	62	*
Automotive Parts	5	33	*
Vacant	10	164	—%
Total	884	19,749	100.0%

* Less than 1%

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Diversification By Geography

Geographic concentration represents the type of asset's contribution to Contractual Rent within our owned real estate properties as of March 31, 2018 (total square feet in thousands):

Location	Number of Properties	Total Square Feet (in thousands)	Percent of Contractual Rent		Location(continued)	Number of Properties	Total Square Feet (in thousands)	Percent of Contractual Rent
Texas	60	2,668	11.7	%	Iowa	20	371	1.5
Wisconsin	37	2,841	9.6		Arkansas	20	316	1.3
Illinois	70	1,461	8.4		New Mexico	11	99	1.3
Minnesota	25	1,398	5.7		Colorado	6	164	1.3
Ohio	40	1,162	5.3		Washington	5	348	1.2
Georgia	72	437	5.2		New York	11	154	1.2
Michigan	64	1,184	4.4		Virginia	17	208	1.0
Indiana	41	637	4.4		West Virginia	8	233	1.0
Missouri	36	431	2.7		Montana	3	254	*
Florida	47	387	2.6		Nebraska	7	227	*
Pennsylvania	23	405	2.6		Kentucky	15	95	*
Arizona	21	301	2.6		Idaho	4	227	*
North Carolina	20	386	2.3		Mississippi	11	60	*
Massachusetts	1	756	2.3		Maryland	12	41	*
Oregon	6	300	1.9		New Jersey	3	292	*
Nevada	3	166	1.9		Wyoming	7	145	*
Tennessee	47	166	1.8		Louisiana	7	19	*
South Carolina	15	252	1.8		Utah	2	97	*
California	12	93	1.6		Rhode Island	1	22	*
Alabama	29	106	1.6		Alaska	1	50	*
Kansas	18	206	1.5		North Dakota	1	8	*
South Dakota	7	370	1.5		Maine	1	5	*
Oklahoma	17	201	1.5

* Less than 1%

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Lease Expirations

The following table sets forth a summary schedule of expiration dates for leases in place as of March 31, 2018. The weighted average remaining non-cancelable initial term of our leases (based on Contractual Rent) was 10.5 years. The information set forth in the table assumes that tenants do not exercise renewal options and/or any early termination rights (total square feet and Annualized Contractual Rent in thousands):

Leases Expiring In:	Number of Properties	Annualized Contractual Rent		Total Square Feet	Percent of Expiring Contractual Rent
2018	17	$	2,818	191	1.2	%
2019	71	9,123		846	4.0
2020	37	6,487		452	2.8
2021	61	11,384		1,180	4.9
2022	77	13,142		1,119	5.7
2023	21	3,551		340	1.5
2024	31	7,091		322	3.1
2025	39	16,180		782	7.0
2026	110	19,855		1,931	8.6
2027	60	37,621		3,383	16.3
Thereafter	350	103,570		9,039	44.9
Vacant	10	—		164	—
Total owned properties	884	$	230,822	19,749	100.0	%

LIQUIDITY AND CAPITAL RESOURCES

Short-term Liquidity and Capital Resources

On a short-term basis, our principal demands for funds will be for operating expenses, including financing of acquisitions, distributions to shareholders and interest and principal on current and any future debt financings. We expect to fund our operating expenses and other short-term liquidity requirements, capital expenditures, payment of principal and interest on our outstanding indebtedness, property improvements, re-leasing costs and cash distributions to common shareholders, primarily through cash provided by operating activities, continued dispositions of our Shopko assets and potential future bank borrowings.

Long-term Liquidity and Capital Resources

We plan to meet our long-term capital needs, including long-term financing of property acquisitions, by issuing registered debt or equity securities, obtaining asset level financing and occasionally by issuing fixed rate secured or unsecured notes and bonds using the Master Trust 2014 program discussed below. We may issue common shares when we believe that our share price is at a level that allows for the proceeds of any offering to be accretively invested into additional properties.

We will continually evaluate alternative financing and believe that we can obtain financing on reasonable terms. However, we cannot assure you that we will have access to the capital markets at times and on terms that are acceptable to us. We expect that our primary uses of capital will be for property and other asset acquisitions and the payment of tenant improvements, operating expenses, including debt service payments on any outstanding indebtedness, and distributions to our shareholders.

Description of Certain Debt

The following descriptions of debt should be read in conjunction with Note 4 to the Predecessor Entities’ financial statements herein.

Master Trust 2014

Master Trust 2014 is an asset-backed securitization platform through which we raise capital by issuing non-recourse net lease mortgage notes collateralized by commercial real estate, net leases and mortgage loans. This collateral pool is managed by Spirit Realty, L.P., a related party, in capacity as property manager. In general, monthly rental and

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mortgage receipts are deposited with the indenture trustee, who first utilizes these funds to satisfy the debt service requirements on the notes and any fees and costs associated with the administration of Master Trust 2014. Any remaining funds are remitted to the issuers monthly on the note payment date.

Upon satisfaction of certain conditions, we may, from time to time, sell or exchange real estate properties or mortgage loans from the collateral pool. Proceeds from these transactions are held on deposit by the indenture trustee in the Release Account until a qualifying substitution is made or the amounts are distributed as an early repayment of principal. At March 31, 2018, $75.0 million was held on deposit in the Release Account and classified as restricted cash within deferred costs and other assets, net in the Predecessor Entities’ combined balance sheet.

As of March 31, 2018, the Master Trust 2014 notes were secured by 790 owned and financed properties. The notes issued under Master Trust 2014 are cross-collateralized by the assets of all issuers within this trust. All outstanding series of Master Trust 2014 were rated investment grade as of March 31, 2018.

The Master Trust 2014 notes are summarized below:

	Stated Rates (1)	Maturity	March 31, 2018			December 31, 2017
		(in Years)	(in Thousands)
Series 2014-1 Class A2	5.4%	2.3	$	249,203		$	252,437
Series 2014-2	5.8%	3.0	232,768			234,329
Series 2014-3	5.7%	4.0	310,439			311,336
Series 2014-4 Class A1	3.5%	1.8	149,629			150,000
Series 2014-4 Class A2	4.6%	11.8	353,746			358,664
Series 2017-1 Class A	4.4%	4.7	540,599			542,400
Series 2017-1 Class B	5.5%	4.7	132,000			132,000
Total Master Trust 2014 notes	4.9%	5.1	1,968,384			1,981,166
Debt discount, net			(26,125		)	(36,342		)
Deferred financing costs, net			(17,263		)	(17,989		)
Total Master Trust 2014, net			$	1,924,996		$	1,926,835

⁽¹⁾ Represents the individual series stated interest rates as of March 31, 2018 and the weighted average stated rate of the total Master Trust 2014 notes, based on the collective series outstanding principal balances as of March 31, 2018.

CMBS

On January 22, 2018, we entered into a new non-recourse loan agreement, which is collateralized by a single distribution center property located in Katy, Texas. The loan has a term of 10 years to maturity with a stated interest rate of 5.14%. As a result of the issuance, we received approximately $84 million in proceeds, all of which was distributed to Spirit.

Debt Maturities

Future principal payments due on our various types of debt outstanding as of March 31, 2018 (in thousands):

	Total		2018		2019		2020		2021		2022		Thereafter
Master Trust 2014	$	1,968,384	$	25,250	$	35,233	$	404,522	$	242,482	$	994,104	$	266,793
CMBS	83,878		935		1,204		1,256		1,336		1,407		77,740
Total	$	2,052,262	$	26,185	$	36,437	$	405,778	$	243,818	$	995,511	$	344,533

Contractual Obligations

There were no material changes outside the ordinary course of business to the information regarding specified contractual obligations contained in our Information Statement filed as Exhibit 99.1 to our Form 10 filed on May 4, 2018 with the SEC.

We may enter into commitments to purchase goods and services in connection with the operations of our properties. Those commitments generally have terms of one-year or less and reflect expenditure levels comparable to our historical expenditures.

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CASH FLOWS

The following table presents a summary of our cash flows for the three months ended March 31, 2018 and 2017:

	Three Months Ended March 31,
(In Thousands)	2018			2017			Change
Net cash provided by operating activities	$	25,322		$	33,157		$	(7,835	)
Net cash provided by investing activities	19,000			30,780			(11,780		)
Net cash used in financing activities	(30,233		)	(53,383		)	23,150
Net increase in cash and cash equivalents	$	14,089		$	10,554		$	3,535

As of March 31, 2018, we had $80.6 million in cash, cash equivalents and restricted cash as compared to $66.5 million as of December 31, 2017 and $23.2 million as of March 31, 2017.

Operating Activities

Our cash flows from operating activities are primarily dependent upon the occupancy level of our portfolio, the rental rates specified in our leases, the collectability of rent and the level of our operating expenses and other general and administrative costs.

The net decrease in cash provided by operating activities was primarily attributable to an increase in cash paid for interest expense of $7.7 million, transaction charges of $3.0 million, an increase of G&A expense of $0.8 million and a net increase in operating assets and liabilities of $0.3 million, partially offset by in increase in cash revenue of $1.9 million, and decreases in property costs of $1.0 million.

Investing Activities

Cash used in investing activities is generally used to fund property acquisitions, for investments in loans receivable and, to a limited extent, for capital expenditures. Cash provided by investing activities generally relates to the disposition of real estate and other assets.

Net cash provided by investing activities during the three months ended March 31, 2018 included $16.9 million in proceeds from the disposition of 23 properties and collections of principal on loans receivable totaling $2.3 million

During the same period in 2017, net cash provided by investing activities included proceeds of $40.5 million from the disposition of 12 properties, partially offset by $10.1 million to fund the acquisition of one property and capitalized real estate expenditures of $0.5 million. Net cash provided by investing activities also included collection of principal on loans receivable of $0.8 million.

Financing Activities

Generally, our net cash used in financing activities is impacted by our contributions/distributions to Spirit and our net borrowings under Master Trust 2014 and CMBS.

Net cash used in financing activities during the three months ended March 31, 2018 was primarily attributable to net distributions to Spirit of $108.0 million, borrowings under our mortgages and notes payable of $92.2 million and payments of $12.9 million on our mortgages and notes payable.

During the same period in 2017, net cash used in financing activities was primarily attributable to net distributions to Spirit of $49.5 million and payments of $3.9 million on our mortgages and notes payable.

OFF-BALANCE SHEET ARRANGEMENTS

As of March 31, 2018, we did not have any material off-balance sheet arrangements.

NEW ACCOUNTING PRONOUNCEMENTS

See Note 2 to the Predecessor Entities’ financial statements herein.

35

NON-GAAP FINANCIAL MEASURES

FFO AND AFFO

We calculate FFO in accordance with the standards established by NAREIT. FFO represents net income (loss) attributable to common shareholders (computed in accordance with GAAP), excluding real estate-related depreciation and amortization, impairment charges and net (gains) losses from property dispositions. FFO is a supplemental non-GAAP financial measure. We use FFO as a supplemental performance measure because we believe that FFO is beneficial to investors as a starting point in measuring our operational performance. Specifically, in excluding real estate-related depreciation and amortization, gains and losses from property dispositions and impairment charges, which do not relate to or are not indicative of operating performance, FFO provides a performance measure that, when compared year-over-year, captures trends in occupancy rates, rental rates and operating costs. We also believe that, as a widely recognized measure of the performance of equity REITs, FFO will be used by investors as a basis to compare our operating performance with that of other equity REITs. However, because FFO excludes depreciation and amortization and does not capture the changes in the value of our properties that result from use or market conditions, all of which have real economic effects and could materially impact our results from operations, the utility of FFO as a measure of our performance is limited. In addition, other equity REITs may not calculate FFO as we do, and, accordingly, our FFO may not be comparable to such other equity REITs’ FFO. Accordingly, FFO should be considered only as a supplement to net income (loss) attributable to common shareholders as a measure of our performance.

AFFO is a non-GAAP financial measure of operating performance used by many companies in the REIT industry. Accordingly, AFFO should be considered only as a supplement to net income (loss) attributable to common shareholders as a measure of our performance. We adjust FFO to eliminate the impact of certain items that we believe are not indicative of our core operating performance, including restructuring costs, other general and administrative costs associated with relocation of our headquarters, transaction costs associated with our spin-off, default interest on non-recourse mortgage indebtedness, debt extinguishment gains (losses), transaction costs incurred in connection with the acquisition of real estate investments subject to existing leases and certain non-cash items. These certain non-cash items include non-cash revenues (comprised of straight-line rents, amortization of above and below market rent on our leases, amortization of lease incentives, amortization of net premium (discount) on loans receivable and amortization of capitalized lease transaction costs), non-cash interest expense (comprised of amortization of deferred financing costs and amortization of net debt discount/premium) and non-cash compensation expense (share-based compensation expense). In addition, other equity REITs may not calculate AFFO as we do, and, accordingly, our AFFO may not be comparable to such other REITs’ AFFO. AFFO does not represent cash generated from operating activities determined in accordance with GAAP, is not necessarily indicative of cash available to fund cash needs and should not be considered as an alternative to net income (loss) determined in accordance with GAAP as a performance measure. A reconciliation of our FFO and AFFO to net income (loss) attributable to common shareholders (computed in accordance with GAAP) is included below.

EBITDAre

EBITDAre is a non-GAAP financial measure and is computed in accordance with standards established by NAREIT. EBITDAre is defined as net income (loss) (computed in accordance with GAAP), plus interest expense, plus income tax expense (if any), plus depreciation and amortization, plus (minus) losses and gains on the disposition of depreciated property, plus impairment write-downs of depreciated property and investments in unconsolidated real estate ventures, plus adjustments to reflect the Company's share of EBITDAre of unconsolidated real estate ventures.

Adjusted EBITDAre and Annualized Adjusted EBITDAre

Adjusted EBITDAre represents EBITDAre modified to include other adjustments to GAAP net income (loss) attributable to common shareholders for restructuring charges, transaction costs associated with the spin-off, real estate acquisition costs, impairment losses, gains/losses from the sale of real estate and debt transactions and other items that we do not consider to be indicative of our on-going operating performance. We focus our business plans to enable us to sustain increasing shareholder value. Accordingly, we believe that excluding these items, which are not key drivers of our investment decisions and may cause short-term fluctuations in net income, provides a useful supplemental measure to investors and analysts in assessing the net earnings contribution of our real estate portfolio. Because these measures do not represent net income (loss) that is computed in accordance with GAAP, they should not be considered alternatives to net income (loss) or as an indicator of financial performance. A reconciliation of net income (loss) attributable to common shareholders (computed in accordance with GAAP) to EBITDAre, Adjusted EBITDAre and Annualized Adjusted EBITDAre is included below.

36

Adjusted Debt

Adjusted Debt represents interest bearing debt (reported in accordance with GAAP) adjusted to exclude unamortized debt discount/premium and deferred financing costs, as further reduced by cash and cash equivalents and cash reserves on deposit with lenders as additional security. By excluding unamortized debt discount/premium and deferred financing costs, cash and cash equivalents, and cash reserves on deposit with lenders as additional security, the result provides an estimate of the contractual amount of borrowed capital to be repaid, net of cash available to repay it. We believe this calculation constitutes a beneficial supplemental non-GAAP financial disclosure to investors in understanding our financial condition.

Adjusted Debt to Annualized Adjusted EBITDAre is a supplemental non-GAAP financial measure we use to evaluate the level of borrowed capital being used to increase the potential return of our real estate investments, and a proxy for a measure we believe is used by many lenders and ratings agencies to evaluate our ability to repay and service our debt obligations over time. We believe the ratio is a beneficial disclosure to investors as a supplemental means of evaluating our ability to meet obligations senior to those of our equity holders. Our computation of this ratio may differ from the methodology used by other equity REITs, and, therefore, may not be comparable to such other REITs. A reconciliation of interest bearing debt (reported in accordance with GAAP) to Adjusted Debt is included below.

Fixed Charge Coverage Ratio (FCCR)

Fixed Charge Coverage Ratio is the ratio of Annualized Adjusted EBITDAre to Fixed Charges, a ratio derived from non-GAAP measures that we use to evaluate our liquidity and ability to obtain financing. Fixed Charges consist of interest expense, reported in accordance with GAAP, less non-cash interest expense.

FFO and AFFO

	Three Months Ended March 31,
(Unaudited, In Thousands)	2018			2017
Net (loss) income	$	(7,579	)	$	13,994
Add/(less):
Portfolio depreciation and amortization	20,993			20,610
Portfolio impairments	4,825			6,493
Losses (gains) on sales of real estate	1,694			(11,189		)
Total adjustments to net income	27,512			15,914
FFO	$	19,933		$	29,908
Add/(less):
Loss on debt extinguishment	255			—
Transaction costs	3,017			—
Deal pursuit costs	1			—
Non-cash interest expense	2,875			1,386
Straight-line rent, net of related bad debt expense	(847		)	(393		)
Other amortization and non-cash charges	90			132
Non-cash compensation expense (1)	1,606			831
Total adjustments to FFO	6,997			1,956
AFFO	$	26,930		$	31,864

⁽¹⁾ Amounts for historical years are based on the Predecessor Entities’ allocated portion of Spirit’s expense. For further detail on the allocation, see related party transactions as described in Note 5 to the Predecessor Entities’ financial statements herein.

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Adjusted Debt, Adjusted EBITDAre and Annualized Adjusted EBITDAre-Leverage

The following provides a calculation of adjusted debt and a reconciliation of EBITDAre and adjusted EBITDAre (dollars in thousands):

	March 31,
(Unaudited, In Thousands)	2018			2017
Master Trust 2014, net	$	1,924,996		$	1,337,074
CMBS, net	82,775			—
	$	2,007,771		$	1,337,074
Add/(less):
Unamortized debt discount	26,125			17,924
Unamortized deferred financing costs	18,366			8,231
Cash and cash equivalents	(5		)	(1,446		)
Cash reserves on deposit with lenders as additional security classified as other assets	(80,594		)	(21,796		)
Total adjustments	(36,108		)	2,913
Adjusted Debt	$	1,971,663		$	1,339,987
	Three Months Ended March 31,
(Unaudited, In Thousands)	2018			2017
Net (loss) income	$	(7,579	)	$	13,994
Add/(less):
Interest	28,012			18,816
Depreciation and amortization	20,993			20,610
Income tax expense	57			45
Realized loss (gain) on sales of real estate	1,694			(11,189			)
Impairments on real estate assets	4,825			6,493
Total adjustments	55,581			34,775
EBITDAre	$	48,002		$	48,769
Add/(less):
Transaction costs	3,017			—
Deal pursuit costs	1			—
Loss on debt extinguishment	255			—
Severance (1)	1,432			—
Total adjustments to EBITDAre	4,705			—
Adjusted EBITDAre	$	52,707		$	48,769
Annualized Adjusted EBITDAre(2)	$	210,828		$	195,076
Interest Expense	$	28,012		$	18,816
Less: Non-cash interest	(2,875		)	(1,386			)
Fixed Charges	$	25,137		$	17,430
Leverage (Adjusted Debt / Annualized Adjusted EBITDAre)	9.4x			6.9x
Fixed Charge Coverage Ratio (Adjusted EBITDAre / Fixed Charges)	2.1x			2.8x

⁽¹⁾  Amounts for historical years are based on the Predecessor Entities’ allocated portion of Spirit’s expense. For further detail on the allocation, see related party transactions as described in Note 5 to the Predecessor Entities’ financial statements herein.

⁽²⁾  Current quarter Adjusted EBITDAre multiplied by four.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to financial market risks, especially interest rate risk. Interest rates and other factors, such as occupancy, rental rates and the financial condition of our tenants, influence our performance more so than does inflation. Changes in interest rates do not necessarily correlate with inflation rates or changes in inflation rates. We generally offer leases that provide for payments of base rent with scheduled increases, based on a fixed amount or the lesser of a multiple of the increase in the CPI over a specified period term or fixed percentage and, to a lesser extent, contingent rent based on a percentage of the tenant’s gross sales, to help mitigate the effect of inflation. Because the properties in our portfolio are generally leased to tenants under triple-net leases, where the tenant is responsible for property operating costs and expenses, our exposure to rising property operating costs due to inflation is mitigated.

Interest rates are highly sensitive to many factors, including governmental monetary policies, domestic and global economic and political conditions, and other factors which are beyond our control. Our operating results will depend heavily on the difference between the revenue from our assets and the interest expense incurred on our borrowings. We may incur variable rate debt in the future. In addition, decreases in interest rates may lead to additional competition for the acquisition of real estate due to a reduction in desirable alternative income-producing investments. Increased competition for the acquisition of real estate may lead to a decrease in the yields on real estate we have targeted for acquisition. In such circumstances, if we are not able to offset the decrease in yields by obtaining lower interest costs on our borrowings, our results of operations will be adversely affected. Significant increases in interest rates may also have an adverse impact on our earnings if we are unable to acquire real estate with rental rates high enough to offset the increase in interest rates on our borrowings.

In the event interest rates rise significantly or there is an economic downturn, defaults may increase and result in credit losses, which may adversely affect our liquidity and operating results. In a decreasing interest rate environment, borrowers are generally more likely to prepay their loans in order to obtain financing at lower interest rates. Some of our investments in our mortgage loans receivable have significant prepayment protection in the form of yield maintenance provisions, which provide us with yield protection in a decreasing interest rate environment with respect to this portion of our investment portfolio.

The objective of our interest rate risk management policy is to match fund fixed-rate assets with fixed-rate liabilities. As of March 31, 2018, our assets were primarily long-term, fixed-rate leases (though most have scheduled rental increases during the terms of the leases). As of March 31, 2018, all $2 billion of our indebtedness consisted of long-term, fixed-rate obligations, consisting of our Master Trust 2014 notes and CMBS loans. As of March 31, 2018, the weighted average stated interest rate of the Master Trust 2014 obligations, excluding amortization of deferred financing costs and debt discounts, was approximately 4.9%. The stated interest rate of the CMBS obligation, excluding amortization of deferred financing costs, was 5.14%. As of March 31, 2018, we had no variable-rate obligations.

The estimated fair values of our debt instruments have been derived based on market quotes for comparable instruments or discounted cash flow analyses using estimates of the amount and timing of future cash flows, market rates and credit spreads. The debt instrument balances as of March 31, 2018 are as follows (in thousands):

	Carrying Value		Estimated Fair Value
Loans receivable, net	$	30,105	$	26,035
Mortgages and notes payable, net (1)	$	2,007,771	$	2,089,603

⁽¹⁾The carrying value of the debt instruments are net of unamortized deferred financing costs and certain debt discounts/premiums.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

An evaluation was performed under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness, as of March 31, 2018, of the design and operation of the Company's disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the design and operation of the disclosure controls and procedures were effective as of the end of the period covered by this quarterly report.

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Changes in Internal Control over Financial Reporting

There were no changes to the Company's internal control over financial reporting (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) that occurred during the quarter ended March 31, 2018 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

From time-to-time, we may be subject to certain claims and lawsuits in the ordinary course of business, the outcome of which cannot be determined at this time. We are not currently a party as plaintiff or defendant to any legal proceedings that we believe to be material or that individually or in the aggregate would be expected to have a material effect on our business, financial condition or results of operations if determined adversely to us.

Item 1A. Risk Factors

There have been no material changes to the risk factors as disclosed in the section entitled “Risk Factors” in our Information Statement filed as Exhibit 99.1 to our Registration Statement on Form 10 filed on May 4, 2018.

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

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

None.

Item 5. Other Information

None.

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Item 6. Exhibits

Exhibit No.	Description
2.1	Separation and Distribution Agreement between Spirit Realty Capital, Inc. and Spirit MTA REIT dated May 21, 2018 (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K of the Company filed on May 21, 2018)
3.1	Articles of Amendment and Restatement of Spirit MTA (incorporated by reference to Exhibit 3.2 to the Current Report on From 8-K of the Company filed on June 5, 2018) REIT (incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K of the Company filed on June 5, 2018)
3.2	Amended and Restated Bylaws of Spirit MTA REIT (incorporated by reference to exhibit 3.3 to the Current Report on Form 8-K of the Company filed on June 5, 2018)
3.3	Articles Supplementary for 10.0% Series A Cumulative Redeemable Preferred Shares of Beneficial Interest of Spirit MTA REIT (incorporated by reference to exhibit 3.1 to the Current Report on Form 8-K of the Company filed on June 5, 2018)
4.1	Second Amended and Restated Master Indenture among Spirit Master Funding, LLC, Spirit MasterFunding II, LLC, Spirit Master Funding III, LLC and Citibank, N.A., dated May 20, 2014 (incorporated by reference to exhibit 4.1 to the Registration Statement on Form 10 of the Company filed on April 13, 2018)
4.2	Amendment No. 1 to the Second Amended and Restated Master Indenture among Spirit MasterFunding, LLC, Spirit Master Funding II, LLC, Spirit Master Funding III, LLC and Citibank, N.A.,dated November 26, 2014 (incorporated by reference to exhibit 4.2 to the Registration Statement on Form 10 of the Company filed on April 13, 2018)
4.3	Series 2014-1 Indenture Supplement among Spirit Master Funding, LLC, Spirit Master Funding II,LLC, Spirit Master Funding III, LLC and Citibank, N.A., dated May 20, 2014 (incorporated by reference to exhibit 4.3 to the Registration Statement on Form 10 of the Company filed on April 13, 2018)
4.4	Series 2014-2 Indenture Supplement among Spirit Master Funding, LLC, Spirit Master Funding II,LLC, Spirit Master Funding III, LLC and Citibank, N.A., dated May 20, 2014 (incorporated by reference to exhibit 4.4 to the Registration Statement on Form 10 of the Company filed on April 13, 2018)
4.5	Series 2014-3 Indenture Supplement among Spirit Master Funding, LLC, Spirit Master Funding II,LLC, Spirit Master Funding III, LLC and Citibank, N.A., dated May 20, 2014 (incorporated by reference to exhibit 4.5 to the Registration Statement on Form 10 of the Company filed on April 13, 2018)
4.6	Series 2014-4 Indenture Supplement among Spirit Master Funding, LLC, Spirit Master Funding II,LLC, Spirit Master Funding III, LLC, Spirit Master Funding VI, LLC, Spirit Master Funding VIII,LLC and Citibank, N.A., dated November 26, 2014 (incorporated by reference to exhibit 4.6 to the Registration Statement on Form 10 of the Company filed on April 13, 2018)
4.7	Omnibus Amendment to Certain Series Supplements among Spirit Master Funding, LLC, SpiritMaster Funding II, LLC, Spirit Master Funding III, LLC, Spirit Master Funding VI, LLC, SpiritMaster Funding VIII, LLC and Citibank, N.A., dated December 14, 2017 (incorporated by reference to exhibit 4.7 to the Registration Statement on Form 10 of the Company filed on April 13, 2018)
4.8	Amendment No. 2 to Second Amended and Restated Master Indenture among Spirit Master Funding, LLC, Spirit Master Funding II, LLC, Spirit Master Funding III, LLC, Spirit Master Funding VI,LLC, Spirit Master Funding VIII, LLC and Citibank, N.A., dated December 14, 2017 (incorporated by reference to exhibit 4.8 to the Registration Statement on Form 10 of the Company filed on April 13, 2018)
4.9	Amendment No. 3 to Second Amended and Restated Master Indenture among Spirit Master Funding, LLC, Spirit Master Funding II, LLC, Spirit Master Funding III, LLC, Spirit Master Funding VI,LLC, Spirit Master Funding VIII, LLC and Citibank, N.A., dated January 29, 2018 (incorporated by reference to exhibit 4.9 to the Registration Statement on Form 10 of the Company filed on April 13, 2018)

41

4.10	Series 2017-1 Indenture Supplement among Spirit Master Funding, LLC, Spirit Master Funding II,LLC, Spirit Master Funding III, LLC, Spirit Master Funding VI, LLC, Spirit Master Funding VIII,LLC and Citibank, N.A., dated December 14, 2017 (incorporated by reference to exhibit 4.10 to the Registration Statement on Form 10 of the Company filed on April 13, 2018)
4.11	Amendment No. 1 to Series 2017-1 Indenture Supplement among Spirit Master Funding, LLC, SpiritMaster Funding II, LLC, Spirit Master Funding III, LLC, Spirit Master Funding VI, LLC, SpiritMaster Funding VIII, LLC and Citibank, N.A., dated January 30, 2018 (incorporated by reference to exhibit 4.11 to the Registration Statement on Form 10 of the Company filed on April 13, 2018)
10.1*	Asset Management Agreement between Spirit Realty, L.P. and Spirit MTA REIT
10.2	Tax Matters Agreement between Spirit Realty Capital, Inc. and Spirit MTA REIT (incorporated by reference to exhibit 10.2 to the Current Report on Form 8-K of the Company filed on June 5, 2018)
10.3	Insurance Sharing Agreement between Spirit Realty, L.P., Spirit Realty Capital, Inc. and Spirit MTA REIT (incorporated by reference to exhibit 10.3 to the Current Report on Form 8-K of the Company filed on June 5, 2018)
10.4	Registration Rights Agreement between Spirit Realty, L.P. and Spirit MTA REIT (incorporated by reference to exhibit 10.4 to the Current Report on Form 8-K of the Company filed on June 5, 2018)
31.1*	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) under the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Spirit MTA REIT
31.2*	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) under the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Spirit MTA REIT
32.1*	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for Spirit MTA REIT
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema
101.CAL	XBRL Taxonomy Extension Calculation Linkbase
101.DEF	XBRL Taxonomy Extension Definition Linkbase
101.LAB	XBRL Taxonomy Extension Label Linkbase
101.PRE	XBRL Taxonomy Extension Presentation Linkbase

* Filed herewith.

42

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned thereunto duly authorized.

SPIRIT MTA REIT
By:	/s/ Ricardo Rodriguez
Name:	Ricardo Rodriguez
Title:	Chief Executive Officer, President, Chief Financial Officer and Treasurer

Date: June 21, 2018

43

EX-10.1

ASSET MANAGEMENT AGREEMENT dated as of May 31, 2018 between SPIRIT MTA REIT and SPIRIT REALTY, L.P.

TABLE OF CONTENTS SECTION 1. DEFINITIONS 1 SECTION 2. APPOINTMENT AND DUTIES OF THE MANAGER 6 SECTION 3. DEVOTION OF TIME; ADDITIONAL ACTIVITIES 10 SECTION 4. AGENCY 11 SECTION 5. BANK ACCOUNTS 11 SECTION 6. RECORDS; CONFIDENTIALITY 11 SECTION 7. OBLIGATIONS OF MANAGER; RESTRICTIONS. 12 SECTION 8. COMPENSATION 12 SECTION 9. EXPENSES 13 SECTION 10. LIMITS OF MANAGER RESPONSIBILITY; INDEMNIFICATION 15 SECTION 11. NO JOINT VENTURE 16 SECTION 12. TERM; TERMINATION 16 SECTION 13. TERMINATION FEE 17 SECTION 14. PROMOTE 17 SECTION 15. ASSIGNMENT 18 SECTION 16. ACTION UPON TERMINATION 19 SECTION 17. RELEASE OF MONEY OR OTHER PROPERTY UPON WRITTEN 19 REQUEST SECTION 18. NOTICES 20 SECTION 19. BINDING NATURE OF AGREEMENT; SUCCESSORS AND ASSIGNS 20 SECTION 20. ENTIRE AGREEMENT 20 SECTION 21. ARBITRATION 20

SECTION 22. NAME LICENSE 23 SECTION 23. CONTROLLING LAW 23 SECTION 24. INDULGENCES, NOT WAIVERS 24 SECTION 25. TITLES NOT TO AFFECT INTERPRETATION 23 SECTION 26. EXECUTION IN COUNTERPARTS 24 SECTION 27. PROVISIONS SEPARABLE 24

ASSET MANAGEMENT AGREEMENT THIS ASSET MANAGEMENT AGREEMENT (this “Agreement”) is made as of May 31, 2018 by and between Spirit MTA REIT, a Maryland real estate investment trust (the “Company”), and Spirit Realty, L.P., a Delaware limited partnership (together with its permitted assignees, the “Manager”). WHEREAS, the Company desires to avail itself of the experience, sources of information, advice, assistance and certain facilities of, or available to, the Manager and to have the Manager undertake the duties and responsibilities hereinafter set forth, on behalf of the Company, as provided in this Agreement; and WHEREAS, the Manager is willing to render such services on the terms and conditions hereinafter set forth. NOW THEREFORE, IN CONSIDERATION OF THE MUTUAL AGREEMENTS HEREIN SET FORTH, THE PARTIES HERETO AGREE AS FOLLOWS: SECTION 1. DEFINITIONS. The following terms have the meanings assigned to them: “AAA” has the meaning set forth in Section 21 of this Agreement. “Affiliate” means, with respect to any Person, (i) any other Person directly or indirectly controlling, controlled by, or under common control with such Person, (ii) any executive officer, general partner or managing member of such Person, (iii) any member of the board of directors or board of managers (or bodies performing similar functions) of such Person, and (iv) any legal entity for which such Person acts as an executive officer, general partner or managing member. For purposes of this Agreement, the Company shall not be considered an Affiliate of the Manager. “Agreement” means this Asset Management Agreement, as amended from time to time. “Appellate Rules” has the meaning set forth in Section 21 of this Agreement. “Award” has the meaning set forth in Section 21 of this Agreement. “Board of Trustees” means the board of trustees of the Company. “Change in Control” shall mean the occurrence of any of the following events: (i) a transaction or series of transactions whereby any “person” or related “group” of “persons” (as such terms are used in Sections 13(d) and 14(d)(2) of the Exchange Act) (other than the Company or any Subsidiary of the Company) directly or indirectly acquires beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) of securities of the Company possessing more than fifty percent (50%) of the total combined voting power of the Company’s securities outstanding immediately after such acquisition; or 1

(ii) during any period of two (2) consecutive years, individuals who, at the beginning of such period, constitute the Board of Trustees together with any new trustee(s) (other than a trustee designated by a person who shall have entered into an agreement with the Company to effect a transaction described in the preceding clause (i) or the succeeding clause (iii) of this definition) whose election by the Board of Trustees or nomination for election by the Company’s shareholders was approved by a vote of at least two-thirds (2/3) of the trustees then still in office who either were trustees at the beginning of the two (2)- year period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof; or (iii) the consummation by the Company (whether directly involving the Company or indirectly involving the Company through one or more intermediaries) of (A) a merger, consolidation, reorganization, or business combination, (B) a sale or other disposition of all or substantially all of the Company’s assets in any single transaction or series of related transactions or (C) the acquisition of assets or stock of another entity, in each case, other than a transaction: (1) which results in the Company’s voting securities outstanding immediately before the transaction continuing to represent (either by remaining outstanding or by being converted into voting securities of the Company or the person that, as a result of the transaction, controls, directly or indirectly, the Company or owns, directly or indirectly, all or substantially all of the Company’s assets or otherwise succeeds to the business of the Company (the Company or such person, the “Successor Entity”)) directly or indirectly, at least a majority of the combined voting power of the Successor Entity’s outstanding voting securities immediately after the transaction, and following which the Successor Entity continues to own all or substantially all the assets that the Company owned immediately before the transaction and succeeds to its business, and (2) after which no person or group beneficially owns voting securities representing fifty percent (50%) or more of the combined voting power of the Successor Entity; provided, however, that no person or group shall be treated for purposes of this clause (iii)(2) as beneficially owning fifty percent (50%) or more of the combined voting power of the Successor Entity solely as a result of the voting power held in the Company prior to the consummation of the transaction; or (iv) approval by the Company’s shareholders of a liquidation or dissolution of the Company. “Code” means the Internal Revenue Code of 1986, as amended. “Common Share” means a common share of beneficial interest, par value $0.01 per share, of the Company now or hereafter authorized as common voting shares of the Company. “Company” has the meaning set forth in the preamble to this Agreement. “Company Account” has the meaning set forth in Section 5 of this Agreement. “Company Indemnified Party” has the meaning set forth in Section 10 of this Agreement. “Company TSR Percentage” means the XIRR, expressed as a percentage (rounded to the nearest tenth of a percent (0.1%)), during the Measurement Period due to the appreciation in the price per Common Share, plus dividends declared during the Measurement Period, assuming dividends are reinvested in Common Shares on the date that they were paid (at a price equal to the closing price per Common Share on the applicable dividend payment date); provided, however, that for purposes of calculating the Company TSR Percentage, the initial share price shall equal the Initial Price Per Share and 2

the final share price as of any given date shall equal the Share Value. “Company TSR Amount” means the sum of the price per Common Share on the last day of the Measurement Period, plus the sum of all dividends declared during the Measurement Period, assuming dividends are reinvested in Common Shares on the date that they were paid (at a price equal to the closing price per Common Share on the applicable dividend payment date); provided, however, that for purposes of calculating the Company TSR Amount, the initial share price shall equal the Initial Price Per Share and the final share price as of any given date shall equal the Share Value. “Conflicts of Interest Policy” refers to the conflicts of interest policy included in the Investment Manual. “Disputes” has the meaning set forth in Section 21 of this Agreement. “Distribution Date” means May 31, 2018. “Effective Termination Date” means the earliest to occur of (i) the date designated by the Company pursuant to Section 12(b)(i) or Section 12(c)(i) on which the Manager shall cease to provide services under this Agreement and (ii) the effective date of termination of this Agreement pursuant to Section 12(b)(ii) and Section 12(c)(ii). “Excess Funds” has the meaning set forth in Section 2(i) of this Agreement. “Exchange Act” means the Securities Exchange Act of 1934, as amended. “GAAP” means generally accepted accounting principles in the United States. “Governing Instruments” means, with regard to any entity, the declaration of trust and bylaws in the case of a real estate investment trust, the articles of incorporation and bylaws in the case of a corporation, the certificate of limited partnership (if applicable) and the partnership agreement in the case of a general or limited partnership, the articles of formation and the operating agreement in the case of a limited liability company, or, in each case, comparable governing documents. “Hurdle TSR Amount” means an indicative price per Common Share on the last day of the Measurement Period calculated assuming appreciation in the price per Common Share based on a specified Company TSR Percentage during the Measurement Period; provided, however, that for purposes of calculating the Hurdle TSR Amount, the initial share price shall equal the Initial Price Per Share. “Indemnified Party” has the meaning set forth in Section 10 of this Agreement. “Independent Trustees” means the members of the Board of Trustees who are not officers or employees of the Manager, and who are otherwise “independent” in accordance with the Company’s Governing Instruments and the rules of the NYSE or such other securities exchange on which the Common Shares are listed. “Initial Price Per Share” means the VWAP per Common Share for the 30 consecutive trading days on the principal exchange on which such shares are then traded immediately following the Distribution Date. “Investment Manual” means the investment manual approved by the Board of Trustees, as the 3

same may amended, restated, modified, supplemented or waived pursuant to the approval of a majority of the entire Board of Trustees from time to time (which must include a majority of the Independent Trustees). “Investments” means the investments of the Company. “Investment Company Act” means the Investment Company Act of 1940, as amended. “Licensed Name” has the meaning set forth in Section 22 of this Agreement. “Losses” has the meaning set forth in Section 10 of this Agreement. “License Term” has the meaning set forth in Section 22 of this Agreement. “Management Fee” has the meaning set forth in Section 8(a) of this Agreement. “Management Fee PIK Event” means (i) the good faith determination by the Board of Trustees that forgoing the payment of all or any portion of the monthly installment of the Management Fee is necessary for the Company to have sufficient funds to declare and pay dividends required to be paid in cash in order for the Company to maintain its status as a REIT under the Code and to avoid incurring income or excise taxes, or (ii) the occurrence and continuance of an “Early Amortization Event,” “Event of Default” or “Sweep Period,” in each case, as defined under the Second Amended and Restated Master Indenture, dated as of May 20, 2014, among Spirit Master Funding, LLC, Spirit Master Funding II, LLC, Spirit Master Funding III, LLC and Citibank, N.A., as amended and supplemented from time to time, such definitions not to be revised, modified or amended without prior written consent by Manager. “Manager” has the meaning set forth in the preamble to this Agreement. “Measurement Period” means the period commencing on the Distribution Date and ending upon the earlier of (i) the Effective Termination Date and (ii) the date that is 36 full calendar months after the Distribution Date. “Notice of Proposal to Negotiate” has the meaning set forth in Section 12(b)(i) of this Agreement. “NYSE” means the New York Stock Exchange. “Operating Partnership” means Spirit MTA REIT, L.P., a Delaware limited partnership, of which Spirit MTA OP Holdings, LLC, a Delaware limited liability company and a wholly-owned subsidiary of the Company, is the sole general partner. The Company is the managing member of Spirit MTA OP Holdings, LLC. “Original Term” has the meaning set forth in Section 12(a) of this Agreement. “Person” means any natural person, corporation, partnership, association, limited liability company, estate, trust, joint venture, any federal, state, county or municipal government or any bureau, department or agency thereof or any other legal entity and any fiduciary acting in such capacity on behalf of the foregoing. “Preferred Share” means a share of share capital of the Company now or hereafter authorized or reclassified that has dividend rights, or rights upon liquidation, winding up and dissolution, that are 4

superior or prior to the Common Shares. “Promote” has the meaning set forth in Section 14 of this Agreement. “Property Management Agreement” means the Second Amended and Restated Property Management and Servicing Agreement dated May 20, 2014, by and among Spirit Realty, L.P., Spirit Master Funding, LLC, Spirit Master Funding II, LLC, Spirit Master Funding III, LLC and Midland Loan Services, a division of PNC Bank, National Association, as subsequently amended. “REIT” means a real estate investment trust under the Code. “Renewal Term” has the meaning set forth in Section 12(a) of this Agreement. “Rules” has the meaning set forth in Section 21 of this Agreement. “SEC” means the U.S. Securities and Exchange Commission. “Securities Act” means the Securities Act of 1933, as amended. “Series A Preferred Shares” means the Series A preferred shares of the Company, par value $0.01 per share. “Share Value,” as of any given date, means the VWAP per Common Share for the 10 consecutive trading days on the principal exchange on which such shares are then traded immediately preceding such date; provided, however, that if a Change in Control causes the end of the Measurement Period, Share Value shall mean the price per Common Share paid by the acquiror in the Change in Control transaction or, to the extent that the consideration in the Change in Control transaction is paid in stock of the acquiror or its affiliates, the Share Value shall mean the value of the consideration paid per Common Share based on the VWAP per share of such acquiror stock for the 10 consecutive trading days on the principal exchange on which such shares are then traded immediately preceding the date on which a Change in Control occurs. “Subsidiary” means any subsidiary of the Company and any partnership, the general partner of which is the Company or any subsidiary of the Company and any limited liability company, the managing member of which is the Company or any subsidiary of the Company. “Termination Fee” has the meaning set forth in Section 13 of this Agreement. “Termination Notice” has the meaning set forth in Section 12(b)(i) of this Agreement. “Transition Services Agreement” has the meaning set forth in Section 12(b)(i) of this Agreement. “VWAP” means the volume weighted average price. “XIRR” means the Extended Internal Rate of Return as calculated by using the “=XIRR” function in Microsoft Excel. SECTION 2. APPOINTMENT AND DUTIES OF THE MANAGER. 5

(a) The Company hereby appoints the Manager to manage the assets of the Company, subject to the further terms and conditions set forth in this Agreement, and the Manager hereby agrees to use its commercially reasonable efforts to perform each of the duties set forth herein. The appointment of the Manager shall be exclusive to the Manager, except to the extent that the Manager elects, pursuant to the terms and conditions of this Agreement, to cause the duties of the Manager hereunder to be provided by third parties. (b) The Manager, in its capacity as manager of the assets and the day-to-day operations of the Company (and all subsidiaries and joint ventures of the Company), at all times will be subject to the supervision, direction and management of the Board of Trustees and will have only such functions and authority as the Company may delegate to it. The Company hereby reserves to a majority of the Board of Trustees (three (3) of whom must be independent) the following powers: (i) the authority to determine or change the strategic direction of the Company at any time and in the sole discretion of the Board of Trustees; (ii) the approval of prospective Investments, to the extent required by the Investment Manual or the Conflicts of Interest Policy, which may not be amended in a manner that is detrimental to the Company without approval by a majority of the Independent Trustees, it being understood that the Board of Trustees shall have the power to reject prospective Investments, even if such Investments comply with the criteria outlined in the Investment Manual; (iii) the approval or disapproval of prospective dispositions of Investments, to the extent required by the Investment Manual, as it may be amended by the Board of Trustees from time to time; (iv) the approval of the terms of loan documents for the Company’s financings; (v) the approval of the Company’s annual budget (which shall address in reasonable detail, among other matters, financing plans and capital planning, it being understood that the Manager will submit such budget in advance to the Board of Trustees for review and approval, and will provide quarterly updates of performance against the annual budget to the Board of Trustees; (vi) the approval of the retention of the Company’s registered public accountants; (vii) the approval of any material transaction between the Company and the Manager and its Affiliates, other than transactions pursuant to this Agreement, the Property Management Agreement and other transactions in effect as of the Distribution Date; (viii) the issuance of equity or debt securities by the Company; (ix) the grant of equity incentive awards by the Company; (x) the entry into joint ventures by the Company or its Subsidiaries; (xi) the approval of entry into any transaction that would constitute a Change in Control; and (xii) such other matters as may be determined by the Board of Trustees from time to 6

time. (c) The Company, subject to Section 2(b), hereby delegates the following functions and authority to the Manager. Subject to the Section 2(b), the Manager will be responsible for managing the assets and the day-to-day operations of the Company and will perform (or cause to be performed) such services and activities relating to the assets and operations of the Company as may be appropriate, including, without limitation: (i) sourcing, investigating and evaluating prospective Investments and dispositions of Investments, subject to and consistent with the Investment Manual, and making recommendations with respect thereto to the Board of Trustees, where applicable; (ii) subject to and consistent with the Investment Manual, conducting negotiations with brokers, sellers and purchasers, and their respective agents and representatives, investment bankers and owners of privately and publicly held real estate or related assets, regarding the purchase, sale, exchange or other disposition of any Investments; (iii) managing and monitoring the operating performance of Investments and providing periodic reports to the Board of Trustees, including comparative information with respect to such operating performance and budgeted or projected operating results; (iv) assisting the Company in developing criteria that are specifically tailored to the Company’s investment objectives and making available to the Company the Manager’s knowledge and experience with respect to its target assets; (v) engaging and supervising independent contractors that provide services relating to the Company or the Investments, including, but not limited to, investment banking, legal or regulatory advisory, tax advisory, accounting advisory, securities brokerage, property management/operations, property condition, real estate and leasing advisory and brokerage, and other financial and consulting services reasonably necessary for Manager to perform its duties hereunder (it being understood that the Board of Trustees and its Audit Committee shall retain authority to determine the Company’s independent public accountant and that the Independent Trustees and any committee of the Board of Trustees shall retain the authority to hire its or their own attorneys or other advisors); (vi) subject to any required approval of the Board of Trustees, negotiating, on behalf of the Company, the terms of loan documents for the Company’s financings; (vii) enforcing, monitoring and managing compliance with loan documents to which the Company is a party on behalf of the Company; (viii) coordinating and managing operations of any joint venture or co-investment interests held by the Company and conducting all matters with the joint venture or co-investment partners; (ix) coordinating and supervising all property managers, tenant operators, leasing agents and developers for the administration, leasing, management and/or development of any of the Investments; (x) providing executive and administrative personnel, office space and office services 7

required in rendering services to the Company; (xi) administering bookkeeping and accounting functions as are required for the management and operation of the Company, contracting for audits and preparing or causing to be prepared such periodic reports and filings as may be required by any governmental authority in connection with the ordinary conduct of the Company’s business, and otherwise advising and assisting the Company with its compliance with applicable legal and regulatory requirements, including, without limitation, periodic reports, returns or statements required under the Exchange Act, the Code and any regulations or rulings thereunder, the securities and tax statutes of any jurisdiction in which the Company is obligated to file such reports, or the rules and regulations promulgated under any of the foregoing; (xii) advising and assisting in the preparation and filing of all offering documents, registration statements, prospectuses, proxies, and other forms or documents filed with the SEC pursuant to the Securities Act or any state securities regulators (it being understood that the Company shall be responsible for the content of any and all of its offering documents, SEC filings or state regulatory filings, and that Manager shall not be held liable for any costs or liabilities arising out of any misstatements or omissions in the Company’s offering documents, SEC filings, state regulatory filings or other filings referred to in this subparagraph, whether or not material (except by reason of acts constituting bad faith, willful misconduct, gross negligence or reckless disregard of Manager’s duties under this Agreement); (xiii) causing the Company to retain qualified accountants and legal counsel, as applicable, to assist in developing appropriate accounting procedures, compliance procedures and testing systems with respect to financial reporting obligations and compliance with the provisions of the Code applicable to REITs (it being understood that the Board of Trustees and its Audit Committee shall retain authority to determine the Company’s independent public accountant and that the Independent Trustees and any Committee of the Board of Trustees shall retain the authority to hire its or their own attorneys or other advisors); (xiv) taking all necessary actions to enable the Company to make required tax filings and reports, including soliciting shareholders for required information to the extent required by the provisions of the Code applicable to REITs; (xv) counseling the Company regarding the maintenance of its status as a REIT and monitoring compliance with the various REIT qualification tests and other rules set out in the Code and Treasury Regulations thereunder; (xvi) counseling the Company regarding the maintenance of its exemption from the Investment Company Act and monitoring compliance with the requirements for maintaining an exemption from the Investment Company Act; (xvii) counseling the Company in connection with policy decisions to be made by the Board of Trustees; (xviii) evaluating and recommending to the Board of Trustees modifications to any hedging strategies in effect on the date hereof and engaging in hedging activities; (xix) communicating with the Company’s investors and analysts as required to satisfy reporting or other requirements of any governing body or exchange on which the Company’s 8

securities are traded and to maintain effective relations with such investors; (xx) investing and re-investing any moneys and securities of the Company (including investing in short-term Investments pending investment in Investments, payment of fees, costs and expenses, or payments of dividends or distributions to shareholders and partners of the Company) and advising the Company as to its capital structure and capital raising; (xxi) causing the Company to qualify to do business in all applicable jurisdictions and to obtain and maintain all appropriate licenses; (xxii) handling and resolving all claims, disputes or controversies (including all litigation, arbitration, settlement or other proceedings or negotiations) in which the Company may be involved or to which the Company may be subject arising out of the Company’s day-to-day operations, subject to such limitations or parameters as may be imposed from time to time by the Board of Trustees; (xxiii) using commercially reasonable efforts to cause expenses incurred by or on behalf of the Company to be within any expense guidelines set by the Board of Trustees from time to time; (xxiv) performing such other services as may be required from time to time for management and other activities relating to the assets of the Company as the Board of Trustees and Manager shall agree from time to time; and (xxv) using commercially reasonable efforts to cause the Company to comply with all applicable laws and regulations in all material respects, subject to the Company providing appropriate, necessary and timely funding of capital. The Board of Trustee has dispositive power in the event of any conflict between the Board of Trustees and the Manager with respect to the functions and authority delegated to the Manager above. Without limiting the foregoing, the Manager will perform portfolio management services on behalf of the Company with respect to the Investments. Such services will include, but not be limited to, consulting with the Company on the purchase and sale of, and other investment opportunities in connection with, the Company’s portfolio of assets; the collection of information and the submission of reports pertaining to the Company’s assets, interest rates and general economic conditions; periodic review and evaluation of the performance of the Company’s portfolio of assets; acting as liaison between the Company and banking, mortgage banking, investment banking and other parties with respect to the purchase, financing and disposition of assets; and other customary functions related to portfolio management. Additionally, the Manager will perform monitoring services on behalf of the Company with respect to any services provided by third parties, which the Manager determines are material to the performance of the business. (d) Subject to Section 2(b) above and the Conflicts of Interest Policy, the Manager may enter into agreements with other parties in connection with its duties hereunder. (e) The Manager may retain, for and on behalf, and at the sole cost and expense, of the Company, such services of accountants, legal counsel, tax counsel, appraisers, insurers, brokers or business developers, transfer agents, registrars, developers, investment banks, financial advisors, underwriters, banks and other lenders and others as the Manager deems necessary or advisable in 9

connection with the management and operations of the Company. Notwithstanding anything contained herein to the contrary, the Manager shall have the right to cause any such services to be rendered by its employees or Affiliates (which, for the avoidance of doubt, includes any employees, consultants or agents of any Affiliate of the Manager). (f) As frequently as the Manager may deem necessary or advisable, or at the direction of the Board of Trustees, the Manager shall, at the sole cost and expense of the Company, prepare, or cause to be prepared, with respect to any Investment (i) an appraisal prepared by an independent real estate appraiser; (ii) reports and information on the Company’s operations and asset performance; and (iii) other information reasonably requested by the Company. (g) The Manager shall prepare, or cause to be prepared, at the sole cost and expense of the Company, all reports, financial or otherwise, with respect to the Company required by the Board of Trustees in order for the Company to comply with its Governing Instruments or any other materials required to be filed with any governmental body or agency, as well as all materials and data necessary to complete such reports and other materials including, without limitation, an annual audit of the Company’s books of account by a nationally recognized independent accounting firm. (h) The Manager shall prepare regular reports for the Board of Trustees to enable the Board of Trustees to review the Company’s acquisitions, portfolio composition and characteristics, credit quality, performance and compliance with the Investment Manual and any policies approved by the Board of Trustees. (i) Notwithstanding anything contained in this Agreement to the contrary, the Manager shall not be required to expend money (“Excess Funds”) in excess of that contained in any applicable Company Account or otherwise made available by the Company to be expended by the Manager hereunder. Failure of the Manager to expend Excess Funds out-of-pocket shall not give rise or be a contributing factor to the right of the Company under Section 12(b) to terminate this Agreement due to the Manager’s unsatisfactory performance. (j) In performing its duties under this Section 2, the Manager shall be entitled to rely reasonably on qualified experts hired by the Manager. SECTION 3. DEVOTION OF TIME; ADDITIONAL ACTIVITIES. (a) The Manager will provide a management team, including a dedicated chief executive officer and a dedicated chief financial officer, to provide the management services hereunder. The members of such team shall devote such of their time to the management of the Company as is reasonably necessary and appropriate. (b) Except to the extent set forth in clause (a) above or in the Conflicts of Interest Policy, nothing herein shall prevent the Manager or any of its Affiliates or any of the officers and employees of any of the foregoing from engaging in other businesses or from rendering services of any kind to any other person or entity, including investment in, or advisory service to others investing in, any type of real estate or real estate related investment, including investments which meet the principal investment objectives of the Company. Subject to the Conflicts of Interest Policy, the Company recognizes that it is not entitled to preferential treatment in receiving information, recommendations and other services from the Manager. The Manager shall act in good faith to endeavor to identify to the Independent Trustees any conflicts that may arise among the Company, the Manager and/or any other person or entity on whose behalf the Manager may be engaged. When allocating investment opportunities among the persons or entities for 10

which the Manager acts as manager, the Manager will comply with its Conflicts of Interest Policy as in effect from time to time (c) Managers, members, officers, employees and agents of the Manager or Affiliates of the Manager may serve as trustees, officers, employees, agents, nominees or signatories for the Company or any Subsidiary, to the extent permitted by the Governing Instruments of the Company or any such Subsidiary, as from time to time amended, or by any resolutions duly adopted by the Board of Trustees pursuant to the Company’s Governing Instruments. When executing documents or otherwise acting in such capacities for the Company, such persons shall use their respective titles in the Company. SECTION 4. AGENCY. The Manager shall act as agent of the Company in making, acquiring, financing and disposing of Investments, disbursing and collecting the Company’s funds, paying the debts and fulfilling the obligations of the Company, supervising the performance of professionals engaged by or on behalf of the Company and handling, prosecuting and settling any claims of or against the Company, the Board of Trustees, holders of the Company’s securities or the Company’s representatives or properties. SECTION 5. BANK ACCOUNTS. The Manager may establish and maintain one or more bank accounts in the name of the Company or any Subsidiary (any such account, a “Company Account”), and may collect and deposit funds into any such Company Account or Company Accounts, and disburse funds from any such Company Account or Company Accounts; and the Manager shall from time to time render appropriate accountings of such collections and payments to the Board of Trustees and, upon request, to the auditors of the Company or any Subsidiary. SECTION 6. RECORDS; CONFIDENTIALITY. The Manager shall maintain appropriate books of accounts and records relating to services performed under this Agreement, and such books of account and records shall be accessible for inspection by representatives of the Company at any time during normal business hours upon reasonable advance notice to the Manager. The Manager shall keep confidential any and all non-public information obtained in connection with the services rendered under this Agreement and shall not disclose any such information to any person, except to (i) its Affiliates, members, officers, directors, employees, agents, representatives or advisors who have a need to know such information in order to carry out their duties to the Company and who have a duty to the Manager or to the Company to keep such information confidential, (ii) appraisers, financing sources and others in the ordinary course of the Manager’s business for the purpose of rendering services hereunder, provided that such persons agree to keep such information confidential, (iii) in connection with any governmental or regulatory requests of the Manager and any of its Affiliates, (v) as required by applicable law or regulation, including any applicable disclosure requirements applicable to the Manager and its Affiliates under securities or blue sky laws or stock exchange listing requirements, or (vi) with the prior written consent of the Board of Trustees. SECTION 7. OBLIGATIONS OF MANAGER; RESTRICTIONS. (a) The Manager shall require each seller or transferor of Investments to the Company to make such representations and warranties regarding such assets as may, in the sole judgment made in good faith 11

of the Manager, be necessary and appropriate. In addition, the Manager shall take such other action as it deems necessary or appropriate with regard to the protection of the Investments. (b) The Manager shall refrain from any action that, in its sole judgment made in good faith, (i) is not in compliance with the Investment Manual, (ii) can reasonably be expected to result in the loss of the Company’s status as a REIT under the Code or (iii) would violate any law, rule or regulation of any governmental body or agency having jurisdiction over the Company or any Subsidiary that would materially adversely affect the Company or that would otherwise not be permitted by such entity’s Governing Instruments. If the Manager is ordered to take any such action by the Board of Trustees, the Manager shall promptly notify the Board of Trustees of the Manager’s judgment that such action would adversely affect such status or violate any such law, rule or regulation or the Governing Instruments. Notwithstanding the foregoing, the Manager and its Affiliates, officers and employees shall not be liable to the Company or any Subsidiary, the Board of Trustees, or the Company’s or any Subsidiary’s shareholders or partners for any act or omission by the Manager, its Affiliates, officers or employees except as provided in Section 10. (c) The Manager shall at all times during the term of this Agreement (including the Original Term and any renewal term) maintain a tangible net worth equal to or greater than $1,000,000. Additionally, during such period the Manager shall maintain “errors and omissions” insurance coverage and other insurance coverage which is customarily carried by asset and investment managers performing functions similar to those of the Manager under this Agreement with respect to assets similar to the assets of the Company, in an amount which is comparable to that customarily maintained by other managers or servicers of similar assets. SECTION 8. COMPENSATION. (a) The Company shall pay Manager a management fee (“Management Fee”) equal to $20.0 million per annum, payable in equal monthly installments, in arrears, on the tenth day of each calendar month beginning with the first calendar month after the date of this Agreement; provided, however, that (i) in the event of a Management Fee PIK Event arising under clause (i) of the definition thereof, the portion of the monthly installment of the Management Fee that is necessary for the Company to have sufficient funds to declare and pay dividends required to be paid in cash in order for the Company to maintain its status as a REIT under the Code and to avoid incurring income or excise taxes shall, during the occurrence and continuation of any such Management Fee PIK Event, be payable in a number of Series A Preferred Shares determined by dividing such portion of the Management Fee by the liquidation preference of the Series A Preferred Shares rounded down to the nearest whole share and (ii) in the event of a Management Fee PIK Event arising under clause (ii) of the definition thereof, that the entire monthly installment of the Management Fee shall, during the occurrence and continuation of any such Management Fee PIK Event, be payable in a number of Series A Preferred Shares determined by dividing the Management Fee by the liquidation preference of the Series A Preferred Shares rounded down to the nearest whole share. In the event that this Agreement commences on a date other than the first day of a calendar month, or terminates on a date other than the last day of a calendar month, the installment of the Management Fee payable for that month shall be prorated for the actual number of days that this Agreement is effective in that calendar month. (b) The Management Fee is subject to adjustment pursuant to and in accordance with the provisions of Section 12(b). (c) To incentivize employees, officers, consultants, non-employee trustees, Affiliates or 12

representatives of the Manager to achieve the goals and business objectives of the Company as established by the Board of Trustees, in addition to the Management Fee set forth above, the Board of Trustees will have the authority to make recommendations of annual equity awards to the Manager or its affiliates or directly to employees, officers, consultants, non-employee trustees, Affiliates or representatives of the Manager (including the dedicated chief executive officer and chief financial officer of the Company), based on the achievement by the Company of certain financial or other objectives established by the Board of Trustees; provided that, no equity awards by the Company to employees or officers of the Manager (including the dedicated chief executive officer and chief financial officer of the Company) shall be made without the Manager’s prior written consent. The Company, at its option, may choose to issue such compensation in the form of equity awards in the Company or the Operating Partnership, unless and to the extent that receipt of such equity awards would adversely affect the Company’s status as a REIT, in which case, the equity awards shall be limited to equity awards in the Operating Partnership, unless and to the extent that receipt of such equity awards would adversely affect the Operating Partnership’s status as a partnership for U.S. federal income tax purposes or the Company’s status as a REIT, in which case, the grant of equity awards shall not be made. Any transfer of such equity awards at any time must comply with the transfer restrictions of the Operating Partnership’s partnership agreement or the Company’s declaration of trust and bylaws, as applicable. SECTION 9. EXPENSES. (a) Expenses of the Manager. Except as otherwise expressly provided herein or approved by majority vote of the Independent Trustees or the Audit Committee of the Board, the Manager shall bear the following expenses incurred in connection with the performance of its duties under this Agreement: (i) base salary, cash incentive compensation and other employment expenses (excluding equity awards granted by the Company pursuant to Section 8(c)) of the dedicated chief executive officer and dedicated chief financial officer of the Company; (ii) employment expenses of other personnel employed by the Manager, including, but not limited to, salaries, wages, payroll taxes and the cost of employee benefit plans; (iii) fees and travel and other expenses of officers and employees of the Manager, except for (A) fees and travel and other expenses of such persons incurred while performing services on behalf of the Company (provided that, if such fees and travel and other expenses are incurred while providing services on behalf of both the Company and its affiliates and Spirit Realty Capital, Inc. and its affiliates, the Manager shall have the authority to reasonably allocate such fees and travel and other expenses between the entities), and (B) fees and travel and other expenses of such persons who are trustees or officers of the Company incurred in their capacities as trustees or officers of the Company; (iv) rent, telephone, utilities, office furniture, equipment and machinery (including computers, to the extent utilized) and other office expenses of the Manager, except to the extent such expenses relate solely to an office maintained by the Company separate from the office of the Manager; and (v) miscellaneous administrative expenses relating to performance by the Manager of its obligations hereunder. (b) Expenses of the Company. Except as expressly otherwise provided in this Agreement, the Company shall pay all of its and its Subsidiaries’ expenses, and, without limiting the generality of the 13

foregoing, it is specifically agreed that the following expenses of the Company and its Subsidiaries shall be paid by the Company or its Subsidiaries and shall not be paid by the Manager: (i) the cost of borrowed money; (ii) taxes on income and taxes and assessments on real and personal property, if any, and all other taxes applicable to the Company or its Subsidiaries; (iii) legal, auditing, accounting, underwriting, brokerage, listing, reporting, registration and other fees, and printing, engraving and other expenses and taxes incurred in connection with the issuance, distribution, transfer, trading, registration and listing of the Company’s or any of its Subsidiaries securities on the stock exchange, including transfer agent’s, registrar’s and indenture trustee’s fees and charges; (iv) expenses of organizing, restructuring, reorganizing or liquidating the Company or any of its Subsidiaries, or of revising, amending, converting or modifying the Company’s or any of its Subsidiaries’ organizational documents; (v) fees and travel and other expenses paid to members of the Board of Trustees and officers of the Company or those of individuals in similar positions with any of its Subsidiaries in their capacities as such (but not in their capacities as officers or employees of the Manager) and fees and travel and other expenses paid to advisors, contractors, mortgage servicers, consultants, and other agents and independent contractors employed by or on behalf of the Company and its Subsidiaries; (vi) expenses directly connected with the investigation, acquisition, disposition or ownership of real estate interests or other property (including third party property diligence costs, appraisal reporting, the costs of foreclosure, insurance premiums, legal services, brokerage and sales commissions, maintenance, repair, improvement and local management of property), other than expenses with respect thereto of employees of the Manager, to the extent that such expenses are to be borne by the Manager pursuant to Section 9(a) above; (vii) all insurance costs incurred in connection with the Company and its Subsidiaries (including officer and trustee liability insurance) or in connection with any officer and trustee indemnity agreement to which the Company or any of its Subsidiaries is a party; (viii) expenses connected with payments of dividends or interest or contributions in cash or any other form made or caused to be made by the Trustees to holders of securities of the Company or any of its Subsidiaries; (ix) all expenses connected with communications to holders of securities of the Company or its Subsidiaries and other bookkeeping and clerical work necessary to maintaining relations with holders of securities, including the cost of any transfer agent, the cost of preparing, printing, posting, distributing and mailing certificates for securities and proxy solicitation materials and reports to holders of the Company’s or its Subsidiaries’ securities; (x) legal, accounting and auditing fees and expenses in addition to those described in subsection (iii) above; (xi) filing and recording fees for regulatory or governmental filings, approvals and 14

notices to the extent not otherwise covered by any of the foregoing items of this Section 9(b); (xii) expenses relating to any office or office facilities maintained by the Company or its Subsidiaries separate from the office of the Manager; (xiii) software licensing fees and other fees and costs associated with proprietary software and programs used separately by the Company; (xiv) the costs and expenses of all equity award or compensation plans or arrangements established by the Company or any of its Subsidiaries, including the value of awards made by the Company or any of its Subsidiaries to the Manager or its employees, if any, and payment of any employment or withholding taxes in connection therewith; (xv) the equity portion of the compensation of the Company’s dedicated chief executive officer and dedicated chief financial officer, which the Company is solely responsible for determining and paying; and (xvi) all other costs and expenses of the Company and its Subsidiaries, other than those to be specifically borne by the Manager pursuant to Section 9(a) above. Notwithstanding the foregoing, nothing in this Agreement shall be deemed to amend or modify the Property Management Agreement. SECTION 10. LIMITS OF MANAGER RESPONSIBILITY; INDEMNIFICATION. (a) The Manager assumes no responsibility under this Agreement other than to render the services called for under this Agreement in good faith and shall not be responsible for any action of the Board of Trustees in following or declining to follow any advice or recommendations of the Manager, including as set forth in Section 7(b). The Manager, its members, managers, officers and employees will not be liable to the Company or any Subsidiary, to the Board of Trustees, or the Company’s or any Subsidiary’s shareholders or partners for any acts or omissions by the Manager, its Affiliates, members, managers, officers or employees, pursuant to or in accordance with this Agreement, except by reason of acts constituting bad faith, willful misconduct or gross negligence. The Company shall, to the full extent lawful, reimburse, indemnify and hold the Manager, its Affiliates, members, managers, officers and employees, sub-advisers and each other Person, if any, controlling the Manager (each, an “Indemnified Party”), harmless of and from any and all expenses, losses, damages, liabilities, demands, charges and claims of any nature whatsoever (including attorneys’ fees) (collectively, “Losses”) in respect of or arising from any acts or omissions of such Indemnified Party made in good faith in the performance of the Manager’s duties under this Agreement and not constituting such Indemnified Party’s bad faith, willful misconduct or gross negligence. (b) The Manager shall, to the full extent lawful, reimburse, indemnify and hold the Company, its shareholders, trustees, officers and employees and each other Person, if any, controlling the Company (each, a “Company Indemnified Party”), harmless of and from any and all Losses in respect of or arising from any acts or omissions of the Manager constituting bad faith, willful misconduct or gross negligence. SECTION 11. NO JOINT VENTURE. Nothing in this Agreement shall be construed to make the Company and the Manager partners or joint venturers or impose any liability as such on either of them. 15

SECTION 12. TERM; TERMINATION. (a) Term. Unless terminated in accordance with Section 15(a), this Agreement shall be in effect until the date that is three years after the date hereof (the “Original Term”). At the expiration of the Original Term, this Agreement shall be deemed renewed automatically each year for an additional one- year period (each, a “Renewal Term”), unless terminated pursuant to Section 12(b) or Section 12(c) below. (b) Termination without Cause. (i) Termination by the Company. The Company may terminate this Agreement at any time upon 180-day written notice to the Manager informing it of the Company’s intention to terminate this Agreement. Effective on the termination date of this Agreement under this Section 12(b)(i), the Company and the Manager will enter into a transition services agreement (“Transition Services Agreement”), upon mutually acceptable terms, that shall be in effect until the date that is eight months after the date of the termination of this Agreement. For its services under the Transition Services Agreement, the Company shall pay the Manager the Management Fee, pro rated for the eights-month term of the Transition Services Agreement, payable in equal monthly installments, in arrears, on the tenth day of each calendar month beginning with the first calendar month after the date of termination of this Agreement. (ii) Termination by the Manager. No later than 180 days prior to the expiration of the Original Term or any Renewal Term, the Manager may deliver written notice to the Company informing it of the Manager’s intention not to renew the term, whereupon the term of this Agreement shall not be renewed and extended, and this Agreement shall terminate effective on the expiration date of this Agreement next following the delivery of such notice. (c) Termination for Cause. (i) Termination by the Company. The Company may terminate this Agreement upon 30 days’ prior written notice to the Manager if (A) there is a commencement of any proceeding relating to the Manager’s bankruptcy or insolvency, including an order for relief in an involuntary bankruptcy case or the Manager authorizing or filing a voluntary bankruptcy petition, and such proceeding or order shall remain in force or unstayed for a period of 30 days, (B) the Manager dissolves as an entity, or (C) the Manager commits fraud against the Company, misappropriates or embezzles funds of the Company, or acts in a manner constituting bad faith, willful misconduct or gross negligence in the performance of its duties under this Agreement; provided, however, that if any of the actions or omissions described in this clause (C) are caused by an employee and/or officer of the Manager or one of its affiliates and the Manager takes appropriate action against such person and cures the damage caused by such actions or omissions within 30 days of the Manager’s actual knowledge of its commission or omission, the Company shall not have the right to terminate this Agreement pursuant to this clause (iii). (ii) Termination by the Manager. The Manager may terminate this Agreement upon 60 days’ prior written notice to the Company in the event that the Company shall default in the performance or observance of any material term, condition or covenant contained in this Agreement and such default shall continue for a period of 30 days after written notice thereof specifying such default and requesting that the same be remedied in such 30-day period. The Manager may also terminate this Agreement in its sole discretion effective immediately concurrently with or within 90 days following a Change in Control or a non-cause termination of the Property Management Agreement, in each case upon 30 days’ prior written notice to the Company. 16

SECTION 13. TERMINATION FEE. In the event that this Agreement is terminated (a) by the Company pursuant to Section 12(b)(i) or (b) by the Manager pursuant to Section 12(c)(ii), the Company shall pay to the Manager, on the Effective Termination Date or as promptly thereafter as practicable, a termination fee (the “Termination Fee”) equal to 1.75 times the sum of (x) the Management Fee for the 12 full calendar months preceding the Effective Termination Date, plus (y) all fees due to the Manager or its Affiliates under the Property Management Agreement for the 12 full calendar months preceding the Effective Termination Date. SECTION 14. PROMOTE. Upon the earlier of (a) a termination of this Agreement pursuant to Section 12(b)(i), (b) a termination of this Agreement pursuant to Section 12(c)(ii), and (c) the date that is 36 full calendar months after the date of this Agreement, the Company shall pay to the Manager, on the date of the relevant termination or other event or as promptly thereafter as practicable, a cash promote payment (the “Promote”) if the Company TSR Percentage exceeds 10% during the Measurement Period. The Promote shall be calculated, without duplication, as follows: (i) to the extent that the Company TSR Percentage exceeds 10% during the Measurement Period, the Promote shall equal the product of: (x) the weighted-average number of Common Shares outstanding during the Measurement Period (calculated on a fully-diluted basis in accordance with GAAP), multiplied by (y) the product of (A) 10%, multiplied by (B) the difference of (I) the Company TSR Amount not to exceed a Hurdle TSR Amount implied by a Company TSR Percentage during the Measurement Period of 12.5%, less (II) a Hurdle TSR Amount implied by a Company TSR Percentage during the Measurement Period of 10%; (ii) to the extent that the Company TSR Percentage exceeds 12.5% during the Measurement Period, the Promote shall equal the sum of: (x) the amount under (i) above, plus (y) the product of: (A) the weighted-average number of Common Shares outstanding during the Measurement Period (calculated on a fully-diluted basis in accordance with GAAP), multiplied by (B) the product of (I) 15%, multiplied by (II) the difference of (1) the Company TSR Amount not to exceed a Hurdle TSR Amount implied by a Company TSR Percentage during the Measurement Period of 15%, less (2) a Hurdle TSR Amount implied by a Company TSR Percentage during the Measurement Period of 12.5%; and (iii) to the extent that the Company TSR Percentage exceeds 15% during the Measurement Period, the Promote shall equal the sum of: 17

(x) the amount under (ii) above, plus (y) the product of: (A) the weighted-average number of Common Shares outstanding during the Measurement Period (calculated on a fully-diluted basis in accordance with GAAP), multiplied by (B) the product of (I) 20%, multiplied by (II) the difference of (1) the Company TSR Amount, less (2) a Hurdle TSR Amount implied by a Company TSR Percentage during the Measurement Period of 15%. For avoidance doubt, the Promote (including the related definitions of the Company TSR Amount, the Company TSR Percentage and the Hurdle TSR Amount) shall be calculated consistent with the illustrative Promote calculation methodology set forth on Exhibit A hereto. SECTION 15. ASSIGNMENT. (a) Except as set forth in Section 15(b), this Agreement shall terminate automatically in the event of its assignment, in whole or in part, by the Manager, unless such assignment is consented to in writing by the Company with the consent of a majority of the Independent Trustees; provided, however, that no such consent shall be required in the case of an assignment by the Manager to an entity whose business and operations are managed or supervised by Spirit Realty Capital, Inc. Any such permitted assignment shall bind the assignee under this Agreement in the same manner as the Manager is bound. The Manager shall continue to be liable to the Company for all errors or omissions of any assignee that is managed or supervised by Spirit Realty Capital, Inc. The Manager shall not be liable for errors or omissions of any other successor manager arising from and after any such assignment. In the case of any assignment, the assignee shall execute and deliver to the Company a counterpart of this Agreement naming such assignee as Manager. This Agreement shall not be assigned by the Company without the prior written consent of the Manager, except in the case of assignment by the Company to another REIT or other organization that is a successor (by merger, consolidation or purchase of assets) to the Company, in which case such successor organization shall be bound under this Agreement and by the terms of such assignment in the same manner as the Company is bound under this Agreement. (b) Notwithstanding any provision of this Agreement, the Manager may subcontract and assign any or all of its responsibilities under Section 2 to any of its Affiliates in accordance with the terms of this Agreement, and the Company hereby consents to any such assignment and subcontracting. In addition, provided that the Manager provides prior written notice to the Company for informational purposes only, nothing contained in this Agreement shall preclude any pledge, hypothecation or other transfer of any amounts payable to the Manager under this Agreement. SECTION 16. ACTION UPON TERMINATION. (a) From and after the Effective Termination Date pursuant to Section 12, the Manager shall not be entitled to compensation for further services under this Agreement, but shall be paid all compensation accruing to the date of termination, including, without limitation, any Termination Fee or/and Promote Fee due in connection with such termination. On the Effective Termination Date or as promptly thereafter as practicable, the Manager shall forthwith: (i) after deducting any accrued compensation and reimbursement for its expenses to 18

which it is then entitled, pay over to the Company or a Subsidiary all money collected and held for the account of the Company or a Subsidiary pursuant to this Agreement; (ii) deliver to the Board of Trustees a full accounting, including a statement showing all payments collected by it and a statement of all money held by it, covering the period following the date of the last accounting furnished to the Board of Trustees with respect to the Company or a Subsidiary; and (iii) deliver to the Board of Trustees all property and documents of the Company or any Subsidiary then in the custody of the Manager; provided, however, that the Manager may retain copies of all such information. (b) Upon termination of this Agreement pursuant to Section 12, on the Effective Termination Date or as promptly thereafter as practicable, the Company shall forthwith: (i) pay over to the Manager all compensation accruing to the date of termination, including, without limitation, any Termination Fee or/and Promote Fee due in connection with such termination; and (ii) reimbursement the Manager for all its expenses to which it is then entitled. (c) The obligation of the Company to pay the Termination Fee and the Promote Fee shall survive the termination of this Agreement. In addition, Section 9 and Section 10 shall survive the termination of this Agreement. SECTION 17. RELEASE OF MONEY OR OTHER PROPERTY UPON WRITTEN REQUEST. The Manager agrees that any money or other property of the Company or a Subsidiary thereof held by the Manager under this Agreement shall be held by the Manager as custodian for the Company or such Subsidiary, and the Manager’s records shall be appropriately marked clearly to reflect the ownership of such money or other property by the Company or such Subsidiary. Upon the receipt by the Manager of a written request signed by a duly authorized officer of the Company requesting the Manager to release to the Company or any Subsidiary any money or other property then held by the Manager for the account of the Company or any Subsidiary under this Agreement, the Manager shall release such money or other property to the Company or any Subsidiary within a reasonable period of time, but in no event later than 30 days following such request. The Manager shall not be liable to the Company, any Subsidiary, the Independent Trustees, or the Company’s or a Subsidiary’s shareholders or partners for any acts performed, or omissions to act, by the Company or any Subsidiary in connection with the money or other property released to the Company or any Subsidiary in accordance with the first sentence of this Section 17. SECTION 18. NOTICES. Unless expressly provided otherwise in this Agreement, all notices, requests, demands and other communications required or permitted under this Agreement shall be in writing and shall be deemed to have been duly given, made and received when delivered against receipt or upon actual receipt of (i) personal delivery, (ii) delivery by reputable overnight courier, (iii) delivery by facsimile transmission or email against answerback, (iv) delivery by registered or certified mail, postage prepaid, return receipt requested, addressed as set forth below: 19

(a) If to the Company: Spirit MTA REIT c/o Spirit Realty Capital, Inc. 2727 North Harwood Street Suite 300, Dallas, Texas 75201 Attention: General Counsel (b) If to the Manager: Spirit Realty, L.P. 2727 North Harwood Street Suite 300, Dallas, Texas 75201 Attention: General Counsel Either party may alter the address to which communications or copies are to be sent by giving notice of such change of address in conformity with the provisions of this Section 18 for the giving of notice. SECTION 19. BINDING NATURE OF AGREEMENT; SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors and permitted assigns as provided in this Agreement. SECTION 20. ENTIRE AGREEMENT. This Agreement contains the entire agreement and understanding among the parties hereto with respect to the subject matter of this Agreement, and supersedes all prior and contemporaneous agreements, understandings, inducements and conditions, express or implied, oral or written, of any nature whatsoever with respect to the subject matter of this Agreement. The express terms of this Agreement control and supersede any course of performance and/or usage of the trade inconsistent with any of the terms of this Agreement. This Agreement may not be modified or amended other than by an agreement in writing executed by both parties. SECTION 21. ARBITRATION. (a) Any disputes, claims or controversies arising out of or relating to this Agreement, the provision of services by the Manager pursuant to this Agreement or the transactions contemplated hereby, including any disputes, claims or controversies brought by or on behalf of the Company or the Manager or any holder of equity interests (which, for purposes of this Section 21, shall mean any holder of record or any beneficial owner of equity interests or any former holder of record or beneficial owner of equity interests) of the Company or the Manager, either on his, her or its own behalf, on behalf of the Company or the Manager or on behalf of any series or class of equity interests of the Company or Manager or holders of any equity interests of the Company or the Manager against the Company or the Manager or any of their respective trustees, directors, members, officers, managers (including the Manager or its successor), agents or employees, including any disputes, claims or controversies relating to the meaning, interpretation, effect, validity, performance or enforcement of this Agreement, including this arbitration agreement or the governing documents of the Company or the Manager (all of which are referred to as “Disputes”), or relating in any way to such a Dispute or Disputes shall, on the demand of any party to such Dispute or Disputes, be resolved through binding and final arbitration in accordance with the Commercial 20

Arbitration Rules (the “Rules”) of the American Arbitration Association (“AAA”) then in effect, except as those Rules may be modified in this Section 21. For the avoidance of doubt, and not as a limitation, Disputes are intended to include derivative actions against the trustees, directors, officers or managers of the Company or the Manager and class actions by a holder of equity interests against those individuals or entities and the Company or the Manager. For the avoidance of doubt, a Dispute shall include a Dispute made derivatively on behalf of one party against another party. For purposes of this Section 21, the term “equity interest” shall mean, (i) in respect of the Company, shares of beneficial interest of the Company, and (ii) in respect of the Manager, “membership interest” in the Manager as defined in the Delaware Limited Partnership Act. (b) There shall be three (3) arbitrators. If there are only two (2) parties to the Dispute, each party shall select one (1) arbitrator within fifteen (15) days after receipt by respondent of a copy of the demand for arbitration. The arbitrators may be affiliated or interested persons of the parties. If there are more than two (2) parties to the Dispute, all claimants, on the one hand, and all respondents, on the other hand, shall each select, by the vote of a majority of the claimants or the respondents, as the case may be, one (1) arbitrator within fifteen (15) days after receipt of the demand for arbitration. The arbitrators may be affiliated or interested persons of the claimants or the respondents, as the case may be. If either a claimant (or all claimants) or a respondent (or all respondents) fail(s) to timely select an arbitrator then the party (or parties) who has selected an arbitrator may request AAA to provide a list of three (3) proposed arbitrators in accordance with the Rules (each of whom shall be neutral, impartial and unaffiliated with any party) and the party (or parties) that failed to timely appoint an arbitrator shall have ten (10) days from the date AAA provides the list to select one (1) of the three (3) arbitrators proposed by AAA. If the party (or parties) fail(s) to select the second (2nd) arbitrator by that time, the party (or parties) who have appointed the first (1st) arbitrator shall then have ten (10) days to select one (1) of the three (3) arbitrators proposed by AAA to be the second (2nd) arbitrator; and, if he/they should fail to select the second (2nd) arbitrator by such time, AAA shall select, within fifteen (15) days thereafter, one (1) of the three (3) arbitrators it had proposed as the second (2nd) arbitrator. The two (2) arbitrators so appointed shall jointly appoint the third (3rd) and presiding arbitrator (who shall be neutral, impartial and unaffiliated with any party) within fifteen (15) days of the appointment of the second (2nd) arbitrator. If the third (3rd) arbitrator has not been appointed within the time limit specified herein, then AAA shall provide a list of proposed arbitrators in accordance with the Rules, and the arbitrator shall be appointed by AAA in accordance with a listing, striking and ranking procedure, with each party having a limited number of strikes, excluding strikes for cause. (c) The place of arbitration shall be Dallas, Texas, unless otherwise agreed by the parties. (d) There shall be only limited documentary discovery of documents directly related to the issues in dispute, as may be ordered by the arbitrators. For the avoidance of doubt, it is intended that there shall be no depositions and no other discovery other than limited documentary discovery as described in the preceding sentence. (e) In rendering an award or decision (the “Award”), the arbitrators shall be required to follow the laws of the State of Maryland. Any arbitration proceedings or award rendered hereunder and the validity, effect and interpretation of this arbitration agreement shall be governed by the Federal Arbitration Act, 9 U.S.C. §1 et seq. The Award shall be in writing and shall state the findings of fact and conclusions of law on which it is based. Any monetary award shall be made and payable in U.S. dollars free of any tax, deduction or offset. Subject to Section 21(g), each party against which the Award assesses a monetary obligation shall pay that obligation on or before the thirtieth (30th) day following the date of the Award or such other date as the Award may provide. 21

(f) Except to the extent expressly provided by this Agreement or as otherwise agreed by the parties thereto, each party involved in a Dispute shall bear its own costs and expenses (including attorneys’ fees), and the arbitrators shall not render an award that would include shifting of any such costs or expenses (including attorneys’ fees) or, in a derivative case or class action, award any portion of the Company’s or the Manager’s, as applicable, award to the claimant or the claimant’s attorneys. Each party (or, if there are more than two (2) parties to the Dispute, all claimants, on the one hand, and all respondents, on the other hand, respectively) shall bear the costs and expenses of its (or their) selected arbitrator and the parties (or, if there are more than two (2) parties to the Dispute, all claimants, on the one hand, and all respondents, on the other hand) shall equally bear the costs and expenses of the third (3rd) appointed arbitrator. (g) Notwithstanding any language to the contrary in this Agreement, the Award, including but not limited to, any interim Award, may be appealed pursuant to the AAA’s Optional Appellate Arbitration Rules (“Appellate Rules”). The Award shall not be considered final until after the time for filing the notice of appeal pursuant to the Appellate Rules has expired. Appeals must be initiated within thirty (30) days of receipt of the Award by filing a notice of appeal with any AAA office. Following the appeal process, the decision rendered by the appeal tribunal may be entered in any court having jurisdiction thereof. For the avoidance of doubt, and despite any contrary provision of the Appellate Rules, this Section 21(f) shall apply to any appeal pursuant to this Section and the appeal tribunal shall not render an award that would include shifting of any costs or expenses (including attorneys’ fees) of any party. (h) Following the expiration of the time for filing the notice of appeal, or the conclusion of the appeal process set forth in Section 21(g), the Award shall be final and binding upon the parties thereto and shall be the sole and exclusive remedy between those parties relating to the Dispute, including any claims, counterclaims, issues or accounting presented to the arbitrators. Judgment upon the Award may be entered in any court having jurisdiction. To the fullest extent permitted by law, no application or appeal to any court of competent jurisdiction may be made in connection with any question of law arising in the course of arbitration or with respect to any award made except for actions relating to enforcement of this agreement to arbitrate or any arbitral award issued hereunder and except for actions seeking interim or other provisional relief in aid of arbitration proceedings in any court of competent jurisdiction. (i) This Section 21 is intended to benefit and be enforceable by the Company, the Manager and their respective holders of equity interests, trustees, directors, officers, managers (including the Manager or its successor), agents or employees, and their respective successors and assigns and shall be binding upon the Company, the Manager and their respective holders of equity interests, and be in addition to, and not in substitution for, any other rights to indemnification or contribution that such individuals or entities may have by contract or otherwise. SECTION 22. NAME LICENSE. The Manager hereby grants to the Company and its Affiliates a personal, royalty-free, non- exclusive, non-sublicensable, and non-transferable right and license during the License Term (as defined below) and Wind-Down Term (if any, and as defined below) to use, display and reproduce the name “Spirit” (“Licensed Name”) in connection with the operation of their respective businesses, including in the corporate names of Company and its Affiliates. The “License Term” shall mean the period commencing on the date of this Agreement and continuing until 90 days after the Effective Date of Termination of this Agreement. For the avoidance of doubt, the license grant herein is non-exclusive and accordingly the Manager and its Affiliates hereby retain the right to continue using the Licensed Name and to license or transfer any rights the Manager and its Affiliates may have in the Licensed Name to third 22

parties, and Company and its Affiliates will not take any action to challenge the Manager and its Affiliates rights in the Licensed Name. Company and its Affiliates acknowledge that certain goodwill and reputation may be associated with the Licensed Name and agree to use the Licensed Name only in a manner that maintains and promotes such goodwill and reputation, and any use in contravention of the foregoing shall be deemed a material breach of this Agreement. Company and its Affiliates shall cooperate with Manager and its Affiliates in facilitating the Manager’s control of the nature and quality of the products, services and other uses of the Licensed Name, including providing Manager, upon Manager’s written request, with samples of any public facing materials produced by or on behalf of the Company and its Affiliates that bear the Licensed Name. Upon the expiration of the License Term, (i) the license grant set forth in this Section 22 will terminate, (ii) Company and its Affiliates will cease all use of the Licensed Name and destroy, or at Manager’s election transfer to Manager, all public facing materials in the Company and its Affiliates’ possession or control containing the Licensed Names, and (iii) Company and its Affiliates will immediately change their corporate names to no longer contain the word “Spirit” or any derivation thereof. SECTION 23. CONTROLLING LAW. This Agreement and all questions relating to its validity, interpretation, performance and enforcement shall be governed by and construed, interpreted and enforced in accordance with the laws of the State of New York, notwithstanding any New York or other conflict-of-law provisions to the contrary. SECTION 24. INDULGENCES, NOT WAIVERS. Neither the failure nor any delay on the part of a party to exercise any right, remedy, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege preclude any other or further exercise of the same or of any other right, remedy, power or privilege, nor shall any waiver of any right, remedy, power or privilege with respect to any occurrence be construed as a waiver of such right, remedy, power or privilege with respect to any other occurrence. No waiver shall be effective unless it is in writing and is signed by the party asserted to have granted such waiver. SECTION 25. TITLES NOT TO AFFECT INTERPRETATION. The titles of paragraphs and subparagraphs contained in this Agreement are for convenience only, and they neither form a part of this Agreement nor are they to be used in the construction or interpretation of this Agreement. SECTION 26. EXECUTION IN COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original as against any party whose signature appears thereon, and all of which shall together constitute one and the same instrument. This Agreement shall become binding when one or more counterparts of this Agreement, individually or taken together, shall bear the signatures of all of the parties reflected hereon as the signatories. SECTION 27. PROVISIONS SEPARABLE. The provisions of this Agreement are independent of and separable from each other, and no provision shall be affected or rendered invalid or unenforceable by virtue of the fact that for any reason 23

any other or others of them may be invalid or unenforceable in whole or in part. [Remainder of this page intentionally left blank] 24

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above. COMPANY: Spirit MTA REIT, a Maryland real estate trust By: /s/ Ricardo Rodrigues Name: Ricardo Rodriguez Title: Chief Executive Officer, President, Chief Financial Officer and Treasurer MANAGER: Spirit Realty, L.P., a Delaware limited partnership By: Spirit General OP Holdings, LLC, a Delaware limited liability company, its General Partner By: /s/ Ken Heimlich Name: Ken Heimlich Title: Executive Vice President [Signature page to Asset Management Agreement]

EXHIBIT A Illustrative Total Shareholder Return Calculation Methodology [See attached.]

EX-31.1

Exhibit 31.1

CERTIFICATIONS OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Ricardo Rodriguez, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Spirit MTA REIT;

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

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

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

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

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

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

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

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

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

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

Date:	June 21, 2018	/s/ RICARDO RODRIGUEZ
		Ricardo Rodriguez
		Chief Executive Officer and President

EX-31.2

Exhibit 31.2

CERTIFICATIONS OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Ricardo Rodriguez, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Spirit MTA REIT;

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

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

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

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

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

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

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

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

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

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

Date:	June 21, 2018	/s/ RICARDO RODRIGUEZ
		Ricardo Rodriguez
		Chief Financial Officer and Treasurer

EX-32.1

Exhibit 32.1

CERTIFICATIONS OF PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(18 U.S.C 1350)

Each of the undersigned officers of Spirit MTA REIT (the “Company”) hereby certifies, for purposes of Section 1350 of Chapter 63 of Title 18 of the United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to his knowledge:

(i) the accompanying Quarterly Report on Form 10-Q of the Company for the period ended March 31, 2018 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended, and

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

Date:	June 21, 2018	/s/ RICARDO RODRIGUEZ
		Ricardo Rodriguez
		Chief Executive Officer and President
		/s/ RICARDO RODRIGUEZ
		Ricardo Rodriguez
		Chief Financial Officer and Treasurer

The foregoing certification is being furnished with the Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2018 pursuant to 18 U.S.C. Section 1350. It is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and it is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

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

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2018	Jun. 19, 2018
Document and Entity Information [Abstract]
Entity Registrant Name	SPIRIT MTA REIT
Trading Symbol	SMTA
Entity Central Index Key	0001722992
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Document Type	10-Q
Document Period End Date	Mar. 31, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q1
Amendment Flag	false
Entity Common Stock, Shares Outstanding		42,851,010

XML

Balance Sheets (Unaudited) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Investments:
Total real estate investments, net	$ 2,800,000,000
Cash	8,643	$ 10,000
Total assets	8,643	10,000
Shareholder’s equity
Common shares, $0.01 par value, 750,000,000 shares authorized: 10,000 issued and outstanding	100	100
Capital in excess of par value	9,900	9,900
Accumulated deficit	(1,357)	0
Total shareholder’s equity	8,643	10,000
Predecessor Entities
Investments:
Land and improvements	958,585,000	973,231,000
Buildings and improvements	1,656,579,000	1,658,023,000
Total real estate investments	2,615,164,000	2,631,254,000
Less: accumulated depreciation	(565,118,000)	(557,948,000)
Total real estate investments, net	2,050,046,000	2,073,306,000
Loans receivable, net	30,105,000	32,307,000
Intangible lease assets, net	97,790,000	102,262,000
Real estate assets held for sale, net	7,853,000	28,460,000
Net investments	2,185,794,000	2,236,335,000
Cash and cash equivalents	5,000	6,000
Deferred costs and other assets, net	121,996,000	107,770,000
Goodwill	13,549,000	13,549,000
Total assets	2,321,344,000	2,357,660,000
Liabilities:
Mortgages and notes payable, net	2,007,771,000	1,926,835,000
Intangible lease liabilities, net	22,538,000	23,847,000
Accounts payable, accrued expenses and other liabilities	16,273,000	16,060,000
Total liabilities	2,046,582,000	1,966,742,000
Commitments and contingencies (see Note 6)
Shareholder’s equity
Total shareholder’s equity	274,762,000	390,918,000
Total liabilities and parent company equity	$ 2,321,344,000	$ 2,357,660,000

XML

Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Mar. 31, 2018	Dec. 31, 2017
Statement of Financial Position [Abstract]
Common stock, par value per share (in USD per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	750,000,000	750,000,000
Common stock, shares issued (in shares)	10,000	10,000
Common stock, shares outstanding (in shares)	10,000	10,000

XML

Statements of Operations and Comprehensive (Loss) Income (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Expenses:
General and administrative	$ 1,357
Other expense:
Net (loss) income	(1,357)
Total comprehensive (loss) income	$ (1,357)
Net loss per share (in USD per share)	$ (0.14)
Weighted average shares of common stock outstanding (basic and diluted) (in shares)	10,000
Predecessor Entities
Revenues:
Rentals	$ 59,031,000	$ 56,385,000
Interest income on loans receivable	81,000	203,000
Tenant reimbursement income	577,000	778,000
Other income	379,000	482,000
Total revenues	60,068,000	57,848,000
Expenses:
General and administrative	5,651,000	5,269,000
Related party fees	1,730,000	1,354,000
Transaction costs	3,017,000	0
Property costs (including reimbursable)	1,413,000	2,456,000
Interest	28,012,000	18,816,000
Depreciation and amortization	20,993,000	20,610,000
Impairments	4,825,000	6,493,000
Total expenses	65,641,000	54,998,000
(Loss) income before other expense and income tax expense	(5,573,000)	2,850,000
Other expense:
Loss on debt extinguishment	255,000	0
Total other expense	255,000	0
(Loss) income before income tax expense	(5,828,000)	2,850,000
Income tax expense	57,000	45,000
(Loss) income before (loss) gain on disposition of assets	(5,885,000)	2,805,000
(Loss) gain on disposition of assets	(1,694,000)	11,189,000
Net (loss) income	(7,579,000)	13,994,000
Total comprehensive (loss) income	$ (7,579,000)	$ 13,994,000

XML

Statement of Changes in Shareholder's Equity (Unaudited) - 3 months ended Mar. 31, 2018 - USD ($)	Total	Common Stock	Capital in Excess of Par	Accumulated Deficit
Balances, December 31, 2017 (in shares) at Dec. 31, 2017	10,000	10,000
Balances, December 31, 2017 (Predecessor Entities) at Dec. 31, 2017	$ 390,918,000
Balances, December 31, 2017 at Dec. 31, 2017	10,000	$ 100	$ 9,900	$ 0
Shareholders' Equity
Net loss | Predecessor Entities	(7,579,000)
Net loss	(1,357)			(1,357)
Comprehensive loss | Predecessor Entities	(7,579,000)
Comprehensive loss	(1,357)			(1,357)
Contributions from parent company | Predecessor Entities	49,819,000
Distributions to parent company | Predecessor Entities	$ (158,396,000)
Balances, March 31, 2018 (in shares) at Mar. 31, 2018	10,000	10,000
Balances, March 31, 2018 (Predecessor Entities) at Mar. 31, 2018	$ 274,762,000
Balances, March 31, 2018 at Mar. 31, 2018	$ 8,643	$ 100	$ 9,900	$ (1,357)

XML

Statement of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Operating activities
Net (loss) income	$ (1,357)
Changes in operating assets and liabilities:
Net cash provided by operating activities	(1,357)
Financing activities
Net decrease in cash	(1,357)
Cash, beginning of period	10,000
Cash, end of period	8,643
Predecessor Entities
Operating activities
Net (loss) income	(7,579,000)	$ 13,994,000
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization	20,993,000	20,610,000
Impairments	4,825,000	6,493,000
Amortization of deferred financing costs	875,000	325,000
Amortization of debt discounts	2,000,000	1,061,000
Stock based compensation expense	1,606,000	831,000
Loss on debt extinguishment, net	255,000	0
Loss (gain) on dispositions of real estate and other assets, net	1,694,000	(11,189,000)
Non-cash revenue	(769,000)	(1,117,000)
Other	(58,000)	1,009,000
Changes in operating assets and liabilities:
Deferred costs and other assets, net	430,000	871,000
Accounts payable, accrued expenses and other liabilities	1,050,000	269,000
Net cash provided by operating activities	25,322,000	33,157,000
Investing activities
Acquisitions of real estate	0	(10,059,000)
Capitalized real estate expenditures	(178,000)	(463,000)
Collections of principal on loans receivable	2,267,000	841,000
Proceeds from dispositions of real estate and other assets	16,911,000	40,461,000
Net cash provided by investing activities	19,000,000	30,780,000
Financing activities
Borrowings under mortgages and notes payable	92,216,000	0
Repayments under mortgages and notes payable	(12,904,000)	(3,927,000)
Debt extinguishment costs	(255,000)	0
Deferred financing costs	(1,251,000)	0
Contribution from parent company	48,213,000	29,306,000
Distribution to parent company	(156,252,000)	(78,762,000)
Net cash used in financing activities	(30,233,000)	(53,383,000)
Net increase in cash, cash equivalents and restricted cash	14,089,000	10,554,000
Cash, cash equivalents and restricted cash, beginning of period	66,510,000	12,688,000
Cash, cash equivalents and restricted cash, end of period	80,599,000	23,242,000
Supplemental Disclosures of Non-Cash Investing and Financing Activities:
Net investment distribution to parent	2,144,000	0
Supplemental Cash Flow Disclosures:
Interest paid	26,518,000	17,430,000
Taxes paid	$ 19,000	$ 25,000

XML

Organization

3 Months Ended

Mar. 31, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization

Organization

Spirit MTA REIT (“SMTA”), a Maryland real estate investment trust, was formed and capitalized on November 15, 2017 as a wholly owned subsidiary of Spirit Realty Capital, Inc. (“Spirit”). SMTA was formed for the purpose of receiving, via contribution from Spirit, (i) an asset-backed securitization trust established in 2005 and amended and restated in 2014, comprised of six legal entities, which issues non-recourse net-lease mortgage notes collateralized by commercial real estate, net-leases and mortgage loans (“Master Trust 2014”), (ii) three legal entities (“Shopko Entities”) that own properties primarily leased to Specialty Retail Shops Holding Corp. and its subsidiaries, (iii) one legal entity that owns a single distribution center property leased to a sporting goods tenant and its general partner entity (“Sporting Goods Entities”), and (iv) two legal entities that own four unencumbered properties (collectively with Master Trust 2014, the Shopko Entities, and the Sporting Goods Entities, the “Predecessor Entities”).

On May 31, 2018, Spirit completed the spin-off by means of a pro-rata distribution of SMTA common shares to Spirit stockholders of record as of the close of business on the record date (“Spin-Off”). As of March 31, 2018, SMTA had not conducted any business as a separate company and SMTA had no material assets or liabilities. Following the Spin-Off, SMTA expects to operate as a real estate investment trust under the applicable provisions of the Internal Revenue Code of 1986, as amended.

As of March 31, 2018, SMTA expected to own approximately 790 assets in Master Trust 2014, 95 assets in the Shopko Entities and 15 other assets, collectively with an approximate net book value of $2.8 billion. SMTA will be managed by Spirit Realty, L.P. under an Asset Management Agreement.

Organization

On August 3, 2017, Spirit Realty Capital, Inc. (“Spirit”) announced a plan to spin-off (“Spin-Off”) its interests in (i) an asset-backed securitization trust established in 2005 and amended and restated in 2014, comprised of six legal entities, which issues non-recourse net-lease mortgage notes collateralized by commercial real estate, net-leases and mortgage loans (“Master Trust 2014”), (ii) three legal entities (“Shopko Entities”) that own properties primarily leased to Specialty Retail Shops Holding Corp. and certain of its affiliates, (iii) one legal entity that owns a single distribution center property leased to a sporting goods tenant and its general partner entity (“Sporting Goods Entities”), and (iv) two legal entities that own four unencumbered properties (collectively with Master Trust 2014, the Shopko Entities, and the Sporting Goods Entities, the “Predecessor Entities” or the “Company”) into an independent, publicly traded company, Spirit MTA REIT (“SMTA”). The legal entities that comprise the Predecessor Entities are: Spirit Master Funding, LLC, Spirit Master Funding II, LLC, Spirit Master Funding III, LLC, Spirit Master Funding VI, LLC, Spirit Master Funding VIII, LLC, Spirit SPE Property Holdings II, LLC, Spirit SPE Portfolio 2006-1, LLC, Spirit SPE Portfolio 2006-2, LLC, Spirit SPE Portfolio 2006-3, LLC, Spirit AS Katy TX, LP, Spirit IM Katy TX, LLC, Spirit SPE Portfolio 2012-5, LLC and Spirit SPE Crown 2014-1, LLC.

To accomplish the Spin-Off, Spirit created a new real estate investment trust, SMTA, which as of March 31, 2018 was a wholly-owned subsidiary of Spirit. Prior to the Spin-Off, but subsequent to March 31, 2018, Spirit transferred to SMTA the legal entities that hold the Predecessor Entities’ assets and liabilities. Spirit effected the Spin-Off by means of a pro-rata distribution of SMTA common shares to Spirit stockholders of record as of the close of business on the record date. The operations of the Predecessor Entities are presented for all historical periods described and at the carrying value of such assets and liabilities reflected in Spirit’s books and records.

Costs associated with the Spin-Off incurred in the three months ended March 31, 2018 totaled $3.0 million, and are reflected as transaction costs on the accompanying combined statements of operations and comprehensive (loss) income. There were no costs associated with the Spin-Off incurred in the three months ended March 31, 2017.

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Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2018

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Basis of Accounting

The accompanying balance sheets include all of the accounts of SMTA as of March 31, 2018 and December 31, 2017, prepared in accordance with GAAP in the U.S. The Company has no assets other than cash. Bank fees on cash are presented as general and administrative expenses on the statement of operations and comprehensive loss and are recognized when fees are paid.

Cash

Cash includes cash on hand or held in banks.

Summary of Significant Accounting Policies

Basis of Accounting

The accompanying combined financial statements have been prepared on a stand-alone basis and are derived from Spirit’s consolidated financial statements and underlying accounting records. The combined financial statements reflect the historical results of operations, financial position and cash flows of the wholly-owned subsidiaries of Spirit that make up the Predecessor Entities and are presented as if the transferred subsidiaries formed SMTA’s business for all historical periods presented. The assets to be contributed and liabilities to be assumed, as presented in the accompanying combined financial statements, reflect Spirit’s historical carrying value of the assets and liabilities as of the financial statement date, consistent with the accounting for spin-off transactions in accordance with GAAP in the U.S. All Predecessor Entities’ intercompany transactions have been eliminated in combination.

The results for interim periods are not necessarily indicative of the results for the entire year. Certain information and note disclosures, normally included in financial statements prepared in accordance with GAAP, have been condensed or omitted from these statements pursuant to SEC rules and regulations and, accordingly, these financial statements should be read in conjunction with the Predecessor Entities’ audited combined financial statements for the year ended December 31, 2017 included in the Company's registration statement on Form 10 filed with the SEC.

As of March 31, 2018, the Predecessor Entities were wholly-owned subsidiaries of Spirit. As a result, the combined net assets of the Predecessor Entities have been reflected in the accompanying combined balance sheets as net parent investment. All transactions between Spirit and the Predecessor Entities are considered effectively settled through equity in the combined financial statements at the time the transaction is recorded, other than certain intercompany mortgages as discussed in the Related Party footnote (see Note 5). The settlement of these transactions is reflected as contributions and distributions to parent in the combined statement of changes in parent company equity and contributions and distributions to parent in the combined statements of cash flows as a financing activity.

The combined financial statements include expense allocations related to certain Spirit corporate functions, including executive oversight, asset management, property management, treasury, finance, human resources, tax, accounting, financial reporting, information technology and investor relations. These expenses have been allocated to the Predecessor Entities based on direct usage or benefit where specifically identifiable, with the remainder allocated pro rata based on property count. All the expense allocations were deemed to have been incurred and settled through net parent investment in the period in which the costs were incurred. At time of the Spin-Off, SMTA entered into an Asset Management Agreement with Spirit to provide corporate functions.

Management considers the expense allocation methodology and results to be reasonable. However, the allocations may not be indicative of the actual expense that would have been incurred had the Predecessor Entities operated as an independent, publicly traded company for the periods presented. Accordingly, the combined financial statements herein do not necessarily reflect what the Predecessor Entities’ financial position, results of operations or cash flows would have been if it had been a standalone company during the periods presented, nor are they necessarily indicative of its future results of operations, financial position or cash flows.

These combined financial statements include the special purpose entities that will be wholly owned by SMTA. Certain of these special purpose entities were formed to acquire and hold real estate encumbered by indebtedness (see Note 4). Each special purpose entity is a separate legal entity and is the sole owner of its assets and responsible for its liabilities. The assets of these special purpose entities are not available to pay, or otherwise satisfy obligations to, the creditors of any affiliate or owner of another entity unless the special purpose entities have expressly agreed and are permitted under their governing documents. As of March 31, 2018 and December 31, 2017, net assets totaling $1.90 billion and $1.82 billion, respectively, were held and net liabilities totaling $2.04 billion and $1.96 billion, respectively, were owed by these encumbered special purpose entities included in the accompanying combined balance sheets.

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 at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although management believes its estimates are reasonable, actual results could differ from those estimates.

Segment Reporting

The Company views its operations as one segment, which consists of net leasing operations. The Company has no other reportable segments.

Allowance for Doubtful Accounts

The Company reviews its rent and other tenant receivables for collectability on a regular basis, taking into consideration changes in factors such as 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 tenant operates. If the collectability of a receivable with respect to any tenant is in doubt, a provision for uncollectible amounts will be established or a direct write-off of the specific receivable will be made. The Company’s reserves for uncollectible amounts totaled $3.5 million as of both March 31, 2018 and December 31, 2017, against accounts receivable balances of $4.7 million and $5.0 million, respectively. Receivables are recorded within deferred costs and other assets, net in the accompanying combined balance sheets. Receivables are written off against the reserves for uncollectible amounts when all possible means of collection have been exhausted.

For deferred rental revenues related to the straight-line method of reporting rental revenue, the collectability review includes management’s estimates of amounts that will not be realized based on an assessment of the risks inherent in the portfolio, considering historical experience. The Company established a reserve for losses of $1.0 million as of both March 31, 2018 and December 31, 2017, against deferred rental revenue receivables of $25.8 million and $24.9 million, respectively. Deferred rental revenue receivables are recorded within deferred costs and other assets, net in the accompanying combined balance sheets.

Cash, Cash Equivalents and Restricted Cash

Cash and cash equivalents include cash and highly liquid investment securities with maturities at acquisition of three months or less. The Company invests cash primarily in money market funds of major financial institutions with fund investments consisting of highly-rated money market instruments and other short-term instruments. Restricted cash is classified within deferred costs and other assets, net in the accompanying combined balance sheets. Cash, cash equivalents and restricted cash as shown in the combined statements of cash flows consisted of the following (in thousands):

	March 31, 2018		December 31, 2017		March 31, 2017
Cash and cash equivalents	$	5	$	6	$	1,446
Restricted cash:
Release Account (1)	74,982		61,001		21,796
Liquidity Reserve (2)	5,527		5,503		—
Tenant improvements, repairs, and leasing commissions (3)	81		—		—
Other (4)	4		—		—
Total cash, cash equivalents and restricted cash	$	80,599	$	66,510	$	23,242

⁽¹⁾ Release Account cash consists of proceeds from the sales of assets pledged as collateral under Master Trust 2014 and is held on deposit until a qualifying substitution is made or the funds are applied as prepayment of principal.

⁽²⁾  Liquidity Reserve cash was placed on deposit in conjunction with the issuance of additional series of notes under Master Trust 2014 and is held until there is a cashflow shortfall, as defined in the Master Trust 2014 agreements, or a liquidation of Master Trust 2014 occurs.

⁽³⁾  Deposits held as additional collateral support by lenders to fund improvements, repairs, and leasing commissions incurred to secure a new tenant.

⁽⁴⁾  Funds held in lender controlled accounts released after scheduled debt service requirements are met.

Goodwill

Goodwill arises from business combinations and represents the excess of the cost of an acquired entity over the net fair value amounts that were assigned to the identifiable assets acquired and the liabilities assumed. Spirit recorded goodwill as a result of its merger with Cole Credit Property II, Inc. (“Cole”) on July 17, 2013. Goodwill was allocated to the Predecessor Entities based on the fair value of the Cole assets attributable to the Predecessor Entities relative to the total fair value of Cole assets acquired through the merger. Goodwill is tested for impairment at the reporting unit level on an annual basis and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying value.

Income Taxes

The Company applies the provisions of FASB ASC Topic 740, Income Taxes, and computes the provision for income taxes on a separate return basis. The separate return method applies the accounting guidance for income taxes to the stand-alone combined financial statements as if the Predecessor Entities were a separate taxpayer and a stand-alone enterprise for the periods presented.

The Predecessor Entities are directly and indirectly wholly-owned by Spirit Realty, L.P. and are disregarded entities for Federal income tax purposes. Spirit Realty, L.P. is wholly-owned by Spirit through certain direct and indirect ownership interests and is taxed as a partnership for Federal income tax purposes. Spirit has elected to be taxed as a REIT under the applicable provisions of the Internal Revenue Code of 1986, as amended, and as a result will not be subject to Federal income tax as long as it distributes 100% of its taxable income and satisfies certain other requirements. Therefore, no provision for Federal income tax has been made in the accompanying combined financial statements. The Predecessor Entities are subject to certain other taxes, including state taxes, which are reflected as income tax (expense) benefit in the combined statements of operations and comprehensive (loss) income. Franchise taxes are included in general and administrative expenses in the accompanying combined statements of operations and comprehensive (loss) income.

Earnings Per Share

The Company does not present earnings per share as common shares were not part of the Company’s capital structure for the periods presented.

New Accounting Pronouncements

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers: Topic 606. This new guidance establishes a principles-based approach for accounting for revenue from contracts with customers and is effective for annual reporting periods beginning after December 15, 2017, with early application permitted for annual reporting periods beginning after December 15, 2016. The Company adopted the new revenue recognition standard effective January 1, 2018 under the modified retrospective method, and elected to apply the standard only to contracts that were not completed as of the date of adoption (i.e., January 1, 2018). In evaluating the impact of this new standard, the Company identified that lease contracts covered by Leases (Topic 840) are excluded from the scope of this new guidance, as such, this ASU had no material impact on the Company's reported revenues, results of operations, financial position, cash flows and disclosures.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which supersedes the existing guidance for lease accounting Leases (Topic 840). ASU 2016-02 requires lessees to recognize leases on their balance sheets, and leaves lessor accounting largely unchanged. Leases pursuant to which the Company is the lessee primarily consists of ground leases. The amendments in this ASU are effective for the fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Early application is permitted for all entities. ASU 2016-02 requires a modified retrospective approach for all leases existing at, or entered into after, the date of initial application, with an option to elect to use certain transition relief. Under the guidance as currently contemplated, the Company will record certain expenses paid directly by tenants that protect the Company's interests in its properties, such as insurance and real estate taxes; however, the FASB has announced it will re-evaluate this requirement. The Company has begun implementation of the ASU and is currently evaluating the overall impact of this ASU on its combined financial statements.

In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments, which requires more timely recognition of credit losses associated with financial assets. ASU 2016-13 requires financial assets (or a group of financial assets) measured at an amortized cost basis to be presented at the net amount expected to be collected. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently evaluating the impact of this ASU on its combined financial statements.

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Shareholder's Equity

3 Months Ended

Mar. 31, 2018

Equity [Abstract]

Shareholder's Equity

Shareholder’s Equity

SMTA has been capitalized with the issuance of 10,000 common shares of beneficial interest ($0.01 par value per share) for a total of $10,000.

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Preferred Shares

3 Months Ended

Mar. 31, 2018

Equity [Abstract]

Preferred Shares

Preferred Shares

SMTA has 20,000,000 authorized preferred shares ($0.01 par value per share). As of March 31, 2018, there were no preferred shares issued and outstanding.

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Investments

3 Months Ended

Mar. 31, 2018

Investments in and Advances to Affiliates [Abstract]

Investments

Investments

Real Estate Investments

As of March 31, 2018, the Company’s gross investment in real estate properties and loans totaled approximately $2.8 billion, representing investments in 884 owned properties and 6 properties securing mortgage loans. The gross investment is comprised of land, buildings, lease intangible assets and lease intangible liabilities, as adjusted for any impairment, and the carrying amount of loans receivable and real estate assets held for sale. The portfolio is geographically dispersed throughout 45 states with only one state, Texas, with a real estate investment of 12.2%, accounting for more than 10.0% of the total dollar amount of the Company’s real estate investment portfolio.

During the three months ended March 31, 2018, the Company had the following real estate and loan activity, net of accumulated depreciation and amortization:

	Number of Properties						Dollar Amount of Investments
	Owned		Financed		Total		Owned			Financed			Total
							(In Thousands)
Gross balance, December 31, 2017	907		11		918		$	2,838,285		$	32,307		$	2,870,592
Acquisitions/improvements (1)	—		—		—		178			—			178
Dispositions of real estate (2)(3)	(23	)	—		(23	)	(29,451		)	—			(29,451		)
Principal payments and payoffs	—		(5	)	(5	)	—			(2,557		)	(2,557		)
Impairments	—		—		—		(4,825		)	—			(4,825		)
Write-off of gross lease intangibles	—		—		—		(16,054		)	—			(16,054		)
Loan premium amortization and other	—		—		—		(139		)	355			216
Gross balance, March 31, 2018	884		6		890		$	2,787,994		$	30,105		$	2,818,099
Accumulated depreciation and amortization							(654,968		)	—			(654,968		)
Other non-real estate assets held for sale							125			—			125
Net balance, March 31, 2018							$	2,133,151		$	30,105		$	2,163,256

⁽¹⁾ Includes investments of $162 thousand in revenue producing capitalized expenditures, as well as $16 thousand of non-revenue producing capitalized expenditures as of March 31, 2018.

⁽²⁾ The total accumulated depreciation and amortization associated with dispositions of real estate was $6.8 million as of March 31, 2018.

⁽³⁾ For the period ended March 31, 2018, the total loss on disposal of assets for properties held and used was $1.7 million.

Scheduled minimum future contractual rent to be received under the remaining non-cancelable term of the operating leases (including contractual fixed rent increases occurring on or after April 1, 2018) are as follows (in thousands):

	March 31, 2018
2018 Remainder	$	173,321
2019	226,667
2020	218,569
2021	211,415
2022	198,474
Thereafter	1,467,603
Total future minimum rentals	$	2,496,049

Because lease renewal periods are exercisable at the option of the lessee, the preceding table presents future minimum lease payments due during the initial lease term only. In addition, the future minimum rentals do not include any contingent rentals based on a percentage of the lessees’ gross sales or lease escalations based on future changes in the CPI or other stipulated reference rate.

Loans Receivable

The following table details loans receivable, net of premium and allowance for loan losses (in thousands):

	March 31, 2018		December 31, 2017
Mortgage loans-principal	$	30,105	$	32,665
Mortgage loans-premium, net of amortization	—		31
Allowance for loan losses	—		(389		)
Total loans receivable, net	$	30,105	$	32,307

The mortgage loans are secured by single-tenant commercial properties and generally have fixed interest rates over the term of the loans.

Lease Intangibles, Net

The following table details lease intangible assets and liabilities, net of accumulated amortization (in thousands):

	March 31, 2018			December 31, 2017
In-place leases	$	176,765		$	191,557
Above-market leases	21,773			24,691
Less: accumulated amortization	(100,748		)	(113,986		)
Intangible lease assets, net	$	97,790		$	102,262
Below-market leases	$	36,740		$	39,274
Less: accumulated amortization	(14,202		)	(15,427		)
Intangible lease liabilities, net	$	22,538		$	23,847

The amounts amortized as a net increase to rental revenue for capitalized above and below-market leases were $154 thousand and $130 thousand for the three months ended March 31, 2018 and 2017, respectively. The value of in place leases amortized and included in depreciation and amortization expense was $2.7 million for both the three months ended March 31, 2018 and 2017. 

Real Estate Assets Held for Sale

The following table shows the activity in real estate assets held for sale for the three months ended March 31, 2018 (dollars in thousands): 

	Number of Properties		Carrying Value
			(In Thousands)
Balances, December 31, 2017	7		$	28,460
Transfers from real estate investments	2		2,207
Sales	—		—
Transfers to real estate investments held and used	(4	)	(22,814		)
Impairments	—		—
Balances, March 31, 2018	5		$	7,853

Impairments

The following table summarizes total impairment losses recognized on the accompanying combined statements of operations and comprehensive (loss) income (in thousands):

	Three Months Ended March 31,
	2018			2017
Real estate and intangible asset impairment	$	4,818		$	6,962
Write-off of lease intangibles, net	23			(469		)
Recovery of loans receivable, previously reserved	(16		)	—
Total impairment loss	$	4,825		$	6,493

Impairments for the three months ended March 31, 2018 were comprised of $4.8 million on properties classified as held and used. Impairments for the three months ended March 31, 2017 were comprised of $4.1 million on properties classified as held and used and $2.4 million on properties classified as held for sale.

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Debt

3 Months Ended

Mar. 31, 2018

Debt Disclosure [Abstract]

Debt

Debt

Master Trust 2014

The Company has access to an asset-backed securitization platform, Master Trust 2014, to raise capital through the issuance of non-recourse net-lease mortgage notes collateralized by commercial real estate, net-leases and mortgage loans. Master Trust 2014 has five bankruptcy-remote, special purpose entities as issuers or co-issuers of the notes.

On January 23, 2018, the Company re-priced a private offering of the Master Trust 2014 Series 2017-1 notes with $674.4 million aggregate principal amount. As a result, the interest rate on the Class B Notes was reduced from 6.35% to 5.49%, while the other terms of the Class B Notes remained unchanged. The terms of the Class A Notes were unaffected by the repricing. In connection with the repricing, the Company received $8.2 million in additional proceeds that reduced the debt discount. The additional proceeds were distributed to Spirit.

During the three months ended March 31, 2018, the Company extinguished $4.6 million of Master Trust 2014 debt as a result of pre-payments, resulting in approximately $0.3 million in losses on debt extinguishment attributable to pre-payment premiums paid.

The Master Trust 2014 notes are summarized below:

	Stated Rates (1)	Maturity		March 31, 2018				December 31, 2017
		(in Years)	(in Thousands)
Series 2014-1 Class A2	5.4%	2.3		$	249,203			$	252,437
Series 2014-2	5.8%	3.0		232,768				234,329
Series 2014-3	5.7%	4.0		310,439				311,336
Series 2014-4 Class A1	3.5%	1.8		149,629				150,000
Series 2014-4 Class A2	4.6%	11.8		353,746				358,664
Series 2017-1 Class A	4.4%	4.7		540,599				542,400
Series 2017-1 Class B	5.5%	4.7		132,000				132,000
Total Master Trust 2014 notes	4.9%	5.1		1,968,384				1,981,166
Debt discount, net			(26,125			)	(36,342			)
Deferred financing costs, net			(17,263			)	(17,989			)
Total Master Trust 2014, net				$	1,924,996			$	1,926,835

⁽¹⁾ Represents the individual series stated interest rates as of March 31, 2018 and the weighted average stated rate of the total Master Trust 2014 notes, based on the collective series outstanding principal balances as of March 31, 2018.

As of March 31, 2018, the Master Trust 2014 notes were secured by 790 owned and financed properties. The notes issued under Master Trust 2014 are cross-collateralized by the assets of all issuers within this trust.

CMBS

On January 22, 2018, one of the Predecessor Entities entered into a new non-recourse loan agreement with Société Générale and Barclays Bank PLC as lenders, which is collateralized by a single distribution center property located in Katy, Texas. The loan has a term of 10 years to maturity with a stated interest rate of 5.14%. As a result of the issuance, the Company received approximately $84 million in proceeds. The Company distributed all of the proceeds to Spirit. As of March 31, 2018, the loan had an outstanding principal balance of $83.9 million and unamortized deferred financing costs of $1.1 million.

Debt Maturities

As of March 31, 2018, scheduled debt maturities of Master Trust 2014 and CMBS debt are as follows (in thousands):

	Scheduled Principal		Balloon Payment		Total
2018	$	26,185	$	—	$	26,185
2019	36,437		—		36,437
2020	40,781		364,997		405,778
2021	23,642		220,176		243,818
2022	23,248		972,263		995,511
Thereafter	182,781		161,752		344,533
Total	$	333,074	$	1,719,188	$	2,052,262

Interest Expense

The following table is a summary of the components of interest expense related to the Company’s borrowings (in thousands):

	Three Months Ended March 31,
	2018		2017
Interest expense	$	25,137	$	17,430
Non-cash interest expense:
Amortization of deferred financing costs	875		325
Amortization of debt discount, net	2,000		1,061
Total interest expense	$	28,012	$	18,816

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Related Party Transactions

3 Months Ended

Mar. 31, 2018

Related Party Transactions [Abstract]

Related Party Transactions

Related Party Transactions

Related Party Transfers

The combined financial statements of the Predecessor Entities include transfers of properties from the Predecessor Entities to Spirit and its wholly-owned subsidiaries. These transactions are reflected in the combined statements of cash flows as distribution to parent. For the three months ended March 31, 2018, the Predecessor Entities transferred three properties to Spirit with a net book value of $2.1 million. There were no related party transfers during the three months ended March 31, 2017. For these transactions, due to all entities being under common control, no gain or loss was recognized by the Predecessor Entities.

Related Party Loans Receivable

The Predecessor Entities have four mortgage loans receivable where wholly-owned subsidiaries of Spirit are the borrower, and the loans are secured by six single-tenant commercial properties. In total, these mortgage notes had outstanding principal of $30.1 million and $30.8 million at March 31, 2018 and December 31, 2017, respectively, which is included in loans receivable, net on the combined balance sheet, and generated $0.1 million of income in both the three months ended March 31, 2018 and 2017, which is included in interest income on loans receivable in the combined statements of operations and comprehensive (loss) income. These mortgage notes have a weighted average stated interest rate of 1.0% and a weighted average maturity of 9.8 years at March 31, 2018.

Related Party Note Payable

Spirit Realty, L.P., a wholly-owned subsidiary of Spirit, owned notes issued under Master Trust 2014 Series 2014-2. The principal amounts due under the notes was $11.6 million at December 31, 2017, and is included in mortgages and notes payable, net on the combined balance sheet. On February 2, 2018, Spirit Realty, L.P. sold its holding of Master Trust 2014 Series 2014-2 notes to a third-party. This transaction had no impact on the Company’s mortgages and notes payable, net balance as shown in the combined balance sheet.

Also, in conjunction with the Series 2017-1 notes issuance completed in December 2017, Spirit Realty, L.P., as sponsor of the issuance, retained a 5% economic interest in the Master Trust 2014 Series 2017-1 notes as required by the risk retention rules issued under 17 CFR Part 246. As such, the principal amounts due under the notes was $33.6 million and $33.7 million at March 31, 2018 and December 31, 2017, respectively, and is included in the mortgages and notes payable, net on the combined balance sheets. The notes have a weighted average stated interest rate of 4.6% with a term of 4.7 years to maturity as of March 31, 2018.

Related Party Service Agreement

Spirit Realty, L.P., a wholly-owned subsidiary of Spirit, provides property management services and special services for Master Trust 2014. The property management fees accrue daily at 0.25% per annum of the collateral value of the Master Trust 2014 collateral pool less any specially serviced assets and the special servicing fees accrue daily at 0.75% per annum of the collateral value of any assets deemed to be specially serviced per the terms of the Property Management and Servicing Agreement dated May 20, 2014. During the three months ended March 31, 2018 and 2017, property management fees of $1.5 million and $1.2 million, respectively, were incurred. Special servicing fees of $0.2 million were incurred in both the three months ended March 31, 2018 and 2017. The property management fees and special servicing fees are included in related party fees in the combined statements of operations and comprehensive (loss) income. There were no accrued payables at March 31, 2018 or December 31, 2017.

Expense Allocations

As described in Note 2, the accompanying combined financial statements present the operations of the Predecessor Entities as carved out from the financial statements of Spirit. General and administrative expenses of $0.1 million and $1.0 million during the three months ended March 31, 2018 and 2017, respectively, and transaction costs of $2.5 million during the three months ended March 31, 2018 were specifically identified based on direct usage or benefit. The remaining general and administrative expenses, restructuring charges and transaction costs have been allocated to the Predecessor Entities based on relative property count, which the Company believes to be a reasonable methodology. These allocated expenses are centralized corporate costs borne by Spirit for management and other services, including, but not limited to, executive oversight, asset management, property management, treasury, finance, human resources, tax, accounting, financial reporting, information technology and investor relations, as well as transaction costs incurred in connection with the Spin-Off. A summary of the amounts allocated by property count is provided below:

	Three Months Ended March 31,
	2018		2017
Corporate expenses:
Cash compensation and benefits	$	2,663	$	1,928
Stock compensation	1,606		831
Professional fees	602		906
Other corporate expenses	650		566
Total corporate expenses	$	5,521	$	4,231
Transaction costs	$	532	$	—

Corporate expenses have been included within general and administrative expenses in the combined statements of operations and comprehensive (loss) income.

There were no accruals for related party amounts at either March 31, 2018 or December 31, 2017.

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2018

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

The Company is periodically subject to claims or litigation in the ordinary course of business, including claims generated from business conducted by tenants on real estate owned by the Company. In these instances, the Company is typically indemnified by the tenant against any losses that might be suffered, and the Company and/or the tenant are insured against such claims.

As of March 31, 2018, there were no outstanding claims against the Company that are expected to have a material adverse effect on the Company’s financial position, results of operations or cash flows.

As of March 31, 2018, the Company had commitments totaling $9.0 million, of which $6.5 million relates to future acquisitions and the remainder to fund improvements on properties the Company currently owns. Commitments related to acquisitions contain standard cancellation clauses contingent on the results of due diligence. Of the total commitments of $9.0 million, $8.5 million is expected to be funded during fiscal year 2018, with the remaining $0.5 million expected to be funded in 2019.

The Company estimates future costs for known environmental remediation requirements when it is probable that the Company has incurred a liability and the related costs can be reasonably estimated. The Company considers various factors when estimating its environmental liabilities, and adjustments are made when additional information becomes available that affects the estimated costs to study or remediate any environmental issues. When only a wide range of estimated amounts can be reasonably established and no other amount within the range is better than another, the low end of the range is recorded in the combined financial statements. As of March 31, 2018, no accruals have been made.

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Fair Value Measurements

3 Months Ended

Mar. 31, 2018

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

Nonrecurring Fair Value Measurements

Fair value measurement of an asset on a nonrecurring basis occurs when events or changes in circumstances related to an asset indicate that the carrying amount of the asset is no longer recoverable. The following table sets forth the Company’s assets that were accounted for at fair value on a nonrecurring basis as of March 31, 2018 and December 31, 2017 (in thousands):

			Fair Value Hierarchy Level
Description	Fair Value		Level 1		Level 2		Level 3
March 31, 2018
Long-lived assets held and used	$	9,533	$	—	$	—	$	9,533
Long-lived assets held for sale	$	—	$	—	$	—	$	—
December 31, 2017
Long-lived assets held and used	$	11,077	$	—	$	—	$	11,077
Long-lived assets held for sale	$	30,956	$	—	$	—	$	30,956

Real estate and the related intangible assets are evaluated for impairment based on certain indicators including, but not limited to: the asset being held for sale, vacant, non-operating or the lease on the asset expiring in 60 days or less. The fair values of impaired real estate and intangible assets were determined by using the following information, depending on availability, in order of preference: signed purchase and sale agreements or letters of intent; recently quoted bid or ask prices, or market prices for comparable properties; estimates of cashflow, which consider, among other things, contractual and forecasted rental revenues, leasing assumptions, and expenses based upon market conditions; and expectations for the use of the real estate. Based on these inputs, the Company determined that its valuation of the impaired real estate and intangible assets falls within Level 3 of the fair value hierarchy.

During the three months ended March 31, 2018 and for the year ended December 31, 2017, we determined that 14 and five long-lived assets held and used, respectively, were impaired.

For none of the held and used properties impaired during the three months ended March 31, 2018 and four of the held and used properties during the year ended December 31, 2017, the Company estimated property fair value using price per square foot of comparable properties. The following table provides information about the price per square foot of comparable properties used as inputs (price per square foot in dollars):

	March 31, 2018			December 31, 2017
	Range	Weighted Average	Square Footage	Range	Weighted Average	Square Footage
Long-lived assets held and used by asset type
Retail	$—	$—	—	$18.40 - $285.98	$72.04	68,871
Office	$—	$—	—	$81.61 - $244.86	$149.49	19,821

For the 14 held and used properties impaired during the three months ended March 31, 2018 and one held and used property impaired during the year ended December 31, 2017, the Company estimated property fair value using price per square foot based on a listing price or a broker opinion of value. The following table provides information about the price per square foot of listing price and broker opinion of value used as inputs (price per square foot in dollars):

	March 31, 2018			December 31, 2017
	Range	Weighted Average	Square Footage	Range	Weighted Average	Square Footage
Long-lived assets held and used by asset type
Retail	$7.00 - $109.79	$75.93	134,478	$88.89	$88.89	22,500

For the three months ended March 31, 2018 and year ended December 31, 2017, we determined that none and six long-lived assets held for sale, respectively, were impaired. The Company estimated fair value of held for sale properties using price per square foot from the signed purchase and sale agreements as follows (price per square foot in dollars):

	March 31, 2018			December 31, 2017
	Range	Weighted Average	Square Footage	Range	Weighted Average	Square Footage
Long-lived assets held for sale by asset type
Retail	$—	$—	—	$55.30 - $346.23	$299.89	87,248
Industrial	$—	$—	—	$54.21	$54.21	96,845

Estimated Fair Value of Financial Instruments

Financial assets and liabilities for which the carrying values approximate their fair values include cash and cash equivalents, restricted cash and escrow deposits, and accounts receivable and payable. Generally, these assets and liabilities are short-term in duration and are recorded at cost, which approximates fair value, on the accompanying consolidated balance sheets.

In addition to the disclosures for assets and liabilities required to be measured at fair value at the balance sheet date, companies are required to disclose the estimated fair values of all financial instruments, even if they are not carried at their fair values. The fair values of financial instruments are estimates based upon market conditions and perceived risks at March 31, 2018 and December 31, 2017. These estimates require management’s judgment and may not be indicative of the future fair values of the assets and liabilities.

The estimated fair values of the following financial instruments have been derived based on market quotes for comparable instruments or discounted cash flow analyses using estimates of the amount and timing of future cash flows, market rates and credit spreads. These measurements are classified as Level 2 of the fair value hierarchy. The following table discloses fair value information for these financial instruments (in thousands):

	March 31, 2018				December 31, 2017
	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Loans receivable, net	$	30,105	$	26,035	$	32,307	$	29,076
Mortgages and notes payable, net (1)	$	2,007,771	$	2,089,603	$	1,926,835	$	2,030,191

⁽¹⁾ The carrying value of the debt instruments are net of unamortized deferred financing costs and certain debt discounts/premiums.

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Significant Credit and Revenue Concentration

3 Months Ended

Mar. 31, 2018

Risks and Uncertainties [Abstract]

Significant Credit and Revenue Concentration

Significant Credit and Revenue Concentration

As of March 31, 2018 and December 31, 2017, the Predecessor Entities’ real estate investments were operated by 200 and 201 tenants, respectively, that operate within retail, office and industrial property types across various industries throughout the U.S. Shopko operates in the general merchandise industry and is the Predecessor Entities’ largest tenant as a percentage of rental revenue. Total rental revenues from properties leased to Shopko for the three months ended March 31, 2018 and 2017 contributed 20.2% and 23.6% of the rental revenue presented in the accompanying combined statements of operations and comprehensive (loss) income. No other tenant contributed 5% or more of the rental revenue during any of the periods presented. As of both March 31, 2018 and December 31, 2017, the Predecessor Entities’ net investment in Shopko properties represents approximately 17.3% and 15.8%, respectively, of the Predecessor Entities’ total assets presented in the accompanying combined balance sheets.

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Subsequent Events

3 Months Ended

Mar. 31, 2018

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

On May 31, 2018, the distribution date, Spirit completed the Spin-Off of SMTA. On the distribution date, Spirit distributed on a pro rata basis one common share of SMTA for every ten shares of Spirit common stock held by each of Spirit's stockholders as of May 18, 2018, the record date. As a result, 42,851,010 common shares of SMTA were issued on May 31, 2018.

Prior to the Spin-Off, but subsequent to March 31, 2018, Spirit transferred to SMTA the legal entities that hold the Predecessor Entities' assets and liabilities, as well as newly formed legal entities that hold ten additional properties contributed to SMTA with an aggregate net book value of $44.9 million, a $35.0 million B-1 Term Loan with Shopko as borrower, and a cash contribution of $3.0 million.

In conjunction with the Spin-Off, SMTA issued to Spirit Realty, L.P. and one of its affiliates, both wholly-owned subsidiaries of Spirit, 10% Series A preferred shares with an aggregate liquidation preference of $150.0 million. A newly formed, wholly-owned subsidiary of SMTA also issued 18% Series A preferred shares with an aggregate liquidation preference of $5.0 million to a third-party entity. The $5.0 million in cash received was distributed to Spirit prior to the Spin-Off.

Subsequent Events

Spin-Off of SMTA

On May 31, 2018, the distribution date, Spirit completed the Spin-Off of SMTA. On the distribution date, Spirit distributed on a pro rata basis one common share of SMTA for every ten shares of Spirit common stock held by each of Spirit's stockholders as of May 18, 2018, the record date. As a result, 42,851,010 common shares of SMTA were issued on May 31, 2018.

Prior to the Spin-Off, but subsequent to March 31, 2018, Spirit transferred to SMTA the legal entities that hold the Predecessor Entities' assets and liabilities, as well as newly formed legal entities that hold ten additional properties contributed to SMTA with an aggregate net book value of $44.9 million, a $35.0 million B-1 Term Loan with Shopko as borrower, and a cash contribution of $3.0 million.

In conjunction with the Spin-Off, SMTA issued to Spirit Realty, L.P. and one of its affiliates, both wholly-owned subsidiaries of Spirit, 10% Series A preferred shares with an aggregate liquidation preference of $150.0 million. A newly formed, wholly-owned subsidiary of SMTA also issued 18% Series A preferred shares with an aggregate liquidation preference of $5.0 million to a third-party entity. The $5.0 million in cash received was distributed to Spirit prior to the Spin-Off.

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2018

Accounting Policies [Abstract]

Basis of Accounting

Basis of Accounting

The accompanying balance sheets include all of the accounts of SMTA as of March 31, 2018 and December 31, 2017, prepared in accordance with GAAP in the U.S. The Company has no assets other than cash. Bank fees on cash are presented as general and administrative expenses on the statement of operations and comprehensive loss and are recognized when fees are paid.

Basis of Accounting

The accompanying combined financial statements have been prepared on a stand-alone basis and are derived from Spirit’s consolidated financial statements and underlying accounting records. The combined financial statements reflect the historical results of operations, financial position and cash flows of the wholly-owned subsidiaries of Spirit that make up the Predecessor Entities and are presented as if the transferred subsidiaries formed SMTA’s business for all historical periods presented. The assets to be contributed and liabilities to be assumed, as presented in the accompanying combined financial statements, reflect Spirit’s historical carrying value of the assets and liabilities as of the financial statement date, consistent with the accounting for spin-off transactions in accordance with GAAP in the U.S. All Predecessor Entities’ intercompany transactions have been eliminated in combination.

The results for interim periods are not necessarily indicative of the results for the entire year. Certain information and note disclosures, normally included in financial statements prepared in accordance with GAAP, have been condensed or omitted from these statements pursuant to SEC rules and regulations and, accordingly, these financial statements should be read in conjunction with the Predecessor Entities’ audited combined financial statements for the year ended December 31, 2017 included in the Company's registration statement on Form 10 filed with the SEC.

As of March 31, 2018, the Predecessor Entities were wholly-owned subsidiaries of Spirit. As a result, the combined net assets of the Predecessor Entities have been reflected in the accompanying combined balance sheets as net parent investment. All transactions between Spirit and the Predecessor Entities are considered effectively settled through equity in the combined financial statements at the time the transaction is recorded, other than certain intercompany mortgages as discussed in the Related Party footnote (see Note 5). The settlement of these transactions is reflected as contributions and distributions to parent in the combined statement of changes in parent company equity and contributions and distributions to parent in the combined statements of cash flows as a financing activity.

The combined financial statements include expense allocations related to certain Spirit corporate functions, including executive oversight, asset management, property management, treasury, finance, human resources, tax, accounting, financial reporting, information technology and investor relations. These expenses have been allocated to the Predecessor Entities based on direct usage or benefit where specifically identifiable, with the remainder allocated pro rata based on property count. All the expense allocations were deemed to have been incurred and settled through net parent investment in the period in which the costs were incurred. At time of the Spin-Off, SMTA entered into an Asset Management Agreement with Spirit to provide corporate functions.

Management considers the expense allocation methodology and results to be reasonable. However, the allocations may not be indicative of the actual expense that would have been incurred had the Predecessor Entities operated as an independent, publicly traded company for the periods presented. Accordingly, the combined financial statements herein do not necessarily reflect what the Predecessor Entities’ financial position, results of operations or cash flows would have been if it had been a standalone company during the periods presented, nor are they necessarily indicative of its future results of operations, financial position or cash flows.

These combined financial statements include the special purpose entities that will be wholly owned by SMTA. Certain of these special purpose entities were formed to acquire and hold real estate encumbered by indebtedness (see Note 4). Each special purpose entity is a separate legal entity and is the sole owner of its assets and responsible for its liabilities. The assets of these special purpose entities are not available to pay, or otherwise satisfy obligations to, the creditors of any affiliate or owner of another entity unless the special purpose entities have expressly agreed and are permitted under their governing documents.

Cash

Cash

Cash includes cash on hand or held in banks.

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 at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although management believes its estimates are reasonable, actual results could differ from those estimates.

Segment Reporting

Segment Reporting

The Company views its operations as one segment, which consists of net leasing operations. The Company has no other reportable segments.

Allowance for Doubtful Accounts

Allowance for Doubtful Accounts

The Company reviews its rent and other tenant receivables for collectability on a regular basis, taking into consideration changes in factors such as 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 tenant operates. If the collectability of a receivable with respect to any tenant is in doubt, a provision for uncollectible amounts will be established or a direct write-off of the specific receivable will be made. The Company’s reserves for uncollectible amounts totaled $3.5 million as of both March 31, 2018 and December 31, 2017, against accounts receivable balances of $4.7 million and $5.0 million, respectively. Receivables are recorded within deferred costs and other assets, net in the accompanying combined balance sheets. Receivables are written off against the reserves for uncollectible amounts when all possible means of collection have been exhausted.

Deferred Rental Revenue

For deferred rental revenues related to the straight-line method of reporting rental revenue, the collectability review includes management’s estimates of amounts that will not be realized based on an assessment of the risks inherent in the portfolio, considering historical experience.

Cash, Cash Equivalents and Restricted Cash

Cash, Cash Equivalents and Restricted Cash

Cash and cash equivalents include cash and highly liquid investment securities with maturities at acquisition of three months or less. The Company invests cash primarily in money market funds of major financial institutions with fund investments consisting of highly-rated money market instruments and other short-term instruments. Restricted cash is classified within deferred costs and other assets, net in the accompanying combined balance sheets.

Goodwill

Goodwill

Goodwill arises from business combinations and represents the excess of the cost of an acquired entity over the net fair value amounts that were assigned to the identifiable assets acquired and the liabilities assumed. Spirit recorded goodwill as a result of its merger with Cole Credit Property II, Inc. (“Cole”) on July 17, 2013. Goodwill was allocated to the Predecessor Entities based on the fair value of the Cole assets attributable to the Predecessor Entities relative to the total fair value of Cole assets acquired through the merger. Goodwill is tested for impairment at the reporting unit level on an annual basis and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying value.

Income Taxes

Income Taxes

The Company applies the provisions of FASB ASC Topic 740, Income Taxes, and computes the provision for income taxes on a separate return basis. The separate return method applies the accounting guidance for income taxes to the stand-alone combined financial statements as if the Predecessor Entities were a separate taxpayer and a stand-alone enterprise for the periods presented.

The Predecessor Entities are directly and indirectly wholly-owned by Spirit Realty, L.P. and are disregarded entities for Federal income tax purposes. Spirit Realty, L.P. is wholly-owned by Spirit through certain direct and indirect ownership interests and is taxed as a partnership for Federal income tax purposes. Spirit has elected to be taxed as a REIT under the applicable provisions of the Internal Revenue Code of 1986, as amended, and as a result will not be subject to Federal income tax as long as it distributes 100% of its taxable income and satisfies certain other requirements. Therefore, no provision for Federal income tax has been made in the accompanying combined financial statements. The Predecessor Entities are subject to certain other taxes, including state taxes, which are reflected as income tax (expense) benefit in the combined statements of operations and comprehensive (loss) income. Franchise taxes are included in general and administrative expenses in the accompanying combined statements of operations and comprehensive (loss) income.

Earnings Per Share

Earnings Per Share

The Company does not present earnings per share as common shares were not part of the Company’s capital structure for the periods presented.

New Accounting Pronouncements

New Accounting Pronouncements

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers: Topic 606. This new guidance establishes a principles-based approach for accounting for revenue from contracts with customers and is effective for annual reporting periods beginning after December 15, 2017, with early application permitted for annual reporting periods beginning after December 15, 2016. The Company adopted the new revenue recognition standard effective January 1, 2018 under the modified retrospective method, and elected to apply the standard only to contracts that were not completed as of the date of adoption (i.e., January 1, 2018). In evaluating the impact of this new standard, the Company identified that lease contracts covered by Leases (Topic 840) are excluded from the scope of this new guidance, as such, this ASU had no material impact on the Company's reported revenues, results of operations, financial position, cash flows and disclosures.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which supersedes the existing guidance for lease accounting Leases (Topic 840). ASU 2016-02 requires lessees to recognize leases on their balance sheets, and leaves lessor accounting largely unchanged. Leases pursuant to which the Company is the lessee primarily consists of ground leases. The amendments in this ASU are effective for the fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Early application is permitted for all entities. ASU 2016-02 requires a modified retrospective approach for all leases existing at, or entered into after, the date of initial application, with an option to elect to use certain transition relief. Under the guidance as currently contemplated, the Company will record certain expenses paid directly by tenants that protect the Company's interests in its properties, such as insurance and real estate taxes; however, the FASB has announced it will re-evaluate this requirement. The Company has begun implementation of the ASU and is currently evaluating the overall impact of this ASU on its combined financial statements.

In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments, which requires more timely recognition of credit losses associated with financial assets. ASU 2016-13 requires financial assets (or a group of financial assets) measured at an amortized cost basis to be presented at the net amount expected to be collected. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently evaluating the impact of this ASU on its combined financial statements.

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Summary of Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2018

Accounting Policies [Abstract]

Schedule of Cash and Cash Equivalents

Cash, cash equivalents and restricted cash as shown in the combined statements of cash flows consisted of the following (in thousands):

	March 31, 2018		December 31, 2017		March 31, 2017
Cash and cash equivalents	$	5	$	6	$	1,446
Restricted cash:
Release Account (1)	74,982		61,001		21,796
Liquidity Reserve (2)	5,527		5,503		—
Tenant improvements, repairs, and leasing commissions (3)	81		—		—
Other (4)	4		—		—
Total cash, cash equivalents and restricted cash	$	80,599	$	66,510	$	23,242

⁽¹⁾ Release Account cash consists of proceeds from the sales of assets pledged as collateral under Master Trust 2014 and is held on deposit until a qualifying substitution is made or the funds are applied as prepayment of principal.

⁽²⁾  Liquidity Reserve cash was placed on deposit in conjunction with the issuance of additional series of notes under Master Trust 2014 and is held until there is a cashflow shortfall, as defined in the Master Trust 2014 agreements, or a liquidation of Master Trust 2014 occurs.

⁽³⁾  Deposits held as additional collateral support by lenders to fund improvements, repairs, and leasing commissions incurred to secure a new tenant.

⁽⁴⁾  Funds held in lender controlled accounts released after scheduled debt service requirements are met.

Schedule of Restricted Cash

Cash, cash equivalents and restricted cash as shown in the combined statements of cash flows consisted of the following (in thousands):

	March 31, 2018		December 31, 2017		March 31, 2017
Cash and cash equivalents	$	5	$	6	$	1,446
Restricted cash:
Release Account (1)	74,982		61,001		21,796
Liquidity Reserve (2)	5,527		5,503		—
Tenant improvements, repairs, and leasing commissions (3)	81		—		—
Other (4)	4		—		—
Total cash, cash equivalents and restricted cash	$	80,599	$	66,510	$	23,242

⁽¹⁾ Release Account cash consists of proceeds from the sales of assets pledged as collateral under Master Trust 2014 and is held on deposit until a qualifying substitution is made or the funds are applied as prepayment of principal.

⁽²⁾  Liquidity Reserve cash was placed on deposit in conjunction with the issuance of additional series of notes under Master Trust 2014 and is held until there is a cashflow shortfall, as defined in the Master Trust 2014 agreements, or a liquidation of Master Trust 2014 occurs.

⁽³⁾  Deposits held as additional collateral support by lenders to fund improvements, repairs, and leasing commissions incurred to secure a new tenant.

⁽⁴⁾  Funds held in lender controlled accounts released after scheduled debt service requirements are met.

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Investments (Tables)

3 Months Ended

Mar. 31, 2018

Investments in and Advances to Affiliates [Abstract]

Summary of Real Estate and Loan Activity, Net of Accumulated Depreciation and Amortization

During the three months ended March 31, 2018, the Company had the following real estate and loan activity, net of accumulated depreciation and amortization:

	Number of Properties						Dollar Amount of Investments
	Owned		Financed		Total		Owned			Financed			Total
							(In Thousands)
Gross balance, December 31, 2017	907		11		918		$	2,838,285		$	32,307		$	2,870,592
Acquisitions/improvements (1)	—		—		—		178			—			178
Dispositions of real estate (2)(3)	(23	)	—		(23	)	(29,451		)	—			(29,451		)
Principal payments and payoffs	—		(5	)	(5	)	—			(2,557		)	(2,557		)
Impairments	—		—		—		(4,825		)	—			(4,825		)
Write-off of gross lease intangibles	—		—		—		(16,054		)	—			(16,054		)
Loan premium amortization and other	—		—		—		(139		)	355			216
Gross balance, March 31, 2018	884		6		890		$	2,787,994		$	30,105		$	2,818,099
Accumulated depreciation and amortization							(654,968		)	—			(654,968		)
Other non-real estate assets held for sale							125			—			125
Net balance, March 31, 2018							$	2,133,151		$	30,105		$	2,163,256

⁽¹⁾ Includes investments of $162 thousand in revenue producing capitalized expenditures, as well as $16 thousand of non-revenue producing capitalized expenditures as of March 31, 2018.

⁽²⁾ The total accumulated depreciation and amortization associated with dispositions of real estate was $6.8 million as of March 31, 2018.

⁽³⁾ For the period ended March 31, 2018, the total loss on disposal of assets for properties held and used was $1.7 million.

Schedule of Minimum Future Contractual Rent to be Received Under the Remaining Non-Cancelable Term of the Operating Leases

Scheduled minimum future contractual rent to be received under the remaining non-cancelable term of the operating leases (including contractual fixed rent increases occurring on or after April 1, 2018) are as follows (in thousands):

	March 31, 2018
2018 Remainder	$	173,321
2019	226,667
2020	218,569
2021	211,415
2022	198,474
Thereafter	1,467,603
Total future minimum rentals	$	2,496,049

Schedule of Loans Receivable, Net of Premium and Allowance for Loan Losses

The following table details loans receivable, net of premium and allowance for loan losses (in thousands):

	March 31, 2018		December 31, 2017
Mortgage loans-principal	$	30,105	$	32,665
Mortgage loans-premium, net of amortization	—		31
Allowance for loan losses	—		(389		)
Total loans receivable, net	$	30,105	$	32,307

Schedule of Lease Intangible Assets and Liabilities, Net of Accumulated Amortization

The following table details lease intangible assets and liabilities, net of accumulated amortization (in thousands):

	March 31, 2018			December 31, 2017
In-place leases	$	176,765		$	191,557
Above-market leases	21,773			24,691
Less: accumulated amortization	(100,748		)	(113,986		)
Intangible lease assets, net	$	97,790		$	102,262
Below-market leases	$	36,740		$	39,274
Less: accumulated amortization	(14,202		)	(15,427		)
Intangible lease liabilities, net	$	22,538		$	23,847

Schedule of Activity in Real Estate Assets Held for Sale

The following table shows the activity in real estate assets held for sale for the three months ended March 31, 2018 (dollars in thousands): 

	Number of Properties		Carrying Value
			(In Thousands)
Balances, December 31, 2017	7		$	28,460
Transfers from real estate investments	2		2,207
Sales	—		—
Transfers to real estate investments held and used	(4	)	(22,814		)
Impairments	—		—
Balances, March 31, 2018	5		$	7,853

Summary of Total Impairment Losses Recognized

The following table summarizes total impairment losses recognized on the accompanying combined statements of operations and comprehensive (loss) income (in thousands):

	Three Months Ended March 31,
	2018			2017
Real estate and intangible asset impairment	$	4,818		$	6,962
Write-off of lease intangibles, net	23			(469		)
Recovery of loans receivable, previously reserved	(16		)	—
Total impairment loss	$	4,825		$	6,493

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Debt (Tables)

3 Months Ended

Mar. 31, 2018

Debt Disclosure [Abstract]

Summary of Master Trust 2014 Notes

The Master Trust 2014 notes are summarized below:

	Stated Rates (1)	Maturity		March 31, 2018				December 31, 2017
		(in Years)	(in Thousands)
Series 2014-1 Class A2	5.4%	2.3		$	249,203			$	252,437
Series 2014-2	5.8%	3.0		232,768				234,329
Series 2014-3	5.7%	4.0		310,439				311,336
Series 2014-4 Class A1	3.5%	1.8		149,629				150,000
Series 2014-4 Class A2	4.6%	11.8		353,746				358,664
Series 2017-1 Class A	4.4%	4.7		540,599				542,400
Series 2017-1 Class B	5.5%	4.7		132,000				132,000
Total Master Trust 2014 notes	4.9%	5.1		1,968,384				1,981,166
Debt discount, net			(26,125			)	(36,342			)
Deferred financing costs, net			(17,263			)	(17,989			)
Total Master Trust 2014, net				$	1,924,996			$	1,926,835

⁽¹⁾ Represents the individual series stated interest rates as of March 31, 2018 and the weighted average stated rate of the total Master Trust 2014 notes, based on the collective series outstanding principal balances as of March 31, 2018.

Schedule of Debt Maturities of Master Trust 2014 and CMBS Debt

As of March 31, 2018, scheduled debt maturities of Master Trust 2014 and CMBS debt are as follows (in thousands):

	Scheduled Principal		Balloon Payment		Total
2018	$	26,185	$	—	$	26,185
2019	36,437		—		36,437
2020	40,781		364,997		405,778
2021	23,642		220,176		243,818
2022	23,248		972,263		995,511
Thereafter	182,781		161,752		344,533
Total	$	333,074	$	1,719,188	$	2,052,262

Summary of Components of Interest Expense

The following table is a summary of the components of interest expense related to the Company’s borrowings (in thousands):

	Three Months Ended March 31,
	2018		2017
Interest expense	$	25,137	$	17,430
Non-cash interest expense:
Amortization of deferred financing costs	875		325
Amortization of debt discount, net	2,000		1,061
Total interest expense	$	28,012	$	18,816

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Related Party Transactions (Tables)

3 Months Ended

Mar. 31, 2018

Related Party Transactions [Abstract]

Schedule of Related Party Transactions

A summary of the amounts allocated by property count is provided below:

	Three Months Ended March 31,
	2018		2017
Corporate expenses:
Cash compensation and benefits	$	2,663	$	1,928
Stock compensation	1,606		831
Professional fees	602		906
Other corporate expenses	650		566
Total corporate expenses	$	5,521	$	4,231
Transaction costs	$	532	$	—

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Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2018

Fair Value Disclosures [Abstract]

Schedule of Assets at Fair Value on Nonrecurring Basis

The following table sets forth the Company’s assets that were accounted for at fair value on a nonrecurring basis as of March 31, 2018 and December 31, 2017 (in thousands):

			Fair Value Hierarchy Level
Description	Fair Value		Level 1		Level 2		Level 3
March 31, 2018
Long-lived assets held and used	$	9,533	$	—	$	—	$	9,533
Long-lived assets held for sale	$	—	$	—	$	—	$	—
December 31, 2017
Long-lived assets held and used	$	11,077	$	—	$	—	$	11,077
Long-lived assets held for sale	$	30,956	$	—	$	—	$	30,956

Fair Value Inputs of Long-Lived Assets Held and Used and Held for Sale

The Company estimated fair value of held for sale properties using price per square foot from the signed purchase and sale agreements as follows (price per square foot in dollars):

	March 31, 2018			December 31, 2017
	Range	Weighted Average	Square Footage	Range	Weighted Average	Square Footage
Long-lived assets held for sale by asset type
Retail	$—	$—	—	$55.30 - $346.23	$299.89	87,248
Industrial	$—	$—	—	$54.21	$54.21	96,845

The following table provides information about the price per square foot of listing price and broker opinion of value used as inputs (price per square foot in dollars):

	March 31, 2018			December 31, 2017
	Range	Weighted Average	Square Footage	Range	Weighted Average	Square Footage
Long-lived assets held and used by asset type
Retail	$7.00 - $109.79	$75.93	134,478	$88.89	$88.89	22,500

The following table provides information about the price per square foot of comparable properties used as inputs (price per square foot in dollars):

	March 31, 2018			December 31, 2017
	Range	Weighted Average	Square Footage	Range	Weighted Average	Square Footage
Long-lived assets held and used by asset type
Retail	$—	$—	—	$18.40 - $285.98	$72.04	68,871
Office	$—	$—	—	$81.61 - $244.86	$149.49	19,821

Schedule of Carrying Amount and Estimated Fair Value of Financial Instruments

The following table discloses fair value information for these financial instruments (in thousands):

	March 31, 2018				December 31, 2017
	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Loans receivable, net	$	30,105	$	26,035	$	32,307	$	29,076
Mortgages and notes payable, net (1)	$	2,007,771	$	2,089,603	$	1,926,835	$	2,030,191

⁽¹⁾ The carrying value of the debt instruments are net of unamortized deferred financing costs and certain debt discounts/premiums.

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Organization - SMTA Organization (Details) $ in Thousands	Mar. 31, 2018 USD ($) entity property	Dec. 31, 2017 USD ($) property	Aug. 03, 2017 entity property
Real Estate Properties [Line Items]
Number of legal entities	6
Net book value | $	$ 2,800,000
Master Trust 2014 Properties
Real Estate Properties [Line Items]
Number of real estate properties | property	790
Shopko Entities Properties
Real Estate Properties [Line Items]
Number of real estate properties | property	95
Other Properties
Real Estate Properties [Line Items]
Number of real estate properties | property	15
Shopko Entities
Real Estate Properties [Line Items]
Number of legal entities	3
Sporting Goods Entities
Real Estate Properties [Line Items]
Number of legal entities	1
Predecessor Entities
Real Estate Properties [Line Items]
Number of legal entities	2
Number of real estate properties | property	4
Predecessor Entities
Real Estate Properties [Line Items]
Number of legal entities			6
Number of real estate properties | property	890	918
Net book value | $	$ 2,050,046	$ 2,073,306
Predecessor Entities | Shopko Entities
Real Estate Properties [Line Items]
Number of legal entities			3
Predecessor Entities | Sporting Goods Entities
Real Estate Properties [Line Items]
Number of legal entities			1
Predecessor Entities | Predecessor Entities
Real Estate Properties [Line Items]
Number of legal entities			2
Number of real estate properties | property			4

XML

Organization (Details) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Predecessor Entities
Transaction costs	$ 3,017,000	$ 0

XML

Summary of Significant Accounting Policies (Details)	3 Months Ended
	Mar. 31, 2018 USD ($) segment	Dec. 31, 2017 USD ($)
Accounting Policies [Line Items]
Net assets	$ 8,643	$ 10,000
Uncollectible receivables		3,500,000
Reserve for rental revenue losses		1,000,000
Federal income tax	0
Predecessor Entities
Accounting Policies [Line Items]
Net assets	2,321,344,000	2,357,660,000
Net liabilities	$ 2,046,582,000	1,966,742,000
Number of reportable segments | segment	1
Uncollectible receivables	$ 3,500,000
Accounts receivable, gross	4,700,000	5,000,000
Reserve for rental revenue losses	1,000,000
Deferred rental revenue receivables	25,800,000	24,900,000
Predecessor Entities | Special Purpose Entities
Accounting Policies [Line Items]
Net assets	1,900,000,000	1,820,000,000
Net liabilities	$ 2,040,000,000	$ 1,960,000,000

XML

Summary of Significant Accounting Policies - Cash, Cash Equivalents and Restricted Cash (Details) - Predecessor Entities - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017	Mar. 31, 2017	Dec. 31, 2016
Restricted Cash and Cash Equivalents Items [Line Items]
Cash and cash equivalents	$ 5	$ 6	$ 1,446
Total cash, cash equivalents and restricted cash	80,599	66,510	23,242	$ 12,688
Release Account
Restricted Cash and Cash Equivalents Items [Line Items]
Restricted cash	74,982	61,001	21,796
Liquidity Reserve
Restricted Cash and Cash Equivalents Items [Line Items]
Restricted cash	5,527	5,503	0
Tenant improvements, repairs, and leasing commissions
Restricted Cash and Cash Equivalents Items [Line Items]
Restricted cash	81	0	0
Other
Restricted Cash and Cash Equivalents Items [Line Items]
Restricted cash	$ 4	$ 0	$ 0

XML

Shareholder's Equity (Details) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Equity [Abstract]
Number of shares issued (in shares)	10,000	10,000
Common stock, par value per share (in USD per share)	$ 0.01	$ 0.01
Issuance value	$ 10,000

XML

Preferred Shares (Details)	Mar. 31, 2018 $ / shares shares
Equity [Abstract]
Preferred shares (in shares)	20,000,000
Preferred share par value (in USD per share) | $ / shares	$ 0.01
Preferred shares issued (in shares)	0
Preferred shares outstanding (in shares)	0

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Investments (Details) - Predecessor Entities $ in Thousands	3 Months Ended
	Mar. 31, 2018 USD ($) State property	Mar. 31, 2017 USD ($)	Dec. 31, 2017 USD ($) property
Investment [Line Items]
Gross investment in real estate properties and loans	$ 2,818,099		$ 2,870,592
Number of real estate properties | property	890		918
Portfolio disbursement, number of states | State	45
Minimum percentage of investment in real estate properties to be disclosed	10.00%
Impairment of properties classified as held and used	$ 4,800	$ 4,100
Impairment of properties classified as held for sale		2,400
Texas
Investment [Line Items]
Percentage of investment in real estate properties	12.20%
Wholly Owned Properties
Investment [Line Items]
Gross investment in real estate properties and loans	$ 2,787,994		$ 2,838,285
Number of real estate properties | property	884		907
Financed Properties
Investment [Line Items]
Gross investment in real estate properties and loans	$ 30,105		$ 32,307
Number of real estate properties | property	6		11
Above Market Leases and Below Market Leases
Investment [Line Items]
Amortization of intangible assets	$ 154	130
In-place leases
Investment [Line Items]
Amortization of intangible assets	$ 2,700	$ 2,700

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Investments - Summary of Real Estate and Loan Activity, Net of Accumulated Depreciation and Amortization (Details) - Predecessor Entities $ in Thousands	3 Months Ended
	Mar. 31, 2018 USD ($) property
Number of Properties
Beginning gross balance (in properties) | property	918
Acquisitions/improvements (in properties) | property	0
Dispositions of real estate (in properties) | property	(23)
Principal payments and payoffs (in properties) | property	(5)
Impairments (in properties) | property	0
Write-off of gross lease intangibles (in properties) | property	0
Loan premium amortization and other (in properties) | property	0
Ending gross balance (in properties) | property	890
Dollar Amount of Investments
Gross balance, December 31, 2017	$ 2,870,592
Acquisitions/improvements	178
Dispositions of real estate	(29,451)
Principal payments and payoffs	(2,557)
Impairments	(4,825)
Write-off of gross lease intangibles	(16,054)
Loan premium amortization and other	216
Gross balance, March 31, 2018	2,818,099
Less: accumulated depreciation	(654,968)
Other non-real estate assets held for sale	125
Net balance, March 31, 2018	2,163,256
Revenue producing capitalized expenditures	162
Non-revenue producing capitalized expenditures	16
Accumulated depreciation and amortization, dispositions of real estate	$ 6,800
Owned
Number of Properties
Beginning gross balance (in properties) | property	907
Acquisitions/improvements (in properties) | property	0
Dispositions of real estate (in properties) | property	(23)
Principal payments and payoffs (in properties) | property	0
Impairments (in properties) | property	0
Write-off of gross lease intangibles (in properties) | property	0
Loan premium amortization and other (in properties) | property	0
Ending gross balance (in properties) | property	884
Dollar Amount of Investments
Gross balance, December 31, 2017	$ 2,838,285
Acquisitions/improvements	178
Dispositions of real estate	(29,451)
Principal payments and payoffs	0
Impairments	(4,825)
Write-off of gross lease intangibles	(16,054)
Loan premium amortization and other	(139)
Gross balance, March 31, 2018	2,787,994
Less: accumulated depreciation	(654,968)
Other non-real estate assets held for sale	125
Net balance, March 31, 2018	$ 2,133,151
Financed
Number of Properties
Beginning gross balance (in properties) | property	11
Acquisitions/improvements (in properties) | property	0
Dispositions of real estate (in properties) | property	0
Principal payments and payoffs (in properties) | property	(5)
Impairments (in properties) | property	0
Write-off of gross lease intangibles (in properties) | property	0
Loan premium amortization and other (in properties) | property	0
Ending gross balance (in properties) | property	6
Dollar Amount of Investments
Gross balance, December 31, 2017	$ 32,307
Acquisitions/improvements	0
Dispositions of real estate	0
Principal payments and payoffs	(2,557)
Impairments	0
Write-off of gross lease intangibles	0
Loan premium amortization and other	355
Gross balance, March 31, 2018	30,105
Less: accumulated depreciation	0
Other non-real estate assets held for sale	0
Net balance, March 31, 2018	30,105
Disposal Group, Disposed of by Means Other than Sale, Not Discontinued Operations
Dollar Amount of Investments
Loss on disposal of assets for properties held and used	$ 1,700

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Investments - Schedule of Minimum Future Contractual Rent to be Received (Details) - Predecessor Entities $ in Thousands	Mar. 31, 2018 USD ($)
Lessor, Lease, Description [Line Items]
2018 Remainder	$ 173,321
2019	226,667
2020	218,569
2021	211,415
2022	198,474
Thereafter	1,467,603
Total future minimum rentals	$ 2,496,049

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Investments - Schedule of Loans Receivable, Net of Premium and Allowance for Loan Losses (Details) - Predecessor Entities - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Accounts, Notes, Loans and Financing Receivable [Line Items]
Mortgage loans-principal	$ 30,105	$ 32,665
Mortgage loans-premium, net of amortization	0	31
Allowance for loan losses	0	(389)
Total loans receivable, net	$ 30,105	$ 32,307

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Investments - Schedule of Lease Intangible Assets and Liabilities, Net of Accumulated Amortization (Details) - Predecessor Entities - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Finite-Lived Intangible Assets [Line Items]
Less: accumulated amortization	$ (100,748)	$ (113,986)
Intangible lease assets, net	97,790	102,262
Below-market leases	36,740	39,274
Less: accumulated amortization	(14,202)	(15,427)
Intangible lease liabilities, net	22,538	23,847
In-place leases
Finite-Lived Intangible Assets [Line Items]
Intangible lease assets, gross	176,765	191,557
Above-market leases
Finite-Lived Intangible Assets [Line Items]
Intangible lease assets, gross	$ 21,773	$ 24,691

XML

Investments - Schedule of Activity in Real Estate Assets Held for Sale (Details) - Predecessor Entities $ in Thousands	3 Months Ended
	Mar. 31, 2018 USD ($) property
Number of Properties
Beginning Balance (in properties) | property	7
Transfers from real estate investments (in properties) | property	2
Sales (in properties) | property	0
Transfers to real estate investments held and used (in properties) | property	(4)
Impairments (in properties) | property	0
Ending Balance (in properties) | property	5
Carrying Value
Beginning balance | $	$ 28,460
Transfers from real estate investments | $	2,207
Sales | $	0
Transfers to real estate investments held and used | $	(22,814)
Impairments | $	0
Ending balance | $	$ 7,853

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Investments - Summary of Total Impairment Losses Recognized (Details) - Predecessor Entities - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Impaired Long-Lived Assets Held and Used [Line Items]
Real estate and intangible asset impairment	$ 4,818	$ 6,962
Write-off of lease intangibles, net	23	(469)
Recovery of loans receivable, previously reserved	(16)	0
Total impairment loss	$ 4,825	$ 6,493

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Debt (Details) - Predecessor Entities $ in Thousands			3 Months Ended
	Jan. 23, 2018 USD ($)	Jan. 22, 2018 USD ($)	Mar. 31, 2018 USD ($) entity property	Mar. 31, 2017 USD ($)	Dec. 31, 2017 USD ($)
Debt Instrument [Line Items]
Loss on debt extinguishment			$ 255	$ 0
Outstanding principal amount			$ 2,052,262
Master Trust 2014 notes
Debt Instrument [Line Items]
Number of properties securing borrowings | property			790
Mortgages | Series 2017-1 Notes
Debt Instrument [Line Items]
Long term debt	$ 674,400
Mortgages | Series 2017-1 Class B
Debt Instrument [Line Items]
Long term debt			$ 132,000		$ 132,000
Interest rate (as percent)	5.49%	6.35%	5.49%
Proceeds from issuance of debt	$ 8,200
Debt term			4 years 8 months 12 days
Mortgages | Master Trust 2014 notes
Debt Instrument [Line Items]
Debt Instrument, Number Of Entities Issuing Debt | entity			5
Long term debt			$ 1,968,384		1,981,166
Amount of debt extinguished			4,600
Loss on debt extinguishment			300
Outstanding principal amount			1,924,996		1,926,835
Unamortized deferred financing costs			17,263		$ 17,989
Loans Payable | CMBS | Societe Generale And Barclays Bank PLC
Debt Instrument [Line Items]
Interest rate (as percent)		5.14%
Proceeds from issuance of debt		$ 84,000
Debt term		10 years
Outstanding principal amount			83,900
Unamortized deferred financing costs			$ 1,100

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Debt - Master Trust 2014 Notes (Details) - Predecessor Entities - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Jan. 23, 2018	Jan. 22, 2018	Dec. 31, 2017
Debt Instrument [Line Items]
Total	$ 2,052,262
Mortgages | Total Master Trust 2014 notes
Debt Instrument [Line Items]
Weighted average stated interest rate	4.90%
Total Master Trust 2014 notes	$ 1,968,384			$ 1,981,166
Debt discount, net	(26,125)			(36,342)
Deferred financing costs, net	(17,263)			(17,989)
Total	$ 1,924,996			1,926,835
Mortgages | Total Master Trust 2014 notes | Weighted average
Debt Instrument [Line Items]
Maturity	5 years 1 month 6 days
Mortgages | Series 2014-1 Class A2
Debt Instrument [Line Items]
Stated Rates (as percent)	5.40%
Maturity	2 years 3 months 18 days
Total Master Trust 2014 notes	$ 249,203			252,437
Mortgages | Series 2014-2
Debt Instrument [Line Items]
Stated Rates (as percent)	5.80%
Maturity	3 years
Total Master Trust 2014 notes	$ 232,768			234,329
Mortgages | Series 2014-3
Debt Instrument [Line Items]
Stated Rates (as percent)	5.70%
Maturity	4 years
Total Master Trust 2014 notes	$ 310,439			311,336
Mortgages | Series 2014-4 Class A1
Debt Instrument [Line Items]
Stated Rates (as percent)	3.50%
Maturity	1 year 9 months 18 days
Total Master Trust 2014 notes	$ 149,629			150,000
Mortgages | Series 2014-4 Class A2
Debt Instrument [Line Items]
Stated Rates (as percent)	4.60%
Maturity	11 years 10 months 6 days
Total Master Trust 2014 notes	$ 353,746			358,664
Mortgages | Series 2017-1 Class A
Debt Instrument [Line Items]
Stated Rates (as percent)	4.40%
Maturity	4 years 8 months 12 days
Total Master Trust 2014 notes	$ 540,599			542,400
Mortgages | Series 2017-1 Class B
Debt Instrument [Line Items]
Stated Rates (as percent)	5.49%	5.49%	6.35%
Maturity	4 years 8 months 12 days
Total Master Trust 2014 notes	$ 132,000			$ 132,000

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Debt - Debt Maturities (Details) - Predecessor Entities $ in Thousands	Mar. 31, 2018 USD ($)
Debt Instrument [Line Items]
2018	$ 26,185
2019	36,437
2020	405,778
2021	243,818
2022	995,511
Thereafter	344,533
Total	2,052,262
Scheduled Principal
Debt Instrument [Line Items]
2018	26,185
2019	36,437
2020	40,781
2021	23,642
2022	23,248
Thereafter	182,781
Total	333,074
Balloon Payment
Debt Instrument [Line Items]
2018	0
2019	0
2020	364,997
2021	220,176
2022	972,263
Thereafter	161,752
Total	$ 1,719,188

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Debt - Interest Expense (Details) - Predecessor Entities - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Debt Instrument [Line Items]
Interest expense	$ 25,137	$ 17,430
Non-cash interest expense:
Amortization of deferred financing costs	875	325
Amortization of debt discount, net	2,000	1,061
Total interest expense	$ 28,012	$ 18,816

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Related Party Transactions - Narrative (Details)	3 Months Ended
	Mar. 31, 2018 USD ($) mortgage_loan_receivable property	Mar. 31, 2017 USD ($)	Dec. 31, 2017 USD ($)
Related Party Transaction [Line Items]
General and administrative	$ 1,357
Predecessor Entities
Related Party Transaction [Line Items]
Net book value	2,144,000	$ 0
Loans receivable, net	30,105,000		$ 32,307,000
General and administrative	$ 5,651,000	5,269,000
Predecessor Entities | Spirit Realty, L.P.
Related Party Transaction [Line Items]
Property management fee, percent fee	0.25%
Servicing fee, percentage	0.75%
Management fee expense	$ 1,500,000	1,200,000
Servicing fees	$ 200,000	200,000
Predecessor Entities | Spirit Realty Capital, Inc.
Related Party Transaction [Line Items]
Number of real estate properties transferred | property	3
Net book value	$ 2,100,000
Number of mortgage loans receivables borrowed by subsidiaries | mortgage_loan_receivable	4
Number of real estate properties, mortgage loans receivables secured by | property	6
Loans receivable, net	$ 30,100,000		30,800,000
Interest income, related party	$ 100,000	100,000
Loans receivable, interest rate	1.00%
Loan receivable, weighted average maturity	9 years 9 months 18 days
General and administrative	$ 100,000	$ 1,000,000
Transaction costs	2,500,000
Series 2014-2 | Predecessor Entities | Spirit Realty, L.P.
Related Party Transaction [Line Items]
Notes payable, related parties	11,600,000
Series 2017-1 Notes | Predecessor Entities | Spirit Realty, L.P.
Related Party Transaction [Line Items]
Notes payable, related parties	$ 33,600,000		$ 33,700,000
Percentage of economic interest retained	5.00%
Weighted average stated interest rate	4.60%
Debt term	4 years 8 months 12 days

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Related Party Transactions (Details) - Predecessor Entities - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Related Party Transaction [Line Items]
Professional fees	$ 3,017,000	$ 0
Spirit Realty Capital, Inc.
Related Party Transaction [Line Items]
Transaction costs	532,000	0
Spirit Realty Capital, Inc. | General and Administrative Expense | Corporate Segment
Related Party Transaction [Line Items]
Cash compensation and benefits	2,663,000	1,928,000
Stock compensation	1,606,000	831,000
Professional fees	602,000	906,000
Other corporate expenses	650,000	566,000
Total corporate expenses	$ 5,521,000	$ 4,231,000

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Commitments and Contingencies (Details) - Predecessor Entities $ in Millions	Mar. 31, 2018 USD ($) claim
Loss Contingencies [Line Items]
Outstanding claims | claim	0
Purchase obligation	$ 9.0
Purchase obligation relating to future acquisitions	6.5
Purchase obligation, remainder of fiscal year	8.5
Purchase obligation, due in second year	$ 0.5

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Fair Value Measurements (Details) - Predecessor Entities - property	3 Months Ended	12 Months Ended
	Mar. 31, 2018	Dec. 31, 2017
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired long-lived assets held and used, properties	14	5
Impaired long-lived assets held for sale, properties	0	6
Fair Value Estimated Using Comparable Properties
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired long-lived assets held and used, properties	0	4
Fair Value Estimated Using Listing Price or Broker Opinion of Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired long-lived assets held and used, properties	14	1

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Fair Value Measurements - Schedule of Assets at Fair Value on Nonrecurring Basis (Details) - Predecessor Entities - Fair Value, Measurements, Nonrecurring - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Long-lived assets held and used	$ 9,533	$ 11,077
Long-lived assets held for sale	0	30,956
Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Long-lived assets held and used	0	0
Long-lived assets held for sale	0	0
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Long-lived assets held and used	0	0
Long-lived assets held for sale	0	0
Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Long-lived assets held and used	9,533	11,077
Long-lived assets held for sale	$ 0	$ 30,956

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Fair Value Measurements - Fair Value Inputs of Long-Lived Assets Held and Used and Held for Sale (Details) - Predecessor Entities	Mar. 31, 2018 ft² $ / ft²	Dec. 31, 2017 ft² $ / ft²
Fair Value Estimated Using Comparable Properties | Retail
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Long-lived assets held and used, square footage | ft²	0	68,871
Fair Value Estimated Using Comparable Properties | Office
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Long-lived assets held and used, square footage | ft²	0	19,821
Fair Value Estimated Using Listing Price or Broker Opinion of Value | Retail
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Long-lived assets held and used, square footage | ft²	134,478	22,500
Fair Value Estimated Using Signed Purchase and Sale Agreements | Retail
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Long-lived assets held for sale, square footage | ft²	0	87,248
Fair Value Estimated Using Signed Purchase and Sale Agreements | Industrial
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Long-lived assets held for sale, square footage | ft²	0	96,845
Measurement Input, Price Per Square Foot | Weighted average | Fair Value Estimated Using Comparable Properties | Retail
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Long-lived assets held and used, measurement input (in USD per sqft)	0.00	72.04
Measurement Input, Price Per Square Foot | Weighted average | Fair Value Estimated Using Comparable Properties | Office
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Long-lived assets held and used, measurement input (in USD per sqft)	0.00	149.49
Measurement Input, Price Per Square Foot | Weighted average | Fair Value Estimated Using Listing Price or Broker Opinion of Value | Retail
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Long-lived assets held and used, measurement input (in USD per sqft)	75.93	88.89
Measurement Input, Price Per Square Foot | Weighted average | Fair Value Estimated Using Signed Purchase and Sale Agreements | Retail
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Long-lived assets held for sale, measurement input (in USD per sqft)	0.00	299.89
Measurement Input, Price Per Square Foot | Weighted average | Fair Value Estimated Using Signed Purchase and Sale Agreements | Industrial
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Long-lived assets held for sale, measurement input (in USD per sqft)	0.00	54.21
Measurement Input, Price Per Square Foot | Minimum | Fair Value Estimated Using Comparable Properties | Retail
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Long-lived assets held and used, measurement input (in USD per sqft)		18.40
Measurement Input, Price Per Square Foot | Minimum | Fair Value Estimated Using Comparable Properties | Office
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Long-lived assets held and used, measurement input (in USD per sqft)		81.61
Measurement Input, Price Per Square Foot | Minimum | Fair Value Estimated Using Listing Price or Broker Opinion of Value | Retail
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Long-lived assets held and used, measurement input (in USD per sqft)	7.00
Measurement Input, Price Per Square Foot | Minimum | Fair Value Estimated Using Signed Purchase and Sale Agreements | Retail
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Long-lived assets held for sale, measurement input (in USD per sqft)		55.30
Measurement Input, Price Per Square Foot | Maximum | Fair Value Estimated Using Comparable Properties | Retail
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Long-lived assets held and used, measurement input (in USD per sqft)		285.98
Measurement Input, Price Per Square Foot | Maximum | Fair Value Estimated Using Comparable Properties | Office
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Long-lived assets held and used, measurement input (in USD per sqft)		244.86
Measurement Input, Price Per Square Foot | Maximum | Fair Value Estimated Using Listing Price or Broker Opinion of Value | Retail
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Long-lived assets held and used, measurement input (in USD per sqft)	109.79
Measurement Input, Price Per Square Foot | Maximum | Fair Value Estimated Using Signed Purchase and Sale Agreements | Retail
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Long-lived assets held for sale, measurement input (in USD per sqft)		346.23

XML

Fair Value Measurements - Schedule of Carrying Amount and Estimated Fair Value Of Financial Instruments (Details) - Predecessor Entities - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Carrying Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Loans receivable, net, estimated fair value	$ 30,105	$ 32,307
Mortgages and notes payable, net, estimated fair value	2,007,771	1,926,835
Estimated Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Loans receivable, net, estimated fair value	26,035	29,076
Mortgages and notes payable, net, estimated fair value	$ 2,089,603	$ 2,030,191

XML

Significant Credit and Revenue Concentration (Details) - Predecessor Entities - tenant	3 Months Ended		12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017
Concentration Risk [Line Items]
Number of tenants	200		201
Shopko | Sales Revenue, Net | Customer Concentration Risk
Concentration Risk [Line Items]
Concentration risk, percentage	20.20%	23.60%
Shopko | Assets, Total | Customer Concentration Risk
Concentration Risk [Line Items]
Concentration risk, percentage	17.30%		15.80%
No Tenant Other Than Shopko Entities | Sales Revenue, Net | Customer Concentration Risk
Concentration Risk [Line Items]
Concentration risk, percentage	5.00%	5.00%

XML

Subsequent Events (Details)			2 Months Ended	3 Months Ended
	May 31, 2018 USD ($) shares	May 18, 2018	May 30, 2018 USD ($) property	Mar. 31, 2018 USD ($)	Mar. 31, 2017 USD ($)	Apr. 01, 2018 USD ($)
Subsequent Event
Subsequent Event [Line Items]
Stock issued during period (in shares) | shares	42,851,010
Predecessor Entities
Subsequent Event [Line Items]
Net book value				$ 2,144,000	$ 0
Cash contribution				$ 48,213,000	$ 29,306,000
Spirit Realty Capital, Inc. | Subsequent Event
Subsequent Event [Line Items]
Share issuance ratio		0.10
Number of real estate properties transferred | property			10
Net book value			$ 44,900,000
Loan amount						$ 35,000,000.0
Cash contribution			$ 3,000,000
Spirit Realty Capital, Inc. | Predecessor Entities | Subsequent Event
Subsequent Event [Line Items]
Share issuance ratio		0.10
Stock issued during period (in shares) | shares	42,851,010
Number of real estate properties transferred | property			10
Net book value			$ 44,900,000
Cash contribution			$ 3,000,000
B-1 Term Loan | B-1 Term Loan | Spirit Realty Capital, Inc. | Predecessor Entities | Subsequent Event
Subsequent Event [Line Items]
Loan amount						$ 35,000,000.0
Series A preferred shares | Spirit Realty, L.P. | Subsequent Event
Subsequent Event [Line Items]
Dividend rate	10.00%
Liquidation value	$ 150,000,000.0
Series A preferred shares | Spirit MTA RIET | Predecessor Entities | Subsequent Event
Subsequent Event [Line Items]
Dividend rate	10.00%
Liquidation value	$ 150,000,000.0
Series A preferred shares | Spirit MTA RIET Subsidiary | Subsequent Event
Subsequent Event [Line Items]
Dividend rate	18.00%
Liquidation value	$ 5,000,000.0
Series A preferred shares | Spirit MTA RIET Subsidiary | Predecessor Entities | Subsequent Event
Subsequent Event [Line Items]
Dividend rate	18.00%
Liquidation value	$ 5,000,000